People Under-Estimate Health Risks On Healthcare : Eco Survey

The structure of the market has substantial implications for the long term trajectory of the health system. The individuals also under-estimate health risks and may, therefore, not purchase adequate health insurance, revealed Economic Survey 2020-21. 

Prasun Sikdar MD and CEO ManipalCigna Health Insurance said, "Due to the COVID-19 pandemic situation, the consumer mindset has undergone a tectonic shift from looking at health insurance as a priority to seeing it as a necessity". 

Despite improvements in healthcare access and quality (healthcare access and quality scored at 41.2 in 2016, up from 24.7 in 1990), India continues to underperform in comparison to other Low and Lower Middle Income (LMIC) countries. On quality and access to healthcare, India was ranked 145th out of 180 countries (Global Burden of Disease Study 2016).

Balachander Sekhar, CEO, and Co-founder, Renewbuy Insurance, said, "This budget is crucial across all sectors and companies as it will re-shape the slowdown faced in the last one year. With Covid vaccination now a reality and economic survey estimating a 2.4 per cent GDP growth through healthcare, this sector provides a ray of hope in the next fiscal for reenergizing India’s economy. This brings health insurance as well in focus, as it is critical for medical needs and emergencies". 

At 3-4 per cent, the hospitalisation rates in India are among the lowest in the world; the average for middle-income countries is 8-9 per cent and 13-17 per cent for Organisations for Economic Co-operation and Development (OECD) countries (OECD Statistics). Thus, the low hospitalisation rates reflect lower access and utilisation of healthcare in India.

"Health insurance has become an essential commodity and needs to be slotted in the 5 per cent GST tax slab along with commodities such as food items to make it more affordable for people to get access to quality healthcare care", noted Sikdar.

 The ongoing COVID-19 pandemic has helped showcase the role of technology-enabled platforms as an alternate distribution channel for remote delivery of healthcare services. These technology-enabled platforms offer a promising new avenue to address India’s last-mile healthcare access and delivery challenges.

However, impressive growth has been seen in the adoption of telemedicine in India since the outbreak of the COVID-19 pandemic. This coincided with the imposition of lockdown in India and the issuance of the Telemedicine Practice Guidelines 2020 by the Ministry of Health and Family Welfare (MoHFW) on March 25, 2020. eSanjeevani OPD (a patient-to-doctor tele-consultation system) has recorded almost a million consultations since its launch in April 2020. Similar growth was also reported by Practo, which mentioned a 500 per cent increase in online consultations (varying from 200 to 700 per cent across different specialties) in just three months.

 The survey also highlighted the mitigation of information asymmetry would also help lower insurance premiums, enable the offering of better products and help increase the insurance penetration in the country. Information utilities that help mitigate the information asymmetry in the healthcare sector can be very useful in enhancing overall welfare. Telemedicine needs to be harnessed to the fullest by investing in internet connectivity and health infrastructure.

Insurance companies resort to high premiums and restriction of services covered in the insurance policy to safeguard against the risks. Addressing this information can help lower premiums, enable the offering of better products and help increase the insurance penetration in the country. Alongside, a sectoral regulator to undertake regulation and supervision of the healthcare sector must be considered.

 "Government should look at increasing the tax exemption limit under health insurance to bridge the insurance demand-supply gap and make healthcare accessible and affordable for everyone, especially in the tier II and III cities", added Sekhar.