‘Modicare’: A Note

The National Health Protection Mission was announced in the Union Budget this year under the larger Ayushman Bharat programme. This has mainly two aspects. Firstly, it includes plans to open 1.5 lakh Health and Wellness Centres that will essentially be the upgraded versions of existing primary health centres. The second dimension is the Pradhan Mantri Jan Aarogya Yojana (dubbed as “Modicare,” analogous to Obamacare in the US), a health insurance scheme targeted to India’s poorest families (roughly 40% of its population). The scheme became operational from September 25, on the birth anniversary of Deen Dayal Upadhyay. This government-sponsored health insurance scheme will provide free coverage of up to Rs. 5 lakh per family per year at any government or empanelled private hospitals for secondary and tertiary medical care facilities. It will be available for 10.74 crore beneficiary families and about 50 crore Indian citizens. Eligibility is based on Socio-Economic and Caste Census (SECC) database. The scheme plans to cover more than 1,300 medical treatments and procedures. Prima facie this sounds good. Now let’s check some of the realities.

Modicare seeks to provide coverage for hospitalisation at the secondary (provided at district hospitals) and tertiary (provided at specialized hospitals like AIIMS, Apollo, etc) levels of healthcare. However, the High-Level Expert Group set up by the Planning Commission (2011) had recommended that the focus of healthcare provision should be towards primary healthcare. It had observed that focus on prevention and early management of health problems can reduce the need for complicated specialist care provided at the tertiary level. In the absence of this, the poor have to go to private doctors. However, the allocation for the Health and Wellness Centres is Rs 1,200 crore, which amounts to only Rs 80,000 per sub-centre. The condition of the existing sub-centres right now is rather poor, with inadequate infrastructure and under-staffing.

Another major challenge in the state of public healthcare in India is the out-of-pocket (OOP) expenses that families incur when accessing services and the informal payments that are made. Modicare, though, covers only expenses on hospitalization and not outpatient-expenses which is mostly spent on buying medicines, diagnostic tests, etc. Moreover, the present health centres and public hospitals, especially in remote rural areas, are plagued with issues such as shortage of equipment, dilapidated infrastructure and shortage of skilled man-power. These will continue to hamper the quality of services. Experts say, one reason families are unlikely to avail of the entire cover amount of Rs 5 lakh in a year is simply because of the under-developed health facilities in many states. Then the big question is why the funds are not being spent on strengthening existing public secondary and tertiary facilities instead. Modicare coverage premiums will be shared between the centre and the states in 60:40 ratio. If the existing Rashtriya Swasthya Bima Yojana (RSBY), which provides coverage of Rs. 30,000 and shared between the centre and state in 75:25 ratio, failed in implementation, then the far more ambitious Modicare which have a higher share of contribution from the states without any commensurate infrastructural support naturally raises more question marks.

The next major point is that the scheme will divert public resources to the private health sector, which in turn will only result in weakening the public health sector. The private sector consists of 58% of the hospitals in the country, 29% of beds in hospitals, and 81% of doctors. The private medical sector remains the primary source of healthcare for 70% of the urban households and 63% of the rural households. Some studies observed that healthcare providers in the private sector tended to extract more money by making patients stay for longer durations and conduct more diagnostic tests compared to their public counterparts. One of the problems that has plagued the RSBY is that of fraudulent claims with hospitals claiming reimbursements from the scheme for tests and procedures that have not actually been performed. Another method of fraud that has been far more dangerous for patients is doctors prescribing unnecessary procedures and surgeries only to claim insurance. Also, “It is the insurance company’s job to make some profit out of this… So there is always the incentive for an insurance company to reject claims. There is very little that the payer… can do to ensure that rejection does not take place”, said an expert. With increasing burden on the public healthcare without commensurate improvement in its infrastructure and quality of service, there will be increasing demand for privatizing healthcare facilities which is the primary objective of the government.

The public health expenditure in India (total of union and state governments) has been only little over 1% of the Gross Domestic Product (GDP) which is abysmally low as compared to the world average of 6%. The actual need of the people is to have a truly universal healthcare which needs large investment in public healthcare.

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