Insurance In Trouble

The National Health Insurance Programme (NHIP) is a crucial pillar towards shielding individuals from unexpected burdens on health care expenses. It is managed and implemented by the Health Insurance Board (HIB). However, due to the financial problems faced by the HIB in clearing overdue payments to service providers, it has restricted outpatient department (OPD) services to only up to Rs. 25,000 per beneficiary. Designed as an interim financial restriction, this move is an admission of the severity of the financial crisis faced by the HIB. It is also an acknowledgement of some of the structural problems with the programme, which this restriction does not solve.

As per the financial data of HIB, the annual outlay for the health insurance programme now exceeds Rs. 24 billion, while income is only about Rs. 14 billion. Government grants are about Rs. 10 billion, and premiums amount to an additional income of Rs. 4 billion. The deficit is therefore more than Rs. 10 billion annually. Additionally, every month, the HIB must pay more than Rs. 2 billion to service providers, amounting to an annual expenditure of over Rs. 24 billion. Financial constraints are therefore an inevitable. The data clearly indicate that OPD services have the highest allocation at 71 per cent, followed by inpatient services at 19 per cent, and then emergency services at 10 per cent. Reducis OPD services seems sensible to save costs. 

However, public health policy cannot be made based on such simple accounting principles. OPD services are the entry point for most people, especially for the poor, elderly, and those with chronic illnesses. To restrict these services would be counterproductive to the core theme of health insurance. The assurance that services have not been ‘reduced’ but only ‘reallocated’ may not be fully convincing. A ceiling, by definition, implies that access will be restricted when the limit is reached. For households dealing with long-term health conditions like diabetes, hypertension, or respiratory conditions, OPD services and drugs will be regular requirements rather than discretionary outgoings. 

Even if coverage for severe health conditions remains at Rs. 100,000, the regular outgo for daily health needs may become unaffordable for many households. More worrying still is that the policy seems to be addressing the OPD expenditure as a problem rather than the result. Excessive OPD expenditure may be symptomatic of inadequate preventive care requirements not being met, inadequate referral services, and possibly overcharging along the service delivery chain. The present health crisis underscores the present policy incoherence. On the one hand, hospitals threaten to suspend services for non-payment of dues; on the other, the finance authorities refuse additional funding because budgets already sanctioned have been released. The hapless health beneficiary finds themself caught in the crossfire of this institutional standoff. 

Temporary internal resource mobilisation may be the present remedy. It cannot be the long-term solution. What is needed now is not just control of expenditure but reform with intent. Better monitoring of claims, review and improvement of payment systems for service providers, investment in preventive and primary care services, and widening the premium base are all important steps. The OPD ceiling may temporarily solve the problem of HIB, but time will not ultimately save the insurance programme. The system will lose both viability and credibility if bigger changes are not made. Health insurance should not be treated as a budget expense. It is a social contract between the state and its people to ensure access to health.