Exclusive: (Reuters) Modi govt puts brakes on India's universal health plan
Prime Minister Narendra Modi has asked for a drastic cutback
of an ambitious health care plan after cost estimates came in at $18.5 billion
over five years, several government sources said, delaying a promise made in
his election manifesto.
Modi has had to make difficult choices to boost economic
growth - his government's first full annual budget, announced last month,
ramped up infrastructure spending, leaving less federal funding immediately
available for social sectors.
The health ministry developed a draft policy on universal
health care in coordination with the prime minister's office last year. The
National Health Assurance Mission aims to provide free drugs, diagnostic
services and insurance for serious ailments for India's 1.2 billion people. The health ministry proposed rolling out the system from
April 2015, and in October projected its cost as $25.5 billion over four years.
By the time the project was presented to Modi in January the costs had been
pared to 1.16 trillion rupees ($18.5 billion) over five years.
That was still too much. The programme was not approved,
three health ministry officials and two other government sources told Reuters.
Three officials said the health ministry has been asked to revamp the policy,
but work is yet to start. "The constraint on India's financial resources was
conveyed to health officials, and even to those from other ministries,"
said one government official who is not from the health ministry but attended
the meeting where Modi was present.
The meeting was held in January and the discussions were not
made public. All of the sources declined to be named because of the sensitivity
of the discussions. Officials at the prime minister's office and the finance
ministry, as well as the health ministry, did not respond to requests seeking
comment.
Modi's manifesto ahead of the election that brought him to
power last year accorded "high priority" to the health sector and
promised a universal health assurance plan. The manifesto said previous public
health schemes, that have been mired in payment delays recently, had failed to
meet the growing medical needs of public. (Read about payment delays, click here)
Modi has another four years left in his first term to fulfil
the promise. India currently spends about 1 percent of its gross domestic
product (GDP) on public health, but the badly-managed public health system
means funds are not fully utilised. A health ministry vision document in
December proposed raising spending to 2.5 percent of GDP but did not specify a
time period.(Read about health budget utlisation, click here)
So health experts were dismayed when the union budget for
the full-year starting April raised the allocation for the country's main
health department only by about 2 percent from the previous year, less than
inflation. The meagre increase dimmed prospects for the massive health plan,
they said. "How can it happen when you have truncated
resources?" one health ministry official asked.
REWORK, DISAPPOINTMENT
The health plan was drafted in consultation with Modi's
office and an expert panel, including an expert from the World Bank. The
proposal included insurance to cover more expensive and serious ailments such
as heart surgeries or organ failure.
Two government officials said this benefit will be
withdrawn. The health ministry was also asked why the new plan could not be
simply combined with existing health schemes. The decision to slash the level of insurance coverage will
have an impact on India's thriving private health sector, which would have seen
huge business growth as the programme channelled millions of new patients into
private hospitals.
Currently only 17 percent of India's population has some
form of health insurance. Anjan Bose of NATHEALTH, a group that represents such
private firms, said the delays in the programme would disappoint both the industry
and the public. "Greater availability of funds for public health care
under this programme would have further boosted growth of the private medical
industry," Bose said.
