Picture credit: Al Jazeera, via Wikimedia Commons

On 1^st February 2018, the Finance Minister of India announced a flagship health insurance scheme to cover over 100 million poor and vulnerable families. The National Health Protection Scheme (NHPS) will provide coverage of up to 500,000 rupees (Rs) per family per year for secondary and tertiary hospital care. In this post, public health researcher and consultant at SATHI-Pune, Dr Indira Chakravarthi, considers who’s really benefiting from this announcement.

A different programme – or window dressing for RSBY?

The Finance Ministry took pains to explain that the new insurance scheme would be different from the previous government’s Rashtriya Swasthya Bima Yojana (RSBY). Yet NHPS seems to be simply a lightly revised version of RSBY, with just higher insurance cover. The Finance Minister himself said NHPS had been formulated as annual coverage of Rs 30,000 in RSBY is inadequate. Information released by the Niti-Aayog health team provides little indication that the new scheme will address previous problems, such as those of poor coverage and persisting high out-of-pocket expenditures, as evident from the NSS survey (71^st round in 2014) and other studies on RSBY.

Big News Globally – A shot in the arm for industry

NHPS is likely to be a bonanza for the insurance and hospital industries that will manage and provide services in the scheme. Standard & Poor have stated that the scheme will be a “game changer” for India’s health industry and generate substantial growth in insurers’ premiums. There were reports of shares of insurance companies spiking after the scheme’s announcement as investors looked to cash in on the prospect of government contracts. According to the Head of Global Health Practice at global consulting firm KPMG, “it’s big news globally”.

Healthcare corporates have also warmly welcomed the announcement, including Naresh Trehan of CII Healthcare Council and Devi Shetty of Narayana Health, who has said “it’s the dream budget I’ve been waiting for 30 years. Now 50% of the population can walk into a corporate hospital with dignity and get treated for catastrophic illnesses and surgeries as a right, not a charity”. The scheme will also subsidise India’s struggling mid-sized hospital and private medical colleges, as noted by the NITI Aayog health team: “several private medical colleges are really good and have the capacity to deliver effectively but are not getting enough patients. Now, they will also get patients and patients will also benefit from their expertise.” Professor Sundararaman at Tata Institute of Social Sciences has pointed out that the increase in insurance cover to Rs 500,000 addresses the complaint of the large corporate hospitals, who till now found the reimbursement rates of Rs 150,000 too low and were not empanelling for RSBY.

What’s the cost?

Crucially, it’s not clear how the Rs 300 billion required for NHPS will be funded. It has been given a provisional allocation of Rs 20 billion for 2018-19. This is less than what state governments are spending on similar existing schemes, and the Finance Ministry claims further funds will be allocated “once the details of the scheme are worked out”. Further, the programme’s announcement comes amidst a real-terms fall in budget allocation for the Ministry of Health. Current budget allocations do not add up to the prescribed expenditure of at least 1% of gross domestic product (GDP) by the centre and 1.5% of GDP by the states for health.

There is a serious risk that vital funding for public health will be diverted into the NHPS, as we’ve seen in healthcare schemes in countries such as Colombia and Thailand. Key health programmes in India – including the National Health Mission and the National AIDS control programme – have seen reductions this year, raising concerns that the government is neglecting public health in favour of curative care and hospitalisations, which while required is, however, a populist move. As tweeted by a former health secretary, Keshav Desiraju, “the vast outlay on the NHPS could have been used to strengthen the public health system and improve government medical and nursing colleges, employ more people, pay better salaries, [so] why transfer funds to private hospitals?”

Health is a political issue

Health and social justice appear to be minor considerations (even mere tools) for an insurance programme designed to boost further India’s private healthcare industries as well as score political points in a highly charged pre-election scenario. Former finance secretary Arvind Mayaram tweeted that “universal health insurance through private hospitals has not worked for the poor anywhere. Biggest beneficiaries are the private hospitals and insurance companies. There is no substitute for public health care. More money should have been pumped to strengthen it.”

The attention finally being devoted to health and ‘universal health coverage’ by national politicians is a positive development, but subversion of health budgets to serve commercial and political interests is troubling. The manner in which health is politicised and distorted to extend support to national and international healthcare businesses should not be ignored.

Indira Chakravarthi is based at SATHI-Pune India where she works on health systems and health policy, public health and social justice, and technology in medicine and public health.