How will the BJP fund a universal health care system?

In its manifesto, the Bharatiya Janatha Party promises on pages 25 and 26 that it has the following idea of health care for Indians.

“The overarching goal of healthcare would be to provide ‘Health Assurance to all Indians and to reduce the out of pocket spending on health care’, with the help of state governments.”

The segment on health care begins with the preamble that there is a need for universal health access for Indians mainly to cut out-of-pocket spending. The theme of universal access is something that has been discussed in various official reports beginning with the Joseph Bhore Committee in 1946. No government at the Centre has really come around to universalising health care, and the BJP is the latest to present the problem afresh to a population that is acutely aware of it.

What the BJP manifesto does not say, however, is that it recognises access to health care as a right. It is admittedly only a goal, and the road to fulfillment, the document says, would be identified through a New Health Policy.

Notably missing in the BJP manifesto is the approach to health care funding.

India’s Planning Commission has gone into this particular issue in some detail, with the help of its High Level Expert Group on UHC. Spending more government funds, as a percentage of GDP, is the universally accepted measure of policy commitment. How much is a Narendra Modi government ready to spend, as a percentage of GDP? Is it committed to match at least sub-Saharan Africa?

In their important book “An Uncertain Glory” on India’s strengths and difficulties, Professors Amartya Sen and Jean Dreze have highlighted the troubled state of national health care policy.

They point out, just as the HLEG report of the Planning Commission headed by Dr. K. Srinath Reddy did, that dependence on private (or commercial) health insurance is the wrong road to take. Expansion of access must be done through a universal, tax-funded system that is free at the point of delivery.

Serious deficiencies

Here is why private health insurance in India (and the system run by public sector companies on the same model), suffers from serious deficiencies:

Insurance companies will predominantly attract high-risk clients who either already need or will soon need care, rather than those who are at low risk and can participate in a universal pool. This problem of adverse selection is a well-known market failure.

There is no incentive to contain costs, either by the patients or by the hospitals. Regulation of costs by official measures would lead to uncertain medical standards and “cream skimming”, which Dr. Sen and Dr. Dreze explain as a temptation to treat low-cost patients and turn away the rest.

The BJP would also have to contend with the fact that the present model of health care is heavily centred around hospitalisation. This seriously impairs the prospects of people with communicable diseases that are acquired due to social factors, and those with non-communicable diseases such as diabetes, hypertension and so on (until their complications lead to a crisis event requiring hospitalisation, such as a heart attack).

Professors Sen and Dreze also point out that the strong grip of private health care on the country, aided by State governments that subsidize them with premiums for a targeted section of the population, is bound to affect the growth of the public health infrastructure network.

Just how much does India spend from public funds on health care?

As a share of GDP, it is 1.2 % (in absolute terms, in 2005 PPP dollars it is 39)

Here is a comparison:

Share of GDP % As share of total health expenditure %
India 1.2 29 39
South Asia 1.2 30 36
Sub-Saharan Africa 2.9 45 66
East Asia & Pacific 2.5 53 167
Latin America & Caribbean 3.8 50 424
Middle East & N Africa 2.9 50 199
Europe and Cen. Asia 3.8 65 585
World Average 6.5 63 641
European Union 8.1 77 2,499

From “India and its Contradictions”, Sen and Dreze, 2013 ; Last column refers to spending in absolute terms, per capita in 2005 PPP international dollars. 

Just what is the BJP’s vision of health care funding, when the national investment so far has been dismally low?

When will it move forward on this critical area for the country?


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