For 20.1% of the Indian Population, borrowing is the first source of healthcare financing, and for 35% it is the second source of healthcare financing, implying that debt is a corollary to meeting healthcare needs.

There is often a positive relationship between aging, deterioration of health, and consequently the frequency of healthcare requirements. According to the National Health Profile 2018, India is among the countries with the least public health spending accounting for about 1.6% of the GDP forcing most people to turn to the private health sector for better quality albeit highly-priced healthcare.

According to the World Health Organization’s health financing profile for 2017, 67.78% of the total expenditure on health in India was paid out of pocket while the world average is just 18.2%.

For 20.1% of the Indian Population, borrowing is the first source of healthcare financing and for 35%, it is the second source of healthcare financing implying that debt is a corollary to meeting healthcare needs.

This predicament, while extensive specifically affects senior citizens. According to the Agewell Foundation’s Report titled ‘Financial Status of Older People in India’, 19.35% of the older persons claimed that their financial status is very critical. Pensions have been the main source of income for 41.43% of the elderly population.

Around 61% of the respondents said that they are not satisfied with old-age financial security schemes in India. The lack of steady income-generating activity, the inadequacy of social security schemes, increased vulnerability to diseases, and the need for chronic care afflicts the elderly community with financial and consequently, health insecurity.

Most members of the elderly community rely on their static retirement corpus to fund their healthcare needs, when their savings run out or are unable to cover costs, they resort to borrowing.

The problem of medical indebtedness arises due to the excessive reliance on Out Of Pocket Expenditure (OOPE) to meet healthcare needs; insurance could therefore help reduce OOPE, thereby mitigating the problem of medical indebtedness. The question that then arises is whether the private and public-tax-driven insurance systems are effective in financing the healthcare needs of the elderly community.

In pursuance of this question, this edition of Vichaar had the honour of hosting Professor (Dr.) Indranil Mukhopadhyay, Associate Professor at Jindal School of Government and Public Policy. Dr. Mukhopadyay begins providing insight into the gravity of the problem of medical indebtedness and draws attention to the inequalities in access, seeking, and reporting of healthcare requirements and, borrowing power, that exists depending on factors such as age, economic background, caste, and gender.

He points out that health-seeking behavior is the least among marginalized societies and it is lower in rural areas when compared to urban areas.

Most members of the elderly community rely on their static retirement corpus to fund their healthcare needs. When their savings run out or are unable to cover costs, they resort to borrowing.

Due to the high cost of healthcare and the apprehension of indebtedness people also do not seek help unless the health condition has deteriorated to a point where they have no other choice than to seek professional medical help.

He then compares the private and public sectors of healthcare on the basis of motive, quality of care, infrastructure, and cost of care. He contradicts the notion that the private sector provides better quality care and asserts that while the private sector provides better service quality, it is the public sector that provides healthcare higher in clinical quality. He adds that quality of care is not static; there is a positive relationship between clinical quality and service quality.

Next, he begins evaluating the private and public-tax-driven health insurance systems in India. He states that contrary to common conceptions, the private health insurance market is very weak, benefiting only the top 20% of the population, and the public tax-funded insurance schemes have failed to cover the needy sections of society.

He asserts that it is the lower middle class of people that are most vulnerable as private health insurance is inaccessible to them and they are not eligible for public tax-funded health insurance. Elderly people also, he maintains, would not be adequately covered by insurance due to the barriers in accessibility to private insurance.

He explains that the Ayushman Bharat Scheme, though exceptional as a concept, has made very little progress with regard to the allocation of funds or the implementation of its programs.

Finally, he speaks about the changes that need to be made in order to ensure universal healthcare and coverage. He emphasizes the importance of expanding public investment and opines that at least 3.5% of the GDP must be allocated for healthcare in the long term.

He opines that the private sector of healthcare must be systematically and comprehensively regulated to curb problems such as exploitation, over-charging, and induced demand for unnecessary care in order to push it into a form of solidarity with public health goals and de-commercialize and de-commodify healthcare.

The private sector of healthcare must be systematically and comprehensively regulated to curb problems such as exploitation, overcharging and induced demand for unnecessary care in order to de-commercialize and de-commodify healthcare.

He asserts that people must be aware of their right to healthcare, the insurance that they are due and make it a point to demand what they are due. He concludes by opining that healthcare is about ‘care’ and therefore empathy and solidarity are essential in care provisions. Healthcare systems he asserts must be geared towards care.

This podcast provides insight into the issues that plague the healthcare and insurance systems in India. This podcast is a must listen!