Where is that health insurance?

Introduction

The healthcare service industry has seen tremendous growth, with privatization and accessibility through the number of government-aided services gaining priority. According to a recent estimate, the size of the Indian healthcare industry is expected to touch $160 billion by 2017 (India Brand Equity Foundation). Considering this scenario at-large, it is simple to assume that people are spending more on their treatments, and are potentially more aware of such service providers.

However, the out of pocket expenditure for health services is proportionately high (46.1% of private expenditure on health in India: WHO). Add to it the rise in the healthcare costs, which is a combined burden of today’s lifestyle diseases. Even new diseases and health risks continue to threaten people. Only recently, as per the media reports, cancer has been announced as the second most life-threatening disease in India, after cardiovascular ailments. The NSSO survey from Jan-June, 2015 reports that the highest expenditure was recorded Cancer (Rs56712) followed by cardiovascular diseases (Rs 31647). It has also been observed, on an average, a much higher amount was spent for treatment per hospitalized case by people in the private (Rs 25850) than in the public (Rs 6120). The NSSO survey is based on quintile system for UMPCE in the rural and the urban sector.

Health insurance penetration

So, what is it that despite the rise in medical expenditure (due to more spending in the private hospitals/doctors), there continues to be an abysmal penetration of health insurance. While we do understand the lack of trust or deficiency of government healthcare infrastructure can trigger the need to spend more for your health; but, what stops the majority of the population to cover their health expense under a government insurance scheme, or a privation service option.

Consider the fact that the average amount spent for treatment per hospitalized case, if treated in a private hospital, is around 4 times of that treated in the public hospital. The Medical Dialogues team has earlier reported the findings of the NSSO survey that clearly point out in case of hospitalization private sector leads the public sector. In the rural area, 42% hospitalization took place in public hospital, and 58% in private hospital (https://medicaldialogues.in/nsso-report-card-private-sector-dominates-indian-healthcare/).

Add to it the case of increase in expenditure in private hospitals associated with better standards of living. The average medical expense by the upper quintile class in urban area is 42,675, and in the 5^th quintile of rural sector is 21,293. Contrast it directly with the fact, that as high as 86% of rural population, and 82% of urban population is not covered under any kind of health expenditure support. Government, however, was able to bring 12% urban and 13% rural population under health protection coverage through Rashtriya Awasthya Bima Yojna, or similar plan. Only 12% households of 5^th quintile class of urban area have some arrangement of medical insurance from private provider.

Conclusion

Given the current circumstances, the reason for lack of luster in health insurance (by the urban and the rural alike), can be attributed mainly to the term coined ‘mediclaim’. The initial and the only concept of health insurance was in-patient expenditure (only and only if you are hospitalized) will lead to recovery of expenses under the scheme. The expense which you incur in consulting a physician, for purchasing your medicines, or for your diagnosis, was not under the purview of the insurance inspectors. As a result, few were spending that extra buck of their income on covering a health risk. Even though the expenditure graph of healthcare has been on a steady rise, the corresponding penetration of health insurance is not even near to developed nations like the US and Australia. A later review of the system, led to covering the out-patient expenditure incurred by a patient. However, the high premium cost attached to the scheme, didn’t find many takers.

With recent initiatives to propagate insurance under the Prime Minister Yojna, there is a ray of hope for insurance sector to finally make a deeper mark. Hopefully......