NHPS is a transformational idea that needs to be implemented well. But alleviated ambitions on NHPS need to be tempered with ground realities
The National Health Protection Scheme (NHPS) or Modicare has become the talk of the town. Refreshingly, politicians in the country are talking about healthcare. Most commentators have dubbed NHPS as the single biggest idea in the Union Budget. Industry folks have hailed it. Health planners and policy makers, who see this as an advancement of Universal Health Coverage, have welcomed it. Beneficiaries of the current State-sponsored health insurance scheme, Rashtriya Swasthya Bima Yojna (RSBY) cheered at the prospects of higher financial cover. The poor and the vulnerable, hitherto excluded from the RSBY, saw a ray of hope of getting included. Never mind it came late in the pre-election Budget.
Undoubtedly, NHPS is well-intentioned — it marks a continued commitment of the Union Government to shield the poor against hospitalisation expenses. The Government has raised the ambitions of the poor in terms of both extent of financial protection and the number of people to be covered under the scheme. Providing a financial cover of five lakh rupees/family to 100 million families is definitely a tall order. It has the potential of becoming the world's largest health insurance scheme. However, going by the decade-long implementation experience of RSBY, it may take several years to realise this potential.
Is the financial cover less or moreIJ The financial protection of five lakh rupees/family announced under NHPS constitutes a significant increase — not five times, not 10 times but more than 15 times — over the protection provided under RSBY. This cover is on the higher side, especially when one considers the Government's thrust on affordable care through other interventions aimed at bringing down the cost of drugs, diagnostics and medical devices. Indeed, under RSBY, some States had enhanced the Rs 30,000 limit through a supplementary State funding. Even so, none of the States provided protection up o five lakh rupees/family. Perhaps a better strategy will be to start with a somewhat reduced level of protection and increase it once the scheme gets stabilised. High-level protection will create incentives for gaming the system. To prevent gaming, design and implementation of the scheme will have to be near perfect at the very outset.
Is the Budget allocation less or moreIJ Many people have raised concerns regarding the Budget allocated to the scheme this year. The real concern is not the allocation. In fact, an allocation of Rs 2,000 crore may actually be on the higher side as the initial rollout of the scheme is expected to be slow for two reasons: One, the scheme is still being given final touches and may take a few months before States start implementing it. Two, the initial phase of the scheme will entail putting the system and processes in place which does not require huge funding.
Thinking beyond this fiscal year, the Union Government has assured that funding of the scheme will not be a problem and one per cent additional cess on the incomes of rich taxpayers should generate adequate funding. The Government may be confident of meeting its share of funding commitment, but States, who are supposed to fund 40 per cent of the costs, may not be that confident. To put the issue of State funding in perspective, if all 14 million Below Poverty line (BPl) families in Bihar, identified under RSBY, were to be brought under NHPS, the State's contribution (at Rs 400/family) will have to be nearly Rs 5,600 million. Similarly, the scheme would cost the Government of West Bengal, Rs 4,440 million to cover it's BPl population. These amounts constituted over 20 per cent and 10 per cent of the States own health spending in Bihar and West Bengal in 2014-15. These States may not be representative, but they do highlight the funding challenge that may be present to varying degrees in almost every State.
Are the States game for itIJ looked from a State's perspective, funding for the scheme is not the only challenge. Availability of quality hospital care services, especially in and around many less developed districts, is another big challenge. There are reasons why, after several years of RSBY implementation, Bihar could cover only 51 per cent of its target BPl population and West Bengal could cover only 57 per cent. Fixing the supply of healthcare services will take some time. The States may have the freedom to choose among different implementation models (trust model, insurance model or a mix of the two) but challenges of funding, capacities and hospital care provision are huge. Elevated ambitions on NHPS need to be tampered with a sobering reality at the ground level.
Further, it is also not just about designing and implementing a scheme. It is also about organisational development, which has to do with building capacities, creating performance and monitoring culture, branding of the scheme, spreading education and awareness and much more. In other words, it is also about creating a smart organisation. If implemented well, the scheme can be truly transformational. From a health system perspective, the scheme has the potential to change the way public hospitals are currently funded. The scheme can be leveraged to move away from annual budgetary support to performance-based financing. This will increase efficiency of public hospitals as well as improve the quality of care in both public and private hospitals that get empanelled under the scheme. With a big planned leap in the hospital care, can the country afford to lag behind in primary care or leave the primary care disconnected from the hospital careIJ
(The writer is a development economist, formerly with the Bill & Melinda Gates Foundation and the World Bank)