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Modicare : The Mission Impossible, or is it ?

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Modicare : The Mission Impossible, or is it ?
By Varun Gera,
CEO & Founder, HealthAssure

This year’s Union Budget certainly gave the healthcare industry players something to talk about, when it announced the National Health Protection Scheme (NHPS), the biggest and probably, the most ambitious global plan to provide quality health cover to a population larger than the combined citizenry of the US, France, Germany and the UK.

For the first time, there has been a budget that was defined by its focus on healthcare. The National Health Protection Scheme should ultimately set the groundwork for Universal Health coverage, which is a very welcome move, given the need to focus on the poor health statistics for a majority of the population. The scheme is expected to reach 50% beneficiaries in the first year based on the states’ acceptance.

Universal healthcare has been on the government’s to-do list for quite some time. When the Modi government came into power in 2014, it made clear its intent to focus on the national health assurance mission that included universal healthcare and comprehensive health insurance for the country’s poor. Universal health assurance is critical in a country like India where 75% of the healthcare expenses are borne by the people.

However, no matter how ambitious the current NHPS program is, it remains to be seen if the mission can be realistic for a country like India. This project hopes to address the flailing state of public healthcare in India. The country’s health-related out-of-pocket expenditure, which pushes families into indebtedness and deeper poverty, is currently among the world’s highest. According to a report by Brookings, the cost of outpatient treatment, which the poor prefer over hospitalisation, forms 65.3% of out-of-pocket expenditure in India.

Decoding Modicare

Though the government’s new health scheme was one of the major takeaways of this year’s budget, there is still a lot of ambiguity around how they plan to set the ball rolling. There needs to be more information on the outlay projected and if it would involve private insurance participation. Typically, implementation of any health policy at such a large scale takes time and in this case, we need to understand and set the milestones for the same. The government has initiated to set up 1.5 lakh health and wellness centres, which is a colossal responsibility, especially if the outlay is of only INR 1200 crores. To achieve such targets, public-private partnership model needs to come together to ensure that the funding stays available and the work is carried out seamlessly.

Setting the right measures for success

The first and most important aspect of executing such a large scale program is the funding. The Centre has earmarked INR 6,000-7,000 crore, while state governments may have to spend INR 4,000-5,000 crore under the programme. The government has allocated only INR 2,000 crore for the next year from the time the scheme starts, to cover the first few months of the plan’s rollout before the next Budget. It is expected to require INR 10,000-12,000 crores annually as it scales up. What this means is that the government has to match up with a strong regulatory framework to avoid misutilization of funds, and clear financial outlays and implementation plans for the announced schemes. Resource prioritization will be the key to effectively utilise the available budgets for primary healthcare.

The second aspect that will decide the success of the NHP scheme is of the actual implementation. The Health & Welfare Ministry as well as the Niti Aayog has reiterated that this scheme shall not stall due to financial constraints. It, is however, important to note that for the scheme to be rolled out effectively, state participation is a must. As health is a state subject, states have to decide whether to be part of this initiative or not. As of now, only 14 states have implemented the existing Rashtriya Swasthya Bima Yojana (RSBY), while other states run their own health insurance schemes. Similarly, it is up to them whether they want their current schemes to be subsumed with the NHPS or act individually. And for this very reason, the government cannot ensure 100% enrolment.

The Opportunity

The silver line, however, lies in the possibilities. The NHPS, if done right, will help people in the lower strata of the society reduce out-of-pocket expenditures and eradicate health payment-induced poverty. This move also opens myriad opportunities for the insurance industry, as there is scope of expanding health insurance drastically in a country such as ours. This expected expansion of healthcare will result in significant growth prospects in the short to medium term, especially for the large healthcare insurers. Moreover, it will aid capital adequacy and create possibly the largest non-life insurer.

A government-sponsored health programme will surely be a game changer and will come as a major boost for the private hospital sector in the country. The focus, in my opinion, needs to be more on Tier 2 & Tier 3 cities, as that is where there is a dearth of private hospitals & specialized care. Moreover, the scheme seems to have omitted OPD care altogether, and with procedures such as MRI’s and CT Scans costing thousands and even generic medicines seeming out of reach for the poor; this can be detrimental to the overall vision of affordable health for the poor. The most challenging task for the Niti Aayog would be to formulate a simple flow that is acceptable and functional for the needy. Implementation, continuity, and sustainability are crucial, and Modicare is yet to introduce the mechanism through which it will be linking the poor population with the healthcare scheme.



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