Saturday, August 30, 2008

Illness : Robbing You of Home and Hearth

The other day, there was a commotion in the office when news came around that the electrician who was having his lunch had suddenly fallen with a thud in the midst of it and fallen unconscious. He was rushed to a near by hospital where tests revealed that he had brain haemorrgage as well as blocks in his heart. The hospital didn’t have the expertise to deal with this and after putting he on a ventilator rushed him to a hospital which has neuro surgeons and cardiac surgeons on its roster. Meanwhile, the office scrambled to arrange money for the lowly paid electrician who could be given to his family as a loan for this treatment and the staff scrambled to take an offering which could be given to his family as a gift.

PS : The electrician has since passed away....

Another person has a liver failure and needs a transplant. His wife has come forward to donate but the cost of the treatment is so high that he has to sell his house , recover the proceeds and then pay the entire amount to the hospital as a deposit before any thing will move.

A third case I remember is that of a man in an Uttar Pradesh village, dismantling his house – literally brick by brick, so that he could then sell the bricks and settle his relatively modest hospital dues.

To put things in perspective, we need to know that “the poor have to increasingly resort to taking debt or selling assets to meet costs of hospital care. It is estimated that 20 million people each year fall below the poverty line because of indebtedness due to healthcare. This is worrisome given the fact that more than two-thirds of the country’s population is already either poor or living at subsistence levels.”

With the government virtually fading out of the health care sector under the guise of promoting public private partnerships, finding alternate options has become imperative and yet not easy. With health insurance seemingly the only viable option to meet health costs in the future, it seems important that the penetration of health insurance be increase but several variations be explored within this domain including micro insurance.

Yet this is never going to be easy in the unorganized sector. For instance how do you provide health care to handloom weavers, who occupy among the poorest segments in the unorganized sector? There are 6.5 million of them scattered across the country and are not always fixed in their occupation. Though there is a scheme in operation for them operated by the Union Textiles ministry, progress in enrolling members is slow. And there are many more segments of the population that are far more unorganized than textile workers.

If the product is properly customized and premiums where need be part subsidized by the government, the market for health insurance in its various variants is huge as currently the penetration of health insurance is estimated be 0.02 % or less of GDP.

However like any other nascent industry in the country, the insurance industry is having to cope with its teething troubles, one of the main ones being the inadequate regulatory norms with in the insurance industry itself. The unethical norms in hospitals which routinely over charge patients who declare themselves to be insured and the inability of the insurance companies to evolve common treatment regimes and protocols which would have led to some rationalization of tariffs and fees charged by the hospitals.

But this has not happened yet and the variation in hospital bills and the variations in tariff between the metros and non metros are astounding and this disconnect raises the insurance premiums which are then recovered from the customer. In a nascent industry, high premiums will further act as a disincentive to newly entering customers. However, even in this evolving situation, it is necessary to popularize and promote insurance as the only solution in the foreseeable future to the challenge of the rising costs of healthcare and in particular for those in the unorganized sector. Providing tax exemptions might be a beginning but then there is a large gap in those who do not pay taxes and who in many ways may be the ones who need health insurance the most….

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