Health cares

Whats most likely to send one of Indias aspirational millions,pushing themselves out of poverty,back below the poverty line? Health expenses. The most telling statistic quoted by an expert group asked by the Planning Commission to examine Indias healthcare system is that 47 per cent of hospitalisation in rural areas and 31 per cent in urban areas were financed by loans and the sale of assets and that 28 per cent of health problems in rural areas and 20 per cent in urban areas went completely untreated because of lack of access to financing. Theres clearly a problem here,as the expert group points out. Their actual recommendations,however,are a mixed bag of the workable and the unworkable.

The larger idea,that preventative and primary healthcare should be based on a single-payer system in which some unified agency would act as a single collector for funds,and a single payer of bills is sensible. Group insurance is what works best,and,importantly for a cash-strapped state,is cheapest. The payment shouldnt be just through taxes; contributory payments should also be part of the financing system. Its certainly the case that,if left to itself,Indias medical insurance system is incapable of dealing with the magnitude of the problem. Theres also good reason,however,to be sceptical of some of their other suggestions: the revival of health PSUs and the reduction of FDI limits in them,for example. Also,the groups complaints that the private medical insurance market is imperfect should be set against the backdrop of possible changes to FDI rules that would increase the capitalisation and know-how in the sector.

Yet,the questions being asked are the right ones. The panel pointed out that many state-run medical insurance schemes so far have been financially unsustainable. India will need,at some point,to put in place a structure that controls costs while increasing access and ensuring proper quality standards. That will need a single-payer component and a private-sector component and some hard thinking about what the state can and cannot deliver.