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The quiet death of universal health insurance in India

05 May 2015 Mark Hollis

In a country as populated as India there are shortages of many things. One thing that seems to be an abundance of, however, is questionable healthcare policies. Now the second health minister in an administration that has been in power less than a year, plans to quietly dismantle the government's target of achieving universal health insurance, dashing hopes that this administration would be a break with the past.

You may think of me as being rather unfair upon the minister, after all he may only be trying to do his job in spite of very tight funding constraints. But, and this is a big but, it is perhaps the duty of a health Minister to put forward the case for increased expenditure, if necessary by shouting over the demands of other Ministers.

For its part, the government may argue that its only option is to curtail health insurance plans as the Indian economy sours and the government is forced to respond by trimming government expenditure. But the government is forgetting a key rule of healthcare expenditure. Time and time again governments have demonstrated that where populations have access to good quality healthcare and communicable diseases are kept in check, this can result in a dramatic improvement on a country's economy. This is not only in maintaining industrial efficiency but also in freeing up personal savings - which people tend to accumulate to prepare for a catastrophic healthcare event - to spend on consumer goods and the like. This was the basis for China's healthcare reform and remains the rationale for efforts by countless other governments from Indonesia to Nigeria, which are attempting to roll out health insurance.

Pharmaceutical companies, I feel are in a good position now to force the government into action on healthcare. Every time that the government moves to reduce drug prices, ostensibly to improve access to medicines in India's largely out of pocket market, the industry responds by suggesting that the move will impact profits. Whilst this is true, the industry is well placed to instead hold the government to account, draw a line in the sand, and demand that no reductions are made in prices without improvements in access that will offset this reduction. Given the size of the industry, the government can hardly afford to ignore the industry lobby and the industry might also win favor amongst the Indian population.

Although the proposed universal health insurance scheme that the government is now abandoning was small with only 50 drugs reimbursed and a limited range of inpatient care options, it offered the potential to provide healthcare to many. In a country with phenomenal economic growth but poor health outcomes the policy U-turn is likely to generate an angry reaction.

Mark Hollis is a life sciences analyst for IHS
Posted 5 May 2015

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