The Indian government has introduced an ambitious new healthcare plan that aims to cover the medical care for 500,000 people in the country. The government has called it the world’s “largest” public healthcare scheme.
Will this truly revolutionize public healthcare which has often been criticized?
India’s constitution guarantees free healthcare for all its citizens. However, it does not have a National health insurance or universal health care. Thus, the private sector has become the main healthcare provider in the country. This has proven to be detrimental for the poor in the nation who can’t afford good healthcare options. Most healthcare expenses are paid out of pocket by patients and their families, rather than through insurance. In fact, recent world health statistics have indicated that India has the highest out of pocket private healthcare costs for families, among many other comparable developing nations including Pakistan, Sri Lanka, and Mexico. The healthcare sector in India is likely to be worth $280 billion by 2020. Penetration of health insurance in India is low by international standards. India presently spends a little over 1% of its GDP on public healthcare, one of the lowest in the world.
To gauge a better understanding of the healthcare problems in India consider these statistics. Between January and June 2014 only 243 people out of 1,000 sought medical treatment within the public healthcare system of India, whereas 756 people out of 1,000 opted to visit a private doctor or private hospital. Public healthcare has been criticized for manpower shortages and inadequate supply of critical drugs and blood.
On February 1st 2018, Finance Minister Arun Jaitley presented India’s budget for the year 2018/2019. The focus of the budget this year was primarily agriculture, infrastructure and healthcare. The government has stated that it hopes to double farmer incomes by 2022 – the 75th year of India’s independence. In addition, it has also unveiled an ambitious new healthcare programme that aims to provide healthcare for around 500 million poor.
The healthcare programme or “Modicare” as it has been dubbed, will reportedly be the world’s largest state funded healthcare programme. It will cover hospital expenses up to Rs 5 lakh a year per family. The government will also establish 1.5 lakh Health and Wellness Centres centres under the Ayushman Bharat program. "We are all aware that lakhs of families in our country have to borrow or sell assets to receive indoor treatment in hospitals. Government is seriously concerned about such impoverishment of poor and vulnerable families," noted Finance Minister Arun Jaitley. He added, “This will be the world's largest government-funded healthcare programme. The government is steadily but surely progressing towards a goal of universal health coverage."
The government announced a federal allocation of 20 billion rupees for the scheme in 2018-19, but officials say more funds would be made available as the programme is rolled out over the year. However, it has been estimated that it may cost the government much more than it has been projected. Reuters has cited sources familiar with the matter has noted that the government’s plan “to provide health insurance for about half the country’s population would require an estimated 110 billion rupees ($1.7 billion) in federal and state funding each year.”
Members of the administration meanwhile have promised that the programme will ultimately be successful. "I don't know if 'Obamacare' was successful or not, but people will one day say 'Modicare' has been successful," said Jaitley.
Our assessment is that providing healthcare to the underprivileged is a laudable effort by the government. However, there are certain caveats inherent in the plan. The money needed for the initiative could be considerably more than it has been projected and it is unclear how the government will be able to fund it. Where will the money come from?
Read more: Healthcare in India