Personal saving is the source of health care financing in India
We are living in extremely difficult times. All around the world, the COVID-19 pandemic is impacting lives, and causing people to have more questions about their health and overall financial well being than before. However, the most critical and immediate challenge that Indian families face today is the rise of chronic diseases, declining health and rapidly escalating healthcare costs, which continue to grow at an unsustainable rate.
India’s healthcare system today is largely underfunded and is dependent on out of pocket expenses. According to the National Sample Survey (NSS) (conducted from July 2017 to June 2018), 85.9 per cent of rural Indians, do not have any health expenditure coverage.
This number stands at 80.9 per cent for urban Indians. Personal saving is the source of health care financing in India, with over 62 per cent of healthcare expenditure being out of pocket. Also, due to rising medical costs around 5 per cent of the population are forced below the poverty line every year according to PWC Analysis.
Lifestyle diseases such as diabetes, cardiac problems, blood pressure, thyroid, and cancer are on the rise in India. And now, given the gravity of the current pandemic, the number of people suffering from infectious diseases and other communicable and non-communicable diseases have also increased with seniors falling ill more often than young adults.
Several studies reveal that at least one member in every household will need some kind of long-term medical assistance. A considerable number of people have the means to pay expenses out of their savings, but for many others, a long-term stay in a healthcare facility due to some illness or other debilitating condition can derail their lifestyle or long-term goals.
For the above reasons, and many more, it’s now time for a new wave of transformative change that makes healthcare more affordable, predictable and simple for all Indians. This is not a far-fetched dream. In recent times, both the national and state-level government bodies are already making targeted efforts to improve the healthcare scenario and make quality healthcare affordable and accessible for crores of people in the country. Also the Insurance Regulatory and Development Authority of India (IRDAI) in its continuous efforts to make health insurance products more standardized, has rolled out affordable standardized health insurance products in the interests of the citizens.
Health is an integral part of the India story and we will continue to see a sea change in healthcare in the coming years. By working together, patients, healthcare providers, communities and the private and public sector, including employers and health insurance companies, can create a more sustainable system that delivers value-based affordable health cover and more personalized health insurance products and services to address the health needs of today and prevent the financial health burdens of tomorrow.
Access to health insurance can help more people become part of the healthcare system and get quality treatment. The COVID-19 pandemic has revealed a serious gap between supply-demand imbalances, which has further increased demand for health insurance. In the hierarchy of needs, Health today is ‘Top of Mind’ and health insurance has gone from a ‘good to have’ to ‘must have’, leading to a consumer who is now proactively knowledgeable about insurance.
The author is MD and CEO ManipalCigna Health Insurance Company
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