India’s middle class is the backbone of our society but unfortunately, their healthcare needs have never been addressed adequately.
Our ability to deliver quality healthcare at a fraction of the cost of the West and other developed Asian countries, has made us one of the most attractive healthcare destinations in the world. However, it is important to note that healthcare is still expensive by Indian standards. A prolonged illness or a sudden trip to the ICU can plunge even a relatively well-to-do family into debt. Which is why it is important for us to move towards health insurance for everyone.
India can broadly be classed into four sections based on wealth and healthcare coverage:
The uber-rich who can afford healthcare anywhere in the world:
Those employed in the formal sector or by the government and are covered by private employer insurance schemes and government schemes like CGHS;
The poor who rely on government assistance like Ayushman Bharat:
And finally, the 'Missing Middle’ - this group is a part of the middle class. They are either self-employed or work for the unorganised sector and have nowhere to go in case of a healthcare crisis. Over 60% of our population pay out of pocket for healthcare and this has driven millions into poverty.
Who makes up the Indian middle class? The size of the Indian middle class is estimated to be anywhere between 78 million and 604 million. The government is looking to cover the lower middle class under the extended Ayushman Bharat scheme. This still leaves a large percentage of people unprotected.
Based on the definitions by economists Sandhya Krishnan and Neeraj Hatekar, the monthly family income of middle class works out to Rs 45,000-80,000 for a family of four. These families have disposable incomes and typically have a vehicle per family. They are already familiar with the concept of insurance, so educating them on the importance of health insurance is relatively easy. If you’ve accepted that vehicular insurance is mandatory, it is easy to understand why health insurance should be mandatory as well. How do we do this?
Look at other countries with successful models. Thailand has a form of social security for private employees while the rest are covered by government resources and a small co-pay from the individual. The patients are mostly treated in government hospitals with a few private hospitals participating in these schemes. The UK’s NHS provides free healthcare; `Medicare and Medicaid’ in the US cover the healthcare needs of many of their citizens.
Unfortunately, we cannot simply emulate the USA’s Medicare, or the UK’s NHS because India does not have a large enough tax base to fund everyone’s healthcare. Our middle class will need to pay a small premium to insure themselves and their families. Our government hospitals need to address the severe shortage of trained personnel and they require a lot of upgradation (in capacity and quality) before they can take on a larger caseload. Till this is accomplished, India would do best with a public-private partnership.
With this public-private partnership involving insurance companies, the government and the private sector can provide quality healthcare to the middle class at an affordable cost by playing on each one’s strengths. The retail cost of a Rs 5 lakh health insurance policy for a family of four is currently around Rs 10,000-15,000 per year.
This works out to be around Rs 1,000 a month which can be lowered, by taking the steps outlined below:
The bills can be reduced by 30-50% if everyone buys insurance. Insurance premiums for a group are determined by combining the healthcare costs of all the people in the pool. We can significantly reduce the risk (and by extension the premium) by adding more healthy (young) people to the pool. Larger numbers will reduce premiums because of the economy of scale. A small co-payment model would disincentivise availing of unnecessary healthcare services.
The government should work with the private sector to build functional hospitals and convince people to come to them for treatment. These do not need to be five-star hospitals with deluxe suites. We should also focus on building and strengthening the primary care centres, setting up secondary care centres and a few designated tertiary care centres.
Tertiary care
Tertiary care centres are expensive and should not be everyone’s first option and patients should be screened before they are referred to a tertiary care centre because most illnesses don’t require specialised equipment and super-specialists.
Preventive care and creation of wellness is far more cost-effective than treating illness. Which is why the government should work with experts to strengthen public health, primary, preventive care to include cancer screening, non-communicable diseases-screening and early appropriate treatment. This will significantly reduce the cost of healthcare.
Forcing the private sector to provide treatment at capped prices is not a long-term solution. Doctors, medical students, nurses and technicians work incredibly long hours under immense pressure and they deserve fair compensation. It takes 12 years of medical schooling to become a heart surgeon or a neurosurgeon. Many accredited seats are already going vacant in these tough and essential specialisations. We cannot afford to short-change them.
Purely from a doctor’s perspective, national health ID is a Godsend. An accurate and complete patient history will allow us to treat patients appropriately, free up medical manpower and most importantly, reduce medical errors and costs.
However, privacy concerns need to be addressed. As Covid-19 has so painfully shown us, anyone can get sick and require hospitalisation. In the light of this indisputable fact, it is unconscionable for us to expect people to continue on as they have been. We have to do something and we have to do it now.
India is only as strong as her healthcare system is. It is high time we recognise this. Let us get to work on achieving this as soon as possible.
(The writer is a consultant kidney transplant physician, nephrologist and chairman of a private hospital chain)