Tag: Rashtriya Swasthya Bima Yojana

Budget 2019 Reeks of a Lack of Real Ambition

While troubles on the low investment are simply assumed away, the silence on major issues like job creation and the viability of agriculture was deafening. 

In terms of economic vision, it has always been difficult to make sense of the Narendra Modi government. 

The previous five years were hardly inspiring in economic terms: relatively little was done in terms of positive changes to address the major problems in the economy. Most economic policies of the earlier government – including some more problematic ones – were simply continued, often in a renamed or repackaged form, while the regime was punctuated by the twin disasters of demonetisation and the badly botched and rushed implementation of the goods and services tax.

Meanwhile, especially before the general election, the government put its head in the sand and simply denied the most obvious economic problems. It encouraged changes in the estimation of the GDP that were opaque and appeared to be unfortunately partisan, creating scepticism about the reliability of the data within and outside the country.

It suppressed unsavoury economic data like the report of the employment and unemployment survey emanating from its own statistical agency, which showed falling labour force participation especially of women and historically high open unemployment. It refused to admit the problem of low investment rates that were afflicting industry.

It offered a minor sop of cash transfers to some farmers in lieu of addressing their significant and growing problems that had resulted in a year of almost continuous farmers’ protests. Overall, it kept insisting that everything is fine in the economy, despite all evidence to the contrary.  

Also read: Union Budget 2019-20: All You Need to Know

Even so, a lot was expected from this first Budget to be presented by the new government. After all, this government now has enormous political capital, having just comprehensively won the recent election, despite all concerns about how that election was run, and so it can afford to announce big policies. Modi had already shown himself to be able to make bold decisions (demonetisation was certainly a bold decision, albeit a crazy and disastrous one).

The prime minister and other government officials have gone on record over the past few days, with extravagant claims of transforming the country through a ten-year vision of a “new India”, in which the size of the economy will supposedly more than double in just five years. (This is what the prime minister’s goal of achieving a $5 trillion size of GDP by 2022 amounts to, even with the optimistic assumption of a stable exchange over the period.) 

And there was much talk of blue sky thinking and bold moves to deal with the economic challenges ahead.

So what did the Budget finally deliver on these expectations? In the wake of all the promises, most people were left scratching their heads trying to identify even one big idea or significant move. 

Certainly, the silence on major issues like job creation and the viability of agriculture was deafening. 

The low investment rate was simply assumed away – in line with government arguments that investment has anyway bottomed out and will now increase. The problems in the banking and non-bank finance sector did get some much-required attention, but the proposed moves are minor and may well be inadequate to deal with the scope of the problem. Despite much emotion expended on small enterprises, there is really nothing that would improve their conditions significantly. 

People watch Nirmala Sitharaman’s Union Budget 2019-20 speech at an electronics store in Kolkata. Image: PTI

As has become usual in the last few years, the Budget was extremely optimistic in the matter of estimating future revenues. GST revenues are projected to go up by more than 13% over last year’s receipts, a tall order given the already poor receipts of the first quarter. 

There is a sop to the middle classes in terms of the increase in the exemption rate to Rs 5 lakh income per year, which it is claimed will be counterbalanced by slightly higher taxes on the very rich. The Centre has continued to centralise and bypass Finance Commission awards – surcharges and cesses, which do not have to be shared with state governments, are projected to account for around 16% of the projected tax revenues.

On the expenditure side, the lack of action may be even more surprising. The only big increase is on the pre-election scheme of cash transfer to farmers, the PM-KISAN, which will eat up Rs 75,000 crore. Infrastructure development is supposed to be a big priority of this government, but only the railways gets a reasonable additional allocation of just under Rs 13,000 crore (leaving out the high hopes of vast amounts to be raised through Public-Private Partnerships). 

Also read: Union Budget 2019: Fiscal Deficit Target for FY’20 Pegged at 3.3%

Road transport and highways get an increase of only 5.6%, barely keeping pace with projected inflation, while rural development fares even worse, with an increase of less than 5%.  

Other social sector spending mostly just about increases in line with the increase in nominal GDP, in other words remains around the same. The absence of any mention of the supposedly flagship Ayushman Bharat health insurance scheme in the Budget speech fits with its absence in the detailed budget papers, but it is no less surprising for that. 

Instead, the Rashtriya Swasthya Bima Yojana – which was supposed to be rendered defunct by the new scheme – has seen its tiny allocation increase from Rs 2,770 crore to Rs 6,656 crore – a tiny drop in the ocean of the projected requirement. As it happens, I am not an admirer of this scheme, which seeks to substitute two layers of private providers for a better funded public delivery scheme. But does the lack of outlay suggest that the government is also no longer so enamoured of this scheme? 

The surprise, then, is in the lack of ambition. 

But perhaps this confirms something that became quite clear before the elections: this is a government that is less interested in improving people’s economic conditions than in capturing people’s hearts and minds for its own goals. 

That is why one of the chapters in the Economic Survey, when combined with the new “ease” of taxation using only Aadhaar as announced in the Budget speech, should give us all pause. For those of us worried about the possible abuse of Big Data, its forthcoming marriage with Big Brother, as indicated by this Budget, may be the single most important indicator of the future intentions of this government.

Jayati Ghosh is a professor of economics at Jawaharlal Nehru University.

Ayushman Bharat Trivialises India’s Quest for Universal Health Care

Little can be done without a massive increase in public health expenditure and a radical revamp of the primary health infrastructure.

Even by Narendra Modi’s high standards, the level of deception involved in the recent launch of the Pradhan Mantri Jan Arogya Yojana (PMJAY) is breath-taking: the prime minister managed to claim that PMJAY is the world’s largest health programme without making any significant financial provision for it.

It may be recalled that PMJAY is one of the two components of Ayushman Bharat, the Modi government’s flagship health initiative. The other component is the creation of 1,50,000 “health and wellness centres”. The finance minister allocated Rs 1,200 crore for these centres in 2018-19. That comes to Rs 80,000 per centre. Essentially, it is just a new coat of paint for the old primary health centres, which are being renamed for the occasion.

The budget allocation for PMJAY in 2018-19 is just Rs 2,000 crore. That is not much more than the previous year’s budget allocation of Rs 1,000 crore for Rashtriya Swasthya Bima Yojana, PMJAY’s predecessor, which is now being subsumed under PMJAY. In other words, there is virtually no new money this year for PMJAY.

The government claims that PMJAY will provide a health insurance cover of Rs 5 lakh to 10 crore families (about 50 crore persons). What would it actually take to provide this sort of insurance cover? If the beneficiaries spend just one per cent of their Rs 5 lakh quota in a year, on average, then the annual expenditure will come to Rs 50,000 crore. This a very conservative estimate – if the scheme makes it reasonably easy for people to claim their insurance money, the actual cost could easily be twice as much, or more. There is absolutely no indication that the government is willing to spend that sort of money on PMJAY.

According to recent media reports, NITI Aayog experts anticipate the annual PMJAY budget to rise to Rs 10,000 crore or so in the next few years, or something in that range. But Rs 10,000 crore (more than five times the current PMJAY budget) is still chickenfeed for the purpose of providing health insurance to 10 crore families. It comes to Rs 1,000 per family, or Rs 200 per person. For the whole year.

How would you feel if you were told you that your budget for health care this year is Rs 200? An illusion has been created that putting this money in an insurance premium has some sort of multiplier effect. This is not the case at all. Insurance can help to redistribute health expenditure towards those who need it most, but it cannot turn Rs 200 into more. If the government spends only Rs 200 per person on health insurance, that’s the amount of health care an average person gets, that too assuming that there are no transaction costs.

World’s largest health care programme or pie in the sky? Photo credit: Anant Nath Sharma/Flickr CC 2.0

Nevertheless, PMJAY is being projected as “the world’s largest government funded health care programme”, as the finance minister put it in his budget speech. This is very misleading. The term “largest” presumably refers to the proposed population coverage of 50 crore or so, but the wide coverage is achieved by reducing per-capita expenditure to a microscopic level. And even the coverage is not the largest in the world: China’s health care system, with its universal coverage, is much larger. In per-capita terms, public expenditure on health in China is about five times higher than in India.

I suspect that PMJAY actually has little to do with health care, for the time being at least. The real purpose, judging from the National Health Stack documents, seems to be to enable private players to harvest huge amounts of health-related data. It is another instance of what the wizards of information technology call “creating public platforms” (on the back of government schemes) that can be used to develop profitable applications. If that is the purpose, then it makes perfect sense to maximise the coverage and minimise expenditure per person. Maximising coverage, of course, is also a good strategy for the purpose of winning votes.

In short, PMJAY trivialises the goal of universal health care (UHC). Many countries have already achieved UHC, or something very close to it – not only rich countries (including all the OECD countries with the notable exception of the United States) but also many developing countries such as Brazil, Mexico, Sri Lanka and Thailand. This is a historic achievement, well on its way to being replicated across the world. India, however, is yet to initiate a serious debate on this issue, let alone make real strides towards UHC. Social insurance, of course, can be an important part of UHC, and PMJAY, despite its symbolic character today, could possibly develop into a useful form of social insurance. But whatever the approach, little can be done without a massive increase in public health expenditure and a radical revamp of the primary health infrastructure.

Note: The budgetary allocation for PMJAY is Rs 2,000 crore. In an earlier version of this article, it was stated that this figure was for the entire Ayushman Bharat scheme.

Jean Drèze is is visiting professor at the Department of Economics, Ranchi University.

Mary Poppins and Nanny McPhee: Why the Perfect Ayah Never Has a Backstory

We like to say that women’s work is invisible, but that’s not really true. We see women work long hours all the time, we just don’t acknowledge care work as ‘real work’.

I was seven when my parents first started discussing how to raise me without my mom. She was developing what we’d later find out was a severe autoimmune disorder, and managing mind-numbingly painful immobility was going to be a lifelong project. My parents were panicking.

But to be middle-class or above in India, is to have the luxury of being cared for by other people. Someone to clean and cook in our homes, fetch tea in our offices, nurse us back to health, the list goes on. And so, I was raised by the perfect nanny. Uma aunty was a constant fixture in my life from eight to 18, through four cities, my first forays into romance, all my board exams and college admissions. She was even there when I returned from college and set out on the great, big adventure we call employment. Having seen our family through my tantrums and my mother’s recovery, Uma aunty decided to retire after securing many promises that she’ll be invited to my wedding (“‘And could you hurry it up please? Are you sure there’s no special person in your life? But there are so many more men than women in this country,” she told me suspiciously.)

Uma aunty was up there with Mary Poppins, Nanny McPhee, Maria in the Sound of Music. But the self-absorption of childhood obscured a rather uncomfortable fact – perfect nannies never seem to have baggage of their own. They arrive out of nowhere – divine intervention for families in disarray. And then just like that, after fixing everything – riotous kids, family finances, mortal danger – they leave quietly, as mysteriously as they arrived.

But what happens to the nanny once the invariably widowed father has found a new wife and doting mother for his children? In Maria’s case, she herself graduates to family member from professional help. However, where do Poppins and McPhee go after the wedding bells stop ringing? Do they have families they return to? Children of their own who have been in someone else’s care for the duration of this one story?

It’s uncomfortable to think of these women as people with their own lives. So we invent mysterious, magical auras for them – conveniently absolving ourselves of the need to ask humanising questions of the help. Poppins and McPhee are supernatural creatures and everyone knows magic must remain mysterious to work. Maria, a mere human, is an orphan, so naturally, there is no backstory to explore.

Nanny stories always focus on the narrative arc of the family, not the help. Stories start with a crisis (usually the absence of a mother) and conclude when the order has been restored (usually the entry of a lovable step-mother). These stories may seem like they’re about nannies, or more realistically, mother-replacements, but they’re really about the familial core of society. The genre not only demands that children’s lives be ordered by a maternal figure, but also mandates that the mother-replacement eventually make way for a ‘real’ mother. What happens before or after isn’t the point of the story.

“There is something you should understand about the way I work,” McPhee tells her wards. “When you need me but do not want me, then I must stay. When you want me but no longer need me, then I have to go.”

What would happen if the nanny stayed? What would happen if we switched to the help’s perspective? Obviously, fiction gives us some answers. In her poem, ‘the maid’, Nayyirah Waheed, writes:

“call her a part of the family, but never ask her
her childrens names.
just
do not be surprised the day
you accidently
look in her eyes
and
her spirit pulls your heart out through your mouth.”

In her novel Lullaby, Leila Slimani traces the slow, painful derangement of a nanny, Louise, as she takes increasingly desperate measures to maintain her co-dependent relationship with her employers and their children. Eventually, driven to desperation by a family that doesn’t seem to have any emotional need for her anymore, Louise kills her wards and attempts to take her own life too.

We don’t even need to go as far as fiction to stretch our imaginations. Millions of women are employed in domestic work of various kinds, including childcare, but their lives remain as obscure to us as their fictional counterparts’.

Recently, a copy of a Singaporean nanny’s daily schedule made waves because of the realities it revealed. This anonymous woman seems to start her day at 5:30 am, goes to bed at 10:30 pm and only takes a half hour off in the middle of the day. She does everything for a several-member household made up of two parents and what seems to be three children. She gets one day off a month.

Before you gasp and ask how this could happen, remember that the Indian government doesn’t yet have laws that guarantee domestic workers a minimum wage, compulsory paid leave each year or maternity leave. The government has been planning a policy since 2015, but unlike laws, nobody is obligated to implement a policy. The only positive development in the recent past has been that domestic workers can now get health insurance under the Rashtriya Swasthya Bima Yojana (RSBY).

We like to say that women’s work is invisible, but that’s not really true. We see women work long, gruelling hours all the time, we just don’t acknowledge care work as ‘real work’. Instead, we mask it in narratives that emphasise someone’s motherly nature or resort to magical powers to divert attention from the labour we take from them. We don’t ask domestic workers questions like ‘Can women have it all?’ even though they are, in several ways, the original ‘career women’ who support their families, work round the clock and often give up time with their own families to care for someone else’s.

The best nanny stories deprive the children of real bonds with the women who raise them. Because behind talented domesticity lie questions about wages and health insurance, and those are really the things that determine questions of employment. But we make women trudge through murky emotional waters with care work, undervaluing their work monetarily while praising their emotional worth unabashedly.

Increasingly, we talk about the rise of the care economy – how everything will be automated soon enough and human things like emotional care and service will be the only things we’ll be able to monetise convincingly. Before that happens, maybe we should talk more about creating systems that value such care and service work in the same ways that we currently value other professions.

Perhaps the strangest part of interacting with Uma aunty post-retirement is how little we have to talk about now that her physical presence doesn’t shape my life. These new, awkward silences on the phone make us both uncomfortable, bonded as we are by something that lies between transaction and love.

Budget Breaks on Healthcare: More Cover Without Coverage

The new health insurance proposal opens the government’s purse strings to private interests.

The new health insurance proposal opens the government’s purse strings to private interests.

Currently, the Indian government is one of the poorest spenders on healthcare in the world in a country with some of the highest diseases burdens and poverty nexus. Credit: Reuters

‘Ease of Living’ announced by Union finance minister Arun Jaitley presenting the Union Budget 2018 to parliament, is what his government intends to achieve. Towards this end, he laid out to much applause from the Treasury benches, the elements of “the world’s largest government funded health care programme.” The National Health Protection Scheme (NHPS), which Jaitley claimed, takes “health protection to more aspirational level” is inarguably one of the largest initiative in that direction that India has ever seen.

The question, however, is will this stretched cover really mean greater health coverage for the vulnerable? What learnings have been taken into account from previous schemes? What does it mean for the public and private health sectors? More importantly, will the government be able to put money where its mouth is and make the scheme work?

Currently, the Indian government is one of the poorest spenders on healthcare in the world in a country with some of the highest diseases burdens and poverty nexus. Its public expenditure on health is just about 1.2% of the GDP forcing people to dip into their steadily shrinking pockets to buy healthcare.

So, while Jaitley’s announcements prompted cheer at the outset, a closer look reveals that there is more cause for the private health sector to rejoice, as evident when the stock prices of private insurance companies shot up.

Also read: Why the Poor Will Not Be the True Beneficiaries of the ‘World’s Largest Health Programme’

Evidence says, all government schemes evolve into public-private ones

As evidenced from a recent Centre for Enquiry into Health Themes (CEHAT) study on the Rajiv Gandhi Jeevandayee Arogya Yojana (RGJAY), as well as other government-funded health insurance schemes such as the Rashtriya Swasthya Bima Yojana (RSBY), these have all become public-private partnerships, utilising previous and meagre public resources and yet people continuing to pay high out-of-pocket expenditure for healthcare. For NHPS to succeed, there has to be a radically new approach and adequate funding.

The NHPS, too, is a government-funded health insurance scheme to cover secondary and tertiary care. It envisages a cashless cover for ten crore poor families with a coverage of Rs 5 lakh per family. It hopes to bring within its ambit 40% of the country’s population. The purpose is to avert wage loss and impoverishment.

However, with this announcement, one would have expected that the operationlisation plans would have been in place as now the cover has been raised significantly. Contribution by the Centre and the states to the scheme is 60:40; and beyond this the details are sketchy.

Also read: NITI Aayog Comes to the Rescue As Health Ministry Clueless on ‘World’s Largest Healthcare Programme’

Details are pertinent, as the NHPS has an ambitious target of providing coverage to 50 crore people. The funds that would be required for the scheme will be massive.  At present, only Rs 2,000 crore has been assigned to it, which is expected to contribute towards in planning and rolling out. Going forward, while funds have been assured, it was also suggested that the government would levy a surtax that would raise about $1.7 billion a year towards healthcare.

NHPS furthers the finalised goals of the National Health Policy on privatisation

The big announcement is in line with the strategy of the National Health Policy 2017 of “aligning” of the private sector towards public health goals. The public sector is seen as dysfunctional, poorly staffed, overcrowded, poorly maintained, poor services and limitations in terms of diagnostic facilities.  The sector has also been unable to utilise funds allocated such as those under the National Health Mission (NHM).

However, instead of developing and strengthening the public sector, the move is to partner with the private sector.

Also read: National Health Policy Reflects Conflict Between Public Health and Neoliberalism

Moreover, the Centre does not seem to have taken into account the mounting evidence against partnering with the private sector through government funded health insurance schemes.

The national health insurance scheme, the RSBY and other state insurance schemes, such as the RGJAY are in the form of public-private partnerships with private sector players including private insurance companies, third party administrators and network empanelled hospitals. The allocations under the RSBY were dwindling over the years and the funds across several states remained utilised. Chhattisgarh was one the states that had actively implemented the RSBY.

Finance minister Arun Jaitley holds his briefcase as he arrives in parliament to present the Union Budget in New Delhi, India, February 1, 2018. Credit: Reuters/Adnan Abidi

Previous and current government insurance schemes have been plagued with issues

Experiences in general with health insurance schemes across the country have been quite similar. They are plagued by poor outreach, barriers in utilisation of health care services, selective promotion of medical specialties, continued out-of-pocket expenditure and supply side moral hazard. None of the schemes were cashless as envisaged and out-of-pocket expenses have continued despite enrolment in the scheme.

Moreover, rural India accounts for over 70% of the population in the country but the private sector has a poor presence here. This defeats the purpose of the scheme to increase access and provide affordable services in the interiors of the country.

The enrolment under the RSBY and other state-level insurance schemes varies from less than five per cent to about half of the eligible population. How the ambitious target of ten crore families under the NHPS would be achieved is unclear. More important, there is a likelihood of the fragmentation of the insurance pool with several parallel insurance schemes across the states and centre.

The government has over decades promoted the growth of the private sector, with feeble regulations and accountability mechanisms and the private sectors openly flouting the commitments to reserve beds for the poor in return for the subsidies and grants provided by the government. The recent cases of irrational care that came to light at private hospitals in Delhi and the Gorakhpur tragedy are as just the tip of the iceberg.

The resistance faced towards the implementation of the Clinical Establishments Act 2010 is an indicator of the strength of the private sector lobby against its regulation. Even under public-private partnerships, regulation and monitoring of the private sector is weak, to say the least, despite a contract with the government.

Under the circumstances, the government opening up its purse strings enabling the private sector to delve even deeper into its pockets filled with taxpayer money is questionable. 

Also read: Health Insurance Companies Will Definitely Gain, But Can We Say the Same for the Poor?

Other health budget announcements

The government in its budget also announced the Ayushman Bharat programme i.e. development of one and a half lakh health and wellness centres. Thus primary health centres and sub-centres would now provide preventive and promotive health services including for non-communicable diseases, screening for cancers diabetes and hypertension; free essential drugs and diagnostic services as well as maternal and child health. The government has allocated Rs 1,200 crore towards this.

While a focus on preventive and promotive health care is a welcome move, the commitment seems meagre in line of the extent of training and infrastructure development such an initiative would require.

Moreover, this comes in light of progressively decreasing of resources of the NHM. While the NHM might not have been a runaway success, it has had significant impact on health indicators and had a made inroads into the rural areas that need to be strengthened to increase access and equity. Further, as with the insurance schemes, here too, there is a real likelihood of fragmentation of meagre resources due to programmes with parallel components under the NHM and Ayushman Bharat Scheme.

A reduction in the budget of the NHM has been accompanied by a reduction in allocations for the nutrition schemes, such as the Integrated Child Development Services, and increasing focus on micronutrient programmes again an indicator of the strong private sector lobby in a country where malnutrition causes amongst the world’s highest stunted children, caused due to consistent lack of basic food intake.

Twenty-four new government medical colleges and hospitals will be set up by upgrading existing district hospitals. The aim is to ensure that there is at least one medical college for every three parliamentary constituencies and at least one government medical college in each state of the country. How we are going to make the best use of the medical personnel being trained at government medical colleges using taxpayer money, is a question that has repeatedly been ignored and the trend continues with the present Budget.

The Budget has done little to strengthen the public health sector with meagre increase in allocations to the department of health and family welfare. The Budget will spark a further strengthening and proliferation of unregulated and unaccountable private sector.

Such a significant focus on healthcare is a rare event in the history of budgets in the country. However, that’s how far its rarity goes and ends quickly.

So, while Jaitley’s heart is in the right place, the Budget might do more harm than good in terms of access, quality and cost of health services.

Tejal Barai-Jaitly and Tanika Godbole are researchers with the Centre for Enquiry into Health Themes (CEHAT), and would like to thank Dr Padma Prakash for her feedback and editorial inputs. 

Budget 2018: Jaitley’s ‘World’s Largest Health Programme’ Rejigs Flailing Old Ones

The government announced a new health protection scheme to give Rs 5 lakh to 50 crore poor and vulnerable individuals, despite existing schemes on this hitting roadblocks.

The government announced a new health protection scheme to give Rs 5 lakh to 50 crore poor and vulnerable individuals, despite existing schemes on this hitting roadblocks.

A patient awaits routine check-up as he sits under a mosquito net inside a dengue ward of a government hospital in New Delhi, India, September 18, 2015. Credit: Reuters/Anindito Mukherjee/File Photo

A patient awaits routine check-up as he sits under a mosquito net inside a dengue ward of a government hospital in New Delhi, India, September 18, 2015. Credit: Reuters/Anindito Mukherjee/File Photo

New Delhi: Finance minister Arun Jaitley today launched a new flagship programme, the National Health Protection Scheme, to cover ten crore poor families with an allocation of Rs 5 lakh per family. This is essentially an insurance scheme, where the government covers insurance payments for poor and vulnerable families.

“Madam this is important,” he said while announcing the details of the scheme. “My government has now decided to take healthcare protection to a new aspirational level.”

He called this the “world’s largest healthcare programme” and said that adequate funds will be provided for the implementation of it.

The new fund will cover ten crore poor and vulnerable families, which will reach about 50 crore people. The amount of Rs 5 lakh per family will go towards helping these families access secondary and tertiary care.

“This will avert wage loss and impoverishment,” said Jaitley.

In the last Budget, the government had announced the National Health Protection Scheme (NHPS) which had proposed to give Rs 1 lakh per family. The NHPS did not quite take off, with the government telling parliament just two months ago, “The contours of the scheme are yet to be finalised.” This notwithstanding, the government has proceeded with this hike, from Rs 1 lakh to Rs 5 lakh per family.

Former finance secretary Arvind Mayaram as well as others weighed in on how this new scheme might be a gateway to a greater role given to private insurance providers and hospitals in healthcare delivery for the poorest.

How is the new programme different from the existing programme?

The government’s new programme is the fourth iteration of the Rashtriya Swasthya Bima Yojana (RSBY). In 2016-2017, RSBY was renamed the Rashtriya Swasthya Suraksha Yojana (RSSY) and in 2017-2018, this was renamed the NHPS.

The NHPS had agreed to provide Rs 1 lakh per family. The RSBY offered Rs 30,000 to poor families and Jaitley acknowledged the RSBY in his speech.

There are two ways in which the new announcement is significant for its scale and ambition.

Firstly, the amount of Rs 5 lakh per family is a massive and unexpected hike from the existing fund of Rs 1 lakh per family. This amount is 17 times bigger than the RSBY scheme and will cover 40% of India’s population.

Secondly, in its final iteration in 2016-2017, the RSBY also targeted 5.9 crore families, and managed to enrol 3.6 crore families. Thus the government’s announcement today of reaching ten crore families is also vastly ambitious.

Source: http://164.100.47.190/loksabhaquestions/annex/12/AU2192.pdf

Source: http://164.100.47.190/loksabhaquestions/annex/12/AU2192.pdf

How well did RSBY, RSSY and NHPS work?

Firstly, the government admitted just two months ago that their own announcement from the last budget – the NHPS – was yet to be finalised.

Secondly, the RSBY itself has been plagued with problems of transparency and efficiency.

The fund allocations towards the RSBY had been dwindling over the last years of the UPA government, going from Rs 1,001 crore in 2012-2013 to Rs 550 crore in 2014-2015. The NDA government’s NHPS increased it somewhat – to Rs 724 crore in 2016-17. The allocations were brought back to Rs 1000 crore last year.

In the last few years of the RSBY, both the amount of money released as well as utilised, fell considerably. The number of states participating also petered out, with only eight states utilising any of the money disbursed to them under RSBY.

Chhattisgarh utilised the maximum amount of funds under RSBY. Other states that took up RSBY with comparable enthusiasm were Kerala and Odisha.

Chhattisgarh utilised nearly one third of all of RSBY’s funds in 2016-2017. But as reports in The Wire explained, studies in Chhattisgarh showed that several private hospitals forced people to pay additional money even after using RSBY insurance funds.

The administrator of this scheme has also changed over time: RSBY used to be administered by the Ministry of Labour and Employment; this was shifted to the Ministry of Health and Family Welfare after renaming it RSSY.

Public sector recedes in health delivery for the poorest

The entry of the private sector into health delivery for the poorest is a very real possibility due to the design of the government’s scheme so far.

Government data shows that out of 7,226 hospitals empanelled by the government for RSBY, more than half of them – 4,291 hospitals – were private, while 2,935 were public hospitals.

Source: Lok Sabha answer

Former health secretary Keshav Desiraju asked, “Why transfer funds to private hospitals?” But given the delivery of RSBY so far, this appears to be the possibility for the scheme.

Indian Express reported that the NHPS announced in the last budget has in fact been lying dormant with the Union cabinet since November 2016. This plan was first announced by Prime Minister Narendra Modi in his Independence Day speech of 2016.

Is the National Health Insurance Scheme in Chhattisgarh Doing More Damage Than Good?

Studies from Chhattisgarh and other states show that most private hospitals force people to pay additional money even after using health insurance.

The Rashtriya Swasthya Bima Yojana (RSBY) or the National Health Insurance Scheme, was initiated in Chhattisgarh in 2009 for below poverty line (BPL) families. In 2012, Chhattisgarh expanded the scheme to non-BPL families as well, through the Mukhyamantri Swasthya Bima Yojana (MSBY), making it a universal scheme. Under the scheme, families need to pay a one-time fee of Rs 30 for getting an insurance card and the government pays the annual insurance premium for them. From October 1, 2017, Chhattisgarh government has increased the annual insurance entitlement for hospitalisation from Rs 30,000 to Rs 50,000, as promised in its 2013 election manifesto.

Chhattisgarh is seen as a ‘well performing’ state when it comes to the national health insurance scheme. The state has achieved enrolment of around 80% of the families by issuing 55 lakh cards, with insurance claims increasing every year. While the coverage and entitlements under the scheme are expanding, the cracks in its implementation are widening. There are serious concerns that the insurance scheme may be causing more damage to the state’s health than good.

People pay from their pockets even after using ‘cashless’ insurance

RSBY/MSBY is supposed to be ‘cashless’ insurance, i.e., people are to get completely free services in public or private hospitals empanelled under the scheme. Empanelled hospitals are not supposed to ask for extra money from patients as they agree to provide services at pre-designated package rates. But studies from Chhattisgarh and other states show that the health insurance is not ensuring cashless services. Most private hospitals force people to pay additional money even after using health insurance. The malpractice by private hospitals is so common that people have starting calling it a ‘discount’, rather than a ‘cashless’ card.

Our study in the slums of Raipur found that 96% women incurred expenditure for hospitalisation, regardless of card use. For those who used insurance, average additional expenditure from pocket was Rs 7530, while for the ones who did not use insurance, it was Rs 8624. Of those using insurance, the additional expenditure was four times higher in private (Rs 10,733) than in the public sector.

Unnecessary procedures and unethical care

The insurance scheme seems to have boosted unethical tendencies in parts of the private sector. Patients going for simple ailments are often subjected to unnecessary procedures by hospitals for maximising insurance claims. Many private hospitals in Chhattisgarh, Bihar and Andhra Pradesh removed uteruses to gain unethically from insurance.

The official enquiry on hysterectomies in Chhattisgarh reported that private hospitals had removed uteruses of poor women aged below 35 years, without due medical process.

Some women not only had their uteruses removed by hospitals using RSBY, they even had to sell their jewellery or land for extra payments.

Representation by women who underwent hysterectomies. Credit: The Hindu

Representation by women who underwent hysterectomies. Credit: The Hindu

In Chhattisgarh, nearly half (47%) of the deliveries in private facilities are by C-section, which raises another red flag.

Unethical practices in the private sector are not new. Through insurance scheme, the government maybe ‘incentivising’ unethical care with public funds.

Insurance scheme does not address main public health needs of the state

Is insurance addressing the actual public health needs of the state’s population or diverting resources away from them? The most important health problems of the state include communicable diseases like malaria, respiratory infections in children, tuberculosis and leprosy and chronic diseases like hypertension, diabetes, asthma etc. The insurance scheme covers a very negligible part of treating these major morbidities. There is hardly any possibility of the insurance scheme reducing the infant or child mortality rate either.

Also read: Why India’s Poor Are Still Paying for Healthcare Despite the National Health Insurance Scheme

So what conditions are getting treated under RSBY/MSBY insurance? Last year, 50% of the total claims were for dental and ophthalmology (mainly cataract) procedures. This represents very poor value addition as free cataract surgeries were anyway amply available in the government hospitals prior to the insurance scheme. In fact, the insurance scheme led to shifting of cataract surgeries from the government to the private sector. Thus, insurance is also leading to a decline in a range of services in government hospitals.

Procedure wise claims. Credit: www.cg.nic.in/healthrsby

Procedure wise claims. Credit: www.cg.nic.in/healthrsby

Another problem created by insurance is that many conditions that could have been treated at the primary level are getting un-necessarily transferred to the secondary or the tertiary level, resulting in what is known as the distorted pyramid of care.

Our study shows that private healthcare providers are giving a narrow and selective range of services and ‘cherry picking’ more profitable of the procedures. Their ‘preferences’ have very little match with the health needs of people. Efforts to restrict private sector from ‘cherry-picking’ or to regulate its behaviour through insurance contract have not worked. For instance, the state government had recently tried to exclude the private sector from doing dental procedures under RSBY/MSBY but had to abandon the move under pressure from the private sector.

Credit: Sulakshana Nandi

Many, especially vulnerable and tribal communities, still excluded from the scheme

Most of the vulnerable groups and tribal communities are not able to utilise the hospitalisation cover of the scheme. There are hardly any private hospitals in tribal areas. Twelve tribal districts in Surguja and Bastar divisions contributed to only 16% of total insurance claims, and that too was mostly by government hospitals. Most of the empanelled private hospitals are concentrated in the urban areas. The three big cities of Raipur, Durg and Bilaspur together contain 63% of total empanelled private facilities. Private sector remains reluctant to go to remote or rural areas as it can make more profit by being in urban areas. RSBY/MSBY has further promoted this tendency.

Many of the poor are not able to use insurance. Our study in 2014 showed that only 21% of hospitalisations of poor people from Raipur slums got covered by insurance, even though Raipur boasts of the largest number of empanelled hospitals. A 2016 study among the Baiga Particularly Vulnerable Tribal Groups (PVTGs) by the Public Health Resource Network shows that insurance was utilised in just 13% of hospitalisations. There is a looming threat of Aadhaar linkage for RSBY/MSBY which may pose further barriers for the poor.

Private hospitals profiting from public funds while public hospitals starve

Though RSBY/MSBY is funded by government money, it is the public sector that is losing out on funds. In 2015-16, 83% of the total Rs 386 crore claim amount went to private hospitals. Nationally too, private facilities have been receiving more than 80% of the insurance claims amount. This means that though government facilities are providing cheaper services to the poor people and remote areas, they now have to compete with private hospitals for public funds. The state’s budgets reveal that insurance scheme funds are progressively increasing as a proportion of the health budget, leaving lesser funds for the government health system which is already under-resourced. The insurance premiums keep climbing. It increased from Rs 376 per family in 2016 to Rs 816 in 2017. This year, the government will have to shell out nearly Rs 450 crore as insurance premium.

RSBY/MSBY budget as proportion of total Public health & family welfare department budget in Chhattisgarh. Credit: Budget books GoCG

What it means for health services in Chhattisgarh and their future

Recently, a Mumbai-based senior doctor said, “this [health insurance scheme] is a sugar coated pill whose bitterness will stay with us for years to come”.

The negative impact of the insurance scheme on the public hospitals and the overall health system is still emerging. A large proportion of the poor are not able to access free and quality care and are still not protected from out of pocket payments. Insurance was introduced as a way to regulate the prices and behaviours in the health sector, but this has not happened. Recently, there have been suggestions that the insurance scheme should be extended to out-patient treatment in order to reduce expenditure borne by patients. Out-patient care is much more difficult to regulate than hospitalisation. Seeing how the insurance scheme has failed to perform on hospitalisation care, imagine the havoc that it will wreak on out-patient care. Strengthening government health systems can serve the health needs of people better than any short-cuts. For this, political intent, a belief in the government’s own system and the will for good governance are key.

Sulakshana Nandi is National Joint Convener of Jan Swasthya Abhiyan and State Convener, Public Health Resource Network Chhattisgarh.k

Why India’s Poor Are Still Paying for Healthcare Despite the National Health Insurance Scheme

While the cost of hospitalisation has gone up more than 10% between 2004 and 2014, the Rashtriya Swasthya Bima Yojana’s insurance coverage has remained unchanged.

While the cost of hospitalisation has gone up more than 10% between 2004 and 2014, the Rashtriya Swasthya Bima Yojana’s insurance coverage has remained unchanged.

India’s health-related out-of-pocket expenditure, which pushes families into indebtedness and deeper poverty, is among the world’s highest. Credit: Reuters

India’s nine-year-old government health insurance programme, the world’s largest, has not eased the burden of healthcare costs borne by its poorest families, a new study has found.

The Rashtriya Swasthya Bima Yojana (RSBY) offers medical insurance up to Rs 30,000 for a family of five living below the poverty line (BPL) – defined as the ability to spend Rs 33 per day in urban India and Rs 27 per day in rural. It is, however, limited to inpatient treatment or hospitalisation.

The programme has not led to any reduction in out-of-pocket expenditure – personal spending – by its 150 million beneficiaries, according to a 2017 study published in Social Science Medicine, a global journal.

India’s health-related out-of-pocket expenditure, which pushes families into indebtedness and deeper poverty, is among the world’s highest. In a low-middle income group of 50 nations, Indians ranked sixth among the biggest out-of-pocket health spenders in 2014, as IndiaSpend reported on May 8, 2017.

Why are the poor still paying for healthcare despite the RSBY? Low enrolment, inadequate insurance cover and the lack of coverage for outpatient costs are reasons, said the study.

The cost of outpatient treatment, which the poor prefer over hospitalisation, forms 65.3% of out-of-pocket expenditure in India, according to a 2016 Brookings report. But these are not covered by RSBY.

This is a critical reason for a probable 23% increase in outpatient costs in the households that enrolled in the RSBY before 2010, found the 2017 study, which evaluated the programme up to March 2012.

Also, while the cost of hospitalisation has gone up more than 10% between 2004 and 2014, RSBY’s insurance coverage has remained unchanged.

RSBY started as a healthcare ‘experiment’ 

In April 2008, the ministry of labour and employment launched the RSBY. The government decided to “experiment” with the insurance schemes after it failed to provide stronger public health infrastructure, said the RSBY website.

The RSBY covers pre-existing diseases and also offers a transport cost of Rs 100 along with the hospitalisation costs. Both public and selected private hospitals are part of the scheme.

The beneficiaries pay Rs 30 during registration and the remaining premia are paid by the state and central governments. Only households on the BPL list maintained by the Census can be enrolled in RSBY.

The programme covers nearly 460 of India’s 707 districts.

Almost 40% BPL beneficiaries still not covered

Of the 59 million households eligible, over 36.3 million (61%) were covered by RSBY. However, it needs to cover a large proportion of the poor for its impact to be noticeable, said Anup Karan of the Indian Institute of Public Health (IIPH), Public Health Foundation of India, and one of the authors of the study.

“States such as Chhattisgarh and Kerala that have a higher coverage are able to make some kind impact on the inpatient costs for the poor” said Karan.

In two states with poor health and education indicators, Assam and Bihar, only 50% to 60% of BPL households are covered, according to government data.

Only 35% eligible households know of RSBY: Study

One of the main reasons for low enrolment is that not enough people eligible for it know about it.

Of all the eligible households, 35% were not aware of the scheme, said a 2013 study conducted by the Tata Institute of Social Sciences, Mumbai. No more than 14 million beneficiaries have been to a hospital among the 150 million registered (9.94%).

“There is a need to educate the poor on the benefits of the scheme,” said Karan.

Hospitalisation costs rise, coverage remains the same

An insurance cover of Rs 30,000 is inadequate for a family of five, said Karan.

In 2014, the average cost of hospitalisation for households was Rs 14,935 in rural India and Rs 24,435 in urban, according to the National Sample Survey Office.

The cost of hospitalisation increased 10.1% in rural areas and 10.7% in urban India in the decade ending 2014, but the RSBY insurance amount has remained the same over the nine years of the scheme’s existence.

Beneficiaries enroll themselves for the Rashtriya Swasthya Bima Yojana in Andhra Pradesh. The programme has not led to any reduction in out-of-pocket expenditure by its 150 million beneficiaries, according to a new study. Credit: ILO in Asia and Pacific.

Beneficiaries enroll themselves for the Rashtriya Swasthya Bima Yojana in Andhra Pradesh. The programme has not led to any reduction in out-of-pocket expenditure by its 150 million beneficiaries, according to a new study. Credit: ILO in Asia and Pacific.

Here are the costs for common surgeries: Rs 2,469-Rs 41,087 for lower abdomen Caesarian, Rs 4,124-Rs 57,622 for hysterectomy and Rs 2,421-Rs 3616 for appendectomy, according to a 2013 study published in the British Medical Journal.

“The relatively low coverage limit of the scheme may have led some households to utilize hospital services beyond the RSBY cap,” the study said. The survey data showed that in 2012, among households incurring inpatient out-of-pocket expenditure, approximately 9% reported paying more than Rs 30,000. The average annual expenditure ranged from Rs 75,000 to Rs 80,000.

The poor prefer outpatient services which RSBY doesn’t cover

The RSBY does not pay for the cost of outpatient care, which does not involve hospitalisation. Typically, this would include doctor’s consultation fees, medicines and medical appliance costs.

However, 63.5% of all out-of-pocket expenditure on health relates to outpatient costs. This means a scheme that aims to reduce the burden of out-of-pocket expenditure on BPL families is missing a critical factor.

It also misses out on a behavioural factor.

“The poor generally prefer outpatient treatment because it does not involve hospitalisation which leads to loss of wages,” said Karan.

Shoddy treatment of BPL patients

Even though the RSBY pays for medicines during hospitalisation, many hospitals refuse to provide these and sometimes push for unnecessary services that adds to the cost of hospitalisation. “Regulation of health providers is essential,” said Karan.

Hospitals also tend to be unfriendly to poor patients and this discourages them from seeking medical help. “[M]any hospitals refuse to admit RSBY-enrolled patients due to administrative concerns such as delayed reimbursement by RSBY to hospitals,” said the IIPH study.

RSBY beneficiaries are given smart cards, verifiable through fingerprints, to facilitate cashless benefit transfer. But these cards are rarely used for two reasons.

One, patients are turned down or their use discouraged by empanelled hospitals. Two, most beneficiaries do not know how to use the services offered by hospitals, found a 2014 study by the Overseas Development Institute. The distance of the empanelled hospital from the patient’s home is a also a factor that discourages beneficiaries.

How to make the scheme more effective

Increasing enrolment and educating those it covers are some of the suggestions on how to make the RSBY more effective, said the study.

The authors also suggested that outpatient costs be covered, especially of those driven by chronic conditions and are expensive to treat in the long run.

Consider Vietnam’s compulsory, state-run health insurance policy. It covers both inpatient and outpatient costs after the policy was reformed in 2002 to include outpatient costs. The change resulted in lower out-of-pocket expenditure even though it led to longer hospital stays. It also resulted in fewer days of missed school and work.

Experts also recommend the strengthening of primary care in order to bring down out-of-pocket expenditure. Neighbouring nations Sri Lanka and Thailand have both strengthened their primary health care system to provide better coverage.

Prachi Salve is an analyst and Swagata Yadavar is a principal correspondent with IndiaSpend.

This article was originally published on IndiaSpend.

Health Budget Figures Tell a Sick Story

Why Jaitley’s plans for 3,000 generic drugs pharmacies, a revamped insurance plan and district level dialysis centres will not make a dent in India’s gaping health deficit.

Why Jaitley’s plans for 3,000 generic drugs pharmacies, a revamped insurance plan and district level dialysis centres will not make a dent in India’s gaping health deficit

India spends a smaller proportion of its GDP on health than most countries in the world. Credit: Shome Basu

India spends a smaller proportion of its GDP on health than most countries in the world. Credit: Shome Basu

The millennium has seen some remarkable achievements in public health in India: significant declines in infant and maternal deaths, halting of the HIV/AIDS epidemic, eradication of poliomyelitis and near elimination of neonatal tetanus. What explains some of these achievements?  Clearly, these were linked to increased investments in public health. Based on recommendations of the National Health Policy (2002), budget allocations to the health sector progressively increased every year from 2005: between 2005 and 2010, budgetary allocations increased by 300%, from Rs 10,000 crores to Rs 30,000 crores. From 0.9% of total GDP, public health expenditures increased to about 1.3%. Most of these increased allocations went to the National Rural Health Mission that sought architectural corrections in India’s public health systems, and to especially support the lesser developed states. Not surprisingly, it is  these states which made the most significant advances.

However, the health status of India’s citizens continues to be bad. If you require any proof, here it is: the country continues to have the distinction of having the largest number of infant deaths, maternal deaths and tuberculosis cases in the world. Its public health systems are in disarray: about 15,000 doctor positions at primary health centres are lying vacant, and 4,000 out of 5,000 community health centres do not have even a single obstetrician. At 1.3% of GDP, India’s health sector also continues to be among the countries with the lowest relative public expenditure on healthcare; even Nepal spends a higher proportion. On the other hand, private sector facilities, largely in the specialist and super specialist segment, continue to grow and are recognised as one of the best in the world.

Losing sight of the real target

The Twelfth Five Year Plan and draft health policy 2015 committed the country to increase public expenditure on health to 2.5% of GDP.  This would have required an increase of 30-40% in the Union health budget every year, matched with increased allocations in the state budgets. Knowing that the fiscal space in some of the states with the poorest health status is likely to be the smallest, Union budgets would need to provide a large share. With an allocation of about Rs 33,000 crores – reflecting a token increase in health allocation of 13% over past year’s allocation (which was itself lower than the previous year) – the finance ministry neither allocates the required funds nor provides an indication of the government’s commitment. The only consolation one can draw from Arun Jaitley’s latest budget is that the allocations could have been even lower.

So how do we ever reach the elusive, but very conservative health policy target of 2.5% of GDP as the quantum of public expenditure on health to ensure that India’s public health systems are accessible, effective, equitable and responsive? I say conservative because most countries with whom India aspires to stand, such as BRICS, spend a much higher proportion of their GDP on health; ranging from 3.5% to 8.5%. Pubic health expenditure keeps their people healthy: healthy people in turn fuel their economy.  If we are not able to have a quantum increase in health allocations, India’s health systems will remain ailing, and large numbers of its citizens, who cannot afford expensive private healthcare, will remain diseased and undernourished.

Another announcement in the budget is that of opening 3,000 government-run pharmacies aimed at increasing people’s access to cheaper drugs, and thus reducing out of pocket expenditure on healthcare. While the intention is laudable, the problem is that India has about 850,000 pharmacies which sell branded drugs, at a high rate, making it difficult for poor families to access cheaper drugs. The proposed 3,000 generic drug stores will constitute less than 1% of the total pharmacies, and will have a negligible impact on the public’s access to cheap drugs. The alternative solution – of ensuring availability of generic drugs in all government-run primary health centres, as in Tamil Nadu and Rajasthan – would have led to significantly increased access of free generic drugs to the poorest populations. We know from these two states that when governments procure and supply generic drugs, they make huge savings, require very little additional funds, and significantly increase the utilisation of public health facilities in the poorest areas.

Misplaced logic on dialysis centres

One specific but surprising announcement in the budget was on the opening up of dialysis centres in district hospitals across the country. Neither the 2002 National Health Policy nor the 2015 identify end stage renal disease as a priority, nor does the illness feature in the top ten causes of adult deaths; hence the surprise. In a country with limited resources like India, any new health intervention funded by the state needs to be backed by evidence on the high prevalence of the disease being addressed, its impact on reduction of mortality and a justification of cost of the intervention to address the disease against its effectiveness; and all of these need to be measured against other competing options. Another significant criterion that the state must apply is the externality its intervention generates – i.e. the impact of the intervention on others besides the patient herself. For example, when you treat a tuberculosis patient, there is a benefit external to the person being treated: you also prevent many others from getting infected by this patient. In view of the many competing priorities for limited health care resources, end stage kidney disease does not fit the criteria of high contribution to mortality and high externality, and there is no evidence on the effectiveness of adding dialysis centres in district hospitals to address the condition.

On the other hand, competing options for investments would be diseases with much higher prevalence and mortality such as TB, which remains one of the major causes of adult mortality, and, with emergence of multi drug resistance in India, becoming increasingly difficult to control. Even if one considers end stage renal disease as a significant problem, prevention and management of hypertension and diabetes, which are major causes of this condition, would appear a much more sensible and cost effective option than setting up dialysis centres.  In such a scenario, the specific announcement in the budget comes as a surprise, and makes one suspect the intention behind such a move.

The insurance trap

Finally, the finance minister announced a health insurance scheme that would cover poor and economically weak families for catastrophic health expenditures. Though more details are not available, the insurance scheme (the Rashtriya Swasthya Suraksha Yojana) is a modification of the existing Rashtriya Swasthya Bima Yojana (RSBY), with the annual limit increased from Rs 30,000 per family to Rs 100,000, and an additional top up of Rs 30,000 for senior citizens. Even with the lower reimbursements as in RSBY, David Dror and colleagues estimate that to enrol all the BPL families in the country would cost anywhere from Rs 2,460-3,350 crore. With the reimbursement limit now hiked to to Rs 100,000, the budgetary allocations required would be substantially higher.  What we have in the budget is Rs 1,500 crore, which is not sufficient to enrol or continue enrolment of half of the BPL households even under the current scheme.

Our health systems are suffering from a deep wound. The wound requires urgent surgery, not the placing of another Band-Aid.

Dr Pavitra Mohan is Co-founder, Basic Health Care Services & Director, Health Services, Aajeevika Bureau

Jaitley is Carrying Forward a Deeply Flawed Health Insurance Program

Why is the government in a hurry to expand an untested programme that provides perverse incentives for private hospitals?

Credit: Calcutta Rescue, Flickr CC BY 2.0

A quarter of RSBY beneficiaries do not have a BPL card. Credit: Calcutta Rescue, Flickr CC BY 2.0

The message coming out of finance minister Arun Jaitley’s budget this year is that the rural economy is back at the heart of policy-making. One of the highlights of the budget was the announcement of the ‘Health Protection Scheme’, under which poor households will be provided with an annual cover of Rs. 1 lakh to protect them from health-related financial shocks. This marks a significant expansion of the Rashtriya Swasthya Bima Yojana, under which the cover was limited to Rs. 30,000. While the move has generated mostly positive responses, it is a matter of concern that a program whose efficacy is shrouded in mystery is being expanded. This becomes all the more worrisome when one takes into account that the infrastructure-augmenting National Rural Health Mission (NRHM) has seen no such increase in outlay.

Unlike the NREGA, publicly available information on the RSBY programme is rare. This has seriously hampered academic work that can evaluate the impact of the program. Yet, a few researchers have managed to study the impact of the RSBY and similar state-level schemes. While evidence of a reduction in financial burden for households is unambiguous, that on the quality and accessibility of hospitals is mixed.  What that implies is that households are merely saving cash that they would have earlier spent on healthcare, and the scheme has failed to increase access to quality healthcare. If this is the case, then a direct cash transfer would work better. A direct cash transfer would also help in getting rid of the perverse incentives that the RSBY creates for hospitals; the mass hysterectomies identified in Bihar are a prime example of these incentives

Whatever little data is available to the public points towards a deeply flawed programme. While the programme is targeted at poor households, almost a quarter of RSBY beneficiaries do not have a BPL ration card. Enrolment also remains extremely poor – even in the districts in which the program was rolled out before 2010, nearly 30% of targeted households are still not enrolled. This despite the fact that, under the scheme, the government provides an electronic list of all targeted households to the enrolment agency and the registration fee is a paltry Rs. 30 for a family of five. Awareness and utilisation also remain extremely poor, with nearly 60% of households enrolled under the scheme unaware that they are covered by government health insurance. Hence, the benefits of the scheme remain limited to a population much smaller than what the scheme is intended to cover.

What then explains the government’s hurry to expand this untested program? In many ways, the new ‘Health Protection Scheme’ ties in with the Modi government’s ‘minimum government, maximum governance’ mantra.

Underlying the new priority is the belief that putting purchasing power in the hands of consumers will drive the private sector to open more hospitals in these underserved areas. It is version 2.0 of the public – private partnership model. However, in a market that has asymmetric information between the hospitals and patients, such policies leave the uninformed consumers exposed to possible exploitation. Whether such a programme is a panacea to India’s health woes is yet to be seen, but the need for a mission to improve health is there for all to see.

Despite a long period of robust economic growth, India’s health outcomes leave much to be desired, being often comparable to much poorer Sub-Saharan Africa. Over half of India’s women are anaemic, 47% of children of age 5 are stunted, and a quarter of pregnant women never receive prenatal care. The government’s intention to involve the private sector in addressing the healthcare gap is praiseworthy, but the government cannot avoid its responsibility as the primary service provider and regulator in this sector. The government needs to open the data books so that citizens and researchers can evaluate the program. Opacity, such as the one existing with the RSBY currently, can quickly become a recipe for corruption. The government, with its focus on efficiency of subsidies, would benefit immensely from open data and transparency.

Subhashish Bhadra is an economic researcher based out of the University Oxford