Out-of-pocket spending to combat coronavirus

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Out-of-pocket spending to combat coronavirus

Sunday, 03 May 2020 | Pratap C Mohanty/ Deepabali Bhattacharjee

Out-of-pocket spending to combat coronavirus

A huge country like India that allocates just 1 per cent of the Budget on health is struggling to cope with coronavirus health-care management. But for the poor, who are unable to even provide for their sustenance, the pandemic is a threat to their survival. The Government needs to provide succour, and the first succour is to provide free protective gears to the marginalised population

On December 29, 2019, a hospital in Wuhan, China, reported severe unexplained viral pneumonia. The Chinese Government notified the World Health Organisation (WHO) about this outbreak. On January 8, 2020, this outbreak was identified as the novel coronavirus 2019 (2019-nCoV). The WHO declared this outbreak as an international concern and China classified it as Class B communicable diseases and is managed as Class A communicable diseases (Guidance for Coronavirus disease 2019, National Health Commission of the PRC, WHO collaborating centre for health information and publishing). This news has shaken the entire world and resulted in mass panic in our country as well. We are already aware of the Indian Government’s spending on health is meagre: WHO ranks India at 184th position out of 191 countries in terms of GDP percentage spending on healthcare. From the earlier 3.6 per cent of GDP spending on health, it came further down to one per cent (Rs 69,000 crore) of the GDP in the 2020-21 budget allocation. The quality of public health facilities is poor.

In order to avoid the deadly virus, certain precautions are necessary, as recommended by the World Health Organization. Particularly, respiratory masks and hand sanitisers (as a means to curb the spread of coronavirus) are preliminary steps to escape the effect of the pandemic. As a result, while these products became scarce, their prices also skyrocketed.

The moot point is when the price of everything is shooting up, how the marginalised section of the society will bear the burden of sustenance. They cannot afford any expensive treatment, nor are they in a condition to spend so much on health-care facilities. When public health spending is paltry, then the only way out is out-of-pocket expenditure on health care (medical costs by households directly at availing health services). But poor people neither have sufficient earnings, nor savings. They are fighting every single day to make both ends meet. According to the latest National Sample Survey (NSS) report (71st round) on health spending, the share of the burden of out-of-pocket expenditure on poor people is much higher.

As per the National Health Account Estimates for India Report, 2015-16 published in 2018, out of the current health expenditures of India, the share of households (includes health insurance) is Rs 3,42,257 crore (i.e., 69 per cent and out-of-pocket expenditure being 64.7 per cent). Also, the share of public spending on health care in India is just over 1 per cent of gross domestic product (GDP) (Angell, Prinja, Gupt, Jha, and Jan, 2019).The out-of-pocket expenditure on health has been increased from 64 per cent in 2005 to 81 per cent in 2012 and from 65 per cent in 2005 to 78 per cent in rural areas and urban areas respectively. This is corroborated by higher rural households (6.34 per cent in 2005 and 7.73 per cent in 2012) expenditure than the urban households (5.05 per cent in 2005 and 5.74 per cent in 2012). In such a situation, they cannot even think of buying masks and hand sanitizers at a higher price. Thus, Government intervention, in terms of provision of the necessities in this situation of crisis, is very much needed.

Moreover, the Insurance Regulatory and Development Authority (IRDA) of India has directed the insurance companies to cover the cost incurred by coronavirus diseases of the individuals under some instructions. These instructions are issued under the provisions of Section 14 (2) (e) of the IRDA Act, 1999, and came into force with immediate effect (March 4, 2020, Circular, IRDA, Guidelines on the handling of claims reported under Corona Virus). But many insurance companies have will not provide the facilities as the disease is declared as epidemic/ pandemic by the World Health Organisation.

The Government is taking necessary actions once the patient is already affected by coronavirus, through quarantining them and putting them in separate wards in hospital. But what about the mass population? During lockdown, the social distancing norms are followed to a T because of the successful implementation of the guidelines by security forces. But what will happen once all curbs are lifted. Most of the people who travel to foreign countries will go back to their hometowns once they are allowed to touch base with their family. Considering the incubation period for the coronavirus is approximately five days, if they reach their hometowns and then the symptoms start, then what will be the consequences in the concerned areas?

Most importantly, in rural areas, the disease will spread more rapidly because there is a lack of awareness and preparedness. The literacy rate is also low. Thus, precautionary measures by the Government for the general mass of the country are the need of the hour.

Although the Central Government, in collaboration with the State Governments, has devised mechanism for staggered lifting of the lockdown curbs, it is not sufficient if healthcare facilities lack vigour to combat a relapse of the pandemic.

For this reason, the supply of masks and hand sanitisers at free of cost either to the marginalised section of the society or universalisation of easy access by reallocating the health funds appropriately in this challenging situation is demand of the time.

(Pratap C Mohanty is Assistant Professor, Department of Humanities and Social Sciences, IIT Roorkee; Deepabali Bhattacharjee is a PhD Fellow at the same department)

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