Towards Universal Health Coverage

December 16, 2014

Onno Ruhl, World Bank India Country Director and Somil Nagpal, Senior Health Specialist Mint

Scaling up public health investments alone will not suffice. It will be equally critical to improve accountability

On Friday, 12 December, for the first time the world celebrated universal health coverage day. On this day two years ago, the United Nations unanimously endorsed a resolution urging governments to ensure that all people can access healthcare without financial hardship.

Until now, most people in India have dug deep into their pockets to pay doctors, pharmacies and diagnostic centres. Paying in this manner—or out-of-pocket spending, as it is called—has been the norm for a long time in India but this is not how most of the world pays for healthcare. In most other countries, including some less developed ones, out-of-pocket spending is far less common than we think. It is far more likely that people pay their medical expenses in some organized manner, such as through tax-financed healthcare or some form of health insurance.

The high share of out-of-pocket spending incurred by Indian households makes them more vulnerable to impoverishment, and every year millions are pushed below the poverty line by catastrophic medical expenses alone.

This first-ever universal health coverage day comes at an opportune time for India. The country has joined the growing number of nations that have placed universal health coverage firmly on their agenda.

Indian policymakers are now deliberating on expanding health coverage in a big way so that all segments of the population are covered for their health needs. The economic case for universal health coverage is strong. Recent studies show reduced mortality alone has increased the productivity of low and middle income countries, contributing as much as 11% to their economic growth.

The much-awaited national health assurance mission (NHAM) is a welcome effort in this direction. Till now, this sector has not only been plagued by low levels of public financing, but the effectiveness of the money spent on healthcare by both the public and private sectors has been low. To add to that, there are accountability challenges in public health systems, and out-of-pocket health expenses continue to pose a huge and unnecessary burden on the people. The success of NHAM will depend on critical reforms in the health sector.

Now, both central and state governments are willing to raise their levels of health spending. They have also introduced a number of initiatives to improve health services, particularly for the poor and vulnerable.

Government health spending is estimated to have risen to 30% of the country’s total health expenditure—up from about 20% in 2005—while out-of-pocket payments have fallen to about 59%, dropping from 69% a decade ago.

But while these initiatives are a promising start, the government’s current share of health spending is still not commensurate with India’s level of socioeconomic development. In fact, the average for other lower middle income countries is over 38% of total health expenditure, while in China government spending accounts for 56%. It must also be remembered that while scaling up public health investments is important, this alone will not suffice. It will be equally critical to improve accountability, focus on results, ensure value for money, and renew the focus on reaching out to the most vulnerable segments of the population.

Uniquely, India’s recent strides towards universal health coverage have followed a bottom-up approach, starting with coverage of the rural population and the poorest groups, and rapidly scaling up to larger segments of the population.

Two prominent national programmes have been at the forefront in this regard: the national rural health mission (NRHM)—now rechristened the national health mission and being further expanded in urban areas—and the Rashtriya Swasthya Bima Yojana (RSBY). In addition, several state programmes have sought to expand access to surgical care for poor and vulnerable groups.

In Karnataka, for instance, the Vajpayee Arogyashree Scheme, a state government programme supported by the World Bank, provides free hospitalization coverage to households below the poverty line for high-impact medical conditions such as cancer and heart disease. The programme pays for hospital care and treatments that the poor would have difficulty receiving without the help of the scheme. A recent evaluation published in the British Medical Journal found that the programme has lowered both mortality rates and out-of-pocket expenses for the people who received this cover.

These programmes have generated several insights that can help guide the proposed NHAM in scaling up health cover, so that people across the country receive a seamless continuum of care that encompasses primary, secondary, as well as tertiary health services.

At the same time, the central and state regulatory and implementing agencies will need to develop new skills to ensure that patients remain safe and receive quality healthcare from both public and private providers. Designing and implementing India’s ambitious effort towards universal health coverage will certainly not be easy but it is necessary. There is much to learn from what has worked—and what has not—within the country and elsewhere, which should make the task more manageable.

The world is willing to help; India’s journey towards this ambitious goal will not be alone.