The Chhattisgarh government’s decision to extend health insurance to all its unorganisedsector workers has given rise to much euphoria. This is misplaced. This notion that all the state needs to do is to pay for insurance and that insurance spread will take care of healthcare, for all its popularity with a lot of sane, sincere people, belongs in the same category as unreasonable ecstasy, hallucinations, impaired memory, increased heart rate and other effects of smoking pot.

Whether delivered at the instance of the government or insurance companies, healthcare calls for providers: doctors, nurses and other paramedical staff. The country has a shortage of about six lakh doctors (see the article above). The shortage in other healthcare staff is larger. Will the government allocating the bulk of its healthcare expenditure on insurance premia produce doctors, nurses, lab assistants, radiologists, pharmacists, et al?

The starting point of healthcare has to be public health and nutrition. Safe drinking water, hygienic disposal of human and animal waste, relief from indoor smoke – caused by wood–burning stoves and kerosene lamps – and access to nutritious food: these are prerequisites.

None of this comes under the ministry of health. But unless these are provided, people’s health will remain fragile and the cost of subsequent illness and its management will go up. Indoor smoke is a major source of ill–health. The solution is to switch to smokeless stoves for cooking and solar lamps in place of kerosene lamps. Natural gas (methane) or liquefied petroleum gas (a mixture of butane and propane) is the best substitute for cooking, but is costly.

Smokeless wood stoves have been designed but these need wood chips rather than the split logs or twigs and branches that typically serve as firewood. Concerted efforts in converting biomass into gas, tapping solar energy and producing and distributing wood chips at an affordable price are called for to combat this major source of illhealth. Clearly not the health ministry’s or health insurer’s responsibility.

After prevention comes cure. One part of prevention, immunisation, and the preliminary, but most important, part of cure is primary care. This is non–existent in many parts of India. It calls for creating primary health centres and sub–centres where these do not exist, manning and equipping them adequately where they do and ensuring that healthcare personnel do not play hookey and that medicines are supplied and stocked as required. These are issues of governance. Unless democracy matures to a level where elected local governments at village, block and district levels have sufficient administrative and disciplinary control over personnel, primary care will remain deficient.

Health insurance will typically cover secondary and tertiary care. A rational health insurance system’s response to absent primary care would be to jack up the premium on other stages of care. It makes sense to run a health insurance business only because a surplus remains in the premia collected after paying for all expenditure on the insured. Why should the government pay for this surplus, when it can directly pay for just the expenditure on providing care?

The most straightforward way for the government to pay for healthcare is for the government to run a large enough system of hospitals, and run them well. There are many examples around the world and in India itself of public hospitals being run well with participation of the local community in the hospital’s management. Another way for the government to pay for healthcare is to pay for managed care. Hospitals and groups of doctors undertake to take care of the health of an assigned number of citizens for a certain amount per head (capitation, in the jargon). Insurance companies only make payments, actual providers determine both the cost of care and the quality of care.

Under managed care, where providers get funds for keeping a certain number of people healthy, they have incentive to keep costs down. The incentive to degrade the quality of care has to be countered with both competition and regulation/governance (assuming the efficacy of the Hippocratic Oath medical graduates take wears off fast in Indian conditions).

Of course, hospitals and doctor groups do not have either the data or the expertise to analyse the data needed to determine what is the optimal capitation charge needed to keep both patients and caregivers in good health. Insurance companies have this capability. Specialised state agencies or commercial entities can develop and offer this capability. For mass healthcare, we need not health insurance but proactive investment in public health and nutrition and publicly–funded hospitals or well–regulated managed care.

It is time we shed this euphoria over the spread of statefunded health insurance.

• Public spending on health must prioritise things other than health insurance.
• Insurance has no control over the cost or quality of the healthcare it pays for.
• Care providers have, and they can be roped in directly, in a system of managed care.