From a small village in Uttar Pradesh, laborer Shavan Kumar, has brought his 38-year-old wife to a government-run hospital New Delhi to be treated for a heart condition. But he worries that the $500 loan he has taken will not cover the cost of her medical care; although the treatment is free, he has to pay for medicines, tests and their stay in the city.
“I am scared about how I will repay the money I have borrowed. What can a man working on daily wages do? It is in God’s hands,” Kumar said.
The Indian government has announced it will implement what it calls the world’s largest public health insurance plan, offering coverages of about $8,000 to poor and low-income families. That could be a game-changer for the 63 million people like Shavan Kumar who are driven into poverty every year by “catastrophic” expenses on health care, according to the Health Ministry.
Dubbed “Modicare” in a reference of Prime Minister Narendra Modi, the hugely ambitious scale of the project - which proposes to insure 500 million people - has caused a wave of optimism in a country where improving access to health services has never been a political priority.
However, in a nation where many government initiatives are hobbled with poor implementation, there are concerns about how it will work and how it will be funded.
Priya Balasubramaniam, a health specialist at the Public Health Foundation in New Delhi questions whether the $300 million earmarked this year will get the project off the ground. “While this has definitely come with a bang, I think for those of us who want to move to the next level, it is really about the fiscal space that the government has allocated for a scheme as ambitious as this,” she says.
Officials say the vast scale of the project will drive down insurance premiums to as little as $18 per year. That adds up to $1.7 billion – an outlay that the government plans to make with funds pooled by both the federal and state governments.
Closing rich and poor gap
Health experts also hope the insurance cover will improve the quality of care by opening the doors of India’s expensive private hospitals to the poor.
A massive gap exists between private and public hospitals. The former have state-of-the-art medical facilities but only the upper income groups can afford their steep costs. On the other hand, quality public hospitals such as the All India Institute of Medical Sciences where Shavan Kumar brought his wife offer free treatment, but are few in number, confined to the big cities and hugely overburdened.
That is the dilemma that Hari Singh, a New Delhi resident, faced when he broke his knee in a road accident three months ago. Having no savings, he first went to a government hospital, but left quickly and headed to a private hospital.
“The conditions were so miserable, the toilets were filthy, two patients were put on one stretcher and there was no system at all. I got very scared,” he says.
But to pay for his care he had to borrow $5,000 at a crippling interest rate of 5 percent a month. Now he does not know when he can return to his job as a driver or how to support his two young children.
Ashok Agarwal, founder of the Indian Institute of Health Management Research, hopes the new government project will change that. “For the first time poor people would have a choice to go to a center where they feel comfortable,” he says. “Once you have insurance which is willing to pay, then the load of the patients can go to the private sector also.”
He says it will also incentivize private hospitals to improve facilities to attract patients. “Imagine you can have 500 million customers at your doorstep. Which company would not like that to happen?”
Health professionals underline that the insurance initiative needs to go hand-in-hand with improved primary health services and point out that poor people often land up in hospitals because they cannot afford day-to-day medical care and medicines.
But most government-run medical centers “are dysfunctional, lacking equipment, medicines and even qualified staff,” says Balasubramaniam, the health specialist at the Public Health Foundation in New Delhi. “You are focusing on the top of the pyramid while the foundations are still very shaky.” For example Shavan Kumar may never have needed to head to a hospital in New Delhi if his wife’s condition had been diagnosed earlier.
But in a country where government spending on health care is among the lowest in the world – just 1 percent of the GDP - the project has sparked hope. “What the government has done in one stroke is to look at 500 million at the same time. I have no doubt it will take a few years to come on the ground and be stabilized, but the intent is very good,” says Agarwal.