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Jehangir S. Pocha
Out Of The Box

Follow Jehangir Pocha on Twitter @JehangirPocha

Defence should not get priority over health

Threat of Indian soil being lost ignites more passions in voters than millions of lives lost to preventable diseases.

o other country in the world spends 6.5 times on defence to what it spends on health. This is a very special kind of political insanity that has gripped India for decades and sadly it did not change in this Budget either.

The NDA has pegged defence spending at Rs 229,000 crore, while allocating just Rs 36,000 crore to health, almost exactly what the UPA did. Even after including state and local budgets, India's total government health spending will barely be Rs 125,000 crore, about Rs 1,000 per person. That is an abysmal 1.3% of GDP, while the global average is 11% and the average for developing countries 3-5%.

Citizens might ask why government is so committed to protecting them from foreign bullets but so disinterested in protecting them from foreign viruses. After all, illness kills far more Indians than Pakistani shells or terrorist bombs.

Just think of how often you and your friends and family fall sick from hygiene-related infections, malaria, dengue, typhoid, jaundice etc. India also has the world's highest incidence of heart attacks, many cancers, diabetes and death during childbirth.

The answer is that for most Indians defence is not about protecting people but borders. The threat of an inch of Indian soil being lost ignites more passions in voters than millions of lives lost to preventable diseases.

This is partly because peoples' security fears are exaggerated while their expectations of government and value for human life are low.

Despite 67 years of socialism, Indians do not see healthcare as a state responsibility, though ironically many capitalist countries see it as a fundamental right. Even in America, which has the developed world's worst healthcare and the world's largest military, total government spending on health is $1.3 trillion, while the defence budget is $820 billion.

Pointing this out to politicians, bureaucrats and voters is futile. The awareness, will and money to increase government health spends simply does not exist. The most anyone can hope for in the next decade is that the private sector will provide some semblance of care. This will doom 400-500 million people who cannot afford private care. But this does not bother anyone in a country where we shoo hungry children away from our car windows.

Already, almost 95% of hospitals and 80% of doctors are in the private sector, where pricing and standards are almost totally unregulated. Medical malpractice is rampant and quality of care erratic. Swish hospitals in metros provide world-class care. But a day's treatment in their ICU costs between Rs 50,000 to Rs 250,000, which even corporate executives can scarcely afford. In fact, health costs are estimated to bankrupt some 39 million people every year. A more tragic and under-reported phenomenon is how wives and daughters are sometimes even forced to prostitute themselves to doctors and chemists.

There is a simple solution to this. India needs medical insurance schemes from private companies that people can buy for their own protection. It is inexplicable that the government, PSU and MNC insurers and the Insurance Regulatory and Development Authority have not created these. Currently, Indians can only buy hospitalisation policies with a measly cap of Rs 500,000. These policies, like MediClaim, do not reimburse any expenses incurred outside hospital even if they are life-saving, like dialysis. That is why Indians pay almost 75% of medical costs themselves, one of the highest self-pay rates in the world.

Full medical insurance can give people comprehensive healthcare cover. Basically you pay, say, Rs 100,000 a year for the policy and then the insurance company pays, say, 80% of all of your medical costs. This includes preventive checkups, doctor's visits, operations, post-operative care, medicines, home nursing, recovery and even counselling and therapy.

Naturally, medical insurance costs more than hospitalisation policies. But prices can be flexible based on coverage, expense caps, percentages of reimbursement and deductibles. This ensures polices can designed for all pockets and needs.

China is experimenting with dozens of such pilot schemes, while India is basically ignoring medical insurance. There is only one medical insurance scheme in the country — the Central Government Health Scheme and its allied plans, showing us again how bureaucrats gift themselves benefits they deny citizens. It is time this changed. Private medical insurance is not perfect, but introducing it will offer about 200 million families security against sky-rocketing medical costs. It will boost the economy while costing the state nothing. Over time, increased awareness of medical insurance can even lead voters to demand some kind of public health insurance. The Budget has already stated FDI in insurance will be raised to 49%. The least the government can now do is link this benefit to insurers bringing real medical insurance to India.

This is Jehangir S. Pocha's last column, which he wrote on Friday. He passed away on Saturday early morning.

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