Outpatient (OP) health care, mainly comprising doctor consultations, drugs, and tests, can be called ‘the elephant in the room’ of Indian public health care policy. Over the past two decades, initiatives announced to extend health care coverage to the indigent sections have come under criticism due to their near-exclusive focus on hospitalisation (inpatient, IP) care. This owes to the fact that OP expenses have the majority share in total out-of-pocket (OOP) expenditure on health. As per the government and various representative surveys, the catastrophic impact of OP expenses on Indian households is disproportionately greater than IP expenditure.
The need for coverage
There are, however, other compelling reasons for extending OP care coverage. First, IP care comprises high-impact and unavoidable episodes that are less prone to misuse than OP care, for which demand is considerably more sensitive to price and is thus more prone to overuse under health insurance. This logic, among other reasons, has led to IP insurance schemes being prioritised. However, while a price-sensitive demand for OP care entails that it could be misused under insurance, it also means that OP care, which includes preventive and primary health care, is the first to come under the knife when there is no insurance. In India, where there are many public IP insurance schemes but no OP coverage, this incentive is further amplified. The mantra of ‘prevention is better than cure’ thus goes for a toss.
Second, it defies economic sense to prioritise IP care over OP care for public funds. Healthcare markets are notorious for being imperfect. However, this is more so for preventive and primary care services which often come with externalities, elicit little felt need and demand, and must therefore be the primary recipients of public investment.
Third, positive feedback in health systems could mean that greater investments in IP care today translate to even greater IP care investments in future, further diminution in primary care spending, and ultimately lesser ‘health’ for the money invested. None of these are conducive to the epidemiological profile that characterises this country.
Some recent policy pronouncements by the Centre have conveyed an inclination to expand healthcare coverage with little fiscal implications for the government. A corollary is that private commercial insurance has been proposed for extending OP care coverage nationwide. Little thought has gone into the many reasons why this could prove detrimental, if not a resounding debacle.
This has to do with the reasons why OP care insurance has not caught on in India yet: under-regulated OP practices and the lack of standards therein; the difficulty to monitor OP clinical and prescribing behaviours and the concomitant higher likelihood of malpractices; low public awareness of insurance products and a low ability to discern entitlements and exclusions; and the high frequency of OP episodes and thus a giant volume of claims all embedded in a context characterised by low incomes and a high disease burden. All these entail tremendous (and largely wasteful) costs and administrative complexity, and it would be of little help even if the government was to step in with considerable subsidies. Add to it the inexperience that a still under-developed private OP insurance sector brings.
Back to the basics
It is important to note a few caveats at the outset. First, significant improvements in healthcare are implausible without significant fiscal and time commitments. Second, there is no ‘perfect’ model of expanding healthcare — the emphasis must be on finding the best fit. Third, implementing even such a best fit could involve adopting certain modalities with known drawbacks.
For India, wisdom immediately points to successful countries that are (or were, at one point) much closer to its socioeconomic fabric, such as Thailand, than countries like the U.S. which we currently look to emulate. The remarkable decline in OOP expenditure that Thailand recorded was achieved on the back of a universal, tax-financed, public sector-predominant model of OP care.
The focus must be on expanding public OP care facilities and services financed mainly by tax revenues. Now, the sparse number and distribution of public facilities offers various modes of rationing care, and their expansion is likely to result in a considerable spike in demand. Systematic, judicious, and tiered copayments on certain OP services that are prone to overuse may be needed, as also a standard benefit package. Contracting with private players based on objective and transparent criteria would also be called for, with just enough centralised supervision to deter corruption while preserving local autonomy. To deter supply-side malpractices, low-powered modes of provider payment, such as capitation, may be considered for private providers wherever possible.
Dr. Soham D. Bhaduri is a physician, health policy expert, and chief editor of The Indian Practitioner
