Universal Health Coverage and Role of Health Insurance

A CASE STUDY FROM INDIA

Universal health coverage (UHC)

Described by the Director-General of the World Health Organization (WHO), Margaret Chan, as ‘the most powerful concept that public health has to offer’, Universal health coverage (UHC) has risen to the top of the global health agenda. At its core, UHC is about the right to health.

UHC means that all people get the treatment they need without fear of falling intopoverty.

Universal health coverage (UHC) has the potential to transform the lives of millions of people by bringing life-saving health care to those who need it most.

This requires a strong, efficient, well-run health system which is robust and responsive.

Three Dimensions to consider - UHC

Health Financing & UHC goals

Service Delivery

Revenue Raising

Pooling

PurchasingBe

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Health Financing within the overall health system

Quality

Financial protection and equity in finance

Utilization relative to

need

Transparency accountability

Efficiency

Equity in Resource

Distribution

UHC Intermediate Objectives Final Coverage Goals

Creating Resources

Revenue Raising Objectives

Service Delivery

Revenue Raising

Pooling

Purchasing

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Creating Resources

Guiding Objectives for

Revenue Raising Policy

Raise adequate revenues in order to make progress

for UHC

Move towards a predominant

reliance on public source

Equity in Finance. Make sure the

financial burden is shared fairly across

society

Ensure stable and predictable flow of funds to

health sector

EarmarkingEarmarking funds for the health sector iS an effort to increase and stabilize levels of public funding, although the evidence is mixed about its effectiveness due to, offset by reduced discretionary allocations during the budget process.

Analysis has shown that what is most important to increase public funding for health, is that it is a political priority for the government, rather than measures such as earmarking.

Pooling

Service Delivery

Revenue Raising

Pooling

Purchasing

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Creating Resources

Purchasing

Health systems need to increasingly purchase health services in a strategic way, for progress to be made towards UHC.

This means allocating and spending funds based on information about provider performance, as well as the health needs of the population they serve.

Service Delivery

Revenue Raising

Pooling

Purchasing

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Creating Resources

Purchaser Provider Split The primary motivation for introducing PPS is the concern that strategic purchasing is very difficult to do when the same organization pays for and delivers health services.

This is the case in many countries where the Ministry of Health plays both roles.

Efficiency and quality improvements in service delivery can be made by separating the two functions and having an agency dedicated to purchasing services.

Financial Protection ?

Trends in Out of Pocket Spending on Health in India, 1987-2004 Source: Mahal A et al. ;2011

Expenditure Category/YearUrban Population Rural Population

Poorest 20% Richest 20% Poorest 20% Richest 20%Outpatient Expenditure/visit (INR) 1987 58 110 60 961996 126 252 121 2272004 231 482 213 338

Inpatient Expenditure/ visit (INR) 1987 801 1781 653 10591996 864 8182 1052 53052004 4705 16910 4071 8375Per Capita Expenditure(INR) 1987 1000 4532 760 14971996 2848 12624 2093 67442004 4967 24676 2997 10926

How much spending is "adequate"

Further analysis in 2015 updated these estimates to $86 per capita, stressing more clearly than previous estimates that this is the amount which governments need to spend.

The analysis also noted that countries would find it difficult to get close to universal health coverage, if public spending on health is less than 4-5% of GDP.

How much do countries rely on public revenue sources?

Catastrophic and Impoverishing payments

Catastrophic payments are greater than a given proportion of total household expenditure (or income); Impoverishing payments are when a household is pushed below, or further below, the poverty line.

Poverty Estimates – Planning commission India 2013

For 2011-12, for rural areas the national poverty line using the Tendulkar methodology isestimated at Rs. 816 per capita per month and Rs. 1,000 per capita per month in urban areas.Thus, for a family of five, the all India poverty line in terms of consumption expenditure wouldamount to about Rs. 4,080 per month in rural areas and Rs. 5,000 per month in urban areas.These poverty lines would vary from State to State because of inter-state price differentials.

Or is it ?

The National Rural Health Mission (NRHM) launched by the Government of India in 2005 seeks to provide accessible, affordable and quality health care to the rural population, especially the most vulnerable.

Despite significant progress especially since the launch of NRHM, challenges remain:

The availability of health care services provided by the public and private sectors taken together is inadequate;

The quality of healthcare services varies considerably in both the public and private sector as regulatory standards for public and private hospitals are not adequately defined and, are ineffectively enforced; and

The affordability of health care is a serious problem for the vast majority of the population, especially at the tertiary level.

According to NSSO (2005-06) estimates most people accessed private providers for outpatient care—78% in rural areas and 81% in urban areas. For inpatient care, 58% of Indian people in rural areas and 62% in urban areas accessed private health facilities.

What has been India’s response ?

Health Insurance

Health Insurance - Status

Most of these schemes cover only in-patient care, mainly at the tertiary level.

https://india.gov.in/spotlight/rashtriya-swasthya-bima-yojana

Eligibility•Unorganized sector workers belonging to BPL category and their family members (a family unit of five) shall be the beneficiaries under the scheme. The beneficiaries will be issued smart cards for the purpose of identification.

BenefitsThe beneficiary shall be eligible for such in - patient health care insurance benefits as would be designed by the respective State Governments based on the requirement of the people/ geographical area. However, the State Governments are advised to incorporate at least the following minimum benefits in the package / scheme:•The unorganized sector worker and his family (unit of five) will be covered.•Total sum insured would be Rs. 30,000/- per family per annum on a family floater basis.•Cashless attendance to all covered ailments•Hospitalization expenses, taking care of most common illnesses with as few exclusions as possible•All pre-existing diseases to be covered•Transportation costs (actual with maximum limit of Rs. 100 per visit) within an overall limit of Rs. 1000.

Funding Pattern•Contribution by Government of India: 75% of the estimated annual premium of Rs. 750, subject to a maximum of Rs. 565 per family per annum. The cost of smart card will be borne by the Central Government.•Contribution by respective State Governments: 25% of the annual premium, as well as any additional premium.•The beneficiary would pay Rs. 30 per annum as registration/renewal fee.•The administrative and other related cost of administering the scheme would be borne by the respective State Governments

•Till March 25, 2013, the scheme had 34,285,737 Smart Cards and 5,097,128 hospitalization cases.

Critiques of the Scheme

Unorganized sector workers belonging to BPL category

India’s RSBY insurance schemes (with 110 million people enrolled) and Cambodia’s Health Equity Funds are good examples of attempts to selectively cover the destitute and poor as often they have no resources to access health care. However, there is a growing perception that these special schemes for the poor provide inferior and often inadequate coverage, so that ‘services for the poor become poor services’.

Here we are !

Equity in resource distribution

Service Delivery

Revenue Raising

Pooling

PurchasingBe

nefit

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Stew

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hip

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Quality

Financial protection and equity in finance

Utilization relative to

need

Transparency accountability

Efficiency

Equity in Resource

Distribution

UHC Intermediate Objectives

Creating Resources

How fair is revenue raising in the USA?

Overall the picture in the USA is clear, that despite having some revenue sources which are mostly fair or progressive, the effect is out-weighed by the high volume of regressive payments, making the overall picture highly unfair.

It will be interesting to repeat this analysis in light of the Affordable Care Act signed into law in 2010, which aims amongst other things to make health insurance premiums more progressive.

Fiscal Context

The "fiscal context" in a country, significantly affects the ability of a government to mobilize public revenues overall, which in turn affects the level available to fund health services.

The Road Ahead: An Integrated Model

Integrated Model

CGHS

ESISRBSY

National Health Mission (NHM) Primary health care

Conclusion

CombinedESIS-RSBY-

CGHS

CGHS - Civil servants

ESIS- Organized

sectorRSBY-

Unorganized / poor Creating a

ready pool of about 138 million population with a staggering budget of roughly Rs. 40,000 million with a per capita expenditure of Rs. 290 per annum.

This would offer a tremendous value for money for all the stakeholders - payer, purchaser, provider and beneficiary.

This would also ensure efficient allocation and utilization of funds.

National Health Mission

thanks !