Universal Healthcare in India

February 20th, 201112:01 pm @


Since its independence in 1947, India has made serious strides in improving the health of the country, as evidenced by the doubling of life expectancy over the past sixty years. However, compared to other countries at a similar stage in development at the time of their independence, India lags behind. The country has high incidences of preventable disease; its current healthcare structure is not accountable, affordable or equitable; the Government of India’s health expenditure is quite low; and most spending on healthcare by the average person is out-of-pocket and becoming more expensive.

The rising cost of healthcare in India is a leading cause for poverty: approximately 39 million Indian people get pushed into poverty every year because of high healthcare costs. Worldwide, India’s healthcare system is one of the most dependent on out-of-pocket spending and on private healthcare. More than 75% of health spending in India is paid privately. Over the past twenty years, there has been growing political support for the social sector, but this has yet to produce proportionate investment and corresponding health gains. In the past five years, there has been renewed commitment by central and state governments in the country to amend the gaps and inequities currently existing in the healthcare system. India’s healthcare system needs to be reformed if the government’s commitments are to optimally serve the health needs of India’s population.

Integrated National Health System

In a new paper part of the Lancet Series Papers published in January 2011, the creation of the Integrated National Health System (INHS) is proposed as the solution to providing universal healthcare in India by the year 2020. The primary goal of this healthcare initiative is to fortify India’s public healthcare system so that it supports the three-front functions of promotional, preventative and curative services. India can improve the quality of its healthcare services and reduce the associated out-of-pocket spending by managing a well-regulated incorporation of the private sector into the national healthcare scheme.

Instituting a system such as the INHS would involve the provision of universal health insurance, the formation of autonomous monitoring and oversight organizations in the healthcare sector, the restructuring of health governance to make it more coordinated and decentralized, and the legislation of health entitlement for all Indian citizens. Key stakeholders like civil society, the government and the private sector must together make concerted, strategic efforts to implement the action plan needed to have universal healthcare in India by 2020.

The Nine-Year Challenge

Around the world, especially in the U.S., healthcare reform has been a major controversial issue on the government’s docket. For India, many of the challenges are unique because of its massive population and the disparity in socioeconomics from person to person. The two questions then become: (1) is India ready to commit to large-scale, national healthcare reform?; and (2) why is India ready to address this challenge now?

The answer to the first question is yes. Economically speaking, India’s growth has been very fast and it has weathered recession better than expected. From a social point of view, in two national elections, India’s rural population has given the government a mandate to prioritize its needs, and healthcare is a priority on the people’s agenda. By improving national health, India would be in a stronger position to achieve its international development goals. Internationally, India wants to be a more active global player and participant. Since it has a free press and global exchange of information is rapid, India’s healthcare system will come under more thorough scrutiny domestically and internationally – the country will be forced to re-examine its healthcare system and make improvements.

Why is India ready for healthcare reform now? A core strength of the country is its young demographic: about 650 million people are under the age of thirty. This demographic is energized and has keen interest in shaping national systems that will better serve the wider population. There have been universal healthcare schemes attempted at the state level and via national initiatives previously; the failings of these projects provide lessons for how to implement a more effective national system. Of particular interest is the upcoming Universal National Health Card scheme: it can be a serious enabler of effective healthcare delivery throughout the country. Lastly, although healthcare costs are increasing, at present they are low enough to allow for major reform at an affordable cost. If healthcare reform is further delayed, it may become too costly for the government and civil society to implement the changes the country needs.

Seven Steps to 2020

There are seven key components to establishing a system like INHS in India. The points of foci need to be on consensus building, drugs and technology, governance, health financing, health information systems, human resources and service delivery.

Under the INHS, the entire population of India would be covered by a healthcare entitlement package that would be financed by a person’s employer, as well as private and public sources. India is the second most populous country in the world and is facing health threats such as chronic diseases, infectious diseases, injuries, nutritional deficiencies, and reproductive and child health issues, to name a few. Relevant diseases and cost-effective interventions need to be included in an entitlement package. It would be mandatory under the new healthcare scheme for all health facilities and practitioners to register with the INHS.

The follow-up to service delivery is drugs and technology, which can be prohibitively expensive for the average patient. There is not a united pharmacy network in India at the national scale. The INHS would require a national network of pharmacies that would provide low-cost generic medication to the entire population. This could effectively also mean putting in place processes by which bulk purchases of patented drugs could be made and thereby made available to the greater population. To avoid moral hazard, further mechanisms acting as a checks-and-balances system would need to be implemented to monitor perverse incentives provided by biotechnology and pharmaceutical companies to healthcare providers.

To support healthcare delivery, strong human resources need to be in place to support the INHS. It is proposed that an Indian Health Service be established with guidelines developed by an autonomous National Council for Human Resources in Health. The health needs of India are growing and it is therefore essential that medical and allied professions have an updated training program to adhere to. Another important piece to human resources is making sure that underserved areas have adequate access to these new healthcare systems: incentive structures need to be put into place to ensure universal healthcare access throughout India.

Health information systems also need to be in place. It is necessary to establish a comprehensive health information and surveillance system that is a thorough reference manual on all major diseases, health system issues and key social determinants. Also necessary for the information ecosystem is ongoing, up-to-date research that studies and reports on key issues affecting the healthcare system — this is particularly important for informing policy.

India does not lack the governance to make INHS a reality; however, there has been poor execution of political commitment. The National Health Bill 2009 was created “to provide for protection and fulfillment of rights in relation to health and well-being, health equity and justice, including those related to all the underlying determinants of health, as well as healthcare; and for achieving the goal of health for all; and for matters connected therewith or incidental thereto.” The legislative framework and intent are present in India, but there are not any processes in place to realize the components of the bill. If a system like INHS is to be born and sustain in India, the National Health Bill 2009 needs to be made functional. The other side of legislation is ensuring that officials working within public health are adequately trained in the sector to which they belong. Eventually, healthcare responsibility should lie with district management systems and accountability must include community participation.

Building consensus around INHS is essential. Providing universal healthcare, institutionalizing the necessary mechanisms and implementing an action plan cannot be a one-sided effort; it is multi-pronged. The government has a very large role to play, but so do other stakeholders like academia, civil society, the media people operating in the health sector and the private sector. Discussion and debate at the national level is needed to bring to fruition a universal healthcare structure that serves all people, irrespective of gender, geography and socioeconomics.

Currently, India’s public spending on health is approximately 1% of its gross domestic product (GDP) and out-of-pocket expenditure is 80%. It is proposed that spending should increase to 6% of GDP, expenditures on health research should increase to 8% of the total health budget and 15% of tax revenues should be allocated to health spending. New taxes on alcohol, some foods and tobacco products would have to be enforced. The main objective in restructuring health financing is ultimately to reduce out-of-pocket spending by patients to 20%.


Healthcare reform is a massive, expensive undertaking. For India, improving national health should be its primary development initiative. Universal healthcare becomes increasingly important in the context of a country where there is a remarkably large divide between the rich and the poor. Affordable public services will continue to be a part of national debate until more action is taken from many sources to improve the overall quality of services and resources for the public.

Whether or not India will adopt an ambitious plan like the INHS is yet to be seen. The big point of contention is how such a plan can be financed sustainably. India is spending a significant amount of money – its own and aid funds – to develop its infrastructure. The same, if not more, commitment is required to make any sort of national health scheme survive. What is obvious though is that in examining each of the seven aspects aforementioned that comprise a robust healthcare system, India has plenty of work to do. The good news is that the time and opportunities are ripe for the country to begin making those changes. Whether it adopts INHS or some variation, the point is to make the reforms needed to improve the quality of life for each of its citizens.

This story originally appeared in the February 2011 edition of the Searchlight South Asia newsletter created by Intellecap for the Rockefeller Foundation.

The opinions expressed on the Searchlight South Asia site are solely those of the authors and do not necessarily reflect the positions of the Rockefeller Foundation.