Bengaluru: The proposed national health insurance scheme will have to surmount many challenges and funding might not be the biggest of them. The government will have to guard against possible abuse of the proposed scheme by hospitals and insurers. Besides, it will also have to deal with other unintended consequences such as creating a moral hazard, which can induce unnecessary expenditure and increase healthcare costs.

The National Health Protection Scheme (NHPS) is intended to offer 100 million poor families an annual cover of Rs5 lakh each, but details on its implementation are unclear.

While implementing, the government must heed the lessons from the existing government-funded insurance scheme, the Rashtriya Swasthya Bima Yojana (RSBY). First, it should ensure that patients are not charged by hospitals despite insurance coverage, as was noticed under the RSBY. “The hospital may charge money from the patient as well as the insurance company as the money does not go into the hands of the patient," said T. Sundararaman, dean, School of Health Systems Studies, Tata Institute of Social Sciences.

Besides, RSBY has also been afflicted by inadequate coverage of intended beneficiaries. Therefore, out-of-pocket expenses remain high in India, especially when compared to other countries. One hopes that the new scheme is implemented in a manner that’s more effective than the RSBY.

Besides, there are other unintended consequences that the government should be wary of.

“Under RSBY, people would ask for hospitalization and treatments even when it wasn’t really needed," said Smriti Sharma, consultant with the National Institute of Public Finance and Policy. The scheme might further promote unnecessary “tertiarization" of healthcare, leading to a cost spiral.

Meanwhile, hospitals empanelled in the RSBY often allegedly resort to malpractices to make money, according to a dissertation submitted to the Liverpool School of Tropical Medicine in August 2012. The infractions could take the form of “admitting patient for simple fever and showing that patient suffers from serious disease", the report quoted doctors in Delhi-NCR as saying.

Possible friction arising between insurers and hospitals is another area of concern. A Comptroller and Auditor General (CAG) report on the implementation of the RSBY in Kerala found that claims were admitted by insurers but payments withheld. Insurance companies often irregularly reduced the claim amount on the grounds of prolonged stay, wrong disease description, etc. Shweta Khandelwal, research scientist and adjunct professor, Public Health Foundation of India, says checks and balances at the ends of both the patient and the providers will be needed to tackle such abuse.

Still doubts remain whether the poorest of districts will benefit from the programme. A paper on the implementation of the RSBY in Chhattisgarh as on March 2011 found that private hospitals did not show much interest in backward districts such as Dantewada, Kanker and Koriya.

Experts fear focusing on secondary and tertiary healthcare might also eat into the spending on primary healthcare. Data from the Rural Health Statistics 2016 shows the number of primary and community health centres have stagnated over the last three decades.

The proposed increase in health cover, though welcome, does not address structural issues. As an earlier Plain Facts column had shown, India fares poorly on both disease surveillance and funds utilization on health.

“Health is not hospitalization and treatments. The endeavour should be to promote preventive health. This means investing in improving nutritional status, improving awareness, creating and maintaining health surveillance systems," Sharma said.

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