K. J.

SOMAIYA INSTITUTE OF MANAGEMENT STUDIES AND RESEARCH

Study of Healthcare in India and measures to improve sources of healthcare finances in India
Research Analysis
Darshini Bhuta (10) & Ekta Shah (48)

2012-14

PGDM - FS

Abstract

The paper studies about various health issues faced in India and what are the issues and challenges to provide healthcare. The demographics are pictured to show the current scenario. Twenty papers are analysed in order to learn what is healthcare and how it works globally and in India. The research findings include Trends in Health Status, Interventions and Progress: Progress on Key Indicators in which various factors are analysed like population, sex-ratio, life expectancy rate, crude birth and death rate, maternal mortality rate, infant mortality rate and Total Fertility Rate to understand the changing trends. Then the paper has analysed the healthcare financing in India and how it has progressed over the years. There is a need for policy changes and recommendations are given accordingly and how government can gather funds for healthcare financing. It also talks about Schemes where the poor sections can be brought under the umbrella of health insurance with a venture with government so as to provide them with better healthcare facilities.

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K. J. Somaiya Institute of Management Studies and Research

Introduction
The government needs to allocate more funds for public health. The mismatch between the declared objective of universal healthcare through the public health system and the actual level of expenditure remains serious. India occupies 119th position out of 160 on the Human Development Index and 123rd on the Gender Equality Index. Nearly 65 % of people in rural areas lack access to medication. [1} India is a country in which healthcare is a much neglected aspect of social development. The total contribution of healthcare to GDP is 1% where as the world average is of 1.23 %.{2} The sector is likely to see an increase in investments from 34.2 billion dollars in 2006 to 78 billion dollars in 2012. This is expected to increase the bed ratio from 0.9 beds per 1,000 persons to 1.85 beds per 1,000 persons. The Indian healthcare market currently is valued at 62 billion dollars with 70 per cent of its comprising of delivery services, 20 per cent pharmaceuticals and the remaining 10 per cent medical technologies and other components.{3} A woman labourer in a tea estate in Assam holds a severely undernourished child. India's population pays the bulk of its healthcare expenses out-of-pocket, as governmental spending is low Rural healthcare in India is characterised by a huge gap between supply and demand. Currently, rural healthcare needs are met either by limited government facilities and private nursing homes, which have not been able to keep pace with increasing demand, or by a number of quacks that practice medicine in rural areas. The quality of infrastructure is usually poor and people end up having to go to nearby large cities if they need high-quality care.{4} How societies pay for health care, and how many resources are devoted to health, affects both the care people can get and its quality In most developed countries, health care is paid for largely by the government or an organization associated with it, using taxes collected from citizens. The United Kingdom, for example, has a single-payer system in which the government pays directly for care; in France and Germany, the government collects taxes to fund part of the government health care system, and employers and individuals pay for the remainder of the costs directly In other countries, such as the United States, a portion of the health care system is market based, that is, paid for by private entities such as employers and individuals. Even in market based systems, the government may provide health care to vulnerable people. For instance, in the U.S., federal funds support Medicare, which covers the elderly and disabled, and state and federal funds support Medicaid, which covers low-income people These two broad approaches to financing health care market-based and government financed offer different advantages and disadvantages and neither is perfect in all aspects. All societies have to make choices between how broadly to provide access to basic and advanced care, how much to pay for health care and how much and which innovations to make available to patients. The major variables that effect healthcare financing is Cost of medical facilities Government Initiatives in building healthcare infrastructure and providing services to its citizens Amount of Insurance availed by individual or no insurance at all Shortage of man power (people with medical knowledge and working staff) The Associated Chambers of Commerce and Industry of India www.economictimes.indiatimes.com K. J. Somaiya Institute of Management Studies and Research

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{1} {2} & {3} {4}

Demographic, Socio-economic and Health profile of India Indicator Total population (in crore) (Census 2011) Decadal Growth (%) (Census 2011) Crude Birth Rate ( SRS 2010) Crude Death Rate ( SRS 2010) Natural growth rate (SRS 2010) Infant Mortality Rate ( SRS 2010) Maternal Mortality Ratio (SRS 2007-09) Total Fertility Rate (SRS 2010) Sex Ratio (Census 2011) Child Sex Ratio (Census 2011) Schedule Caste population (In crore) (Census 2001) Schedule Tribe population (In crore) (Census 2001) Total Literacy Rate (%) (Census 2011) Male Literacy Rate (%) (Census 2011) Female Literacy Rate (%) (Census 2011) Key Demographic Health Indicators and Relationship to Poverty and Wealth Maternal Mortality Rate (2007- 09) 261 269 258 318 359 Per capita National State Domestic Product 2008-09 ( in Rs.) 10206 19521 16294 13299* 18212 19708 12481 25114 India 121.01 17.64 22.1 7.2 14.9 47 212 2.5 940 914 16.6 8.4 74.04 82.14 65.46

States

Life Expectancy at Birth (2002-06)

Infant Mortality Rate (2010)

Total Fertility Rate (2010)

Poverty Level (2004-05)

Per capita Health Exp.(in Rs.)

High Focus Empowered Action Group States Bihar 61.6 Chhattisgarh Jharkhand Madhya Pradesh 58.0 Orissa 59.6 Rajasthan 62.0 Uttar Pradesh 60.0 Uttarakhand -

48 51 42 62 61 55 61 38

3.7 2.8 3.0 3.2 2.3 3.1 3.5 2.55 (2005-06)

41.4 40.9 40.3 38.3 46.4 22.1 32.8 39.6

513 772 500 789 902 761 974 818

States

Life Expectancy at Birth (2002-06)

Infant Mortality Rate (2010)

Maternal Mortality Rate (2007- 09)

Total Fertility Rate (2010)

Poverty Level (2004-05)

Per capita National State Domestic Product 2008-09 ( in Rs.) 22475 16272 16508 23069 20483 17129* 30652 12481 32343 17590* 27362 60232* 31780* 41896 27385 35457 33302* 33198 30652 24720 25494

Per capita Health Exp.(in Rs.)#

High Focus NE States Arunachal Pradesh Assam Manipur Meghalaya Mizoram Nagaland Sikkim Tripura General Category Himachal Pradesh Jammu & Kashmir Andhra Pradesh Goa Gujarat Haryana Karnataka Kerala Maharashtra Punjab Tamil Nadu West Bengal INDIA

67.0 64.4 64.1 66.2 65.3 74.0 67.2 69.4 66.2 64.9 63.5

31 58 14 55 37 23 30 27 40 43 46 10 44 48 38 13 28 34 24 31 47

390 134 148 153 178 81 104 172 97 145 212

2.5 1.6@ 3.1@ 2.0@ 2.0@ 2.1 (2004-06) 1.7@ 1.8 2.0 1.8 2.5 2.3 2.0 1.8 1.9 1.8 1.7 1.8 2.5

17.6 19.7 17.3 18.5 12.6 19.0 20.1 18.9 10.0 5.4 15.8 13.8 16.8 14.0 25.0 15.0 30.7 8.4 22.5 24.7 27.5

1454 774 673 894 113 819 1507 1486 1511 1001 1061 2298 953 1078 830 2950 1212 1359 1257 1259 1201

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State Domestics Product (Per capita Income) at constant (1999-2000) prices - : Not available * : 2007-08 Source: (col. 2) to Col. (4): Registrar General of India; Planning Commission; for col. (6), NHA 2004-05, for Col. 8 table 1.3. , Col.7-CSO. The MMR estimate of Bihar, Madhya Pradesh and Uttar Pradesh also apply to Jharkhand, Chhattisgarh and Uttrakhand respectively. @ Data relates to 2005-07 #(NHA-2004-05

K. J. Somaiya Institute of Management Studies and Research

The Indian healthcare industry is growing at a rapid pace and is expected to become a US$280 billion industry by 2020. Rising income levels and a growing elderly population are all factors that are driving this growth. In addition, changing demographics, disease profiles and the shift from chronic to lifestyle diseases in the country has led to increased spending on healthcare delivery. In order to meet manpower shortages and reach world standards India would require investments of up to $20 billion over the next 5 years. India's public health delivery infrastructure is characterised by an overly bureaucratic legal and regulatory framework that fails to protect the interests of vulnerable groups or generate the trust of providers or the public; this failure could be addressed by India's Ministries of Health through active inclusion of a range of stakeholders to monitor and advise on the use of public and private health care providers. Rural India deserves better, since the ability to pay has gone up over the last few years, driven by growth in income and penetration of government healthcare programmes like the Rashtriya Swasthya Bima Yojana (RSBY). Increasing demand, combined with the failure of existing infrastructure to scale, has resulted in rural healthcare being a large under-served market. Absence of a viable business model prevents conversion of the huge rural expenditure on health into an economic activity that generates incomes and serves the poor. The government is taking a number of measures through providing healthcare facilities through various schemes through (NHRM) National Rural Health Mission. And also providing various opportunities to study the rural health care through providing insurance.

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K. J. Somaiya Institute of Management Studies and Research

Review of Literature The willingness to pay for medical care: evidence from two developing countries
-Gertler, P.; Gaag, J. van der Health care is essential to development. However, rising costs combined with scarce resources mean that there are serious shortcomings in the quality and distribution of health care in developing countries. The book examines the feasibility and desirability of introducing or increasing user fees as alternative to government financing of health care. Under such a system, the patient pays a greater share of the cost. The health care systems in rural areas of the Cte d'Ivoire and Peru are presented as case studies. Specifically, two main issues are analysed: (1) the effect of price on the demand for health care; and (2) differences in the willingness of various segments of the population, such as the poor, the aged and women, to pay for health care Recommendations are made on introducing user fees and on topics for future research. It is concluded that the demand for health care is price sensitive and that children and the poor are hurt more than the population in general by the introduction of user fees. To raise revenue and protect the poor simultaneously and to improve both the health care system and the chances of the poor to contribute to economic development, it is suggested that governments need to shield vulnerable groups from the adverse effects of user fees. Policy makers could introduce modest fees, maintain greater subsidies for poorer communities and for lower levels of health care, and carefully evaluate how fees affect the decisions of individuals about whether and where to seek medical care.

Are the Poor too Poor to Demand Health Insurance?

-Ahuja, Rajeev That there is an urgent need to extend income and social protection to the poor is widely recognised. One, there is greater appreciation of the fact that income and social protection to the poor is not only an end in itself but also a means to achieving higher economic growth. Two, because the adverse effects of greater economic integration (through liberalisation and globalisation) are likely to be on

the poor. In the mitigation of poverty, there is increasing appreciation of the role played by risks in the lives of the poor. It is not sufficient to provide the poor with income alone. For making any meaningful and lasting impact in their lives, there is a need to also protect them from the several risks such as risk of illness, death, loss of assets, and so forth. Accordingly, micro insurance, which is basically insurance for the low income people, is gaining importance not only in India but also in other developing countries. In India we find many community based insurance initiatives taking roots partly because of their felt needs and also because of policy design as in the social obligation imposed by the Indian insurance regulator. In some of the initiatives involving low-income people, the members of an insurance scheme have themselves contributed (even if partly) towards paying insurance premium for covering against risks. The early success of these initiatives points towards the possibility of mobilising funds from the beneficiaries themselves. It is an open issue to what extent the poor can contribute towards paying premium. If the poor are unable to contribute it may be not due their lack of ability per se but because of the prevailing institutional rigidities. This paper explores this particular issue and provides some valuable insights. In particular, the finding that institutional rigidities, such as credit market constraints, may prevent the people from demanding insurance that they can otherwise afford is an important message that ought to be taken note of by the policy makers, insurance initiators, social activists and all others working for the upliftment of the poor. Community based micro insurance has aroused much interest and hope in meeting health care challenges facing the poor. In this paper we explore how institutional rigidities such as credit constraint impinge on demand for health insurance and how insurance could potentially prevent poor households from falling into poverty trap. In this setting, we argue that the appropriate public intervention in generating demand for insurance is not to subsidise premium but to remove these rigidities (easing credit constraint in the present context). Thus from insurance perspective as well, our analysis highlights the importance of having appropriate savings and borrowing instruments for the poor.

Antenatal and Maternal Health Care Utilization: Evidence From Northeastern States Of India
-Anindita Chakrabartia and Kausik Chaudhuri
This article examines the role played by the various socio-economic and community level factors in determining the antenatal and maternal health care utilization pattern using the data from the National Family Health Survey carried out in India in 199899 in the Seven North Indian States (namely Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland and Tripura). The article tries to answer following Questions a) How does the presence of a different health facility such as government health facility, rural public health facility and Anganwadi centre5 influence the use of formal delivery care or that of antenatal care? b) Does the womens autonomy based on her decision-making power, control of resources and freedom of movement play any role controlling in her education and work status? c) Does birth history of mother matter? d) Does other village level infrastructure play any important role in this regard? Exploring the economic and socio-cultural barriers that deter women from seeking maternal health services. There are various factors which make a woman to not seek formal medical help during child birth in our country such as demographic, social and economic barriers. It also depends on availability / accessibility of heath care. The findings when dependent variables were analysed were Deliveries at home accounted for 79.5% of a total of 2766 births and in case of antennal care 51% of women went just twice for a medical examination during pregnancy. And also womens access medical heath care depended on her education, exposure to media, a ladys occupational status, her husbands occupation, the development of the village, her caste and religion, her order of birth were important indicators as it affects a ladies autonomy and decision making power. the final conclusions are Apart from education, the other variable instrumental in spreading awareness i.e. Media has a beneficial impact. These results suggest that policies directed towards improving the health status of women must go beyond merely enhancing her educational opportunities.

Reasons for Non-Utilization of Institutional Healthcare Service in Rural West Bengal: A Perspective
-Srabanti Mukherjee, N. R. Bandhopadhyay & B. K. Bhattacharya
It is beyond any doubt that the wealth of a country is judged by the health of its people. When the health care practices of the developed countries are analyzed, several common themes emerge. Most of the developed countries are successful in terms of universal access to health care for their populace. Nevertheless, some minor problems still persist in the systems. The developed, developing and the under developed countries are compared in order to understand the healthcare facilities availability and accessibility and also health insurance (its origin, development and requirement by different economy classes). India has been traditionally identified the provision of primary health care as the states responsibility and encouraged the establishment of a countrywide, state-run, primary care infrastructure. The role of the central government has been limited to family welfare programmes and design of disease control programmes. The policy has remained silent on the role of the private sector in provision of medical care. The paper studies the health care facilities available in the state of West Bengal. It also says that the healthcare in WB is similar to India on a whole. The people are more dependent on state run healthcare system. And there is poor accessibility for poor people to all the healthcare facilities provided and this is due to lack of awareness. People hardly avail to healthcare facilities which are provided by government such as free vaccines. There is huge difference in healthcare providers and people who require healthcare. the infrastructure for healthcare is inadequate and also there is gap between awareness among the various classes. the paper has studied people by dividing them in 3 segments depending on their literacy, income, expenditure on healthcare and no of dependents. From the paper it is evident that the public and private health care setup needs to provide high quality, accessible health care services. Community based health insurance is perhaps the most appropriate insurance arrangement for the poor. And a proper research is needed on how we should improve health care make it available to poor so that they get a better life.

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K. J. Somaiya Institute of Management Studies and Research

Quality of Healthcare Services in Rural India: The User Perspective

-J K Sharma and Ritu Narang Developing nations have been focusing on relevant infrastructure, technology, disease control, and health outcomes in terms of deaths and disabilityadjusted life years, largely ignoring the service quality aspect from the patients viewpoint. However, researchers opine that real improvement in quality of care cannot occur if the user perception is not involved. Patients perception is significant as it impacts their health-seeking behaviour including utilization of services, seeks involvement in issues directly related to them, enables the service provider to meet their expectations better, and provides relevant information to the policy makers to improve the quality. The following points are discussed in the paper Healthcare delivery and financial and physical access to care significantly impacted the perception among men while among women it was healthcare delivery and health personnel conduct and drug availability. With improved income and education, the expectations of the respondents also increased. It was not merely the financial and physical access that was important but the manner of delivery, the availability of various facilities and the interpersonal and diagnostic aspect of care as well that mattered to the people with enhanced economic earnings. What was most astonishing was the finding that the overall quality of healthcare services is perceived to be higher in Primary Healthcare Centres than in Community Healthcare Centres (CHCs). Inadequate availability of doctors and medical equipments, poor clinical examination and poor quality of drugs were the important drawbacks reported at CHCs. The is need for better health care facilities in our country. Inadequate availability of doctors and medical equipments, poor clinical examination, and poor quality of drugs were the important drawbacks reported at community health centres. we require medical specialists comprising surgeon, physician, gynaecologist, and pediatrician supported by twenty-one paramedical and other staff are supposed to be in charge of each community health centre whereas just one medical officer supported

by fourteen paramedical and other staff is in charge of the primary health centres.

Healthcare for the Other India

-K. R. Balasubramanyam Few people would have heard of Kavaratti; fewer still, the Indira Gandhi district hospital there. Till a few years ago, it was a wrong place to fall ill with a disease that required superior medical care. But now, patients effortlessly, albeit virtually, step into Amrita Institute of Medical Sciences (AIMS) in faraway Kochi and meet up with specialist doctors. There was a time when such patients and their attendants had to be either airlifted or shipped to Kochi at the governments expense. But telemedicine-delivery of health services via telecommunication network-has changed their lives. Studies have shown that 90 per cent of ailments dont require surgery. If there is no need for surgery, then a doctor need not touch the patient at all. In that case, there is no need for both to be present at the same place, says L. S. Satyamurthy, Programme Director, Telemedicine, ISRO. the paper talks about how people have saved money coz of telemedicines and how in country like ours where medical facilities is limited and geographies huge there is no other tool that can be as beneficial as telemedicine. 52,000 patients are treated so far using telemedicine. The large scale economies at these healthcare units help the weaker sections to avail to medical facilities. It has been initiated in a number of states in country (Karnataka, Rajasthan, Kerala, Chattisgarh, and Andhra Pradesh). Since the project is not effectively run in some districts, the government is setting up a dedicated team to coordinate between the district and referral hospitals. The government, however, is not looking at extending the programme to taluk hospitals for now. We are working on strengthening the existing network by roping in more tertiary hospitals from both government and private sectors, says M. Madan Gopal, Health Secretary, Karnataka. The technology enables transmission of patients medical records including images, besides providing live two-way audio and video link. With the help of these, a specialist doctor can advise a doctor or a paramedic at the patients end on the course of treatment to follow.

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Health security for the rural poor? A case study of a health insurance scheme for rural farmers and peasants in India
-Sarosh Kuruvilla and Mingwei Liu This is a case study of an important innovation in providing healthcare for the rural poor: the Yeshasvini Health Insurance Scheme for rural farmers and peas ants in Karnataka, India. Arguably the worlds largest health insurance scheme for the rural poor, the scheme commenced in 2003. Designed in ways that overcome several obstacles to providing health security for rural populations, the scheme covered, in its second year, about 2.2 million widely dispersed peas ant farmers for surgical and outpatient care for a low annual premium of approximately US$ 2. In this pa per, we de scribe and evaluate the scheme in its first year of operation, and explore its potential to be a model for the developing world generally. The scheme originated in the mind of Dr. Devi Shetty, a cardiac surgeon who has pioneered the spread of telemedicine as well as low-cost cardiac operations in India. the only solution to providing sophisticated healthcare to the rural poor was to create a re ally large health insurance scheme, where the law of large numbers would overcome the basic financing problem associated with the small schemes of the past. Step ping back, the key story in this model is the law of large numbers being effectively used to provide a relatively high degree of health security to the poorest populations of the world. This is not a new story, to be sure. The most innovative aspect is the success in mobilizing these large numbers who are geographically dispersed. The more challenging issues are the first two pre conditions, mobilizing a large sub scriber base and finding ways to enroll them. The implications are that there are three necessary pre conditions for the creation of successful self-financed health insurance schemes for large, poor, rural and in formal sector populations. But the Yeshasvini case demonstrates the importance of using the law of large numbers to de sign an affordable health security system for the poor. This is an instance, potentially, where Indias large population, normally seen as a negative, can be a valuable resource for increasing social health.

Healthcare in India: Changing the Financing Strategy

-Ravi Duggal The way in which healthcare is financed is critical for equity in access to healthcare. At present the proportion of public resources committed to healthcare in India is one of the lowest in the world, with less than one-fifth of health expenditure being publicly financed. India has large-scale poverty and yet the main source of financing healthcare is outof-pocket expenditure. This is a cause of the huge inequities we see in access to healthcare. The article argues for strengthening public investment and expenditure in the health sector and suggests possible options for doing this. It also calls for a reform of the existing healthcare system by restructuring it to create a universal access mechanism which also factors in the private health sector. The article concludes that it is important to over-emphasize the fact that health is a public or social good and so cannot be left to the vagaries of the market. The healthcare in India needs to concentrate on increasing the contribution of public sector in the total healthcare finances. The poorer sections of the country which depend on out-of-pocket source to meet the healthcare expenses or on debt or sale of assets needs to be covered under insurance and public healthcare schemes so that all get the benefits like in many countries of the world. There are various ways (levy 2% tax on tobacco products, alcohol private vehicles, etc) in which the government can earn and thus spend those earnings on public health. The medical graduates in the country should be made to serve the public sector as 80% percent of them earn their degrees from public medical colleges. There needs to be Social insurance to strengthen the poorer sections of society. At least per cent of the workforce in India has the potential to contribute to such a social insurance programme. There are various ways in which government can collect finances for public healthcare what is important building awareness and consensus in civil society; advocating rights to healthcare at the political level; demanding legislative and constitutional changes and, finally, reorganizing the entire healthcare system, especially the private health sector

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K. J. Somaiya Institute of Management Studies and Research

Globalisation and Healthcare Financing in India: Some Emerging Issues

-Guljit K. Arora The paper highlights the changing scenario of the healthcare financing in India in the wake of globalisation process initiated during early 1990s and the structural changes taking place in the health sector. It attempts a status report of the health sector in India and raises issues related to accessibility, efficiency, and quality of the health delivery in the face of glaring inter-state variations and discouraging healthcare financing situation. The rising health needs particularly in the backward and low income states, sluggish health outcomes, dwindling budgetary allocations and heavy household out-of-pocket expenditure on health pose serious challenges to healthcare financing in India. The paper also discusses the issues likely to be further compounded as global institutions (such as the WTO) are supposed to ensure compliance to Intellectual Property Rights; but, unfortunately, can not provide for the healthcare needs of the poor in India in the face of rising health risks. It talks about how development over the years have helped the health of country to improve but it also highlights how the public health policies have been the benefactors to rich people rather than the poor people. It also highlights how globalisation has affected healthcare Globalisation effects are mediated by a number of factors such as expected increased income and its distribution, and poverty reduction on the one hand, and the initial conditions like the on-going growth pattern and its quality, economic policies which facilitate this growth, the level of human capital development and infrastructure available in the reforming country on the other. Both globalisation and health outcomes are greatly influenced by a number of other factors like the socio-economic macro policies, and the political will with which they are implemented, technological developments, economic pressures, changing ideas and increasing social and environmental concerns. It is well acknowledged that health gains are likely to be positive only if economic inequalities are moderate, domestic markets are competitive and non-exclusionary, access to healthcare infrastructure is evenly spread out, regulatory instruments are effective and strong, social safety nets are well placed, and rules to access to global markets are non exclusionary

Utilization Of Maternal Health Care Services In South India

-K. Navaneetham & A. Dharmalingam In the Below paper the patterns and determinants of maternal health care use across different social setting in south India: in the states of Andhra Pradesh, Karnataka and Tamil Nadu. We use data from the National Family Health Survey (NFHS) carried out during 1992-93 across most states in India. The study focuses on most recent births to evermarried women that took place during the four years prior to the date of the survey. We have used logistic regression models to estimate the effect of covariates on the utilization of maternal health services viz., antenatal care, tetanus toxoid vaccine, place of delivery and assistance during delivery. The study indicates that determinants of maternal health care services are not same across states and for different maternal health care indicators. Although illiterate women were less likely to use maternal health care services; there was no difference among the educated. The level of utilization of maternal health care services was found to be highest in Tamil Nadu, followed by Andhra Pradesh and Karnataka. Part of the interstate differences in utilization is likely to be due to differences in availability and accessibility among the three south Indian states. It is argued that the differential in access to health care facilities between rural-urban areas is an important factor for lower utilization of maternal health care services, particularly for institutional delivery and delivery assistance by health personnel in the rural areas of the three states. Results from this study indicate that health workers might play a pivotal role in providing antenatal care in the rural areas. It was also found the level of utilization of maternal health care services was highest in Tamil Nadu, followed by Andhra Pradesh and Karnataka. Part of the interstate differences in utilization could be due to differences in availability and accessibility.

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K. J. Somaiya Institute of Management Studies and Research

Research Findings
Trends in Health Status, Interventions and Progress: Progress on Key Indicators

Parameter

Details

Charts

Population and Average Annual Exponential Growth Rate

As on 1st March, 2011 Indias population stood at 1.21 billion comprising of 623.72 million (51.54%) males and 586.46 million (48.46%) females. India, which accounts for worlds 17.5 percent population, is the second most populous country in the world next only to China (19.4%)

Sex Ratio (Number of females per 1000 males)

940 females per 1000 males in 2011 Census of India. The adverse states are Haryana (830 girls per 1000 boys), Punjab (846 girls per 1000 boys) and Jammu and Kashmir (859 girls per 1000 boys)

Life Expectancy at Birth Crude Birth Rate

The Life Expectancy which was 49.7 years during 1970- 75 increased to the level of 63.0 years in 2000-04 further improved and stood at 63.5 years during 2002-06. Kerala has life expectancy of 74 yrs at birth The Crude Birth Rate declined from 29.5 per 1000 population in the 1991 to 22.1 in 2010

Crude Death Rate

The Crude Death Rate which was 25.1 per 1000 population in 1951 came down to 9.8 in 1991 and further declined to 7.4 in 2007. During 2008 it remained at 7.4 but came down to 7.3 in 2009. During 2010 the CDR further declined to 7.2.

Maternal Mortality Ratio (MMR)

MMR has reduced from 254 per 100000 live births in 2004-06 to 212 per 100000 live births in 2007-09

Infant Mortality Rate (IMR)

The IMR, according to SRS 2010 at national level was 47 per 1000 live births in 2010 as compared to 50 in 2009. The IMR has shown a steady decline from 129 deaths per 1000 live births in 1971 to the current level

Total Fertility Rate Indias Total Fertility Rate (TFR) is at 2.5 (SRS-2010) and the target (TFR) is to achieve Replacement level of Fertility of 2.1 by 2012 There have been various initiatives taken by NRHM to achieve healthcare in India some of them are All these initiatives were taken to ascertain targets, which were partially achieved Reproductive and Child Health (RCH) Janani Suraksha Scheme (JSY) Along with various initiatives to improve health there are initiatives taken JananiShishu Suraksha Karyakram to achieve Human resource augmentation, Improve Programme Management and Infrastructure Development Navjat Shishu Suraksha Karyakram Population Stabalization

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K. J. Somaiya Institute of Management Studies and Research

Healthcare Financing The health care needs of India are vast and divergent . Health indicators viz. Maternal Mortality Ratio, Infant Mortality Rate, Life Expectancy at Birth are a matter of concern. Concerted efforts are required in bridging the shortfall in the availability of health infrastructure and its delivery for better health outcomes. The health delivery channels and access thereto need to be structured and sequenced. Health financing accordingly assumes great importance in the architecture of the health system. A desirable health financing edifice is one which not only reduces the Out Of Pocket(OOP) expenditure on health care but also lessens the probability of any financial impoverishment while meeting healthcare needs. As per National Health Accounts (NHA2009), the OOP in India in 2004-05 was more than two- thirds of total health spending, which is high compared to global standards. Moreover, rural households accounted for 62 percent of the total OOP expenditure by households for availing different health care services while urban households accounted for 38 percent. Such high share of OOP expenditure needs to be reduced as it aggravates the inequities by impoverishing the poor further. Therefore, the role of the Government assumes importance in this context. The breakup of total health expenditure, in terms of source of financing, shows that around 78 percent of the expenditure was financed by private entities with households accounting for the major share (71 percent). About 20 per cent of the total health expenditure was financed by the Central Government, State Government and local bodies while external flows accounted for 2 percent of the total health expenditure. Breakup of total health expenditure between public and private providers show that private providers of health in 2004-05 accounted for about 77 per cent of health expenditure incurred. In this backdrop, public intervention in making health care available and affordable is essential to meet the objectives of universal coverage, affordability and good health care delivery. Accordingly, the Government of India has been mobilizing resources for distributing across different entities, intervention and activities in the health system. The Plan outlay of the Ministry of Health and Family Welfare for health has been increased by 52 percent to Rs. 26760 crore in 2011-12, as against the levels in 2009-10 (actual). Source: Budget 2011-12 This outlay constitutes among others, Rs. 17840.00 crore under NRHM , Rs. 2356.00 crore for the benefit of the schemes/projects in the North Eastern Region(NER) and Sikkim and Rs 5720.00 crore for Health. The allocation under NRHM, aims at providing universal access to equitable, affordable and quality health care that is accountable as well as responsive to the needs of the people. A provision of Rs. 1616.57 crore has been earmarked for the Pradhan Mantri Swasthya Suraksha Yojana (PMSSY) Scheme which is aimed at strengthening the tertiary sector. Further, development of human resources in health sector through building up of necessary institutional structures is targeted. The National Programme for Prevention and Control of Cancers, Diabetes, Cardiovascular Diseases and Stroke (NPCDCS), which aims at health promotion and prevention, strengthening of infrastructure including human resources, early diagnosis and management and integration with the primary health care system through non-communicable disease cells at different levels for optimal operational synergies, has been allocated Rs.125 crore in 2011-12. During 2011-12, an amount of Rs. 1700 crores has been earmarked for National Aids Control Programme whose objective is to halt and reverse the HIV epidemic in the country by integrating programmes for prevention, care, support and treatment. The Government also seeks to develop and promote the Indian system of medicines in an organized and scientific manner by involvement/integration of AYUSH systems in National Health care Delivery and has allocated Rs.900 crore as plan outlay in 2011-12.

In addition to increasing the resource allocation for the health sector the Central Government is also playing a critical role in facilitating access to health care delivery channels, public and private, through subsidized health insurance schemes like the Rashtriya Swasthaya Bima Yojana (RSBY) for providing a basic health care to poor and marginal workers. The RSBY is being extended to cover MGNREGA beneficiaries and beedi workers. In 2011-12 it is proposed to extend the coverage to the unorganized sector workers in hazardous mining and associated industries like slate and slate pencil, dolomite, mica and asbestos etc. The Eleventh Five Year Plan had targeted for increasing the public spending on health to atleast 2 percent of GDP by the end of the Plan. However total public health expenditure as a percent of gross domestic product currently stands at around 0.9 percent. To achieve the target set in the Eleventh Five Year Plan continued effort is called for. Factors essential for achieving this target include among others, greater resource mobilization and reengineering of the resource flows. The Government is committed to providing high quality cost effective health care and delivery especially to the vulnerable sections of society. Policy Challenges and recommendations to improve it The objective of the government is to provide accessible, affordable, effective, accountable and reliable health care to all citizens and in particular, to the poorer and vulnerable sections of the population including women and children. Although progress has been made towards achieving the goals much more needs to be done in order to attain the objectives. The major challenges faced are Increase Public Investment: The accepted norm for public spending on health is 2-3 per cent of GDP and about 15 per cent of public budget. It is proposed to increase the public expenditure on health in the 12th Plan to 2-3% of the GDP from the current level of less than 1%. Purchasing Health Care Services from the Private Sector: In order to provide healthcare the Public sector should tie up with the private sector for providing healthcare insurance and to help functioning of healthcare continue strengthening the public health infrastructure, keeping quality in mind. Focus on Health Determinants: The basic aim is to provide access to safe water, nutrition and sanitation and government needs to ensure that the people have access to basics. Human Resources for Health: One major constraint in achieving universal access to health services is the non-availability of skills and trained human resources. By international standards, India fares very poorly, calling for strong remedial action. This requires primarily: a) Opening many more medical colleges and nursing schools, taking care to see by positive state action, that most of these are opened in the areas where skilled human resource densities are low and professional educational institutions are few. This would also require major efforts at faculty development and the use of modern technology to provide quality education. The challenge is to ensure that these colleges open up where they are needed most. b) How can we make our health services less doctor-dependent and more nurse-enabled? Can new models of medical and nursing and paramedical education be created to meet specific shortages? Should every medical college and nursing college be linked to a district hospital and a district health system and augment the skills of the service providers there? c) Putting in place a National Council for the Human Resources in Health, which would play a guiding role in defining national human resource requirements and policies to meet these requirements and which should define the regulatory framework with respect to professional bodies and standards and the expansion of professional and Rising Out-of-Pocket Expenditures: The drugs are purchased OOP and so we need develop a balanced policy so that nobody is denied for life-saving drugs. Health Promotion: The rise of institutional care and technology necessitating a measure of specialisation and the increasing demand for such technology-based care have medicalised health care.

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Recommendations
As already mentioned, Indias health-financing mechanism is largely based on out-of-pocket expenditure, with the role of public finance actually in decline. It has been observed that public finance of healthcare is weakening and that private expenditures are becoming even larger. But this can be changed, using mechanisms listed below

Within the existing public finance of healthcare, macro policy changes in the way funds are allocated could bring about a substantial improvement in equity by reducing the inequalities between rural and urban areas. Suppose if Together, central and state governments currently spend Rs 300 per capita at the national level, yet this is inequitably allocated between urban and rural areas. The rural healthcare system gets only Rs 130 per capita and urban areas get Rs 600 per capita, a 450 per cent difference If allocations were made simply on a per capita basis then rural and urban areas would both get Rs 300 per capita. Doing away with the current highly centralized system of planning and programming in the public health sector would result in greater faith being placed in local capacities. The public exchequer even today contributes substantially to medical education, to the extent that nearly 80 per cent of medical graduates are from public medical schools. This major resource is not fully being utilized. Since medical education is virtually free in public medical schools, the state should demand compulsory public service for at least three years from graduates from them as a return for the social investment3 (today only about 15 per cent of such medical graduates are actually absorbed into the public health system). Furthermore, a spell of public service should also be made mandatory for those wishing to undertake post-graduate studies, which currently attract as many as 55 per cent of public medical school graduates. Governments could raise additional resources by imposing health cesses (levies) and taxes on health-degrading products, if they cannot be banned, such as cigarettes, beedis (small Indian cigarettes), alcohol, paan masalas (betel nut mixture) and guthka (tobacco), personal vehicles and so on. For instance tobacco, which kills 670,000 people in India each year, is a Rs 350 billion4 industry. A 2 per cent health cess on tobacco could generate Rs 7 billion annually for the public health budget. Similarly alcohol, which presently generates Rs 250 billion in sales turnover per year, could also bring in substantial resources if a 2 per cent health cess was levied. The same logic could also be applied to personal transportation vehicles, both at point of purchase as well as each year, through a health cess on road tax and insurance to be paid by owners. Land revenues and property taxes could also attract a health cess (i.e. a tax earmarked for public health, just as municipal taxes already have an education cess component). Social insurance could be strengthened by making a contributory system similar to the Employee State Insurance Scheme (ESIS) compulsory across the entire organized labour market sector and integrating ESIS, the central government health scheme and other such social insurance schemes with the general public health system. In addition, social insurance will need gradually to be extended to other sectors of employment, using models drawn from experiments elsewhere in collective financing (as with the sugarcane farmers of south Maharashtra, for instance, who pay Re 1 per tonne of cane as a health cess, for their entire families to be assured of healthcare through the sugar cooperative). There are many nongovernmental organization experiments in using micro-credit as a tool for health financing for members and their families. Large collectives, whether they are self-help groups facilitated by non-governmental organizations or groups of self-employed people, such as the headload workers in Kerala, could buy insurance cover collectively, so as to provide health protection for their memberships. At least 60 per cent of the workforce in India has the potential to contribute to such a social insurance programme.

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Other options to raise additional resources could be various forms of innovative direct taxes like a health tax similar to the profession tax (a tax on employment, so that those who are earners contribute a fixed amount, depending on their level of earning, each month, which funds the employment guarantee) deducted at source of income for the employed and in trading transactions for the self-employed. Using the Tobin tax route5 is a highly progressive form of taxation that, in an increasingly finance-and-service-sector-based economy, can generate huge resources without bearing too heavily on the individual, since it is a very small deduction at the point of transaction. What this basically means is that for every financial transaction, whether by cheque, credit card, cash, on the stock market, through foreign exchange, securities and so on, estimated to be Rs 1,000 billion daily, a very small proportion is deducted as tax and transferred to a fund earmarked for the social sector. For example if 0.1 per cent is the transaction tax, then for every Rs 100,000 the transaction tax would be a mere Rs 100 and this would generate Rs 365 billion per annum. This would not hurt anyone if it were made clear that it would be used for social sectors such as health, education, public housing, social welfare and so on. The above are just a few examples of what can be done within the existing system, by making small innovations. But this does not mean that radical or structural changes should not also be considered. Ultimately, if we wish to ensure universal access with equity, we need to think in terms of restructuring and reorganizing the healthcare system, using a rights-based approach. This would require a multi-pronged strategy: building awareness and consensus in civil society; advocating rights to healthcare at the political level; demanding legislative and constitutional changes and, finally, reorganizing the entire healthcare system, especially the private health sector. In short, we have to stem the growing out-of-pocket financing of the healthcare system and replace this with a combination of public finance and various collective financing options such as social insurance and other forms of collective fund-raising. The healthcare system needs to be organized into a regulated system that is ethical and accountable, that is governed by a statutory mandate and that pools together the various collective resources and manages autonomously the workings of the system in the interests of providing comprehensive healthcare to all with equity. All over the country there are various policies emerging which were successfully implemented like Yeshasvini started in Karnataka as a self funded healthcare scheme Offering a low priced product for a wide range of surgical cover, nearly 805 defined surgical procedures to the farmer cooperators and his family members. It is a contributory scheme wherein the beneficiaries contribute a small amount of money every year to avail any possible surgery during the period. The beneficiaries are offered cashless treatment subject to conditions of the scheme at the Network Hospitals spread across the State of Karnataka. More and more such schemes should be implemented by central and state governments.

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Conclusions
The preceding sections of this paper present the health insurance scenario in India. Given the situation, there are few issues of concern or barriers towards implementing a social health insurance scheme in India. These are enumerated below along with the possible way ahead. India is a low-income country with 26% population living below the poverty line, and 35% illiterate population with skewed health risks. Insurance is limited to only a small proportion of people in the organized sector covering less than 10% of the total population. Currently, there no mechanism or infrastructure for collecting mandatory premium among the large informal sector. Even in terms of the existing schemes, there is insufficient and inadequate information about the various schemes. Data gaps also prevail. Much of the focus of the existing schemes is on hospital expenses. There continues to be lack of awareness among people about health insurance. In spite of existing regulation in some States, the private sector continues to operate in an almost unhindered manner. The growth of health insurance increases the need for licensing and regulating private health providers and developing specific criteria to decide upon appropriate services and fees. Health insurance per se, suffers from problems like adverse selection, moral hazard, cream-skimming and high administrative costs. This is coupled with the fact that in the absence of any costing mechanisms, there is difficulty in calculating the premium. There is also a need to evolve criteria to be used for deciding upon target groups, who would avail of the SHI scheme/s and also to address issues relating to whether indirect costs would be included in health insurance. Health insurance can improve access to good quality health care only if it is able to provide for health care institutions with adequate facilities and skilled personnel at affordable cost. There is an urgent need to document global and Indian experiences in social health insurance. Different financing options would need to be developed for different target groups. The wide differentials in the demographic, epidemiological status and the delivery capacity of health systems are a serious constraint to a nationally mandated health insurance system. Given the heterogeneity of different regions in India and the regional specifications, one would need to undertake pilot projects to gather more information about the population to be targeted under an insurance scheme and develop options for different population groups. Health policy-makers and health systems research institutions, in collaboration with economic policy study institutes, need to gather information about the prevailing disease burden at various geographical regions; to develop standard treatment guidelines, to undertake costing of health services for evolving benefit packages to determine the premium to be levied and subsidies to be given; and to map health care facilities available and the institutional mechanisms which need to be in place, for implementing health insurance schemes. Skillbuilding for the personnel involved, and capacity-building of all the stakeholders involved, would be a critical component for ensuring the success of any health insurance programme. The success of any social insurance scheme would depend on its design, the implementation and monitoring mechanisms which would be set in place and it would also call for restructuring and reforming the health system, and developing the necessary prerequisites to ensure its success.

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References

Financing Health Care - http://www.jnj.com The Associated Chambers of Commerce and Industry of India

www.economictimes.indiatimes.com Health Insurance in India: Current Scenario Annual Report to the People on Health Government-2011 Government of India & Ministry of Health

and Family Welfare

Health Care Financing Reforms in India - M. Govinda Rao and Mita Choudhury

http://www.yeshasvini.kar.nic.in/

The willingness to pay for medical care: evidence from two developing countries -Gertler, P.;

Gaag, J. van der

Are the Poor too Poor to Demand Health Insurance?-Ahuja, Rajeev

Antenatal and Maternal Health Care Utilization: Evidence From Northeastern States Of India

-Anindita Chakrabartia and Kausik Chaudhuri

Reasons for Non-Utilization of Institutional Healthcare Service in Rural West Bengal: A Perspective-

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Srabanti Mukherjee, N. R. Bandhopadhyay & B. K. Bhattacharya

K. J. Somaiya Institute of Management Studies and Research

Quality of Healthcare Services in Rural India: The User Perspective-J K Sharma and Ritu Narang

Healthcare for the Other India-K. R. Balasubramanyam

Health security for the rural poor? A case study of a health insurance scheme for rural farmers and peasants

in India-Sarosh Kuruvilla and Mingwei Liu

Healthcare in India: Changing the Financing Strategy-Ravi Duggal

Globalisation and Healthcare Financing in India: Some Emerging Issues-Guljit K. Arora

Utilization Of Maternal Health Care Services In South India-K. Navaneetham & A. Dharmalingam

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