Discuss the structural challenges in India’s healthcare system that limit the effectiveness of publicly funded health insurance schemes. Suggest measures to strengthen equitable access to healthcare. (10 Marks)

Introduction:

Publicly funded health insurance schemes like PM-JAY Scheme have expanded financial coverage in India; however, structural deficiencies in the health system limit their ability to ensure universal, equitable, and effective access to healthcare.

Structural Challenges:

1. Insurance–Access Mismatch: Health insurance expansion has not translated into proportional increase in hospitalisation or service utilisation. Limited availability of quality facilities and uneven distribution of healthcare infrastructure restrict actual access despite coverage.
2. Dependence on Private Sector: Low reimbursement rates under public schemes lead private hospitals to impose additional charges for diagnostics and services. This results in indirect out-of-pocket expenditure and weakens financial protection objectives.
3. Inadequate Public Health Infrastructure: Public sector capacity remains strong in primary care but insufficient in secondary and tertiary care. This compels patients to depend on costlier private facilities for advanced treatment.
4. Rising Burden of Non-Communicable Diseases: The health system is not fully equipped to manage long-term and chronic diseases, which require sustained care beyond episodic hospitalisation covered under insurance schemes.
5. Persistent Out-of-Pocket Expenditure: While routine care costs have reduced, catastrophic expenditures for major illnesses continue, particularly affecting middle-income groups.

Measures to Strengthen Equitable Access:

1. Strengthening Public Hospital Capacity: Expand and upgrade public sector hospitals, especially for secondary and tertiary care, to reduce reliance on private providers.
2. Regulation of Private Healthcare: Ensure standardised pricing, transparent billing, and effective regulation of private hospitals to prevent hidden costs.
3. Comprehensive Health Coverage: Extend coverage beyond hospitalisation to include outpatient care, diagnostics, medicines, and chronic disease management.

Conclusion:

For publicly funded insurance schemes to achieve their intended outcomes, India must move beyond financial coverage and invest in strengthening healthcare delivery systems, ensuring that access is equitable, affordable, and comprehensive.

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