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Flaws of Insurance-based Healthcare Provision
Tamil Nadu is recognised for its achievements in human development, especially in the area of healthcare. In light of the central government’s recent move to launch insurance-based targeted healthcare provision, a case is made for paying attention to building public health infrastructure based on Tamil Nadu’s experience with healthcare provisioning. The pitfalls of insurance-based provisioning and targeting, and the need to recognise regional trajectories and institutional innovations in this regard are highlighted.
The authors thank the anonymous referee whose comments were helpful in finalising this article.
Although the National Democratic Alliance government’s 2018–19 budget reduced the National Health Mission’s budgetary allocation, it also marked the unveiling of two new initiatives under Ayushman Bharat. These were health and wellness centres with a budgetary outlay of ₹ 1,200 crore, and the National Health Protection Scheme (NHPS) with a budgetary outlay of ₹ 10,500 crore. The Ayushman Bharat–National Health Protection Mission (AB–NHPM), also referred to in the budget speech as the National Health Protection Scheme, is a targeted health insurance programme for hospitalisation-related expenditure with an annual coverage of ₹ 5 lakh per family, catering to 10 crore poor families identified using the deprivation criteria from the Socio-economic Caste Census data. Subsuming the Rashtriya Swasthya Bima Yojana (RSBY), this scheme will cover almost all secondary and tertiary care procedures—including for pre-existing diseases—at empanelled public and private hospitals and will be portable across the country. The implementation modalities are in the process of being finalised.
The scale of the announced scheme is definitely unprecedented, but it is hardly novel in its approach. The RSBY, which was introduced by the United Progressive Alliance in 2008, was similar. The RSBY was preceded by state-level schemes, like Karnataka’s pioneering Yeshasvini Cooperative Farmers Health Care Scheme introduced in 2003, Andhra Pradesh’s (AP) Rajiv Aarogyasri Community Health
Insurance in 2007, Kerala’s Comprehensive Health Insurance Scheme in 2008, Tamil Nadu’s (TN) Chief Minister Kalaignar Insurance Scheme in 2009, and Karnataka’s Vajpayee Arogyasri Scheme in 2011. Other states too have similar schemes. At the all-India level, evidence based on three rounds of National Sample Survey Office (NSSO) data (1999–2000, 2004–05, and 2011–12) indicates that the RSBY was not successful in reducing the out-of-pocket (OOP) expenditure burden for treatment among poor households (Karan et al 2017a). Since the intervention seems to be inspired by state-level initiatives, and also since health is a subject of state governments, we use TN’s experience with public healthcare provisioning to argue against relying on insurance-based provisioning of healthcare at the expense of the public healthcare system by comparing evidence on healthcare utilisation and expenditure from the other southern states.
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