National Health Insurance for Universal Health

Coverage
Implementing Services

Disclaimer: The views expressed in this paper/presentation are the views of the author and do not
necessarily reflect the views or policies of the Asian Development Bank (ADB), or its Board of Governors,
or the governments they represent. ADB does not guarantee the accuracy of the data included in this
paper and accepts no responsibility for any consequence of their use. Terminology used may not
necessarily be consistent with ADB official terms.

Indias sheer size makes it impossible to ignore today...

Indias population is equal to combined population of seven large countries

1.25
billion

+
US

Indonesia

+
Brazil

+
Russia

Japan

Mexico

Germany

Indias adding a Brazil every decade

17.6%
Every 6th person on
earth lives in India

181
~
= million
~

Brazil

Nearly equals
the population
of Brazil

Decadal growth
from 2001 to 2011

Population density is growing rapidly

2001
2011

Source: World Bank, Census of India

World Economic Forum, WHO, Bain & Co analysis, MoHFW, CII McKinsey study
Slide No.Source:
37

325

Population
per sq km

385

Indias Current State of Healthcare: Challenges Galore

20% of the Worlds Disease
Burden

~75%

~2 Million

Population with no health

insurance

Gap in bed capacity

~$ 6.2 Trillion

178

~$ 3Trillion

Economic Loss impact from

Non Communicable
Diseases by 2030

Maternal mortality rate vs.

Millennium Development
Goals target of 109

Cumulative healthcare
spending requirement by
2025

But 17% of the Worlds

Population

1.3%
Percentage of GDP as
public spending on
healthcare

<1%
Percentage of delivery
providers accredited

World Economic Forum, WHO, Bain & Co analysis, MoHFW, CII McKinsey study
Slide No.Source:
37

~3 Million
Urban diabetes patients
who receive adequate
treatment, out of ~38Mn

Indian Healthcare Accessibility

Brazil

Russia

India

China

South
Africa

Global

75

69

66

75

60

71

22

17

17

19

17

20

8.4

5.3

29.2

7.7

14.8

20

93

74

253

41

612

178

514

790

682

576

711

539

80

103

116

50

104

73

Antenatal care at least 1 Visit

96

75

95

97

83

Births attended by skilled person %

99

100

67

100

94

74

18.9

14.9

7.8

13.9

Nursing Personnel per10,000

76

17.1

16.6

51.1

28.6

% of GDP

9.5

6.5

3.8

5.4

8.9

8.6

Govt. exp as % total health exp.

47.5

51.1

30.5

56

48.4

57.6

Govt. exp as % total govt exp.

7.9

8.9

4.3

0.1

14

14.1

OOP exp. as % of pvt.exp. health

57.8

92

87.2

78

13.8

52.6

Crude birth rate per 1,000

14.9

11.8

20.4

13.3

20.9

19.5

Crude death rate per 1,000

6.1

14.8

7.9

7.2

11.1

7.8

WHO 2015 Report

Indicators
Life expectancy at birth(Years)

Life expectancy &

Life expectancy at age 60(Years)
Mortality
Neonatal MR Per 1,000 Live births
Communicable per 100,000
Age-standardized
Non Communicable per 100,000
mortality rates
Injuries per 100,000
Health Service
Coverage
Health
Systems

Health Expenditure

Socio
economic
Slide No. 37

Physicians per 10,000 population

Indian Healthcare Landscape

INDIAN MARKET IS GROWING AT A SIGNIFICANTLY FASTER RATE OF ~18%, COMPARED TO
WESTERN MARKETS
2017E
2012

150

2010

65
52

2009

Medical Insurance

Medical Equipment & Supplies

36
2006

4% 3%

28

Diagnostics

20%
Pharmaceuticals

9%
13%

Hospitals
71%

Market size ($ bn)

Slide No. 4

Source: IBEF

Indian Healthcare Landscape

OVERALL SPEND IN THE HEALTHCARE SECTOR IS VERY LOW
6.00%

5.50%

5.00%
4.20%
4.00%

4.50%

4.40%

4.10%

3.60%

3.90%

4.00%

2011

2012

3.00%
2.00%
1.00%
0.00%
2006

2007

2008

2009

2010

2022 (P)
Vision

HEALTHCARE EXPENDITURE AS % OF GDP

2012: Public spending (government) ~ 1.2%

Slide No. 6

Source: World Bank

Private Sector Faces Unique Challenges

Increased Regulation

Limited Incentives
Medico-legal liabilities

Regulatory

Major cause of
indebtedness

70% of pop: ~15%

Health resources
10% pop: 40% Hosp
in Top 20 cities

Affordability
and
Accessibility

Healthcare
ecosystem

Competition

Fragmented
New formats
Innovative
Commoditization

Rising Input costs

Variable costs

High inflation

Manpower

Capital Expenditure

Rising Expectations

Social responsibility
Sustainability

Our Journey
2013-16
2012

2013

2011

Acquired stake in
SRL (Diagnostics
laboratory network)

Acquired Fortis
International Pte. &
85% stake in
RadLink-Asia

Commissioned 2
new hospitals &
divested Dental
Corp. / Hoan My /
Quality Healthcare

Commissioned
FMRI, LDH &
Bengaluru;
Divested
International Assets
Acquired 51% in
FHTL

YTD FY2017
Announced
demerger of
Diagnostics Business
(including SRL ) into
Fortis Malar in
August 2016

2010
Acquired &
divested stake in
Parkway Holdings
& commissioned 2
new hospitals
2009

Acquired 10
hospitals from
Wockhardt group

Slide No. 17

2008

Acquired Malar
hospitals, Chennai

2005

Acquired Escorts
chain of hospitals

2004

Commissioned
the second
Hospital in NCR

2001

Started first
hospital at
Punjab, Mohali

FORTIS: Scale of Operations

45 HEALTHCARE FACILITIES WITH PRESENCE ACROSS 14

STATES & 19 CITIES

PROVIDES SECONDARY TERTIARY AND QUATERNARY

HEALTHCARE DELIVERY SERVICES TO PATIENTS

TREATING ~2.6 MILLION DOMESTIC & 15000

INTERNATIONAL PATIENTS FROM 94 COUNTRIES EVERY
YEAR

314 DIAGNOSTIC CENTRES OVER7 300 COLLECTION

POINTS AND PRESENCE ACROSS 700+ CITIES IN INDIA
;OFFERS OVER 3800 TESTS

OVER 22,000 EMPLOYEES ACROSS FORTIS & SRL

4700 OPERATIONAL BEDS WITH ~10,000 POTENTIAL BED

CAPACITY

4000 CLINICIANS ON BOARD

Current India Health Insurance Market

o Health Insurance Market India

Market Size (2014): $2.7 billion (~3.5% of overall healthcare market)

Growth Rate: 20% CAGR (2007-2014)
Growth rate going forward: 30-35% CAGR
Total population covered under any form of health insurance: 18%

o Healthcare Insurance Market Share (by value)

Public sector insurance schemes: 59%
Private Sector insurance schemes: 41%

Slide No. 37

Trend: Health Insurance in India

Key Drivers
Health insurance premium collected (USD Bn)
15

16
12

CAGR 14%

0.3

Individuals are also taking up higher value insurance, thereby

driving further growth

0
FY 05

FY 10

FY 15E

7%

3
2
1

FY 20P

Health insurance claim contribution towards

healthcare delivery1 (USD Bn)
5

4
1

6%

FY 20P

Source: Secondary Research, PwC Healthcare Database, PwC Analysis

India Healthcare The Opportunity Today

HI is increasingly being provided as part of compensation package

across companies in India in order to boost employee
motivation/welfare
Premium corporates are demanding high quality services and
networks for their employees
Government initiatives supporting health insurance

Streamlining product approvals, new licenses etc. (lead time of new

license shortened to 6-12 months) are key focus areas of the
government

FY 15E

Increasing demand from corporates

IRDA is focusing on profitability and sustainability of the industry as

a whole

4.5%

FY 10

Current low penetration of health insurance (HI) which indicates

large potential for growth
Increasing awareness coupled with urbanization and income growth
of incomes is expected to drive demand for HI

CAGR 17%

8
4

Increasing demand from individuals

The government has passed an ordinance to increase FDI in

insurance from 26% to 49%, further augmenting the service quality
standards

The health
insurance market
in India is
expected to grow
at 17%, driven by
increasing
demand from
individuals and
corporates,
coupled with
supportive
government
initiatives

Healthcare Insurance in India

Forms of Health Insurance Schemes:

Employer Provided: In the employer-provided insurance model, the employee is reimbursed for his health
expenses upon producing a claim. Many of these insurance schemes include dependents. The employer usually
pays the insurance company directly.

Government/Social: Employee Social Insurance Scheme (ESIS) and Central Government Health Scheme (CGHS)
are types of mandatory or social insurance schemes. The ESIS scheme automatically covers labour class
employees, while the CGHS covers Central Government employees

Voluntary: Many voluntary schemes are administered by public or private companies, such as Life Insurance
Corporation, Oriental Insurance Company Limited, United Insurance Company Limited, Star and Health Allied
Health Limited, among others

Community-based: These are insurance schemes specifically applicable to certain segment of the population;
usually implemented in areas where there is a special need to address concerns like low premiums, reduction in
default payments or improve social healthcare. These insurances are sponsored by governments or NGOs

Competitive Landscape-health insurance in india

P&C* and Health

Other General &

health

Pure Play Health

Currently, the competitive landscape is largely made up of pure play and diversified health
insurance companies

Government
Source: Secondary Research, PwC Healthcare Database, PwC Analysis
Note: *P&C refers to Property and Casualty Insurance

India Healthcare The Opportunity Today

Group

Individual

UHC : INDIA

Ensuring equitable access for all citizens, resident in any part of

the country, regardless of income level, social status, gender,
caste or religion, to affordable, accountable, appropriate health
services of assured quality (promotive, preventive, curative and
rehabilitative) as well as public health services addressing the
wider determinants of health delivered to individuals and
populations, with the government being the guarantor and
enabler, although not necessarily the only provider, of health and
related services
Source: The High Level Expert Group instituted by the planning commission of India. Defined in the High level group report on
Universal health coverage for India, November 2011

UHC IN ACTION

India is signatory to W.H.O.s Alma Ata

(1978) convention of Health for All by
2000 A.D.
Indias commitment to UHC has been
reaffirmed by:
o 12th Five Year Plan
o National Health Assurance Mission
(NHAM)
Implementation of UHC by the Center:
o Rashtiya Swasthiya Bima Yojana (RSBY)
o Employment State Insurance Scheme
(ESIS)
o Central Government Health Scheme
(CGHS)
o Aam Aadmi Bima Yojana (AABY)
o Janashree Bima Yojana (JBY)
o Universal Health Insurance Scheme
(UHIS)
Slide No. 37

Implementation of UHC by states:

o a few states have launched universal
health insurance schemes:
AarogyaSri (Andhra Pradesh),
Vajpayee Arogyashri (Karnatka),
Chief Minister Comprehensive
Health Insurance (Tamil Nadu)
RSBY Plus (Himachal Pradesh)
Coverage under current UHC schemes:
o 170 million
110-120 million: RSBY
30 million: state insurance schemes
20-30 million: others
Cost of RSBY coverage:
o From FY10-FY15
$560 millio

Role of insurance in healthcare uplifting

Drives healthcare penetration
Protects the interest of the individual
Drive price efficiency and manage quality with cost
Flexibility to design differential support across economic strata - Customization

Influencing change towards prudent claim practices

Connect the dots with data analytics

Anchor to connect all stakeholders and enable transparency

Provide coordinated care continuum pathway

Slide No. 37

Key Challenges

Funding

Availability

Access

Affordability

Paucity of infrastructure

Shortage of Talent

Poor regulatory compliance

Delivery mechanism

Integrated healthcare planning: from prevention to primary care to secondary care to tertiary care

Lack of effective strategies to combat dual disease burden

Ineffective utilization of existing infrastructure: Can be substantially improved through PPPs

Future Outlook
Recommendation
Govt should increase public expenditures on health from the
current level of 1.2% of GDP to at least 2.5% by the end of the
12th plan, and to at least 3% of GDP by 2022.
Ensure availability of free essential medicines by increasing
public spending on drug procurement.
Use general taxation as the principal source of health care
financing
Do not levy sector specific taxes for financing.

Current Status
Unchanged; public expenditure on health still at 1.2% of GDP
Only 9 countries (out of 191) devoted a smaller share of
government spending to health than India.
Has been set into motion

Looks unlikely as tax to GDP ratio still below 15%; overall tax
revenues insufficient
Might need to levy specific taxes the way it has been done for
Swacch Bharat
Will require RSBY and other government insurance schemes to
comprehensively increase scale which has not been seen yet

Do not use insurance companies or any other independent

agents to purchase health care services on behalf of the
government
All government funded insurance schemes should be
No progress
integrated with the UHC system. All health insurance cards
should be replaced by National
Health Entitlement Cards.
Develop an overall National
No progress
Health Package that offers essential health services at different
levels
Develop contracting-in guidelines with adequate checks and
No progress
balances for the provision of health care by the formal private
sector

Future Outlook
Recommendation
Current Status
Reorient health care provision to focus significantly on primary No significant change in allocation
care.
Some progress; in principal call taken to upgrade 58 district
Strengthen District Hospitals
hospitals
Increase the bed capacity to at least 2 functional beds per
Low progress; India still at 1.3 beds (out of which only 60%
1,000
functional)
District Hospitals should be large enough to cater to 95% of
Bed capacity growth at existing district hospitals not yet seen
populations need
All health facilities should be licensed by Indian Public Health Likely to miss target
Standards (IPHS) by 2017
Ensure 1.0 doctor per 1,000 population by 2027
Currently at 0.7
Ensure 3.0 nurses per 1,000 population by 2025
Currently at 1.5
Invest in additional educational institutions to produce and
Nursing capacity needs major capacity addition: 149 districts in
train additional healthcare manpower
14 states do not have any nursing school or nursing college
Set up 187 new medical colleges by 2022
Likely to miss target
Establish a dedicated training system for Community Health
Workers
Establish State Health Science Universities.
Establish National Council for Human Resources in Health
(NCHRH)

Not started
Not started
No progress

But there is light at the end of the tunnel..

Creation of the High-Level Expert Group (HLEG) on Universal Health Coverage (UHC), constituted by the Planning Commission of India in October 2010,
with the mandate of developing a framework for providing easily accessible and affordable health care to all Indians.

HLEG recognized that it is possible for India, even within the financial resources available to it, to devise an effective architecture of health financing and
financial protection that can offer UHC to every citizen. Some of the recommendations are as follows:

The government (Central government and states combined) should increase public expenditures on health from the current level of 1.2% to at least
3% of GDP by 2022

Developing a National Health Package that offers, as part of the entitlement of every citizen, essential health services at different levels of the health
care delivery system with ensuring adherence to quality assurance as per Indian Public Health Standards (IPHS).

In order to improve community participation, transforming existing Village Health Committees or Health and Sanitation Committees into
participatory Health Councils

Enforcement of price controls and price regulation on essential and commonly prescribed drugs as well as revising and expanding the essential drug
list.

The HLEG Group envisages that over time, every citizen will be issues an IT-enabled National Health Entitlement Card (NHET) that will ensure cashless
transactions, allow for the mobility in the country, and contain personal health information

The Indian insurance industry is expected to grow to US$ 280 billion by FY2020, owing to the solid economic growth and higher personal disposable
incomes in the country

Thank You