The Hindu Business Line : Healthcare as business

Everyone in the US is agreed that all Americans — rich or poor, urban or rural — must have access to affordable and quality healthcare. Translating it into a legislation, let alone putting it into practice, seems to be its worst nightmare. From the days of yore, in the health business, only two parties were involved — the doctor attending on the sick and the sick paying the doctor’s fees.

Changing equation

With the entry of the insurance company, this simple equation changed. While the doctor provides medical advice and services, the insurance company takes money from the people and pays the doctor. The insurance company wants its customers to be healthy. On the other hand, doctors’ livelihoods depend on people falling sick. Obviously, there is a conflict of interest in this zero-sum game.

The insurance company wants to ensure profit to its shareholder and, thus, its interest lies in rationing healthcare. Further, with advancing technologies and discovery of new drugs, doctors have a new ally in companies providing pharmaceuticals and medical devices to increase costs. When more costs are factored into the system, they have to be borne by the consumer since all others in the equation are interested in their side of the business. Thus, even as the costs rise, the overall satisfaction levels plummet, particularly for the underprivileged, uninsured, unemployed, those between jobs and those with pre-existing conditions.

Reforming the system

The US government, under President Barack Obama, is now making a valiant attempt at reforming the system and restoring the balance to stem the rising costs even, while spreading the benefits of quality care over a larger population. It has chosen to reform the insurance side of the equation which is fiercely resisted by the Opposition and private sector protagonists. Obviously, since insurance companies are there for profits and appreciation in stock value for its shareholders. In 2008, the largest three US insurance made profits of $2.4 billions each.

In terms of health plans on the table, the Opposition wants nearly the status quo except for ending exclusion on the base of pre-existing diseases. The middle-roaders want non-profit co-ops to be introduced as insurers in addition to existing private players. Liberals back the proposal to add a fully government-owned insurer as a third option.

Americans traditionally pitch for private enterprise and fear the strong arm of bureaucracy and lethargy of red tape in any government set-up. Also, the antagonists have injected unprecedented acrimony in the debate by alleging that under the government proposal, powers may be vested in a wing of bureaucracy dubbed as “Death Panel” to decide if some one needs treatment or may be allowed to die on the basis of cost-effectiveness.

Gross inequalities

Whatever may be the outcome of this ongoing debate, it has several lessons for us. While political leaders here invariably lace their speeches with a few lines on ‘inclusiveness’ they are yet to address the present gross inequities in healthcare, between the rich and poor and the urban and rural.

While the government runs indifferent healthcare delivery systems for its poorer sections, citizens are forced to spend exorbitantly on quality healthcare. The foreign-funded health insurance companies have increased their premiums over 100 per cent in two years, making it unaffordable for senior citizens. Is it not time for the debate on the status of healthcare in India to be brought out of closed conference halls into the domain of political campaigns?

(The author is former Member, Ordnance Factories.)

Related Stories:
US healthcare market set for price reset

More Stories on : Health | Insight | General Insurance | Impressions

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
Freeway to FDI

Healthcare as business

Investment-linked tax incentives

Lessons from crisis for Fund-Bank

Comply or pay

More pain than gain for non-residents

Pruning asset size

Code concerns for individuals

The Partition

Weak pulse