Universal Health Coverage and Health Insurance - India

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Universal Health Coverage and Role of Health InsuranceA case study from india

Health Systems Research"The people, institutions, and activities whose primary purpose is to generate high quality knowledge that can be used to promote, restore, and or maintain the health status of populations. It can include the mechanisms adopted to encourage the utilization of research."Health systems research (HSR) focuses on the performance and problems of health systems. A health system is the sum of the structures, people and processes that together provide the vehicle for the delivery of health care and achievement of better health.

Universal health coverage (UHC)Described by the Director-General of the World Health Organization (WHO), Margaret Chan, as the most powerful concept that public health has to offer, Universal health coverage (UHC) has risen to the top of the global health agenda. At its core, UHC is about the right to health.

UHC means that all people get the treatment they need without fear of falling intopoverty. Universal health coverage (UHC) has the potential to transform the lives of millions of people by bringing life-saving health care to those who need it most.

This requires a strong, efficient, well-run health system which is robust and responsive.

Three Dimensions to consider - UHC

Health Financing & UHC goalsService DeliveryRevenue RaisingPoolingPurchasingBenefitsStewardship / Governance / OversightHealth Financing within the overall health systemQualityFinancial protection and equity in financeUtilization relative to needTransparency accountabilityEfficiencyEquity in Resource DistributionUHC Intermediate ObjectivesFinal Coverage Goals

Creating Resources

Kutzin et al 2001 and later modified by Thomas et al 20055

Revenue Raising Objectives

Service DeliveryRevenue RaisingPoolingPurchasingBenefitsStewardship / Governance / OversightCreating Resources

Guiding Objectives for Revenue Raising PolicyRaise adequate revenues in order to make progress for UHCMove towards a predominant reliance on public sourceEquity in Finance. Make sure the financial burden is shared fairly across societyEnsure stable and predictable flow of funds to health sector

Equity is a normative term as opposed to equality which is numerical.6

Revenue RaisingEfforts to make public revenues the predominant source of money for the health sector can include:Increasing the priority given to health in government budget allocations, although broader fiscal constraints may limit the effect in real terms.Improving tax administration andraising new taxes may help to increase fiscal space for health.External funding is also an important source of public funding for health in many countries, although the actual flow of funds may be unpredictable and inflexible.

We know that when countries rely predominantly on public sources of revenue, they make greater progress towards universal health coverage; but why?

This is because public revenues enable risk-sharing between the better-off and the worse-off, and between the healthy and the sick in society. This in turn enables health systems to improve access to health services, with financial protection, for all citizens.


Earmarking funds for the health sector iS an effort to increase and stabilize levels of public funding, although the evidence is mixed about its effectiveness due to, offset by reduced discretionary allocations during the budget process. Analysis has shown that what is most important to increase public funding for health, is that it is a political priority for the government, rather than measures such as earmarking.

Example Sin taxes, etc. In other words, there may be no increase in the level of public funding for health overall. 8


Service DeliveryRevenue RaisingPoolingPurchasingBenefitsStewardship / Governance / OversightCreating Resources

Risk fragmented pool, unified larger pool. Pooling can be defined as "the accumulation of prepaid health revenues on behalf of a population for eventual transfer to providers." By pooling funds, we enable the pooling of risk, meaning that everyone on whose behalf the funds are pooled (i.e. the "covered population") has a degree of protection against the costs of using health services should they need them, irrespective of their individual health risk.


PurchasingHealth systems need to increasingly purchase health services in astrategic way, forprogress to be made towards UHC.This means allocating and spending funds based on information about provider performance, as well as the health needs of the population they serve.

Service DeliveryRevenue RaisingPoolingPurchasingBenefitsStewardship / Governance / OversightCreating Resources

Passive and strategic / active10

Purchaser Provider Split

The primary motivation for introducing PPS is the concern that strategic purchasing is very difficult to do when the same organization pays for and delivers health services. This is the case in many countries where theMinistry of Health plays both roles. Efficiency and quality improvements in service delivery can be made by separating the two functions and having an agency dedicated to purchasing services.

Financial Protection ?

Trends in Out of Pocket Spending on Health in India, 1987-2004 Source: Mahal A et al. ;2011

Expenditure Category/YearUrban PopulationRural PopulationPoorest 20%Richest 20%Poorest 20%Richest 20%Outpatient Expenditure/visit (INR)198758110609619961262521212272004231482213338Inpatient Expenditure/ visit (INR)1987801178165310591996864818210525305200447051691040718375Per Capita Expenditure(INR)19871000453276014971996284812624209367442004496724676299710926

Out of the total 1201 INR spent on health care in India, Government (both Central and State combined) spending is only 242 INR. Health spending per person in India growing exponentially - contributed mainly by OOP13

How much spending is "adequate"Further analysis in 2015 updated these estimates to $86 per capita, stressing more clearly than previous estimates that this is the amount whichgovernmentsneed to spend. The analysis also noted that countrieswould find it difficult to get close to universal health coverage, if public spending on health is less than 4-5% of GDP.

2001 WHO commission on macroeconomics and health2010 World health report14

How much do countries rely on public revenue sources?

Catastrophic and Impoverishing payments

Catastrophicpayments are greater thana given proportion of total household expenditure (or income);Impoverishingpayments are when ahousehold is pushed below, or further below, the poverty line.


Poverty Estimates Planning commission India 2013

For 2011-12, for rural areas the national poverty line using the Tendulkar methodology isestimated at Rs. 816 per capita per month and Rs. 1,000 per capita per month in urban areas.Thus, for a family of five, the all India poverty line in terms of consumption expenditure wouldamount to about Rs. 4,080 per month in rural areas and Rs. 5,000 per month in urban areas.These poverty lines would vary from State to State because of inter-state price differentials.

< 20 $ then you are above poverty line.17

Or is it ?

TheNational Rural Health Mission (NRHM)launched by the Government of India in 2005 seeks to provide accessible, affordable and quality health care to the rural population, especially the most vulnerable.Despite significant progress especially since the launch of NRHM, challenges remain:Theavailabilityof health care services provided by the public and private sectors taken together is inadequate;Thequalityof healthcare services varies considerably in both the public and private sector as regulatory standards for public and private hospitals are not adequately defined and, are ineffectively enforced; andTheaffordabilityof health care is a serious problem for the vast majority of the population, especially at the tertiary level.

According to NSSO (2005-06) estimates most people accessed private providers for outpatient care78% in rural areas and 81% in urban areas. For inpatient care, 58% of Indian people in rural areas and 62% in urban areas accessed private health facilities.

What has been Indias response ?

Despite this mammoth effort at the country level, the uptake has been largely limited due to traditional means of bringing change using the brick and mortar approach rather than an technologically leveraged interventions.19

Health Insurance

Health Insurance - Status

Most of these schemes cover only in-patient care, mainly at the tertiary level.


EligibilityUnorganized sector workers belonging to BPL category and their family members (a family unit of five) shall be the beneficiaries under the scheme. The beneficiaries will be issued smart cards for the purpose of identification.

BenefitsThe beneficiary shall be eligible for such in - patient health care insurance benefits as would be designed by the respective State Governments based on the requirement of the people/ geographical area. However, the State Governments are advised to incorporate at least the following minimum benefits in the package / scheme:The unorganized sector worker and his family (unit of five) will be covered.Total sum insured would beRs.30,000/- per family per annum on a family floater basis.Cashless attendance to all covered ailmentsHospitalization expenses, taking care of most common illnesses with as few exclusions as possibleAll pre-existing diseases to be coveredTransportation costs (actual with maximum limit ofRs.100