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Deficit Or Investment: A Case For Universal Health Coverage In India

04/03/2015 8:11 AM IST | Updated 15/07/2016 8:24 AM IST
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** ADVANCE FOR USE SUNDAY, JUNE 5, 2011 AND THEREAFTER ** In this Feb. 4, 2011 photo, patients get registered for a free sterilization procedure at the Mohan Lal Gautam District Women's Hospital in Aligarh, India. Every day dozens of women line up at this hospital for a free sterilization procedure that will spare them the risk and cost of having another child. The hospital's three staff doctors race through seeing some 500 patients a day needing help with childbirth, pelvic inflammatory diseases, abortions and other treatments at subsidized costs. Each year, the cost of health care pushes some 39 million people into poverty, with patients shouldering up to 80 percent of India's medical costs. (AP Photo/Mustafa Quraishi)

India has a choice. A choice to have the planet's largest productive workforce and drive the world's economy for the next several decades OR to become the disease capital of the world with sky-high rates of disease, malnutrition and infant mortality.

Where we stand

Consider this: 22 out of every 1000 babies in India are stillborn, which is higher than Rwanda in sub-Saharan Africa. Of those who are born alive, 29 out of 1000 babies die within the first month and 41 out of 1000 do not live to see their first birthday. In addition, nearly 50% of all children are likely to be permanently stunted for want of proper nutrition. India as a whole accounts for 21% of the world's global burden of disease, according to the World Health Organization (WHO). The 21% is concentrated in rural areas where diseases lead to huge numbers of deaths that, correctly diagnosed and treated, are preventable. Yet more than 50% of all villagers have no access at all to allopathic healthcare providers. Health infrastructure continues to be abysmal. According to this report, India has a bed density of less than 1.5 beds per 1000 persons as compared to the WHO guideline of 3.5 and only 2.2 doctors per 1000 as compared to the WHO guideline of 2.5. Out of pocket spend is abnormally high at 86% as compared to an average of around 40% for low income countries which pushes more than 60 million Indians into poverty every year as a result.

"22 out of every 1000 babies in India are stillborn, which is higher than Rwanda in sub-Saharan Africa."

It is not to say that nothing has been achieved. Visible progress has been made on health outcomes since independence, with a 60 % reduction in child mortality and a two-third reduction in maternal mortality. However, a lot more needs to be done. This is evident in the fact that the country continues to reflect some of the world's poorest health statistics, but spends just over 1% of its GDP on publicly funded healthcare. In comparison, China's public health investments in 2011 were 2.9 % of GDP and Brazil's 4.1 %.

Universalisation vs. targeted healthcare

While it is clear that India needs to step up investments in healthcare, there is fierce debate among healthcare professionals about universalisation versus targeted healthcare coverage primarily due to the huge financial costs. In this article I would argue that universalisation of healthcare is in fact cost-effective as well as much more doable both socially and politically. I would further state that instead of targeting beneficiaries, it would be much more beneficial to target interventions with the highest returns.

It just might be easier to provide universal healthcare coverage rather than identify on average the 3 out of 10 Indians to exclude.

Indian society is rife with deep-seated socio-economic inequalities. This makes effective targeting extremely difficult and renders most of the targeting mechanisms inadequate. All previous schemes based on a targeted approach have failed to meet their objectives with examples ranging across the spectrum of social welfare schemes like BPL benefits, PDS, RSBY and most recently the 25% provision in RTE. Coupling that with the fact that with poverty headcount ratio at $2 a day (PPP) pegged at nearly 60% and health insurance coverage at less than 25% of the population, it just might be easier to provide universal healthcare coverage rather than identify on average the 3 out of 10 Indians to exclude, given the associated political and social costs. We can also take comfort from the fact that the top 20% of the Indian population i.e. the 250-300 million strong upper and middle classes, will pretty much self-exclude themselves as is evidenced by the fact that they have already largely stopped using the government health infrastructure. Thus demand-based universalisation will automatically target the needy while avoiding the economic, social and political costs of a targeted approach.

As Professor Lawrence Summers from Harvard University, points out in his article in the Economic Times, if India doubles its Healthcare spends from $20 billion to about $45 billion and "if the additional investments were spent on the highest impact interventions, India could achieve a 'grand convergence' in global health, which means India's rates of avertable infectious, maternal and child deaths could plummet to those seen in the best performing middle-income countries like Chile, China, Cuba, or Costa Rica, or 'the 4C countries'." Professor Summers goes on to state, "The economic payoff of the investments would be enormous. From now until 2035, for every dollar that India invests in achieving convergence, there would be a return of around $10. In financial markets, investments with foreseeable returns of 10 to 1 over reasonable time horizons simply do not exist."

Research by Harvard University and World Economic Forum further states that India stands to lose $4.6 trillion before 2030 if it does not control the incidence of non-communicable Diseases (NCD) such as heart and lung diseases.

If India increased the price of tobacco by 50% through taxation then it would prevent more than 4 million deaths and generate an additional $2 billion in revenue over the next 50 years.

The Global Health 2035 report outlines the means to finance the additional financial burden for universalisation of healthcare in key intervention areas. Innovative fiscal policies like taxing alcohol, sugar, all forms of tobacco and reducing fossil fuel subsidies could help curb the incidence of NCD's while raising additional revenues. An example of this is a recent study led by Sanjay Basu from Stanford University that shows that if India increased the price of tobacco by 50% through taxation then it would prevent more than 4 million deaths and generate an additional $2 billion in revenue over the next 50 years. The Global Health 2035 report further outlines various approaches to expanding insurance, including publicly financed 'pro-poor' insurance schemes, catastrophic coverage and private insurance. The report points out that the pro-poor schemes would yield the highest health gains per dollar spent while ensuring that the poorest gain the most in terms of health and financial protection.

Thus if India wants the 21st century to be an Indian century then it must invest in universalisation of healthcare. Universalisation is not only the most socially and politically viable alternative in the Indian context, if focused on key areas, can not only finance its own costs but also yield positive returns in the long term.

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