Relevance and use of the article in UPSC prelims and mains examination:Dear aspirants,this article is about the much needed health care reforms in in India.The burden of non communicable, tertiary diseases in India is increasing as its population of prosperous and aged people increases. Private health insurance is largely limited to upper middle class patients, while publicly financed health insurance has failed to attract lower-income patients. New evidence from the Aarogyasri Programme in the Indian state of Andhra Pradesh, suggests that community networks may provide an important channel to disseminate information and encourage take up of public health insurance.
Menace of disease in country:
- Apart from quality of life and income, poor health affects the wellbeing of families sociologically and psychologically. The economic burden of bad health is tangible and substantial. This expenditure is financed by borrowing or selling assets.
- Approximately one-third of households in India face catastrophic health expenditures were out-of-pocket payments exceed 40% of the household’s ability to pay. For poorer households, catastrophic healthcare expenditure, followed by temporary or permanent job loss, may effectively lead to impoverishment.
Communicable versus non-communicable diseases
- Communicable diseases, maternal and child health conditions account for nearly half of India’s disease burden. Healthcare policies focus primarily on communicable diseases as they pose large negative externalities to society and are usually less resource intensive to address.
- As a result, the incidence of communicable diseases, such as malaria, tuberculosis, diarrhoea and other infectious diseases has reduced sharply, with polio and leprosy being almost eliminated.
- The number of deaths from communicable diseases decreased. But tertiary diseases in India and elsewhere in South Asia have increased disproportionately but received relatively less attention from policy makers.
Tertiary diseases: burden and demand
- India’s public interventions toward tertiary diseases are mostly limited to subsidized health care services through facilities that are directly owned and operated by the government. In practice, the vast majority of these public healthcare facilities are of poor quality and often crowd out private health care providers.
- The treatment of tertiary diseases such as cancer, diabetes, cardiovascular and respiratory diseases requires better facilities. Additionally, recent trends suggest that the burden of such diseases is slated for a fairly sharp increase, while incidents of death from communicable diseases are on the decline.
An absence of insurance in developing countries
- Insurance against catastrophic health expenditure may increase the ability of economically weaker households to save and invest their way out of poverty. In many developed nations, where insurance markets are developed, health insurance coverage is almost universal.However, in the context of developing countries, despite being heavily subsidized, health insurance coverage is negligible.
- In India, 86% of all health expenditure is out of pocket, with only 15% of Indian households reporting any insurance coverage. Utilization of Rashtriya Swasthya Bima Yojna (RSBY), a central government operated health insurance programme providing insurance coverage to Below Poverty Line (BPL) households in 25 states.
Why has the private market failed to deliver?
- One reason the private market fails is because only the chronically unhealthy try to enroll, resulting in the premiums quickly spiraling beyond affordability.
- Poor households do not understand the benefits of health insurance.
- Households may not trust insurance providers to reimburse claims, especially since few private firms have proven track records in processing and paying claims.“Typically, people in that strata of society are circumspect about any scheme, which needs them to put in money – simply because they do not trust that they will get this money back.”.
Publicly funded programmes: hidden potential?
- Publicly funded programmes with cashless transactions and no co-payments or deductibles may have the potential to increase the adoption of health insurance.
- If premiums are paid directly by the government, trust in the provider and liquidity constraints in paying premiums do not serve as significant barriers to take-up.
- Even so, the treatment of tertiary diseases relies critically on information, about which specialty hospitals and physicians provide the best care, treatment options, as well as information on how to use the programme. Peers and social networks might be an important channel by which such information is obtained.
The Aarogyasri Programme
- The Aarogyasri Programme is a cashless public health insurance programme for BPL households in Andhra Pradesh (and Telangana since the state’s formation in 2014). The programme covers medical bills up to Rs. 200,000 for the treatment of serious ailments such as cancer, kidney failure, heart and neurosurgical disease that require hospitalization.
Provisions under Aarogyasri:
- All transactions are cashless, allowing beneficiaries to go to any authorized hospital and receive care without paying upfront for the covered procedures. The insurance does not have any deductible or co-payment.
- The programme is operated by the Aarogyasri Health Care Trust and managed by a private insurance company. Currently, 938 treatments are covered under the scheme. Almost 90% of the population of the two states possesses a BPL card making the programme almost universal.
- The Aarogyasri Trust pays health care providers on a case-by-case basis at a predefined rate. Hospitals conduct free health camps for patients and help desks facilitate patient access at primary health centres, area/district hospitals and network hospitals.
Outcomes of community networks
- The results show that network effects are the largest for cardiology, nephrology and urinary surgery, with oncology and pediatrics patients also relying extensively on their peers. In contrast, network effects associated with ophthalmology, plastic surgery, dermatology and gastroenterology are lower, perhaps because decision-making by patients is less complex for these procedures.
- These findings have implications for strategies to improve the treatment of tertiary diseases in India and other developing countries. By uncovering the role of community networks on healthcare use, the welfare programs should incorporate network based learning, in addition to direct information provision, to increase participation.
- With respect to publicly financed health insurance, researcher has also found that community liaisons are effective in encouraging enrollment in RSBY. Future research, with a sharper focus on implementation, could help understand and operationalise the network-based approach to increasing healthcare use.