Covid has shown what medical spending can do to the poor and even the middle classes. Governments must act at the micro and macro levels
With Covid cases detected touching 3 crore, it is entirely possible that many lakh citizens have had to be hospitalized in the past year. Last month, the General Insurance Council revealed that insurers had received more than 15 lakh claims. But this might only represent a fraction of the total complaints received. And hundreds of thousands of dollars more would have benefited from treatment without the benefit of insurance. The 2017-18 NSO Healthcare Survey found that over 80% of Indians lacked health insurance coverage. The same report also found that only 42% of patients sought inpatient treatment in public hospitals, highlighting the extent of dependence on private care for low-income Indians.
This newspaper yesterday highlighted the widow of a marginal farmer, Sunita Paswan, struggling with a debt of Rs 2.5 lakh after she was unsuccessfully transferred to a private hospital because a public hospital in Muzaffarpur did not have a bed. The farm’s last harvest income was only Rs 18,000, highlighting the dire odds Sunita now faces. Even the insured middle class has had to dip into its pockets with insurers refusing claims for many aspects of Covid treatment in private hospitals like consumables (masks, gloves, PPE, etc.) and various running costs. Even before Covid, direct spending (OOP) on healthcare outweighed government spending 2: 1.
Not only most of the developed countries, but even some emerging economies like Brazil, Cuba, South Africa and Turkey have a much lower OOP than India. Clearly, India needs to improve both public health and insurance coverage. Since the 2018 NSO survey, the Centre’s PM-JAY has registered 16 crore of households. But its effectiveness during this pandemic is called into question after responses from RTI revealed that PM-JAY has been catastrophic in many states with UP, Bihar, Gujarat, Punjab and Jharkhand the worst culprits.
For too long, most parts of India have underestimated public health. In 2018, only 4% of those who received inpatient medical care in public hospitals in Bihar received free medicine compared to 89% in Tamil Nadu. One in five BPL households charged medical expenses to their fate. The latest economic survey also clearly warned the government against healthcare costs that drive people into poverty, while suggesting an increase in public health budgets to 3% of India’s GDP. Given the current unemployment crisis in India, such an increase in spending will also create thousands of jobs in the healthcare sector. While the Center rejected a PIL requesting compensation of Rs 4 lakh for Covid deaths, governments must make an effort to understand the debt linked to Covid hospitalization and make special payments for most deserving cases . And if this crisis does not lead to an increase in public health spending, we really wonder what will happen.
This article appeared as an editorial notice in the print edition of The Times of India.
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