Affordable Health Care For the Poor

August 29, 2008
Shantanu Dutta

The other day there was a commotion in the office. An electrician having lunch suddenly collapsed and fell unconscious. He was rushed to a near by hospital where tests revealed that he had brain hemorrhage as well as blocks in his arteries. That hospital didn’t have the expertise to deal with this and after putting him on a ventilator rushed him to another hospital which had neuro surgeons and cardiac surgeons on staff.

Meanwhile, the office scrambled to arrange money for the lowly paid electrician which could be given to his family as a loan for this treatment. And the staff scrambled to take an offering which could be given to his family as a gift.

Another person's liver has failed and needs a transplant. His wife came forward to donate but the cost of the treatment is forbidden. He was forced to sell his house to pay a deposit to the hospital.

A third case I remember is that of a man in an Uttar Pradesh village, dismantling his house – literally brick by brick, so that he could then sell the bricks and settle his relatively modest hospital dues.

To put things in perspective, we need to know that “the poor have to increasingly resort to taking debt or selling assets to meet costs of hospital care. It is estimated that 20 million people each year fall below the poverty line because of indebtedness due to health care. This is worrisome given the fact that more than two-thirds of the country’s population is already either poor or living at subsistence levels.”

With the government virtually fading out of the health care sector under the guise of promoting public-private partnerships, finding alternate options has become imperative. With health insurance seemingly the only viable option to meet health costs in the future, it seems important that the penetration of health insurance be increased. And several variations be explored, including micro insurance.

This is never going to be easy in the unorganized sector. For instance, how do you provide health care to handloom weavers, who are among the poorest segments in this sector? There are 6.5 million of them scattered across the country and are not always fixed in their occupation or location. There is a scheme in operation for them, operated by the Union Textiles ministry. But progress in enrolling members is slow. And there are many more segments of the population that are far more unorganized than textile workers.

If the product is properly customized and the premium subsidized, the government will discover a huge market for health insurance. Currently the penetration of health insurance is estimated be 0.02 % or less of GDP.

Like any other nascent industry in the country, the insurance industry is having to cope with its teething troubles. One of the main ones being the inadequate regulatory norms within the industry. The unethical norms in hospitals which routinely over charge insured patients and the inability of  the insurance companies to ensure rationalization of tariffs and fees charged by the hospitals are issues not yet resolved.

The variation in hospital bills and the variations in tariff between the metros and non metros are astounding and this disconnect raises the insurance premiums which are then recovered from the customer. In a nascent industry, this will further act as a disincentive to newly entering customers. 

Shantanu Dutta is a medical doctor by training and a development professional by vocation. His writings mostly deal with change, complexity and conversion and tries to look at a changing world through heaven's eyes.
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September 25, 2008
04:27 PM

I sincerely hope that India continues to provide free health care via government hospitals and improve care in those. Also the government needs to put a cap on the number of "nursing homes. clinics and hospitals" operating in any given area- there needs to be a fair distribution of medical facilities across the nation to offer medical services to all its citizens.
I have seen the total disaster that managed health care is , here in America. It is plain business and no care. I hope we stop this ridiculous health insurance business right away.

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