Modicare: All Sound and Fury...
The big take-away from the Union Budget 2018 was the mega National Health Protection Scheme that is probably aimed at getting Modi sarkar through the 2019 general elections. The programme, dubbed as Modicare, is already claimed to be the largest government-funded healthcare scheme in the world by providing a cover of Rs5 lakh to 100 million families (or 500 million Indians) for secondary and tertiary care.
Typical of this government, the scheme is tall on claims and short on details. Only Rs2,000 crore has been provided for the grand plan in the Budget, but that has not stopped acolytes and apologists claiming it to be a game-changer, while detractors are calling it another jumla
(empty statement). And, yet, no political party would dare to oppose a scheme that promises much-needed healthcare to our poorest people.
Will Modicare work and be a game-changer? It is too early to say, except that there are too many contradictions and questions. Over the past four years, the Narendra Modi government has demonstrated its ability to ram through big and audacious programmes but has fallen far short on implementation. Demonetisation and the Goods and Services Tax (GST), with its many glitches and frequent change in rules, caused immense hardship and anger by treating people like guinea pigs. The government adamantly refuses to admit to any flaws in the mega unique identification programme (Aadhaar), despite sickening reports of denial of benefits and rights, data leaks and faulty implementation every other day.
When it comes to Modicare, puffery and media management is giving us different signals. On the one hand, an interview by Union health minister, JP Nadda, to The Economic Times suggests that the scheme is still being designed and will evolve over the next six months or longer. He told the newspaper that the best practices of various state governments that already have large healthcare schemes, will be studied to see “how the programme can best reach the masses.” They may also be persuaded to subsume their schemes into Modicare and then “a separate body will be put together to run the programme on mission mode.” This suggests a big-bang launch and media blitzkrieg just before the election code comes into operation, whose reach will be limited by the Budget allocation for it.
In complete contrast to what the health minister has said, Firstpost.com claims that a 28-page report titled “Universal Access and Quality” was prepared by top bureaucrats, way back in 2016, under the direct supervision of the prime minister. The report, it says “clearly stated that the government must provide health protection to 10 crore deprived families as per the Socio-Economic Caste Census (SECC) absolutely free of cost.” Why then is the health minister saying that the scheme is still being formulated, two years later?
Writing for the Scroll, T Sundaraman, a healthcare expert, points out that a smaller version of Modicare “was, in fact, announced in the 2016 Budget—the only difference being that the sum assured was raised from Rs30,000 to Rs1.5 lakh then and to Rs5 lakh now. The scheme has not been operationalised in the last two years. Moreover, not even 50% of the funds under the existing health cover scheme have been spent in the past year.”
Dr Sunil Nandraj, a former advisor to the health ministry, has written that the government is already struggling with the Rashtriya Swasthya Bima Yojana (RSBY) which offered a Rs30,000-cover to 36 million people.
The issue is: What kind of healthcare infrastructure is really being offered to 100 million people? Ultimately, won’t Modicare depend on the creaky government healthcare system or the massive corruption, malpractices, pass-backs, unnecessary procedures and extortive costs of private healthcare? There have been several hard-hitting books such as Dissenting Diagnosis and The Ethical Doctor that have exposed the rot in India’s healthcare system from within and also suggested practical reform.
Serious corrective action and a clean-up of the healthcare industry ought to precede the roll-out of a massive, insurance-based, national healthcare programme; but this will take ages. The timing is so close to the general elections that this is wishful thinking.
Dr Arvind Mayaram, former finance secretary
So far, the government has only tried to cut costs by fiat. Last year, people cheered the dramatic 80% cut in the cost of cardiac stents and price control over several medicines. But this effort, to force down costs, has also had mixed results, with hospitals hiking up the cost of consumables and manufacturers squeezing supply. Media reports suggest that a rethink on costs is in the offing amidst hectic lobbying by the industry.
The poor need free primary healthcare as much or more than secondary and tertiary healthcare. Modicare requires availability of high-quality medical and diagnostic facilities within reach in small towns and villages of India which covers 70% of the population. Otherwise, the costs in bringing patients to hospitals will be prohibitive for many poor families. The Budget announced the Ayushman Bharat Programme to develop 150,000 health and wellness centres which is also only a proposal.
There is nothing to indicate that India can circumvent the pathetic public health infrastructure with public-private partnerships anytime soon. In fact, global experience suggests that government schemes are only a bonanza for the private sector and escalate healthcare costs for all.
Moreover, researchers, who have studied the RSBY of 2008, covering five persons per household below the poverty line (BPL), found severe problems with its implementation and corruption; over half the households enrolled were not even BPL. A health secretary in Maharashtra had expressed concern about needless surgeries (mainly bypass surgeries and hysterectomies) being performed due to the funding available under such schemes; but this has not even been studied in detail.
While the poor suffer enormously, due to absence of healthcare facilities and costs, the middle-class has borne the brunt of medical malpractice, galloping healthcare and insurance costs as well as rampant mis-selling of products. Other than a small set of organised sector employees who benefit from corporate group insurance policies, the majority of Indians have three big financial worries for their families—housing, education and healthcare.
Action to regulate the insurance industry has always been slow and inadequate; grievance redress is poor (all 17 posts of the insurance ombudsman in India are currently vacant) and affordable coverage for senior citizens remains a serious issue with insurers brazenly circumventing regulation to double insurance premiums in this segment.
As if this is not bad enough, the middle-class also pays an indirect price when the exchequer covers the losses of existing schemes. For instance, the Pradhan Mantri Suraksha Bima Yojana, an accidental death and disability cover with 130 million subscribers, has a 200%+ claims ratio. Insurers were told to hold premium at Rs12 per year for three years and it is now likely to treble.
If, as claimed, the government’s vision is to provide universal life and health assurance to citizens “with defined standards of services and at affordable rates,” a lot more work is required. So far, there isn’t enough groundwork to make the big healthcare announcement very credible and it does appear more like election bombast.
Also, while one set of bureaucrats, led by the current finance secretary, is credited with formulating Modicare, here is what former finance secretary, Dr Arvind Mayaram (who was shunted out to tourism ministry in 2016), tweeted immediately after the Budget speech on 1st February: “Universal health insurance through private hospitals has not worked for the poor anywhere. The biggest beneficiaries are the private hospitals and insurance companies. There is no substitute for public healthcare. More money should have been pumped to strengthen it.”