Health Care Reforms in India - The India Saga



Health Care Reforms in India

With a population of 1.3 billion, and possibly to become the world’s most populous country by 2025, India has puzzled…

Health Care Reforms in India

With a population of 1.3 billion, and possibly to become the worldÂs most populous country by 2025, India has puzzled the world, with its health indicators lagging behind its economic growth. Today, India ranks below most other nearby countries in life expectancy, maternal mortality, and infant mortality. The Indian health care system also offers sharp contrasts, with select urban hospitals offering world-class care as a destination for medical tourism, while many individuals have poor access to appropriate and affordable care. Health care reforms started around 2005 through programs aimed at strengthening rural health services and providing partial financial protection for health care to vulnerable families. Fresh initiatives proposed this year promise to open the road to universal health coverage (UHC).

The National Health Policy of 2017 (NHP) set the stage for the new wave of reforms. This policy not only underscored the high rates of child and maternal mortality, but also highlighted the increasing disease burdens of noncommunicable diseases, mental illness, and road traffic crashes. The threat of drug-resistant tuberculosis and vector-borne diseases was also recognized.

About 7% of Indians are pushed into poverty each year due to unaffordable health care, a figure that remained constant in the decade of 2004-2014. Only 27% of the population is covered by health insurance, and of those, 77% have coverage through government-subsidised schemes or implementation plans for protecting informal workers (ie, self-employed individuals or those who work for them, such as street vendors or farm workers) and some other vulnerable groups. The NHP called for comprehensive primary health care and strategic purchasing of secondary and tertiary care from public and private sectors. It committed to raising the public financing of health care from 1.15% of gross domestic product to 2.5% over 8 years. The government also aims to reduce out-of-pocket expenditures from 63% to 50% by 2020.

Health Care With Many Mixes

A mixed health system has evolved in India, by default rather than design. While the public sector served as the principal provider of health care in the first 4 decades after independence in 1947, rendering mostly free services, the private sector now provides 75% of outpatient and 55% of inpatient care. The private sector has grown rapidly in the past 3 decades but is very heterogeneous, ranging from individual clinicians and small nursing homes to large corporate hospital chains.

In IndiaÂs federal structure, the central government designs and partially funds major national programs, whereas the 29 states have the responsibility to deliver health care with a high level of autonomy. Public sector delivery channels use a 3-tier model of primary, secondary, and tertiary care facilities. Rural primary care links health outposts (subcenters) with a hierarchy of primary health care centers and community health centers. District hospitals offer secondary care while tertiary care is provided by large hospitals, usually linked to medical colleges. The organized private sector is concentrated in urban areas.

Health care practitioners include unqualified clinicians and persons trained in traditional Indian systems of medicine or homeopathy besides allopathic physicians, nurses, and allied health professionals. The availability of physicians and nurses varies widely across the country, with the central, northern, eastern, and northeastern states being poorly served. Rural areas have an especially severe shortage of qualified health professionals. Regulatory systems for training, accreditation, and quality assurance of health professionals have been weak and are under review for reform.

Reforms Over a Decade

The National Rural Health Mission was launched in 2005 to improve maternal and child health services by strengthening primary care infrastructure, staffing, and supplies and by financially incentivizing demand for institutional deliveries. While births in health care institutions increased, quality of care declined due to shortages in health workforce. The increasing burden of noncommunicable diseases remained unaddressed.

A high-level expert group was convened by the Planning Commission of India in 2011 to design a framework for UHC. This group recommended concerted initiatives to improve health financing, health workforce development and deployment, access to drugs and vaccines, health care infrastructure, governance, and community engagement. However, a slowing in IndiaÂs economic growth saw the plan for UHC shelved. After 2014, the new government reset the course for UHC through the NHP. Following through, the national budget of 2018 announced a major initiative, Aayushman Bharat (ÂLong Life to IndiaÂ), with 2 components.

Strengthening Primary Care

The first component will create health and wellness centers (HWCs) at the subcenter level. A total of 150?000 subcenters will be upgraded to HWCs, offering free basic clinical and preventive services including simple diagnostic tests and provision of essential generic drugs to all. To overcome the health workforce shortage in HWCs, it is proposed to provide graduates from the nonallopathic systems of medicine (such as Ayurveda and homeopathy) with training in some elements of allopathic medicine through a bridge course. Nurse practitioners and other categories of midlevel care practitioners will also be used at this level in the future, when available. HWCs will also engage the community in health promotion.

ÂHealth Assurance to the Poor

The second component is the National Health Protection Scheme (NHPS), which offers financial coverage to 100 million poor and near-poor families. This revamps a previous government-subsidized health insurance program aimed at protecting the large informal segment of the workforce. That scheme, Rashtriya Swasthya Bima Yojana in operation since 2007, enrolled potential beneficiaries at a low annual premium of 50 cents per family and provided them yearly cost coverage up to US $500 per family for hospitalized care. Even though this program improved access of the poor to secondary care, it failed to provide anticipated financial protection because outpatient care and additional costs of inpatient care were not covered. Schemes initiated by some state governments to pay for tertiary care to the poor also had similar results. However, all of these schemes helped to develop robust information technologyÂenabled services and fraud detection mechanisms. They also engaged both public and private health care practitioners, for the first time, in large government-funded programs. This experience will benefit NHPS as it evolves.

The NHPS does not demand any premium or enrolment but registers families identified as economically vulnerable from government surveys. It offers a coverage of US $8000 to each such family annually for hospitalized health care. The government terms this entitlement as Âhealth assurance, distinct from Âhealth insurance, which requires premium paid enrolment. As in Rashtriya Swasthya Bima Yojana, both public and private sector hospitals will be empaneled as care practitioners. An Âessential health package to be developed by each state, based on its disease profiles and health care demands, will guide strategic purchasing for procuring services from these practitioners.

The central government will bear 60% of the cost of NHPS, while each state will contribute 40% of the funding needed in its territory. However, the merger of preexisting state insurance schemes with NHPS is still being debated by the states. Different states presently provide different ranges of free services to the population, often including those who fall outside the ambit of NHPS. How the states will reconcile these, and whether non-poor families will be encouraged to buy into NHPS through paid insurance premiums, are developments that will contribute to the evolving architecture of NHPS. Each state will choose whether to operate NHPS through a private insurance intermediary or through an autonomous trust established by the government. Both models exist in presently operating schemes.


Both HWC-led comprehensive primary health care and NHPS will increase access to health services. Regulatory systems will need to be strengthened to improve quality and accountability. Other levels of primary health care, beyond HWCs, will need investment. District hospitals will need to be upgraded to provide good-quality secondary care and form an effective link between primary and tertiary levels of care. The health workforce will need to be scaled up in numbers and quality, if the new schemes are to succeed.

India has committed to UHC but it may take years to achieve. Even the NHPS covers only 40% of the population. The rest of the population is mostly uninsured because private insurance covers only a small segment. Out-of-pocket spending on outpatient care and catastrophic expenditure on hospitalized care will continue to represent major problems that will need to be addressed. The budgetary allocations to HWCs and NHPS this year are very low and need to be increased at least 5-fold next year. Unless public financing increases to 2.5% of gross domestic product well before 2025, the journey toward UHC will be sluggish, despite the uplifting promises made in the reforms initiated this year.

(This article has been published in JAMA, the Author Dr Srinath Reddy is the President of Public Health Foundation of India)