Why the Insurance Model of Health Care is Not Enough for India?

 Why the Insurance Model of Health Care is Not Enough for india?

The insurance model of healthcare, which is prevalent in many developed countries, faces significant challenges in the context of India due to a variety of socio-economic and structural factors. Here are several reasons why this model may not be sufficient for India:

1. High Out-of-Pocket Expenditure

Despite the existence of insurance schemes, a large proportion of healthcare costs in India are still borne directly by patients. This out-of-pocket expenditure accounts for nearly 62% of the total healthcare spending in the country . This high burden can lead to catastrophic health expenditures, pushing many households into poverty.

2. Low Insurance Penetration

Health insurance penetration in India is relatively low. As of recent estimates, only around 37% of the population has some form of health insurance coverage . This leaves a significant portion of the population without financial protection against medical expenses, particularly in rural and underserved areas.

3. Fragmented and Inadequate Coverage

The health insurance market in India is fragmented with a variety of schemes (both public and private) that often provide limited coverage. Many insurance plans do not cover outpatient services, medications, or pre-existing conditions, which constitute a substantial part of healthcare costs . Additionally, the quality of coverage varies, with some plans offering insufficient reimbursement rates that do not match actual medical costs.

4. Complex and Bureaucratic Processes

Navigating the health insurance system can be complex and bureaucratic, especially for those with low literacy levels or limited access to information. Claims processes can be cumbersome, and there is often a lack of transparency regarding what is covered, leading to disputes and delayed payments .

5. Focus on Tertiary Care

Many insurance schemes in India are focused on covering high-cost tertiary care, such as hospitalization and surgeries, rather than preventive and primary care. This approach neglects the need for a comprehensive healthcare system that emphasizes early intervention, prevention, and management of chronic diseases, which are crucial for improving public health outcomes .

6. Inequity in Access

There is significant inequity in access to health services across different socio-economic groups. Urban areas and higher-income individuals have better access to quality healthcare and insurance products, while rural and lower-income populations are often left out. This disparity exacerbates health inequalities and undermines the principle of universal health coverage .

7. Provider-Induced Demand

In an insurance-driven model, there is a risk of provider-induced demand, where healthcare providers may recommend unnecessary tests and procedures to maximize revenue from insurance claims. This can lead to over-utilization of services and increased healthcare costs without corresponding improvements in health outcomes .

8. Lack of a Strong Public Health System

A robust public health system is essential to complement health insurance and ensure equitable access to care. However, India's public healthcare infrastructure is often underfunded and overstretched, resulting in poor quality of services and limited availability of care, especially in rural areas .

Conclusion

While health insurance can play a role in improving access to healthcare, it is not a panacea for India’s health system challenges. A more holistic approach that includes strengthening the public health infrastructure, expanding insurance coverage to include comprehensive care, improving health literacy, and addressing socio-economic determinants of health is essential for achieving better health outcomes for all Indians.

*A Better Model of Health Care

There are a number of different models of health care that could be adopted in the United States. One promising model is the single-payer system. In a single-payer system, the government would be the only insurer. This would eliminate the need for private health insurance companies, and it would significantly reduce the cost of health care.

Another promising model of health care is the multi-payer system. In a multi-payer system, there would be a number of different health insurance companies, but the government would regulate the industry. This would help to ensure that health insurance premiums are affordable, and it would also help to prevent rationing of care.

No matter which model of health care is adopted, it is clear that the insurance model is not enough. We need a new model of health care that is more affordable, more transparent, and more equitable.