Unhealthy growth
PRASHANT KUMAR
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Success of health insurance a paradox?
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Ever since the liberalisation of the insurance sector in India, an aura of euphoria abounds. This is exemplified in the 95 per cent growth in insurance business in the year 2006-07 as per the IRDA annual report. Amidst stories about growth and development, the success story of health insurance sector seems to be the most intriguing.
The past decade-and-a-half, in the Indian context, can be aptly described as the period of experimentation with liberalisation alongside a massive curtailment in the responsibilities bestowed on the public sector. With more and more private entities including multinational corporations setting foot in a liberalised environment, the need for a professionally skilled workforce witnessed a dramatic surge. The same led to the generation of massive employment opportunities in the private sector and the emergence of a new middle-class concentrated mainly in cities and endowed with enough resources to sustain a decent living. Heartening though the new development was, all the excitement and enthusiasm about it was subdued owing to the perpetual threat posed by lifestyle related diseases and the prohibitive cost of healthcare in cities.
Healthcare investment
As a corollary, investment in healthcare scheme emerged as the most prudent and convenient route to secure oneself against future healthcare contingencies. With the Indian middle-class estimated to gallop tenfold to 583 billion by the year 2025 (as per the study Tracking the Growth of India’s Middle Class conducted by Mckinsey Global Institute), the health insurance industry in India seems all set to flourish. Nonetheless, underneath the much bragged about success story lies muffled the tale of a lopsided and disorderly growth.
The same is well reflected in the adoption of differentiated policies by health insurance companies across different age and risk groups aimed primarily at providing coverage to the better-off and least-at-risk masses.
The fallout of such an approach has been that those actually in need continue to be left out. Financial ability and immunity from disease appear to have become the pivot of health insurance growth in India.
As the state of public healthcare institutions is no secret to anybody, the plight of a nation with 26 per cent of its population below the poverty line and about an equal percentage on the borderline could not be worse. But many in need of healthcare do not have access to it. The part played by regulatory authorities and public healthcare institutions to ensure orderly and equitable growth entails little imagination. Irrespective of the pace at which the health insurance sector grows, a majority of the population will still, at best, have access to public healthcare institutions only. There ia a need to strike a balance between growth and equity in such a situation.
The same entails standardisation of public healthcare institutions in line with modern needs. Further, the private sector needs to balance its growth objectives against the concerns of all for ensuring an orderly growth of the health insurance sector in India in all earnestness.
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