Indian healthcare can transform if the one nation one public insurance system, delivered as promised

Dr Mark Britnell, Chairman and Partner of the Global Health Practice at KPMG, informs that the world’s largest health protection scheme, the National Health Protection Scheme (NHPS) ‘is a clever move’

How feasible is the new National Health Protection Scheme (NHPS), under the Ayushman Bharat plan, that will cover 100 million poor and families and 500 million people, providing each family an insurance of up to Rs 5 lakh every year in case of secondary and tertiary  hospitalisation? How will NHPS change the Indian healthcare system?

Lot of promises were made earlier on the Universal healthcare system, but the promises have been kept hollow. I genuinely believe and hope that the announcements made in the recent Budget will be a seminal point for Indian healthcare. I have palpably sensed that people in the country believe that this change in the healthcare system is real for three reasons. First being it such a big statement to cover 100 million families and 500 million people and it is very important that its implementation is planned properly. Second, the budget has made a financial provision for launching the first phase of the Universal Healthcare. The third reason is India’s economic growth, which is about six per cent per annum and the introduction of the Goods and Services Tax. All these reasons make me feel that this development is real. The people I have spoken to in the Indian healthcare industry are filled with enthusiasm, particularly the private hospitals who will have a significant expansion opportunity. I have been coming here to (India) for the past 20 years and I have never seen such prospects for growth, innovation, improvement and enthusiasm in the healthcare industry. With unfavourable conditions like public health expenditure by the government being 1.5 per cent which is very less compared to other BRIT nations, life expectancy is under 70 years of age. Frankly, there can be no national wealth in India unless there is national health.

KPMG today is 150-years-old and in our experience of working with over 156 countries, and particularly a lot of work done on the Universal healthcare front, I can say that there was one key fault line in the budget announcement by India. It doesn’t join the development of primary healthcare. In any high performing and relatively low cost healthcare system, there exists a need for a strong primary healthcare platform. A major downside of the budget was that it did not have any announcement regarding spending enough money on primary care. It only talked about having wellness centres, the amount of money that is being directed towards these wellness centres and how they seem to be insufficient to meet the needs of the patients. We all know that public hospitals are overcrowded and they don’t have enough capacity. I hope the government spends some of the budget allocation towards improving public health. The ideological barricade between the private and public sector was wide, but this government is more plural in approach. The budget had a clear dictat for the private sector, i.e. to innovate itself and produce higher quality and low cost healthcare models. It has also indicated to the private sector not to follow the traditional business models and not to look on to the affluent section of the society. It clearly wanted the private sector to explore business models, which are indigenous. To sum up, it was a very clever budget.  The real action will be in engaging the private sector.

Do you think private players in public health will work in India? We have had lot of PPP healthcare models which have failed?

The reason for the Public Private Partnership (PPP) not working in healthcare could be due to lack of proper coordination and other operational issues. KPMG will be happy to partner with government and other relevant agencies so as to provide a truly global experience and develop an attractive business model. The government has to increase the way they pay and as mentioned earlier, private hospitals should change their business models. They till date follow the 20th century-based traditional, hospital and in-patients based service. So, this can be looked after in primary care, ambulatory care, diagnostic center, 18 to 23 hour facilities, emergency medicines, surgery and diagnostic facilities are taken care of. As stated previously, the Indian private sector has to be innovative, and change the business model. If they don’t there would be new entrants from outside India as the political urgency for the universal healthcare is so strong. In India, for most healthcare facilities which were PPP based, land was free and treatment was available at a low cost, which was one of the reasons most of them failed. The challenge with the model is they should understand that P&L (Profit and Loss) statements are made every year and not once in a period of time.

What would be KPMG’s role in the NHPS?

An Indian firm with a global reach is needed, when you are launching a scheme such as this, both at the central and state government levels. There needs to be a perfect orchestration effort. There are many concerns post the budget announcements, so KPMG wants to help the central and state governments in this endeavor. We want to press upon the centrally coordinated capabilities and an execution plan that enables to implement UHC. In the past, we have seen many programmes that have not reached the intended beneficiaries. For such an ambitious plan there needs a radical, disciplined and focussed mindset, which works with and between the various states and the union government. For example, we are helping the Chinese to implement the UHC. China made the announcement of UHC in 2009 and they have now covered 100 millions of people over a decade. They had executed this with careful and proper planning specifically asking different states to lay down various issues. They also have a reform program which encourages FDI and they are now spending a lot of money on Primary Healthcare plus are improving pharmaceutical payments so as to reduce corruption. With increased payments to doctors and nurses the Chinese now have more central control and direction to the programme. Apart from China, we are working with Vietnam, Indonesia, Philippines, Brazil, Bangladesh, Pakistan and many other countries.

What are the main components needed for a robust public insurance system?

We are talking here about ‘one nation one public insurance system’, it takes time to have such a system as it needs a well-designed public enroll and claim settlement system in place. Five lakh rupees is a very big large amount and the uptake is going to be quite significant. Therefore, the government should be ready and design an insurance system, which improves the health outcomes exponentially and keep the premium relatively low. What gets covered and how do you design it will have a significant impact on the premium if not in the first year but in the upcoming years.

The NHPS has hinted about 1000 health packages. Can you explain how it should be designed?

Bundle payments for care packages is a very progressive and advanced form of healthcare payment. KPMG is concerned that India needs a very sophisticated payroll and purchasing mechanism to start, establish, monitor, direct and control these packages. Packages are in principle a great idea, in practice it needs to be carefully implemented.

The NHPS is seen as Modicare and it is been compared to Obamacare. Your comments?

The only similarity is that President Obama was trying to provide affordable healthcare to millions of people, who didn’t have insurance and Prime Minister Modi is trying to provide insurance to hundreds of millions. Under the Affordable Act or the Obamacare, Obama was trying to reduce the cost of healthcare by creating more accountable care organisations viz. primary care, hospital care and social care provided by the government. Individuals had to be covered by insurance. This is not the same with India, there is no legal penalty. Differences are obvious, US spends 18 per cent of its GDP on healthcare and India spends only 1.5 per cent of its GDP on healthcare. US has some form of primary care, though it is not excellent but India doesn’t. There are superficial comparisons and they are not substantial ones. I don’t think India has to mimic America and there are many other better healthcare systems to follow.

[email protected]