I often hear that in India poor people are being pushed deeper into poverty when they have to pay out of their own pockets for healthcare, especially when they avail of private healthcare.
We also often hear about the “high cost of healthcare” in the private sector in India which services 70% of India’s healthcare needs.
What are the solutions we hear being proposed by almost every stakeholder?
- Universal Medical Insurance
- Increased Government spending on Healthcare
Let me try to explain why these are definitely not the best things that could happen to Indian healthcare @drspmathew.com
Whats wrong with Universal Medical Insurance [UMI]?
If there is one thing we know for sure from the experience of other countries, it is this: Universal Medical Insurance ensures in the long run that no middle class or poor person will be able to afford medical care without Medical Insurance. In a sense, UMI does everything to ensure its own survival!
Why does that happen? There are several factors:
Behavioral changes:
When people do not have to pay for their own healthcare: Have you thought through the way people approach their own health when they know they are covered by Medical Insurance and they believe they need not worry about taking care of their own health, especially in terms of the non communicable diseases NCD’s which are the leading causes of death? worldwide? http://www.who.int/mediacentre/factsheets/fs310/en/index3.html
When people have medical insurance and do not have to spend for their own healthcare, it encourages a very casual approach to their own health, which is fueled by the media hype about how medical technology is able to treat every known disease on earth. So, the common attitude is, I have insurance, so no problem. If I fall sick, I am covered by insurance, and medical technology will make me alright. Wrong thinking, friend!
The incidence of NCD’s have skyrocketed in all developed countries and increasing even in the developing countries. There are multiple reasons for this rise but behavioral or lifestyle disorders are so called for a reason: Bad behavior causes bad health, and the false sense of security that insured persons have is a major cause for this behavior according to me.
As a result of this increasing burden of NCD’s, Insurance companies keep increasing the premiums, and the overall burden on healthcare increases dramatically.
Where do you think Insurance companies get the money to pay your Medical bills?
[Read more on The Relation between Universal Health Insurance and Cost Control http://www.nejm.org/doi/full/10.1056/NEJM199503163321111 ]
Disruption of Free Market economics:
Mediclaim and other forms of Medical Insurance try to dictate pricing based not on actual costing studies but on a collective bargaining with providers. Paradoxically this has been shown to raise healthcare costs and lower healthcare quality, rather than bring them down as one would have hoped.
On the other hand, when people do not have medical insurance and must spend on healthcare out of their own pockets, they take all steps possible to avoid getting sick in the first place. They also behave more responsibly to take care of their own health and are very cost conscious.
This cost consciousness enables enabling free market economy forces in the private healthcare sector to keep costs low without unnecessary bureaucratic intervention. This is what has been happening till now in India to a large extent.
Whats wrong with Increased Government spending on Healthcare?
What really happens when the Government tries to step in to provide Healthcare?
The US spends 17% of its GDP on Healthcare. India barely 4%. Per capita annual Healthcare spending in the US is 8600 US Dollars which equals 551195.50 Indian Rupees, while in India and other such countries, annual average healthcare spending is 88 US Dollars which equals 5641.23 Indian Rupees.
In the real world, healthcare costs skyrocket when the Government and Medical Insurance companies step in. All that they are concerned about is their own survival.
When left to the economies of the free market as with any other industry or business, the price of healthcare will remain reasonable, access and quality will be determined by market forces, and there will be no opportunity for corrupt Governmental agencies to dictate their own often selfish agendas. I am not denying that there are several good people in the Government who sincerely believe that they are trying to do good, but the vast majority do not understand the realities and complexities of the healthcare system.
The Government, instead of wasting tax payers money in areas which are not its core competencies, should rather focus on providing basic things needed for health, starting with good infrastructure and a lot more! In these areas the Indian Government can do well to learn from the developed world!
Poverty and sickness:
But why do poor people in India find healthcare expensive?
Poverty is a big problem everywhere but more so in India. Is the healthcare industry responsible for poverty? A better question would be to ask, why are these people poor? And why are they falling sick?
Many poor people in India fall sick and die, because the environment and infrastructure essential for good health were not adequately provided for by the government and other agencies responsible for the same.
The Government also did not provide a conducive environment for businesses to function transparently and efficiently, resulting in corruption and low wages for the workers. Of course there are diverse reasons for low wages, each of which is equally responsible for the poor person not being able to pay for healthcare.
The result: Poor people living in unhygienic conditions, getting underpaid for whatever work they do.
And when they fall sick, where do they go? Government healthcare, if available, is crowded and not free either. They lose days waiting in line, losing what little income they earned. So what alternative do they have? Private healthcare, that is fast, efficient, and much cheaper than any healthcare anywhere in the world. Why? Because when the pricing of healthcare is left to market forces, competition keeps costs low as in any business in the free market economy.
Warped Economics:
If this poor person cannot afford the fees at a private healthcare setup, something is drastically wrong in the economics. The poor person is not being paid adequately or unable to save enough.
So, who is really to blame for the poor sick man being pushed into poverty due to sickness? Who is responsible for him falling sick in the first place?
Is it not the Government, which has not provided him basic needs for good health like clean air, pure drinking water and good sanitation? Which has not ensured that he gets adequate opportunities to earn his reasonable livelihood?
Every person in India has a right to claim that the taxes he pays are adequately utilized, not to line the pockets of corrupt politicians through short sighted mega projects in ‘Government healthcare’, but to ensure a life of dignity to the poorest, with the basic needs for good health provided to every citizen of the land.
The WHO definition of Health is “a state of complete physical, mental, and social well-being and not merely the absence of disease or infirmity.”
The Government can do much more for the health of India if it focusses on what it is paid to do, govern impartially and without corruption, rather than try to enter into Healthcare and muddle it up. In that way it would be doing a great favor to the health of its citizens.
The Government can mess up Healthcare even if it is relatively non-corrupt like in the developed nations. So one can only guess what is going to happen to Healthcare in India once the Government tries to do anything.
Private Healthcare Providers and the responsible Free Market:
I must salute the private healthcare provider, who despite the odds, is providing a reasonable level of service to large segments of society at a fraction of the cost worldwide. No doubt there are black sheep here also but the model is one that has a hope for a better future, bringing about Shalom Healing to people.
Let us stop blaming those who are trying to do good, and focus on the real culprits. The people get the Government they deserve, an old saying goes.
I hope I have made myself clear. Neither increased Governmental spending on healthcare nor Universal Medical Insurance is the answer dear friend.
Instead, if it really cares for the health of its people, let our Government take serious steps to improve the basic essentials for good health. Let it restore and improve the quality of our air, water, food and soil.
Let the Government eradicate corruption and red tape within itself, help honest businesses to establish and grow, thus providing people with a reasonable standard of living. This will help to not only improve the health of our nation, but to transform India into a world class nation. Hope better sense prevails in our country. Please pass this on to those who care. Jai Hind!
Love, power and a sound mind 
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