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By Saurabh Bhattacharjee

The announcement of the flagship National Health Protection Scheme [NHPS] by the Finance Minister. Mr Arun Jaitley in his budget speech earlier this week has led to renewed attention on the direction of public healthcare in India. Branded by some as the ‘Modicare’, the scheme promises to provide an insurance cover uptoRs. 5 lakh per family per year for treatment in secondary and tertiary care institutions to around 10 crore poor and vulnerable families. Given that public expenditure on health care in India has traditionally hovered around a paltry 1% of India’s GDP,[1] the announcement of NHPS may signal a new phase of increased public investment in healthcare. Yet, NHPS is not India’s first brush with public health insurance.

The Ministry of Labour launched the RashtriyaSwasthyaBima Yojana (RSBY) in 2008 for Below Poverty Line (BPL) families.[2] In addition, several state-level schemes like the Vajpayee Arogyasri in Karnataka,[3] Rajiv Arogyasri in Andhra Pradesh[4] and Megha Scheme in Meghalaya[5] were started in the last decade. While the Megha scheme is a universal scheme, the RSBY provides an annual insurance cover of Rs. 30,000 for BPL families. NHPS promises to take this tradition of state-funded cashless health insurance scheme for targeted households a notch ahead and scale it up in an unprecedented manner. There has been considerable attention on the fiscal implications of this scheme and how inadequate budgetary outlay undermine the credibility of the scheme.[6] But what does the scheme portend for effective realisation of the human right to health? In so far as right to health constitutes an inalienable human right, there is a fair case to evaluate the proposed scheme against the touchstone of the obligations of the state to further the realisation of the right.

The human right to health has been enshrined in numerous international legal instruments, most notably Article 25.1 of the Universal Declaration of Human Rights[7] and Article 12.1 of the International Covenant on Economic, Social and Cultural Rights,[8] as an inalienable right that inheres in every human being. General Comment No. 14 of the Committee on Economic, Social and Cultural Rights (CESCR) provide us a very comprehensive framework on the normative content of the right.[9] It clarifies that the essential elements of the right to health include availability, accessibility, affordability, acceptability and quality. Examining the contours of the proposed NHPS scheme, as sketchy as they are at this moment, through the lens of these elements of right to health suggests that the scheme may not enhance effective and meaningful access to healthcare. While insufficient financial support may indeed impede the effectiveness of the scheme, it is posited that the core edifice of the NHPS are so fundamentally flawed that it is unlikely to further effective realisation of right to health even with substantial fiscal commitment. Indeed, a model of public healthcare that seeks to privilege insurance for secondary and tertiary care over expansion of public health infrastructure cannot meet the standard of human right to health.

Firstly, NHPS appears to be no different than the RSBY and the other assorted existing cashless public health insurance schemes in its focus on coverage for hospitalisation expenses. As such, these schemes fail to cover even half of the out-of-pocket [OOP] expenditure incurred on healthcare. In fact, a recent study on the effectiveness of the RSBY concluded that 60% of OOP expenditure on healthcare relates to outpatient costs.[10] Insurance coverage that is limited to hospitalisation related expenses therefore, can only have a marginal impact on making healthcare more affordable. Indeed, a Brookings study found that Indian “public health insurance programmes have been ineffective in lowering health expenditures of Indian households.”[11] In view of the fact that health-related expenses is one of the major reasons for households to fall into poverty,[12] the failure to curtail OOP spending is a singular weakness of the existing model of public health insurance.

It must also be noted that General Comment No. 14 of the CESCR states that “health facilities, goods and services must be within safe physical reach for all sections of the population”. Yet, the National Family Health Survey-II (NFHS-II) found that only 13 % of the rural population in India have access to primary health centres and only 9.6% have access to hospitals in rural areas.[13] Another study found that 32 % of the respondents in rural areas had to walk for more than 5 kilometres to seek even OPD treatments.[14] Introduction of an insurance-based model of public healthcare, which is predicated on reimbursement for treatment undertaken in private hospitals, is ill-suited for India. Given that most of the empanelled hospitals are likely to be situated in urban areas, availability of insurance coverage is unlikely to result in meaningful access to healthcare without expansion of public health infrastructure. This is also borne by the insights from capabilities approach as propounded by Professor Amartya Sen, which tell us that mere availability of resources does not on its own result in substantive enjoyment of a basic functioning like healthcare since the conversion of resources into a functioning is variable and deeply contingent on personal heterogeneities and diversities in physical and social environment.[15]

Insurance-driven schemes for public health like NHPS are also likely to undermine the quality of healthcare through the distortions they induce in healthcare.  As Amartya Sen and Jean Dreze wrote in ‘An Uncertain Glory: India and its Contradictions,’ an insurance system focussed on hospitalisation may lead to excessive and unnecessary hospitalisation, especially for diseases, such as diabetes, circulatory problems and cancer, that can be best dealt with by early – pre-hospitalization – treatment.[16] Indeed, there are documented accounts of patients being subjected to unnecessary medical procedures by hospitals under the RSBY scheme.[17]The scope for such unethical practices are particularly aggravated due to the systematic information asymmetry between patients and medical professionals that is pervasive in healthcare sector.

Furthermore, the tilt towards secondary and tertiary healthcare created by such schemes can have a very deleterious impact on health outcomes by shifting scarce public resources away from primary healthcare. The positive relationship between primary healthcare and improved health outcomes have been well-established through studies from different parts of the world.[18] In fact, stronger primary health care systems not only result in better health but also partially counteract the pact of poor economic conditions on health and decrease reliance on hospitalisation and emergency services.[19] As it is, the primary healthcare system in India is severely understaffed and underfunded with a single Primary Health Centre (PHC) being responsible, on average, for more than 30,000 people.[20] Since the announcement of NHPS has not been accompanied by a significant increase in budgetary outlay on health, the scheme is likely to accentuate the shift of resources from primary healthcare to a form of subsidy to private hospitals which the poor shall be compelled to rely on even more. In this context, it is alarming that the share of the National Rural Health Mission (NRHM) in total health expenditure has declined in the last two years.[21]

As such, the NHPS is ill-suited to make healthcare available, accessible and affordable and guarantee effective realisation of the human right to health, for the poor in the country. A decade of experience with RSBY and other state-level schemes like Vajpayee Arogyasree and Rajeev Arogyasreeshould have provided the government sufficient evidence of the inherent limitations of a public health insurance scheme that is limited to coverage for hospitalisation related expenditure. NHPS fails to transcend those limitations and is unlikely to have a transformative effect on enjoyment on the human right to health, even if adequate financial support is provided for the scheme.

(Saurabh Bhattacharjee is an Assistant Professor at the WB National University of Juridical Sciences)

[1]Ministry of Health and Family Welfare, National Health Policy 2017, 5 (2017), available at

[2]RashtriyaSwasthyaBoma Yojana, About RSBY – The Genesis of RSBY, available at (last accessed on February 3, 2017)

[3]Centre for Innovation in Public Systems, Vajpayee Arogyasri, Karnataka, available at accessed on February 3, 2017).

[4]Aarogyasri Healthcare Trust, Aarogyasri Scheme, available at accessed on February 3, 2017).

[5]Megha Health Insurance Scheme, accessed on February 3, 2017).

[6]Aditya Kalra, India’s ‘Modicare’ to Cost about $1.7 billion a year: sources, Reuters, February 2, 2018, available at; See also Prabhat Patnaik, Budget 2018: Fantabulous Schemes with Not a Paisa Earmarked, Feb.3, 2018, available at

[7]UN General Assembly, Universal Declaration of Human Rights, 10 December 1948, 217 A (III), available at:

[8]UN General Assembly, International Covenant on Economic, Social and Cultural Rights, 16 December 1966, United Nations, Treaty Series, vol. 993, p. 3, available at:

[9]UN Committee on Economic, Social and Cultural Rights (CESCR), General Comment No. 14: The Right to the Highest Attainable Standard of Health (Art. 12 of the Covenant), 11 August 2000, E/C.12/2000/4, available at:

[10]R Shahrawat and KD Rao, Insured Yet Vulnerable: Out of Pocket Payments and India’s Poor, 27 Health Policy Plan 3 (2012).

[11]Shamika Ravi, Rahul Ahluwalia and Sofi Bergkvist, Health and Morbidity in India (2004-2014), Brookings 2016, available at

[12]Anirudh Krishna, One Illness Away: How People Become Poor and How They Escape Poverty (2013).

[13] National Family Health Survey, NFHS-2 India: Main Report, 1998-1999 available at

[14] Press Trust of India, Study reveals rural India gets only 1/3rd of hospital beds, The Hindu, July 2013, at!.

[15]Amartya Sen, The Idea of Justice 254-255 (2009).

[16]Amartya Sen and Jean Dreze, An Uncertain Glory: India and its Contradictions(2013).

[17]Sulakshana Nandi, Is the National Health Insurance Scheme in Chattisgarh Doing More Damage than Good, November 3, 2017, available at

[18]Barbara Starfield, Leiyu Shi and James Macinko, Contribution of Primary Care to Health Systems and Health, Milbank Q. 2005 Sep; 83(3): 457–502.

[19]Leiyu Shi, The Impact of Primary Care: A Focused Review, Scientifica, Volume 2012 (2012).

[20]N Devadasan, Of Primary Importance, Indian Express, June 11, 2014, available at

[21]Sourindra Mohan Ghosh and ImranaQadeer, Poor Diagnosis and Wrong Medicine, Indian Express, February 3, 2018.

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