Universal Health Coverage in India: Various Issues

Universal Health Coverage (UHC) is free access to healthcare to all, enabled and guaranteed by the government and provided by public as well as private sector. UHC is now widely adopted by many other countries both as a developmental imperative and the moral obligation of a civilized society.

Challenges to Universal Healthcare in India

The Constitution via DPSP mandates every state with “raising the level of nutrition and the standard of living of its people and the improvement of public health as among its primary duties”.  However, insufficient funding of public facilities, combined with faulty planning and inefficient management over the years, has resulted in a dysfunctional health system that has been yielding poor health outcomes. India’s public spending on health — just around 1 per cent of GDP — is among the lowest in the world.

Further, India’s public and private health sectors operate on two contrasting planes. The public sector means largely for the poor. It is underfunded, understaffed, overcrowded and inefficiently managed. The private sector on the other hand, caters chiefly to those who can afford it. The private sector is flourishing, rapidly modernizing and striving to offer world-class facilities with an eye on capitalizing on medical tourism. Thus, a contrast in public and private healthcare sector is the biggest challenge in providing UHC in India.  The other challenges are as follows:

• Overly bureaucratic legal and regulatory framework around public health delivery infrastructure.
• Still not enough availability of generic drugs through the public system.

Suitable Model for India

Globally, there are two models of achieving UHC objective and these models vary from country to country. First is tax-financed model, while second is insurance model. Some countries deliver care through salaried public providers; others have adopted capitation as the preferred model for payment for out-patient care, and fee-for-service for in-patient care. For example, while in Canada, UHC is financed through Federal and Provincial tax revenue, in Germany, there is a sickness fund. In New Zealand, the National Health Service is publicly financed through general tax revenue.

Which model is more suitable for India – has been a subject of debate. Various committees (including Planning Commission’s High Level Expert Group) had recommended for a tax funded and cashless at delivery model of UHC.  The reason is that the health insurance schemes may exclude the majority of people and leave the poor behind. Such schemes also prioritize advantaged groups in the formal sector and drive up inequality. Thus, instead of collecting contributions from people who are too poor to pay, the countries making most progress towards UHC have prioritized spending on health from general taxation – either on its own or pooled with formal sector payroll taxes and international aid.

Apart from these two, there was a suggestion of a “Managed Care” Model also. In a managed care system, large networks (in the Indian situation these are mostly controlled by corporate hospitals) would be invited to compete for public funds and provide different sets of services. Patients will need to buy these services, which would be provided in separate packages, thereby fragmenting the health system and compromising quality and continuity of health care.  The foremost example of managed care today is the United States, which has among the highest per capita expenditures on health, yet the worst health indicators among Organisation for Economic Co-operation and Development (OECD) countries. Naturally, for India, such a model can be problematic.

Current Status

The problem with India’s UHC plan is that it is looming between “sound economics” and “social good”. UHC project, which was declared a priority for the 12th Plan period (2012-17), has been shelved due to fiscal constraints during the NDA Government.