| UPSC Relevance GS-II (Governance, Social Justice): Health policy, cooperative federalism, Ayushman Bharat. GS-III (Inclusive Growth, Science & Tech): Digital health, AI in healthcare, insurance economy. Essay: Themes of health equity, welfare state, technology for inclusion. Prelims: Ayushman Bharat-PMJAY, Ayushman Bharat Digital Mission, IRDAI. |
Why in News?
India’s health-care system is at a defining inflection point — tasked with delivering universal, affordable, and quality health care to 1.4 billion citizens. Recent developments such as the expansion of Ayushman Bharat-PMJAY, proposals for insurance premium revisions, and digital health innovations have highlighted the urgent need for a systemic transformation.
Background: India’s Health-Care Landscape
India’s health system reflects a paradox of growing needs but limited resources.
- Public Spending: India allocates only 2.1% of GDP to health (2023), far below the global average of 6%. This underinvestment hampers infrastructure, human resources, and service delivery.
- Out-of-Pocket Expenditure: Nearly 48% of total health spending comes directly from households, pushing millions below the poverty line annually. For example, the National Health Accounts (2022) reported that catastrophic health expenses are a major cause of indebtedness in rural India.
- Insurance Penetration: Merely 15–18% of Indians are covered by any form of health insurance, compared to a global average above 60%. This exposes the majority to financial risks during illness.
- Demographic Challenge: The country is witnessing a rising burden of non-communicable diseases (NCDs) such as diabetes, hypertension, and cancer, alongside maternal and child health needs.
- Dual Disease Burden: India faces both communicable diseases (TB, malaria, dengue) and lifestyle-driven NCDs, stretching already limited resources.
👉 Thus, India’s health-care challenge is twofold:
- Expanding access to underserved populations, especially rural and urban poor.
- Ensuring affordability amid rising health-care costs.
Insurance as the Foundation of Affordability
Pooling risk remains the most effective mechanism to shield households from catastrophic health expenses. A robust insurance ecosystem not only reduces poverty-inducing out-of-pocket expenditure but also encourages timely and quality care.
Current Insurance Coverage in India
- Premium-to-GDP ratio: 3.7% in India vs. ~7% globally.
- Gross Written Premiums (2024): $15 billion, projected to grow at 20% CAGR till 2030.
- Ayushman Bharat – PM-JAY: The world’s largest public health insurance scheme, covering 500 million beneficiaries with an annual coverage of ₹5 lakh per family.
- Impact: Beneficiaries reported a 90% increase in timely cancer treatment, showing insurance’s role in improving early interventions.
Core Challenge
Insurance in India is largely perceived as a “crisis shield”, activated only during major hospitalisations. Its potential as an everyday health security tool—covering outpatient care, diagnostics, medicines, and preventive check-ups—remains underutilised.
Why This Matters
Expanding insurance beyond hospitalisation to include primary care, preventive health, and chronic disease management can:
- Lower long-term treatment costs.
- Promote health-seeking behaviour.
- Reduce the financial shock of frequent, smaller medical expenses (which currently push millions into debt).
Efficiency and Scale: India’s Hidden Advantage
- India delivers care at a scale unmatched globally:
An MRI machine in India conducts several times more scans/day than in the West.
- This efficiency comes from workflow innovations, high doctor-patient ratios, and resource optimisation.
- Challenge: Replicating this efficiency in tier-2 and tier-3 cities, which remain underserved.
If achieved, India could set a global benchmark in affordable universal health care at scale.
Prevention as the Most Powerful Cost-Saver
Rising Disease Burden
India is facing a fast-growing challenge from non-communicable diseases (NCDs) such as diabetes, hypertension, cancer, and respiratory problems. These illnesses require long-term care and push families into financial stress.
The Evidence
A study from Punjab showed that even families with health insurance had to spend heavily from their own pockets. Why? Because most insurance plans do not cover outpatient visits (OPD) and diagnostic tests — which form a large share of medical expenses.
The Way Forward
To control costs and improve health, India needs to focus on prevention rather than only on treatment:
- Expand insurance coverage to include OPD consultations and diagnostic tests.
- Run preventive health campaigns in schools, offices, and local communities to spread awareness.
- Promote healthy living by encouraging balanced diets, regular exercise, and controlling air pollution.
The Big Picture
Studies show that every ₹1 spent on prevention saves many times more in treatment costs. Preventing diseases before they start is the smartest and cheapest form of healthcare.
Digital Health: Technology as an Equaliser
How Technology Helps
India has been an early adopter of telemedicine and Artificial Intelligence (AI) in healthcare. These tools make it possible for patients to:
- Consult doctors remotely through video calls.
- Use AI-based triaging to identify the seriousness of symptoms.
- Get diagnostic support without travelling long distances.
Government Push
The Ayushman Bharat Digital Mission (ABDM) is building a nationwide digital health system. Its goals include:
- Universal health records for every citizen.
- Portability of care, so patients can access services anywhere in India.
- Continuity of treatment, as doctors can track past health history.
Real-Life Example
A cardiologist sitting in Delhi can guide a patient in a remote Bihar village via digital consultation. This saves travel costs, reduces delays, and makes quality care accessible even in rural areas.
Why It Matters
Digital health tools can:
- Bridge the rural–urban divide in access to doctors.
- Boost doctor productivity by reducing unnecessary hospital visits.
- Democratise healthcare, ensuring that good medical advice is not limited to big cities
Regulation and Trust: The Missing Link
- Rising costs: Insurers considering a 10%-15% premium hike due to pollution-related illnesses.
- Trust deficit: Low insurance uptake linked to poor claims settlement and grievance redress.
- Government role:IRDAI reforms:
- Strengthen transparency, speed up claims, and cap unfair hikes.
- Build confidence in insurance, making it reliable and affordable.
Investment and Private Sector Role
- Health-care investments: In 2023, India’s sector attracted $5.5 billion in private equity/VC funding.
- Skewed growth: Capital concentrated in metros, while tier-2 and tier-3 towns remain underserved.
- Way forward:
- Direct investments to smaller cities & rural areas.
- Expand primary health-care networks.
- Strengthen medical education and skilling to meet rising demand.
Challenges to Universal Health Care
Despite progress, India faces several barriers in achieving universal and affordable health care:
1. Low Public Spending
- India spends only 2.1% of its GDP on health, far below the WHO recommendation of 5%.
- This underinvestment limits infrastructure, staffing, and service quality.
2. Shortage of Health Workforce
- The doctor–patient ratio is 1:834, better than before but still strained.
- The nurse–patient ratio is even worse, falling short of global norms.
- This shortage particularly affects government hospitals and rural areas.
3. Inequitable Access
- Rural and tribal populations remain underserved.
- Most specialists and advanced hospitals are concentrated in urban centres, widening health disparities.
4. Fragmented Insurance Coverage
- Multiple schemes exist at the central and state level, but they overlap and exclude many citizens.
- For example, Ayushman Bharat covers hospitalisation but often misses outpatient and diagnostic costs, which burden families.
5. Regulatory and Trust Gaps
- Patients often lack trust in insurance systems due to delays and exclusions.
- As a result, India still has high out-of-pocket expenditure (OOPE) — around 48% of total health spending.
Way Forward: A Holistic Health Framework
To achieve universal, equitable, and affordable health care, India needs an integrated approach:
1. Expand Public Spending
- Increase health expenditure to 2.5% of GDP by 2025 (as targeted in the National Health Policy, 2017).
- Prioritise primary and preventive health infrastructure in underserved regions.
2. Redesign Health Insurance
- Move beyond hospitalisation coverage to include outpatient care, diagnostics, and preventive services.
- Ensure simplified procedures and timely reimbursements to build trust among beneficiaries.
3. Strengthen Tier-2 and Tier-3 Cities
- Incentivise private hospitals and diagnostic chains to expand into smaller cities and semi-urban regions.
- Provide fair reimbursements under government schemes to make participation sustainable.
4. Push for Preventive Care
- Launch mass awareness campaigns against non-communicable diseases (NCDs), pollution-related illnesses, and lifestyle disorders.
- Embed school-based health education and regular community screenings.
5. Digital Integration
- Accelerate the Ayushman Bharat Digital Mission for universal health records.
- Leverage AI-enabled diagnostics and telemedicine to bridge rural-urban divides.
6. Regulatory Strengthening
- Ensure transparent pricing norms for hospitals and medicines.
- Build trust in insurance systems with faster claims processing and strong grievance redressal mechanisms.
7. Public–Private Partnerships (PPPs)
- Harness private sector efficiency with public funding to expand reach.
- Example: Dialysis centres and cancer care units under PPP models in various states.
Conclusion
India’s health-care journey is at a decisive decade. The model must evolve from being episodic and hospital-centric to universal, preventive, and digitally integrated. Insurance has to become everyday health security, prevention must be the first line of defence, technology must bridge inequalities, and regulation must build trust.
If India succeeds, it will not just secure health for 1.4 billion Indians but also create a global blueprint for inclusive, affordable health care at scale.
Mains question-
Q “India’s health-care system faces the dual challenge of expanding access for the underserved while ensuring affordability amid rising costs. Discuss the major bottlenecks in achieving universal, affordable health care in India. Suggest policy measures to balance public health needs with financial sustainability.”(250 WORDS, 15 MARKS)
SOURCE- THE HINDU
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