The need for reforms in healthcare finance
India's long-term strategy for health financing seems to be health insurance. This is a perilous path.
The Centre and state governments are experimenting with several new and exciting ideas in healthcare reforms. What is missing, however, is a serious reform agenda for health financing. The last big reform was expanding the coverage of the Rashtriya Swasthya Bima Yojana (RSBY) from Rs30,000 to Rs1 lakh, reinforcing insurance as the long-term strategy for health financing. However, the experience of several countries has revealed that this is a perilous path—taking India towards a bad equilibrium. Depending on the route, India could end up spending either 18% of its gross domestic product (GDP) on health like the US or just 4% like Singapore to achieve similar outcomes.