The Deputy Chairman of the Planning Commission, Montek Singh Ahluwalia, has proposed that organised sector employers be mandated to initiate jointly funded health insurance cover for their employees. In the process he has flagged off what should be a major debate. As the Indian state raises its abysmally low expenditure on health care, should it all go into better funding of the public health-care system or should a part of the resources also be used as incentive to employers to partly pay for group health insurance cover for their employees? Since a carrot-and-stick combination works best, Mr Ahluwalia suggests, why not allow employers to claim tax deduction for employee expenditure if there is a health insurance element in it? What he is asking Indians is to debate whether to opt for the US private insurance-driven model or the European publicly funded model of health care, or a hybrid.
In the post-liberalisation scenario, relatively well-off Indians have opted for and taken the country down the road of the US model, partly because of the absence of an alternative that delivers. However, there is no doubt that the European model, with all its variations, is better on the whole. Europeans spend far less per capita on health care than Americans do and live longer. So, the choice for Indians should be easy. But India has an abysmal culture of poor delivery of any kind of public service. So maybe, a mixture of the two models is what will work in India. There is no doubt that a well-functioning and free health-care system is essential in a country where most people are poor. There is also no need to worry about the very well-off who can pay for and get their own kind of health care. But what about the large space in the middle? Governments in India, particularly in the south, are increasingly moving forward with health insurance systems for the poor where the family covered pays a small, regular premium and the state puts in a significant subsidy for a minimum cover. For this the approved provider network includes both public and private health-care facilities. Crucially, the private providers find it worth their while to treat patients under these schemes. Thus a working model of largely public-funded but privately delivered health care is emerging.
India has little to borrow from the discredited US model of privately provided and insurance-based health care. However, given the reality of the coexistence of a mix of public and private health-care delivery, a well-functioning, no-frills public system can keep private greed in check, as is happening in Kerala and Tamil Nadu where private health-care costs remain under control. But how to deliver an even partially functioning public health-care system? The answer is both political and cultural. In those two states and, to an extent, in Andhra Pradesh lately, politicians have realised that they will not survive in power unless a minimum level of public good is delivered, be it the primary health centre or the primary school. Plus, as societies, Tamil Nadu and Kerala retain a minimum sense of public service, something that has virtually disappeared in the rest of the country.
