April 3, 2018 Yes Institute

Health insurance for poor will bolster economy

Author: Rana Kapoor, MD & CEO, YES Bank & Chairman, YES Global Institute

Note: This article first appeared in www.thehindubusinessline.com on 28 February 2018.

India improved its ‘Ease of Doing Business’ ranking from 142 to 100 in three years, driven by a laser-focussed strategy and relentless efforts of the Government. On most economic indicators (GDP growth, per capita income and formalisation of the economy), India has consistently shown high growth over the past 3-4 years. Budget 2018 has embarked on continuing the momentum in the social sectors, quintessential to raising living standards of the populace and actualise GDP gains for tangible benefits on the lives of common people.

The Government announced the National Health Protection Scheme to cover over 10 crore households or 50 crore beneficiaries, providing coverage up to 5 lakh per family per year for secondary and tertiary care hospitalisation. This single step has the potential to transform the entire healthcare landscape of India.

First, this will significantly reduce the Out-of-Pocket (OOP) expenditure, which currently stands at 62 per cent; consequently serving as a lifeline to a large number of people.

Second, it will unleash latent demand for healthcare services as the poor would now have access quality healthcare services.

Next, the scheme will pave the way for universal health coverage over the medium term. Depending on the success and speed of execution of the proposed scheme, the goal of 100 per cent coverage can be envisaged by extending the scope of the current scheme, which covers 40 per cent of the population, in a defined time-frame.

Finally, this will give a huge indirect boost to the healthcare sector with hospitals, medical device manufacturers, health insurance companies and allied healthcare businesses expected to benefit from the spike in the overall demand for healthcare. It will also result in large number of employment opportunities considering that healthcare is the fifth largest employer among all sectors.

Extension of health insurance to the bottom of the pyramid will energise the entire ecosystem towards the targeted objectives of providing every Indian with accessible, affordable and quality healthcare.

Together with insurance-led financing of secondary and tertiary care, Budget 2018 has also enhanced focus on primary and preventive care by widening the network of sub-centres and primary healthcare centres and including non-communicable diseases in the overall strategy of care.

Budget 2108 has also sought to boost other healthcare aspects such as healthcare infrastructure including medical education and health technology.

The programmes that will be led by NITI Aayog and Department of Science & Technology will promote open innovation and catalyse growth research and development and adoptions of technologies in public health, improving outcomes in public infrastructures.

Last year, the UNDP HDI Index ranked India 131 among 188 countries. With several measures in healthcare and social security announced in Budget 2018, we can now hope to achieve similar gains in the HDI index, provided, we are able to find necessary financial resources to plug the huge gap in social spending.