Delivering health care to a billion-plus population is very complex. And, like eating a Reese’s, there’s no right way to do it. In the past, Indian entrepreneurs have innovated on several business models that range from frugal to world-class luxury care. A testimony to its success is the fact that citizens spent Rs 1,650 billion, or 3.16 percent of the GDP (in 2011-12), on health care, whereas the government spent only 1.04 percent. In other words, a family of four spends nearly Rs 10,000 per year on health care. With the government once again shirking from committing higher budgets to health care, it is tempting to ask: Since there’s money on the table, can entrepreneurs devise privately financed and privately run universal health coverage? Perhaps all it needs is one disruptive idea to show that it’s possible to design comprehensive care outside the government.
We asked four health care industry leaders what it would take to deliver such care and if they’d be willing to take the first steps.
‘NO UNIVERSAL HEALTH CARE SCHEME CAN RUN FOR FREE’
Dr Devi Shetty
Image: Mallikarjun Katakol for Forbes India
Dr Devi Shetty, Founder And Chairman, Narayana Group of Hospitals
Taxpayers’ money cannot pay for health care anymore; it could pay 20 years ago when people retired at 60 and died at 65. Today, people retire at 60 and live on to celebrate their 95th birthday. People are going to live longer not working than they do working, and as you live longer you invariably undergo 5-10 procedures. Any country dependent on taxpayers’ money for health care is struggling, so we have to relook at how we run health care.
The only concept that will work is that everyone should contribute a tiny amount every month. It’s not an annual premium; if you ask them to pay every year, it’s a lot. A monthly payment should be sufficient to pay for health care. So Yeshasvini, which was the mother of all insurance schemes and which inspired the Andhra Pradesh and Tamil Nadu governments to start Arogyasri and Kalaignar schemes, was designed in a manner to let people pay a tiny amount. They started by paying Rs 5 a month, today they pay Rs 10 a month. It is the only self-funding scheme in the country today. All the other schemes are doled out by the government. When the government gives money, the schemes run well as long as there’s good tax revenue; the moment tax collection goes down, they don’t pay the hospitals, hospitals don’t treat patients and the scheme dies a natural death. It’s not that the government will one day announce that a scheme is not functioning, they just don’t pay. No government has the guts to say the scheme is off because they have no money.
But the government’s strength lies in the credibility it enjoys as an organisation that doesn’t cheat. It is inefficient, but that’s okay. In villages, when we tell people to pay a tiny amount every month to an MNC bank or an insurance company, they are not willing, but when we tell them to pay to the government they are willing because the government is the only organisation they trust. It can also make law, make something mandatory. So, the government should make use of this power. We have 900 million cellphone subscribers who are spending Rs 150 per month to speak on the phone.
Let’s assume 600 million are active. We could ask them to pay Rs 20 extra. There’s no extra cost to collecting this amount, there already exists a mechanism to collect Rs 150. This way, we could have the largest insurance scheme in the country. I’ve interacted with politicians across many states, including Delhi. The problem lies with them. When a politician launches a scheme, he wants to take the credit of giving it free, he doesn’t know if he’ll be in power after five years, nor does he care if the country runs out of money. As long as this ‘free’ attitude runs, there’ll be no universal health care in this country.
I’ll give an example. In Kerala, a few years ago, the government gave a few 100 crores to insurance companies to cover BPL cardholders, but the latter didn’t know they were covered. So, in the end, barely a few crore claims came and the insurance companies pocketed the whole lot.
If the UK government can’t pay for health care, if the US is struggling, how can the Indian government pay for health care when it’s allocation for health care is just about 1 percent [of the GDP].
Whatever you want to do, first you have to understand where the money is coming from. Today, we have had the mobile revolution; it didn’t happen by charity from the government. People are willing to pay if there is adequate service. People are willing to pay tiny amounts for health care but you have to create a vehicle for them to contribute. You can do simple things. There are a few million maid servants. When they fall sick, who pays for care?
The employer, in whatever limited manner. If there is a scheme for maid servants where an employer pays Rs 25 every month for the health care, every employer will pay.
On the other hand, the government always complains health care is expensive. Has anyone asked why private sector is so expensive? When it comes to paying taxes, we are treated on a par with the entertainment industry. Then, look at the salary costs and the acute shortage of medical professionals. We have a shortage of more than 1 million doctors. But we make such stringent rules in running a medical college that no one can start medical colleges in this country; even if one starts, it costs over Rs 200-300 crore, whereas anywhere in the world one can start a medical college with any building. They don’t need 25 acres of land and teachers retiring at 60.
All over the world, higher education happens at big hospitals, you don’t need to have medical schools. But here, you have a shortage of post-graduate opportunities because if you open it up, capitation fee will collapse and then the [medical education] industry will collapse.
To universalise health care, there has to be one health insurance scheme, one open source software for the whole country. With UID coming, ID will not be a problem. One concept, one body, but every state should monitor it itself because health is a state subject and the Centre can’t manage these schemes.
We also have a piecemeal approach to health care. We should be integrating primary, secondary and tertiary care with a lot of emphasis on preventive care. We [at the Narayana Group] have been thinking of [entering primary care] but you can’t deliver primary care with MBBS doctors.
Today, a nurse who has worked in hospitals for 20 years cannot give a paracetamol tablet. Are you aware of it? Legally, she is not covered. Unless the government comes up with a regulation that alternative medical specialists and nurses can look at primary care, there is no future. For the last 12 years, I’ve been speaking about it, everyone thinks it’s a great idea, but nothing happens in reality, because medical lobbies are very powerful.
(As told to Seema Singh and Nilofer D’Souza)
‘WE SHOULD INCENTIVISE PRIMARY AND PREVENTIVE HEALTH CARE’Shivinder Singh
Universal health care (UHC) for a country like ours is a commendable thought, but it’s not going to be easy to execute, though I think the whole idea of Aadhar coming in might help. I think the only way to deliver universal coverage, or any kind of coverage, from the government is through an insurance product. It cannot be done by bailouts and payouts. In our country, we don’t have much of primary care, so it will have to be for critical illnesses, which are hospital-based. There can be the fabric of a network setup that can start working on primary and preventive care so that people don’t need tertiary care as much.
We have to work on a framework to get an individual more concerned and responsible for his health, rather than wait for health care to take care of his illness. We take more care of our cars than of our bodies. If we are incentivised or disincentivised to go for regular walks or drink or smoke, then we have the construct of a healthier nation, which is what the [UHC] is trying to achieve. I think primary care today is disorganised; it has low margins, and doesn’t have any attraction to become an organised setup. An organised preventive [care] setup comes into play when there’s a large enough market driving you into that business. Today, a doctor would rather see a patient in his home, and get cash, [where he] doesn’t have to pay tax and doesn’t have any sharing; whereas in an official organisation, it doesn’t happen. Doctors do not want to share the margin.
In markets where infrastructure does not exist, rather than the government setting up infrastructure, I think we have to work on a minimum guarantee structure where you incentivise private players to set up shops and run them. [You should also have a] technology-based framework of who should go where. What happens in our country is people get bounced from one clinic to the other.
We also have to look at reducing the gap between the government and the private sectors. We have to look at the [health care] resource of the country as one. The only difference is that in one case the country puts capital [and in the] other case an individual puts capital. As long as you see a return on capital, you have to respect that…Why can’t you turn around and say that anyone who goes to a private facility will be taken care of for this much money? The number may be lower but the volume higher. The government’s role there is in regulating; it can empanel or dis-empanel if you don’t do a good job.
Last, we have to look at this in a phased manner, and not be over-ambitious. We have a GDP deficit at this point, and most countries are suffering with high health care costs. We do not want to land up in the same boat. I think let us look at it as a moderate rollout, where we have to share the [cost] with the citizen, otherwise it is a burden to the exchequer, with no benefit. (As told to Seema Singh and Nilofer D’Souza)
‘BUILD PUBLIC-PRIVATE PARTNERSHIPS, REDUCE WASTAGE AND OVERLAPS’Naresh Trehan
The first thing to do is to aggregate all resources and make them perform efficiently, so that the wastage that is going on is leveraged to create the first line of defence. The challenge there will be to make them perform, because we work in three different silos—government, private sector and the NGOs. Very often there is an overlap and wasted resources.
Let’s study them first. There are 8 lakh ASHA (Accredited Social Health Activist) workers at the village level. Right now, she is only a social health activist with very poor knowledge and training. How can we upskill them to make ASHAs our frontline workers who can identify early signs of diseases? Then, we need to create a system where, if there is a functioning sub-centre or primary health centre (most of them are non-performing, with no doctors or nurses) then she reaches it in time. I’ve suggested that wherever there is patchy service, supplement it with mobile services. All this is done by the government so that every person is reached in an appropriate time span; in case of emergencies, they can be transported to a nearby civil hospital.
At the secondary level, where you have civil and district hospitals, we need to study how they are performing, how they are financed and equipped. That is the most opportune place for public-private partnerships. So you take the existing infrastructure and make them perform better. Once the gap analysis is done, then you think of creating new infrastructure to fill the gaps. There is not enough money in the world to create tertiary hospitals for every district. We need to come up with models in alliance with the three [NGOs, private sector and the government]. I think it is possible.
The High Level Expert Group [HLEG] report [which has provided the UHC framework] is placing too much burden on the government. We are already in deficit. If the government can provide universal access to all, nothing like it, but no government has been able to do it successfully. The HLEG-recommended UHC idea is a little out of sync. We need to come up with proposals of strong partnerships...go beyond ourselves and start doing things that will deliver universal access.
The only way you can overcome [financial] burdens on individuals is by collective insurance. It is good because in one cycle not everybody is going to fall sick. The Rashtriya Swasthya Bima Yojna is nice, but it can’t cover much in Rs 30,000. So, it can be jacked up, and the government can give more rebate on health insurance premium.There are gaps in insurance schemes but they can be fixed.
There’s no question about doctors not leading from the front. The biggest problem is doctors cannot go and live in the villages. Which is why I suggested mobile services. Health care is still not high on the election agenda, but it is slowly getting there. If you are asking when it will become the roti-kapda-makaan kind of slogan, I’d say education and health care are moving in that direction. People have to demand it. (As told to Seema Singh)
‘THE PRIORITY OF THE GOVERNMENT SHOULD BE TO ADDRESS PRIMARY CARE’Prathap C Reddy
Now that the government is talking about health care for the entire Indian population, we have to look at two countries that have successfully done it: South Korea and Thailand. India’s population is huge, but a formula can be arrived at, where all levels of providers, from primary to tertiary care to private practitioners, can be brought in.
But health is a total responsibility. I have advocated four Ps—private, public, people and participation. But the government is talking about it without people’s involvement. I’d say get everybody to pay, even if a tiny amount. I started a scheme in my village where everyone paid Rs 350 per year, just about Re 1 a day. My trust paid for those who could not pay. It worked beautifully and that tempted me to start telemedicine.
Now Arogyasri has come and people don’t want to pay because it is free. But to what extent can the government absorb health care costs? We need to add 100,000 beds for the next 10 years. At a cost of $60 billion per year, we need $300 billion in the next five years, which has never been mentioned by the Planning Commission or talked about as infrastructure. I’ve articulated, then and now, there should be continuous co-payment. The village people should pay 10-40 percent; the middle class can pay 40-70 percent; the rest as government subsidises.
The priority of the government should be to address primary care. If you give clean drinking water, you eliminate 200 million people suffering from gastric ailments. I think we’re cursed with three-four things: We’re the cancer capital of the world, diabetic capital of the world, and the heart [disease] capital of the world. Besides, there are new infections. This is where awareness in people for early care will make a huge difference.
There should be clear, defined goals for all of us. But we, as an industry, lack a body that represents us. The government, on its part, has to usher in reforms. The private sector should share responsibility of primary care but the bigger issue is that 70 percent of people pay from their pocket to go to the private doctor, so we should redefine private care.
We are using [Apollo] pharmacies to reach out to different locations. We’ve begun placing nurses there; very soon we’ll introduce vaccine and immunisation in our retail outlets. Next, we’ll put physicians. Finally, we have a vision for total health; we can’t do it for 1.2 billion people but we can select 100,000 people and give them total care, from birth to their last breath. In the end, let me tell you, health care [industry] needs a little pat on the back because we have delivered from scratch. The government should be a facilitator and should have frequent interactions with the industry to see what new things can be rapidly developed to address the nation’s health issues. (As told to Seema Singh)
(This story appears in the 22 March, 2013 issue of Forbes India. You can buy our tablet version from Magzter.com. To visit our Archives, click here.)