• Home
• /
• Opinion

What ails India's and China's health systems?

China and India, often cited as two rising economic powerhouses, are less than fully equipped in terms of health care, a key attribute of national economic development, according to Amartya Sen. Emergence of the United States, Europe, Japan and Korea as developed economic powerhouses validates Sen's argument. China and India, representing one out of three people on the planet, must step up efforts to remedy the gaps in health care to realise their economic potential.
India and China have adopted insurance as a tool to provide health-care access and mitigate catastrophic expenditures. India has 20 per cent penetration of insurance while China has managed over 95 per cent penetration. Each nation has adopted an independent route towards achieving universal health coverage. Despite good intentions, both nations are struggling with the complexities of deploying insurance. China struggles with issues of limited health-insurance benefits and high out-of-pocket expenditure. India on the other hand struggles with variability across a myriad of insurance schemes and limited engagement of the private sector.
For India, achieving universal health coverage is also a national priority. Penetration remains low, with 5 per cent coverage by private insurance. Two significant sources of health-insurance coverage in India are sponsorship by employers or the government at the federal or state level.
Formal employment in India is available to 20 per cent of the Indian workforce. Two significant employer-sponsored health-care insurance schemes in India, according to the World Bank, are the Employees' State Insurance Corporation launched in 1948, providing access to more than 55 million beneficiaries, and the Central Government Health Scheme launched in 1954, providing access to over 3 million beneficiaries.
With India's abysmally low penetration of insurance, the health-care sector continues to thrive on unregulated out-of-pocket spending by customers seeking medical care. For a patient in India, there is an inherent bias to seek care in private facilities because of perceived higher quality and benefits. These private facilities, having complete control over pricing their services, have little incentive to implement cost-effective strategies. One expected benefit as health insurance penetration rises in India is the ability of insurance payers to better negotiate prices for procedures and services with providers.
Unlike India, China's main obstacle to achieving universal coverage is not insurance penetration, but rather the extent of financial protection within the existing insurance schemes. In 2011, 95 per cent of China's population was covered under one of its three main national health insurance schemes: New Rural Cooperative Medical Scheme, Urban Employees Basic Medical Insurance and Urban Residents Basic Medical Insurance. China's three national schemes were each established within the past two decades in response to restructuring after Deng Xiaoping's market reforms.
In China, on the other hand, health insurance has been modeled as a tool to improve efficiency and control rising costs of government facilities, introducing accountability.
In India, the health insurance is scattered among players from across the government and private sector. India's health insurance has huge variations in coverage. Most health-insurance schemes in India cover hospitalisation with few provisions for outpatient, primary or preventive care. Coverage on hospitalisation can include waiting periods, exclusions and other details that limit financial support for the insured.
China, primarily dominated by three health insurance schemes, experiences less product variability.
As India works towards securing extended coverage for its citizens and China moves towards optimising coverage benefits, the systems should model key interventions to ensure desired success for both nations. India's motivation to promote state-sponsored health insurance is driven by attempts to optimise shrinking public expenditures. As state-sponsored health-insurance schemes become mainstream for India, there is an urgent need to focus on strengthening delivery within both the public and private sector.
India and China each must focus on establishing appropriate governance and coordination mechanisms across the delivery value-chain. As India struggles to extend coverage and China struggles with surging out-of-pocket expenditures, a health-systems perspective and a view on end-to-end care mechanisms offer the only affordable way forward.
Insurance is a key lever in health-systems design. But for health insurance as an instrument to be truly effective, delivery systems need to be responsive. Health insurance does offer a promising answer for easing expenditures. Stronger commitment towards comprehensive care is required - commitment among providers towards preventive and primary care, commitment from payers and insurance providers towards an inclusive-care design as extended benefits.
Appropriate timing for the introduction of health insurance as a financing tool within an economy is essential. Health insurance has a much better chance of being both inclusive and effective in an economy with well- developed, managed and governed health-care infrastructure. Both India and China should align their health-insurance priorities with essential needs of their delivery systems. Both India and China should view their insurance interventions as a catalytic tool allowing them to build effective health-care delivery systems.
Zeena Johar is a 2015 Yale World Fellow and the founder of SughaVazahvu Healthcare serving rural India. Xue Ying Hwang is a senior studying Molecular, Cellular and Developmental Biology in Yale College