Page 191 - ES 2020-21_Volume-1-2 [28-01-21]

174 Economic Survey 2020-21 Volume 1

within the framework of data privacy with the aid of artificial intelligence and machine learning
algorithms to mitigate information asymmetry with respect to the patients. A standardised
system for quality reporting on healthcare for hospitals, physicians and insurance companies
can start with basic input indicators to be reported mandatorily by every healthcare stakeholder.
Over time, this can evolve to cover output and outcome indicators such as infection rates and
re-admission rates. A start has been made in this direction by the Niti Aayog through the Health
Index at the state level. Finally, a sectoral regulator to undertake regulation and supervision of
the healthcare sector must be seriously considered. This is especially pertinent as regulation has
grown in importance as a key lever for governments to affect the quantity, quality, safety and
distribution of services in health systems (Clarke 2016).

5.42 With limited visibility into patients’ medical records and no standardised treatment
protocols, insurance companies have a risk of adverse selection at the time of policy issuance
and a risk of moral hazard at the time of claims. To safeguard against this risks, insurance
companies resort to high premiums and restriction of services covered in the insurance policy.
Addressing this information asymmetry can help lower premiums, enable the offering of better
products and help increase the insurance penetration in the country.

CHaPter at a GLaNCe

¾ The recent COvID-19 pandemic has emphasised the importance of healthcare sector
and its inter-linkages with other key sectors of the economy. The ongoing pandemic
has showcased how a healthcare crisis can get transformed into an economic and social
crisis.
¾ Healthcare policy must not become beholden to “saliency bias”, where policy over-
weights a recent phenomenon. To enable India to respond to pandemics, the health
infrastructure must be agile.
¾ 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 to with Ayushman Bharat, the
emphasis on NHM should continue.
¾ 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 OOPE from 65 per cent to 30 per
cent of overall healthcare spend.

¾ 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.

¾ 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 healthcare
sector can be very useful in enhancing overall welfare.

¾ Telemedicine needs to be harnessed to the fullest by investing in internet connectivity
and health infrastructure.