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					Achieving Universal Coverage in India:
An Assessment of the Policy Challenge

         Ajay Mahal & Victoria Fan
               July 12, 2011
          Universal Health Coverage:
            Recent Developments
• WHO (2010) World Health Report on ‘Health Systems
  Financing: The Path to Universal Coverage’

• Rockefeller Foundation, R4D, and others and the ‘Joint
  Learning Initiative for Universal Health Coverage’

• Several (mostly) middle-income countries have
  expanded or reformed health-care systems to cover the
  previously ‘uninsured’ (e.g. China, Mexico, Ghana,
  Thailand, Indonesia, etc.)
               The Indian Context:
              Recent Developments
• Planning Commission set up High-Level Expert Group
  (HLEG) to develop “…a blueprint and investment plan” to
  achieve Health for All by 2020

• Call for ‘Health for All’ in India (Reddy et al, Lancet 2011)

• Draft National Health Bill

• Central initiatives: ‘Universal Health Insurance Scheme’ for
  Poor (2003), Rashtriya Swasthya Bima Yojana

• State programmes: Aarogyasri, Vajpayee, Kalaignar

• What is meant by “Universal” Coverage?

• A Conceptual Framework and Options

• Implementation Issues

• Financial Implications: A Preliminary Look
        What is Universal Coverage?
•   From a SWF perspective that is inequality averse

    –   Policy priority to promote & equalize health outcomes
        and financial risk protection, presumably via actions that
        include: healthcare provision, subsidies, etc.

•   From Human Rights perspective

    –   Every one has the ‘Right to Health’(care)– access,
        affordability, appropriateness and quality
    –   Legal enforceability
    –   Subject to resource constraints
                      List of health services of
                      given quality from the
                      most needed (0) to least
                      needed (1)

                                    Proportion of
Proportion of                       expected population
expected population                 visits/needs where
visits/needs that                   costs are covered via
meet some physical                  pre-payment
accessibility                       mechanisms
    Share of private sector and out-of-
     pocket spending on health, 2005
                   Private         Out-of-pocket
                expenditure          spending
                as % of total   as % of total health
Countries    health expenditure     expenditure
Bangladesh          70.9               62.6
Brazil              55.9               30.5
China               61.2               52.2
India               78.1               71.1
Indonesia           53.4               35.5
Growing and Unequal: Expense of “Standard” Hospital
 Stay Relative to HH Income Per Capita, 1996 & 2004

     Population Group           1996        2004

Urban: Bottom 20%                1.00        1.87

Urban: Top 20%                   0.23        0.38

Rural: Bottom 20%                1.36        3.10

Rural: Top 20%                   0.42        0.85
       Universal Coverage in India:
       Key Implementation Issues
• What to Cover and Whom to Cover?

• Other Design Issues on the Demand Side

• How will supply of good quality health services
  be ensured?

• How much will all this cost?
           What to Cover? Whom to Cover?
•    Baeza and Packard (2006)
    – What services to cover (depth)
    – Whom to cover (breadth)

•    Households have four potential responses to financial risks
     of illness:
    – Expensive Conditions that Require Insurance/Subsidy
    – Frequent but Generally Inexpensive Conditions
         (Prevention & Self-Insure)
    – Rare and inexpensive (cope with the loss or self-insure)

•   Complications: Children, Externalities, Behavior

•   Poor
              Three Options for
          Universal Coverage in India

• Separate Insured Pools with Differential
  Benefits (Thailand, Mexico, Indonesia)

• Single pool with Generous Benefits and
  Targeting (Reddy et al 2011)

• Increased Resources in a Publicly Funded and
  Publicly Provided System with ‘Comprehensive’
  Coverage (NHS, Sri Lanka, Malaysia)
Other Design Issues on the Demand Side
• Targeting the poor
• Informal sector
• Raising funds and pooling
  – Payroll taxes
  – General revenues
  – Earmarked Taxes
• Single vs. multiple pools & Fund management
• How to pay and whom to pay?
        Key Supply-Side Issues:
       Adequacy and Distribution
• Public health-care services
  – Accountability of providers
  – Operational and financial autonomy of providers
  – Long-term future of the public sector

• Health-care services in remote and rural areas
  – Rural shortage of health workers
  – Compounded by absenteeism, poor infrastructure,
    weak HR management
  – Both public and private sectors have been ineffective
      Costing Universal Coverage
• Main expenditure categories: inpatient care,
  outpatient care, prevention & promotion, overheads,
  infrastructure, human resources
• Assumptions:
  – Health expenditure inflation
  – Time horizon
  – Expansion path of benefit package
  – Changes in demand
• Marginal Resource Requirements versus Total
  Resource Requirements
 Two Approaches to Costing Exercise
• Bottom-up costing approach
  – From benefit package
  – From costs of each of the main expenditures
• Using Mexico and Thailand as benchmarks
  – Obvious differences in populations and
    epidemiological characteristics
  – Some common features (the poor in rural areas,
  – Information readily available for comparison
Annual Spending and One-Time Investments for (90%)
         for India, 2010 (Billions of Rupees)
   Spending Category    Thailand     India Data,    Mexico
                        Data, 2010      2010       Data, 2010
     Inpatient and                    916-1,727      1,009
      Outpatient          2,171
     Prevention &          337         46-86           84
                            46          n. a.         n. a.
   Incentive Payments
      Oversight and      79-134        51-95          115
     Infrastructure &      n. a.     108-205(R)       n. a.
        Equipment                    91-150 (U)
          Other             23           0             0
  Recurrent Spending:
   Main Conclusion and Caveats
• Recurrent expenditure requirements: 2% to
  4.5% of GDP

• Rudimentary estimates do not adequately
  account for:
  – Responses of insurers, providers, fund managers in
    terms of price negotiations and impacts on costs
  – Future implications of rapid increases in health-
    care spending that tend to outpace GDP growth
  – Could do with better costing of packages that
    reflect epidemiological profile of Indians
Thank you

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