A look at the number of infant deaths in the country caused by preventable diseases makes it clear that without effective intervention, India’s famed demographic dividend could be coughing its way to oblivion.
India’s spending on health is the least among the BRICS nations. Last year, India missed six out of the ten health targets part of the United Nations Millennium Development Goals. The prime minister wants everyone to have insurance to ensure better healthcare, but there is a long way to go before that vision is realised.
Fresh data released last week by government agency National Sample Survey Organisation, on expenditure incurred by households on health, revealed that eight out of 10 Indians are not covered by any sort of health insurance. This comes along with another warning sign that a lot of people are not only using up their savings to pay hospital bills in case of ailments, but some are even forced to sell personal assets.
According to the data, at least one in every 20 people was reported to have been hospitalised in the last one year. However, more than two persons reported being sick from an ailment in the past 15 days. This means that a substantial number of people are suffering from acute and chronic conditions, but only a fraction is actually able to receive effective care.
Insurance cover
The data further claims that patients in public hospitals spend about Rs 6,120 on hospital treatment on an average, while those receiving treatment in private facilities shell out close to Rs 26,000. This amount goes up exponentially if one considers expenditure on life-threatening ailments. Households with a tight financial situation could often delay or avoid going to the hospital altogether, which is where health insurance steps in. Studies have shown that millions of people are being pushed into poverty owing to rising medical costs in hospitals.
By paying a monthly or yearly premium, households are able to secure compensation for their expenditure in the hospitals through medical insurance policies, which are offered by the government as well as many private players. In India, however, after years of existing in various forms, insurance is yet to catch up – or even work.
From those polled in the nationwide survey during the first half of 2014, 86% in rural areas said they had no formal insurance cover to take care of their medical expenses, while the figure was close to 82% in urban areas. While 13% of the people avail the benefits of government-funded insurance, only about 3% pay for insurance privately. In rural areas, less than three people per 1,000 persons actually subscribe to insurance.
Who's paying?
The problem of not enough Indians getting insurance is just the tip of the iceberg. A far more troubling situation exists for those who do. According to the data, only 1.2% of hospitalisations were reimbursed by insurance companies, while this figure was 6.2% for urban areas. This implies that only about 29 per 1,000 people received reimbursement for hospitalisation expenses on their treatment.
So who is paying for people’s ailments? People. Two out of every three households in urban areas reported that they used their personal income and savings to pay for their medical expenditure in the past year. In rural areas, 67% of people said they used savings, while 25% had to resort to borrowing funds.
Other sources of funds included contribution from friends or relatives for 5% of the people surveyed, while 1% reported that they even had to sell personal assets to fund medical expenditure.
This further underscores the need for insurance for the less privileged, as the survey remarked that those on the lowest rung of the ladder had negligible access to insurance and this number rose with the rise in income levels.
“It is also observed that such [insurance] coverage was broadly correlated with levels of living in both rural and urban sector,” the report stated. “On the whole, the poorer households appear not to recognise the efficacy of the coverage, both in rural and urban areas.”
