What is the issue?

• Providing the poor with health insurance not only can improve the health of individuals, but it has much bigger potential positive spillovers

• Against this backdrop, the sustainability of Ayushman Bharat—National Health Protection Mission (AB-NHPM), is questionable.

What is the status of health expenditure in India?

•  According to the World Bank, health expenditure as a percentage of GDP in India was 3.8% in 2015.

• This was 16.8% for the US and 9.9% for the world as a whole.

• 15% of the Indian population is insured, and 94% of the health expenditure is paid by individuals out of pocket.

• Hence, health shocks have the potential to drive individuals and families into perennial debt traps.

How AB-NHPM addresses the issues?

• The AB-NHPM is to provide coverage of ? 5 lakh per family, targeting more than 100 million families belonging to the poor and vulnerable sections of the population, aiming to cover 40% of the entire population.

• The AB-NHPM will also provide primary care assistance by upgrading the government health centres.

• There are also plans of digitisation of the entire process. The government also.

What are the concerns with the scheme?

Sustainability

• The government has claimed that it would be able to finance it through the savings generated from DBT that amounts to ? 90,000 crore.

• However, this money has already been taken into account in fiscal calculations.

Rich poor gap

• Since states have to bear 40% of the costs, this would be a problem particularly for poorer states with a large population of people BPL.

Structural issue

•  About 80% of doctors and 75% of dispensaries are serving urban India, which makes up only 28% of the country’s population, leaving the rest in dire need of basic health facilities.

• There are only 0.9 hospital beds per 1,000 population & 0.6 doctors per 1,000 population while the figure was around 6.5 & 3 for developed countries respectively.

• As per the World Bank, even in 2015, 15% of the children did not have access to basic vaccines.

Privitisation of health sector:

• Lack of government health services would result in dependence on the private sector.

• It is well known that in regions where the public health sector is well developed like Tamil Nadu, the cost of the private health facilities is lower.

• In contrast, in the northern states, the costs in private hospitals can really skyrocket.

Lack of monitoring

• Also, there are no credible monitoring agencies watching out for medical malpractice in such hospitals. • If malpractice is not kept in check, it is very easy to exhaust the entire insurance amount in one go.

• At the same time, monitoring of doctors in public hospitals is also required.

• Given the fact that the health insurance covers private facilities, this might be an encouragement for government doctors to go in for private practice.

• Since people know that they have access to expensive private hospitals, they might also choose to use their services for even minor ailments.

• It might also encourage people to save less and indulge in more risky expenditure like on cigarettes and tobacco.

What should be done?

• Hence, one can say that the AB-NHPM has a lot of potential, but it might turn into a nightmare if not carefully implemented.

• These issues need to be kept in mind by the policymakers.

• We also need better data so that the various dimensions can be analysed.