Key Concepts

• Health Care is very essential especially for the very young and the very elderly.
• The costs for Health Care are prohibitively high and hence, out of reach of most.
• Effective and reasonable Health Care can be within reach of all vide a properly designed universal coverage programme, as the more inclusive the programme the less the individual’s premium.
• The demographic distribution in favour of the expected increase of the working population must be healthy and only thus be beneficial to all.
• Traditional Medicine and Therapy, its proper validation and recognition for inclusion.

Key Metrics:

• Today only 20 percent of Indians have any sort of health Insurance, and there is generally no protection for those beyond 65 years age.
• Decades ago, Gujarat, outsourced Child deliveries to doctors on a contract fee of only about Rs. 2000/- each and yet succeeded in reducing the maternal death rate in Childbirth across 4 Lakh deliveries to less than 4 percent of what it used to be and, costs from an earlier Rs 1600/- to only Rs 64/-.

A voluntary health insurance scheme will be ineffective as the young and healthy will opt out increasing the premium on the rest. It should therefore be a broad-based mandated coverage on community rating basis. Not allowing for different premiums based on different criteria, except perhaps age and geography etc. and not excluding previous or chronic illness will be the most economic and effective way to provide basic Health Care for All at a reasonable cost. Such universal coverage will also, prevent the ills of Data Mining that may otherwise allow the Insurance Companies to set discriminative Premium rates.

“Effective Insurance depends on mutual ignorance. The more the individual or the Insurance Company knows of the risk of disease the less effective the insurance.” – Tim Harford

“If you think health care is expensive now, wait till you see what it costs when it’s free.” – P. J. O’Rourke

“To freely compensate people when bad things happen to them, leads them to become more careless (Moral Hazard).” – Tim Harford

The definition of ‘Basic’, as a general directive principle, could be decided on by a Group of Doctors, NGOs and Politicians etc. and reviewed, say every 5 years. Additional levels of care could be provided as riders at extra cost on a voluntary basis, e.g.: Dr. Devi Prasad Shetty’s ‘Asha Health Care Programme’. Also, all hospitals / clinics / nursing homes etc. should be rated as per standard guidelines on the facilities, amenities and level of care provided (both qualification of doctors and nursing staff etc.) and also, be reviewed at regular intervals. (Similar to the star rating done for hotels).

The basic premium will cover treatment at a standard facility and those seeking additional facilities, greater privacy, better ambience and comfort could opt for necessary riders at extra cost. The cost should also, be proportionate to the time actually required by the physician or specialist, as may be required to properly assess and care for the patient as deemed fit by him/ her, on a sliding scale. After all a cup of tea at a 5-star hotel will cost many times more than a similar cup at a street side tea shop and the ‘Chaiwallah’ or the Chef respectively, be paid accordingly.

To keep the costs from burgeoning out of control due to misuse / overuse or unreasonable demands, it would be advisable to let people meet the costs of small treatments themselves. Take advantage of Primary Health Centres and Alternate or Complementary treatment centres.

Therefore, every patient must be required to be first treated only at a primary hospital and be allowed to move to a secondary level hospital only by referral and similarly, move from there to a tertiary level hospital only on further referral. The cost of treatment at each level of hospital will have to be determined on the basis of the location, quality and the level of care that will be provided there and the system should provide for such additional charges to be paid to the hospitals at each level for even similar procedures. However, patients requiring emergency care as victims of accident or violence, should receive immediate stabilizing care at the nearest Hospital and thereafter moved into the appropriate facility, and the cost be claimed from the appropriate Government Health Scheme.

Also, as Ezekiel Emanuel noted, – half the population accounts for less than three percent of the costs while the sickest 10 percent consume 64 percent of the total pie.

Hence, all premiums, must also, have an initial cost component (say 10 percent) to be borne by the insured. Visits to outpatient Clinics and private doctors need not receive any coverage thus requiring the patient to meet all such costs. This will prevent infructuous hospital visits and tests and claims for minor ailments and thus greatly reduce misuse of Health Insurance as now prevalent in existing Health coverage schemes such as ESI and ‘Arogyasri’ etc. Subsidize the really needy in a predetermined and transparent manner. This can be done by having each hospital appoint a small committee of say 3 to 5 people consisting of a doctor from that hospital, one or two citizens and an NGO representative etc.

After all, the aim is to give maximum responsibility and choice to the patient and yet ensure that no one, even the poor, faced with catastrophic medical bills is denied basic coverage. As Harford recommends, everyone should be mandated to have a high interest-bearing savings account dedicated to medical bills, and perhaps given tax exemption to encourage greater contributions, which can be linked to the employees Provident Fund (PF), and to which the Government contributes in the case of the poor or the chronically ill or those needing special care. E.g.; Singapore which uses forced savings and minimum catastrophic insurance to keep costs down and allows the power of patient choice to be the heart of the system. In India the Employee State Insurance (ESI) contribution can then be done away with and ESI Hospitals be made into Government Hospitals for all.

Government owned Insurance Companies as well as Private Insurers can all also, work with the Employers to compete for Group Insurance Schemes if the Employees so decide. However, a properly empowered regulatory body (say IRDA) should have oversight and Ombudsman responsibility to ensure equitable coverage and proper competition.

Preventive Care will receive attention only if there is an incentive. Private Insurance sees no benefit in Preventive Care as Insurance requires a long term prospective, in which prevention is viewed as an important component to reduce future costs, and as the administrative costs have to be kept to a minimum. It is hence, necessary to involve the Government in preventive care to reduce inequality and insecurity, and to ensure learning and compliance, from Play School level itself, by encouraging proper practice of Sanitary and Health habits and also for adults, through social messages and financial incentives, say as small discounts on Insurance Premium rates for each year of no-claims.

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