People's Democracy

(Weekly Organ of the Communist Party of India (Marxist)


No. 36

September 04, 2011


Universal Access to Health Care

Amit Sen Gupta


IT is generally acknowledged that the necessity to pay for health care at the point of delivery is a major determinant of access to health care. Such out-of-pocket (OOP) expenses can have catastrophic consequences and there is substantial evidence that not only does it lead to poor health outcome for those who cannot afford such expenses, but is also associated with other long term socio-economic expenses. In many low and middle income countries, OOP expenses incurred to access health care are a major cause of poverty and indebtedness.


As a consequence, systems to finance health care access are often seen as a key to the development of sustainable health systems. Principles of health care financing in the last two centuries, ie, in the era of modern medicine, have consistently been an attempt to insulate people from the effects of catastrophic OOP expenses for health care. While the intent has been similar, different systems have been developed to address the basic intent of preventing the adverse effects of payment at the point of care.




Such systems of health financing are built around two basic ways of generating resources for health care – through general taxation, or through an insurance mechanism. The earliest model of a nationwide system of health financing is, what is know as the Bismarckian model – first introduced in unified Germany in the nineteenth century. The model evolved within a larger concept of the welfare state and was premised on mandatory participation in insurance schemes that were regulated by the State. The model continues to thrive in many countries in Europe, as well as in Japan, some Latin American countries, etc. An even larger intervention of the State was the hallmark of, what is known as the Beveridge model – introduced initially in post World War II Great Britain as the National Health Scheme (NHS). The model is based on public funding of health care through general taxation, as well as public provisioning of care. Examples of such a model today can be seen in UK, Scandinavian countries, Spain, Cuba, etc. A third variant of State intervention in health care financing is the Social Health Insurance (SHI) model, where care is financed through  a national, publicly administered, insurance scheme that is financed through contributions from users, employers and the government. Unlike the Bismarckian model, it is a ‘single payer scheme’ but provisioning can be public or private or (usually) a combination of the two. Canada and South Korea are examples of developed SHI models. Most low income countries use elements of one or other of these models to finance their health system, but often a large majority of people are excluded and depend upon unregulated private prodders.


It is important to note a difference in the way public intervention in health systems has evolved, in comparison to that in other sectors involving public goods, viz, in water and electricity sectors. In the latter, public intervention (before the advent of neoliberal policies), public financing and provisioning were, usually, integrally linked. However, in the health sector, the very evolution of what are generally termed as public systems, often combined public financing (or partial public financing) with partial or near total private provisioning. In situations where systems were built around private provisioning of care, public interventions were, however, still seen as necessary in public health interventions that went beyond just provisioning of health care – viz, drinking water supply, environmental hygiene, housing, etc.




Two major developments in the twentieth century, have forced the necessity to examine the merits of different models of health financing and health care provisioning. The first is the necessity for finding the optimum solutions in building sustainable health systems in the newly independent nations in Africa and Africa (and to an extent in Latin America). State intervention in the provision of public goods, before the mid-twentieth century, was largely seen in developed capitalist countries. It went hand in hand with the development of capitalism in these countries. In the health sector, the evolution of State intervention in health systems evolved in sync with the ability of modern medicine to make available medical products that could significantly alter population health outcomes. However, in the case of the newly independent countries, a large number of beneficial medical products were already available and the immediate issue was to conceive of a system that could best make them available to the population. Most of these countries had rudimentary infrastructure and trained human resources, and very limited financial resources.


The Alma Ata conference in 1978, and the evolution of the concept of Primary Health Care was a response to the challenge faced by newly independent, resource poor countries. While the Alma Ata declaration was not explicit in combining public financing and public provisioning of health care, its intent was clearly to indicate a central role for governments in both financing and provisioning of health care. There is clear evidence as well, that developing countries which chose to build systems which combined both – viz, Sri Lanka, Costa Rica, Cuba – did much better.


A second development led to strains that were more prominent in high and (some) middle income countries. This had to do with the fairly rapid demographic shift in these countries, with a rise in the population of elderly people. All insurance schemes integrate some forms of ‘risk pooling’, which anticipate that all the people in an insurance pool would, to start with, draw equally from the pool. In the health sector this never works very well. Even if differential risks due to difference in socio-economic status are discounted, age is a very  important differential. But with age differentials having become especially important as a consequence of the demographic shift, insurance schemes are under major strain. The situation is made more unsustainable because the aged population are able to contribute less to insurance schemes (as they are more likely to be out of unemployment) and more likely to draw form the pool (not only because they are more likely to fall ill but also because new treatments available to treat such illnesses are much more expensive). In such a situation, private providers who are part of insurance schemes (of any kind) tend to start excluding people at the margins (those at highest risk) or exclude disease categories and specific interventions. In other words, structurally, we see a shift away from provision of comprehensive care.


Social health insurance in low income countries have the added disadvantage that employers’ contribution is often a negligible source of finance to the insurance pool as a vast majority of the employed work in the informal, unregulated sector. Thus, in low-income countries, social health insurance schemes are largely built around public financing and private provisioning.




The issue, therefore, of whether it is sustainable to divorce public financing of health care from public provisioning, is a key issue that confront strategies to build sustainable health systems. Unlike in other sectors, even if provisioning is private, systems that are largely financed through public means are viewed as public systems. This, in large measure, has to do with how State intervention in the health sector has developed over time. Consequently there are persuasive arguments that are put forward in favour of public financed health systems that largely depend on the private sector for provision of care. For example, recent WHO documents state: “the emerging model for organising health care is that of “integrated service delivery networks”. It is elaborated that: these networks depend on linking up the diversity of public and private providers; and that: in pluralist, mixed health systems these policies, strategies and plans have to relate to the entire health sector and cannot be limited to ‘command-and-control’ plans for the public sector. And “take advantage, where appropriate, of opportunities that exist for collaboration between public and private providers and health-financing organisations, under strong overall government-inclusive stewardship”.


Such positions, thus, are not merely part of neo-conservative discourses, but (unfortunately) are part of the larger mainstream discourse on health systems.


What implications do these current debates on health care financing have for India? India has had one of the most privatised health systems in the world for decades. In the past decade -- the national health policy of the government in 2002, the previous Five Year Plan document and the common minimum programme of the UPA I – have all recommended a quantum increase in public funding for health to at least 2-3 per cent of GDP. This may be contrasted with a minimum of 5 per cent of GDP,  that the WHO recommends. However even this meager increase has not come to pass and public expenditure on health care has stagnated at just 1 per cent of GDP, over the last two decades. This has resulted in huge out-of-pocket expenditures (OOPs) being incurred to access health care. Estimates indicate that over 70 per cent of health care costs are through such OOPs. Catastrophic expenditures on health care has been indicted for 39 million people being pushed below the poverty line in a year.


The extremely low level of public expenditure has been responsible for an inadequately resourced public health system. In spite of some progress made through implementation of the National Rural Health Mission (NRHM), huge gaps continue to exist in infrastructure creation and human resource utilisation and retention. For example, 68.6 per cent of primary health centres function with only one or no qualified doctor and 64.9 per cent of community health centres report that there is a shortfall of specialists.


Again, largely as a consequence of grossly inadequate public expenditure on health care, the private sector has grown enormously. In spite of some sporadic attempts, the private sector is largely unregulated. Costs in the private sector have also grown enormously over time (at current prices, OOP on medical care has grown two and half times between 1993-94 and 2004-2005), with little attention having been paid to the standardisation of the quality of care. The private sector is undergoing a transformation, with large corporate run hospital chains forming an important segment of private care – especially in urban areas. In contrast, there is a huge pool of untrained and unqualified private providers, who are often the only source of medical care in rural areas. While public systems remain under resourced, the private sector (especially the large and organised corporate controlled private sector) benefits from indirect subsidies it receives from the government in the form of tax breaks, land made available at almost no cost and a pool of human resources trained in public funded institutions.




In India, we are now starting to gather evidence of how social health insurance schemes of the government – that are largely premised on private provisioning – fail to ensure universal access. A recently published study by the Public Health Foundation of India (PHFI) examined data from the 3 largest social health insurance schemes in India – the national Rajiv Gandhi Swasthya Bima Yojana (RSBY) scheme and the Arogyasri and Kalaignar schemes in Andhra Pradesh and Tamilnadu, respectively. These schemes explicitly separate financing and provision of health care. They allow beneficiaries to access care in accredited facilities – which may be in the private or the public sector. In practice, an overwhelming majority of the accredited facilities are in the private sector – almost all providers of hospital care under the Kalaignar, and 80 per cent under the Arogyasri scheme, are in the private sector. The study found that the average cost of hospitalisation in these schemes was extremely high – indicating that private providers not only benefit from these schemes by securing a ‘captive’ market, they also over-charge (with possible complicit participation of the administrators of the schemes).


What such evidence implies is that increase in public expenditure on health care, which is not accompanied by expansion of public health services, further strengthens the private sector (especially the large tertiary care sector that increasingly is constituted of corporate run hospital chains) – which already accounts for 70 per cent of health care in India. That the health care system in India might follow this route, is not an empty threat. This is exactly what is happening in the case of various other public services – in water supply, electricity, telecommunications, etc. Neo-liberal policies of the present government are designed to promote the building and strengthening of the private sector through the use of scarce public resources.


Almost a year back the Planning Commission had constituted an expert group on universal health coverage, mandated to rework the physical and financial norms needed to ensure quality, universal reach and access to health care services, particularly in underserved areas and to indicate the role of private and public service providers. A full report from the group is still awaited, though some portions of its recommendations have been recently reported upon in the media. In anticipation of the report, it is important that we keep in view the record of the Indian State in making available health care services in the country. It is to be hoped that the forthcoming report will not bow to the current mantra of public private partnerships, and thus put forward recommendations that divorce public financing from public provisioning of health care. Rather, any strategy that seeks to ensure universal access to health care, must be built around a system that integrates public tax-based financing and public provisioning of health care.