Delivering health care to a billion-plus population is very complex. And, like eating a Reese’s, there’s no right way to do it. In the past, Indian entrepreneurs have innovated on several business models that range from frugal to world-class luxury care. A testimony to its success is the fact that citizens spent Rs 1,650 billion, or 3.16 percent of the GDP (in 2011-12), on health care, whereas the government spent only 1.04 percent. In other words, a family of four spends nearly Rs 10,000 per year on health care.
With the government once again shirking from committing higher budgets to health care, it is tempting to ask: Since there’s money on the table, can entrepreneurs devise privately financed and privately run universal health coverage? Perhaps all it needs is one disruptive idea to show that it’s possible to design comprehensive care outside the government.
We asked four health care industry leaders what it would take to deliver such care and if they’d be willing to take the first steps.
Taxpayers’ money cannot pay for health care anymore; it could pay 20 years ago when people retired at 60 and died at 65. Today, people retire at 60 and live on to celebrate their 95th birthday. People are going to live longer not working than they do working, and as you live longer you invariably undergo 5-10 procedures. Any country dependent on taxpayers’ money for health care is struggling, so we have to relook at how we run health care.
The only concept that will work is that everyone should contribute a tiny amount every month. It’s not an annual premium; if you ask them to pay every year, it’s a lot. A monthly payment should be sufficient to pay for health care. So Yeshasvini, which was the mother of all insurance schemes and which inspired the Andhra Pradesh and Tamil Nadu governments to start Arogyasri and Kalaignar schemes, was designed in a manner to let people pay a tiny amount. They started by paying Rs 5 a month, today they pay Rs 10 a month. It is the only self-funding scheme in the country today.
All the other schemes are doled out by the government. When the government gives money, the schemes run well as long as there’s good tax revenue; the moment tax collection goes down, they don’t pay the hospitals, hospitals don’t treat patients and the scheme dies a natural death. It’s not that the government will one day announce that a scheme is not functioning, they just don’t pay. No government has the guts to say the scheme is off because they have no money.
But the government’s strength lies in the credibility it enjoys as an organisation that doesn’t cheat. It is inefficient, but that’s okay. In villages, when we tell people to pay a tiny amount every month to an MNC bank or an insurance company, they are not willing, but when we tell them to pay to the government they are willing because the government is the only organisation they trust. It can also make law, make something mandatory. So, the government should make use of this power. We have 900 million cellphone subscribers who are spending Rs 150 per month to speak on the phone.
Let’s assume 600 million are active. We could ask them to pay Rs 20 extra. There’s no extra cost to collecting this amount, there already exists a mechanism to collect Rs 150. This way, we could have the largest insurance scheme in the country. I’ve interacted with politicians across many states, including Delhi. The problem lies with them. When a politician launches a scheme, he wants to take the credit of giving it free, he doesn’t know if he’ll be in power after five years, nor does he care if the country runs out of money. As long as this ‘free’ attitude runs, there’ll be no universal health care in this country.
I’ll give an example. In Kerala, a few years ago, the government gave a few 100 crores to insurance companies to cover BPL cardholders, but the latter didn’t know they were covered. So, in the end, barely a few crore claims came and the insurance companies pocketed the whole lot.
If the UK government can’t pay for health care, if the US is struggling, how can the Indian government pay for health care when it’s allocation for health care is just about 1 percent [of the GDP].
Whatever you want to do, first you have to understand where the money is coming from. Today, we have had the mobile revolution; it didn’t happen by charity from the government. People are willing to pay if there is adequate service. People are willing to pay tiny amounts for health care but you have to create a vehicle for them to contribute. You can do simple things. There are a few million maid servants. When they fall sick, who pays for care?
The employer, in whatever limited manner. If there is a scheme for maid servants where an employer pays Rs 25 every month for the health care, every employer will pay.
On the other hand, the government always complains health care is expensive. Has anyone asked why private sector is so expensive? When it comes to paying taxes, we are treated on a par with the entertainment industry. Then, look at the salary costs and the acute shortage of medical professionals. We have a shortage of more than 1 million doctors. But we make such stringent rules in running a medical college that no one can start medical colleges in this country; even if one starts, it costs over Rs 200-300 crore, whereas anywhere in the world one can start a medical college with any building. They don’t need 25 acres of land and teachers retiring at 60.
All over the world, higher education happens at big hospitals, you don’t need to have medical schools. But here, you have a shortage of post-graduate opportunities because if you open it up, capitation fee will collapse and then the [medical education] industry will collapse.
To universalise health care, there has to be one health insurance scheme, one open source software for the whole country. With UID coming, ID will not be a problem. One concept, one body, but every state should monitor it itself because health is a state subject and the Centre can’t manage these schemes.
We also have a piecemeal approach to health care. We should be integrating primary, secondary and tertiary care with a lot of emphasis on preventive care. We [at the Narayana Group] have been thinking of [entering primary care] but you can’t deliver primary care with MBBS doctors.
Today, a nurse who has worked in hospitals for 20 years cannot give a paracetamol tablet. Are you aware of it? Legally, she is not covered. Unless the government comes up with a regulation that alternative medical specialists and nurses can look at primary care, there is no future. For the last 12 years, I’ve been speaking about it, everyone thinks it’s a great idea, but nothing happens in reality, because medical lobbies are very powerful.
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