India and the ‘managed care’ promise
Relevance: GS Paper I & II
Why in News?
India has decided to rely heavily on health insurance to achieve universal health coverage (UHC). With the help of advancements in digital technology, the country is exploring new ways to improve its health system.
Background
- Universal Health Coverage (UHC) and Health Insurance in India:
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- India is increasingly relying on health insurance as a key component of its UHC strategy.
- The digital revolution is facilitating reforms in health care, inspired by systems like that in the United States but adapted to avoid excessive health care spending.
- Emergence of Managed Care Organisation (MCO):
- A notable healthcare chain in South India has introduced a model combining insurance and healthcare provision, akin to an MCO in the U.S. This involves integrating insurance and care provision under one roof.
History of MCOs in the U.S.
- Origins and Evolution:
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- MCOs have roots in prepaid healthcare practices from the 20th century U.S.
- Their prominence rose in the 1970s due to the need for cost containment in health care.
- They combined insurance and healthcare delivery, focusing on prevention and cost control under a fixed premium.
- Impact:
- While MCOs have not shown robust evidence of improving health outcomes significantly, they have helped reduce expensive hospitalizations and associated costs.
Health Insurance in India
- Current State:
- Since the 1980s, health insurance in India has focused on indemnity insurance covering hospitalisation costs.
- There is a large market for outpatient consultations, which is largely uninsured.
- Innovation in health insurance has been limited, with high operational costs.
Challenges and Differences
- Differences with U.S. Context:
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- MCOs in developing countries typically serve urban, high-income populations where public health systems are weak.
- Indian health insurance lacks incentives for cost control seen in U.S. MCOs.
- Insurance has targeted mainly the urban affluent, with informal outpatient practices and no widely accepted clinical protocols.
- Potential and Limitations:
- Successful MCO initiatives in India are likely to come from established healthcare brands with a loyal urban patient base and significant financial resources.
- However, expecting private initiatives alone to drive UHC is unrealistic.
Opportunities and Recommendations
- Public Patronage and Incremental Approach:
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- Managed care can be explored with cautious and gradual public support.
- Significant potential exists in reducing healthcare costs through early interventions and comprehensive outpatient care coverage.
- In 2021, NITI Aayog recommended a new type of health insurance for outpatient care, where people pay a regular subscription. This plan would save money by organizing and coordinating healthcare better.
- It would bring together scattered medical practices, simplify how healthcare is managed, and emphasize preventive care in the private sector. Overall, this could provide a lasting solution for outpatient care coverage.
- Incentives and Implementation:
- Incentives similar to those in the Ayushman Bharat Mission, which promotes hospitals in underserved areas for PMJAY (Pradhan Mantri Jan Arogya Yojana) beneficiaries, could be considered for MCOs.
- MCOs could serve both PMJAY patients and private clients initially on a limited and pilot basis.
Conclusion
UHC is a complex issue requiring multifaceted solutions. While MCOs are not a perfect solution, they could contribute significantly to the broader strategy for improving health care in India. MCOs could help streamline practices, emphasize preventive care, and provide sustainable outpatient care coverage, ultimately aiding in the pursuit of UHC.
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Beyond Editorial Universal Health Coverage (UHC): UHC in India aims to provide all citizens with access to essential health services without financial hardship. This initiative is part of a broader global effort led by the World Health Organization (WHO) to ensure that everyone, everywhere, can obtain the health services they need without suffering financial ruin. Key Components of Universal Health Coverage in India: 1. Ayushman Bharat Scheme:
2. Funding and Financial Protection:
3. Benefits Package:
4. Inclusivity and Access:
5. Quality Assurance and Regulation:
6. Digital Health Infrastructure:
Challenges:
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