Page 167 - ES 2020-21_Volume-1-2 [28-01-21]

05

Healthcare takes centre stage,

finally! CHAPTER

"It is health that is real wealth and not pieces of gold and silver.”

—Mohandas K. Gandhi

The recent COVID-19 pandemic has emphasised the importance of the healthcare sector
and its inter-linkages with other key sector of the economy. The ongoing pandemic has
showcased how a healthcare crisis can get transformed into an economic and social
crisis. First, while key learnings need be gleaned from the current health crisis, healthcare
policy must not become beholden to “saliency bias”, where policy over-weights a recent
phenomenon that may represent a six-sigma event that may not repeat in an identical
fashion in the future. To enable India to effectively respond to future pandemics, the health
infrastructure must be agile. Second, given its potential to provide healthcare access in
remote areas, telemedicine needs to be harnessed to the fullest by especially investing in
internet connectivity and health infrastructure. Third, the National Health mission (NHM)
has played a critical role in mitigating inequity as the access of the poorest to pre-natal and
post-natal care as well as institutional deliveries has increased significantly. Therefore,
in conjunction with Ayushman Bharat, the emphasis on NHM should continue. Fourth,
an increase in public spend from 1 per cent to 2.5-3 per cent of GDP – as envisaged in
the National Health Policy 2017 – can decrease the Out-Of-Pocket Expenditures from 65
per cent to 30 per cent of overall healthcare spend. Fifth, as a bulk of the healthcare in
India is provided by the private sector, it is critical for policymakers to design policies
that mitigate information asymmetry in healthcare, which creates market failures and
thereby renders unregulated private healthcare sub-optimal. Therefore, information
utilities that help mitigate the information asymmetry can be very useful in enhancing
overall welfare. The Quality and Outcomes Framework (QOF) introduced by the National
Health Service (NHS) in the United Kingdom 2004 as well as other quality assessment
practices in various countries provide good examples in this context. A sectoral regulator
to undertake regulation and supervision of the healthcare sector must be considered
given the market failures stemming from information asymmetry; WHO also highlights
the growing importance of the same. 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.