“7,000 people slip into poverty every hour in India because of catastrophic health expenses”: Calling for a radical shift in health insurance – from an ‘antibiotic’ to a people based ‘vitamin approach’!

TEDx Dharavi – the talk by Shailabh Kumar – made me sit up when I first saw it, many months ago. The warning shots he fired then echo equally aloud today, as the world watches ‘Dharavi’ with a bated breath. Shailabh’s vision is to replicate an ‘Amul’ model for Mutual health insurance, at the very bottom of the pyramid. Be it rural or tribal India and the urban slums.

A mutual is an entity which collectively pools its members’ risks, as opposed to transferring the risk to an insurer. The entity collects the premiums from its members and pays out the claims itself. The funds are retained and redistributed within the group. Members will donate funds (premium or contributions) into a pool held by the Mutual. In event of a deficit, members can be asked to make either supplementary payments or reduce the entitlement to loss compensation.

Speaking of Amul, livestock insurance was introduced in our country long before commercial health insurance for humans commenced. Coming from a family of four generations of doctors, I am aghast watching the erosion particularly in primary health care, inaccessibility to healthcare, deteriorating doctor to population ratio, health inflation, excessive commercialisation of medical education and the resulting exclusion of the poor. Covid-19 exposes the severe fragility of our healthcare infrastructure.

An alumnus of Tata Institute of Social Sciences (TISS) and an Ashoka Fellow, Pune based Shailabh has been working relentlessly to uplift the poorest of the poor from their daily healthcare challenges. Uplift Mutual works in Maharashtra, Gujarat, Dungarpur district of Rajasthan and very recently Tamil Nadu. The existing form of health insurance he says takes an ‘antibiotic approach’ – with no interest in keeping people healthy. Its current design is vastly different from what people want. Uplift Mutuals wishes to make it a ‘vitamin approach’ which prioritises well-being.

Praveen Gupta: In your experience what is the state of Primary healthcare both in rural and urban India?

Shailabh Kumar: Based on Uplift’s experiences in the slums of Pune, Mumbai and Tribal areas of Rajasthan and Gujarat – here are some observations:

Primary Health Care	Rural/Tribal villages	Urban Slums
Availability	Low to negligible availability (non-working PHCs). Mostly Govt. facilities dotted with informal private providers and faith healers.	High availability, mostly private facilities. Public facilities either closed or staff unavailable. People prefer going to OPDs in public hospitals.
Accessibility	People prefer faith healers and local quacks. PHCs are far away and most of the time are turned away because of absence of medical staff. Where NGOs work, accessibility is better.	Doctors of all kinds are available within a kilometre’s distance. Private facilities are open based on people’s convenience whereas public facilities have fixed time often not matching with people’s availability.
Affordability	Low to extremely low. People prefer giving in kind to faith healers, charge low or give on credit. PHC are almost free but many times medicines are not available hence they have to buy from outside.	Can afford up to Rs.100 a consultation but should include three-day medicines (mostly generic). Otherwise short-term borrowing for managing cost of medicines.
Quality	Almost nonexistent, do more harm than good.	Doctors/Medical that provide immediate relief are preferred – very high use of steroids. Quality docs are available but navigation towards them is a matter of chance.
Seeking behavior	Waiting period ranges from 2-7 days before showing to anybody as distance and affordability major issue.	As availability is high, waiting time to seek care is lower but may hop from one to three doctors if no immediate relief.
Gender	Women and girls suffer the most.	Discrimination exists between girl and boy but in certain communities, overall lower than rural areas.

PG: Don’t you think women and children need special attention?

SK: Based on what I have seen on the field there are very exhaustive public programmes available on maternal and infant health. What I have not seen are the primary screening facilities including pediatric and gynecology ones – also geriatric health is often missing. 

PG: How critical is Primary Healthcare for the bottom of the societal pyramid?

SK: 7,000 people slip into poverty every hour in India because of catastrophic health expenses. 70% of all our out of pocket expenses on health care are on medicines and OPD. If one looks at this macrolevel data one realizes that if a good primary healthcare ecosystem is available, the poor will be able to take care of his/her health much earlier and therefore much better. Primary healthcare and a good quality accessible one with good referral facilities is essential if we want our bottom population to grow out of it. Primary healthcare along with follow ups and counselling can reduce hospitalization 8 out of 10 times based on our experience.

70% of all our out of pocket expenses on healthcare are on medicines and OPD… Primary healthcare and a good quality accessible one with good referral facilities is essential if we want our bottom population to grow out of it.

PG: Do you come across health bankruptcy? How rampant is it?

SK: I understand you mean to ask healthcare expense induced bankruptcy for poor families! I have seen many families indebted for life, paying interest over two generations, losing all their savings, paying 50-70% of their income to health loans and this is not just rural but also urban phenomena. I have seen families stopping buying care for lack of financial resources specially for the elderly and when it comes to monthly medicines. I have seen people taking health loans at 120% per annum. I have seen children pulled out from school as one of the first casualties of health indebtedness. While I have not seen large numbers of acute bankruptcy, long term indebtedness and stopping of seeking care, is very rampant both in urban and rural areas.

I have seen families stopping buying care for lack of financial resources specially for the elderly and when it comes to monthly medicines. I have seen people taking health loans at 120% per annum. I have seen children pulled out from school as one of the first casualties of health indebtedness.

PG: Are there any lessons to be learnt from countries like Cuba?

SK: Even before we look at Cuba, we need to understand the dramatic change in stance of the Government from building health care infrastructure to financing health care. COVID has laid bare this faulty thinking that the Government should increasingly get into health financing. Healthcare and education are two extremely critical infrastructure that need to be publicly funded. The fact that health is a state subject has a lot to do with the way our healthcare system is designed, and it varies from state to state. There are already many good practices available across states that can become the foundation of a comprehensive primary healthcare ecosystem. There are strong lessons emerging from the states that have been able to contain COVID and we must not lose them be it Kerala or Karnataka.

COVID has laid bare this faulty thinking that the Government should increasingly get into health financing. Healthcare and education are two extremely critical infrastructure that need to be publicly funded.

PG: Is there a room for Public Private Partnership (PPP)?

SK: In fact, we should be talking about Public, Private and People Partnership. Government and Private interventions have their benefits and shortcomings but what is acutely lacking in this country is people participation in health. The supply side is far better organized than the demand side. If demand can be organized, we have better chances that health infrastructure whether public or private will be better utilised. From my personal experience health infrastructure at the primary health care level can have PPP but it should have a people financing component like an OPD cover insurance.

From my personal experience health infrastructure at the primary health care level can have PPP but it should have a people financing component like an OPD cover insurance.

PG: The Gurudwaras for instance are doing commendable work locally and internationally – to fill some of the vacuum in the healthcare space due to the pandemic. This and any other similar initiatives could be institutionalised for greater good?

SK: Yes, the Gurudwaras can easily become a mutual health protection provider given the quality of solidarity and responsibility they command with their patrons. They should become the provider of primary health care financed through a mutual risk sharing model in the first stage.

PG: How could people-based infrastructure in insurance come to the rescue of the poorest of poor for their health insurance requirements?

SK: Any people-based infrastructure can organize or express demand better than a public or private entity. This is what a community based, or mutual insurance model does. For example, within Uplift Mutuals when we sat with poor women to design a mutual solution they were very clear that they would need this protection when they are old and hence the elderly should not be excluded from entering the risk pool. In another location we covered transportation costs for normal pregnancies as women said that this would heavily encourage institutional deliveries in rural areas. These features which come from listening to the ground are the ones missed often by commercial players.

Within Uplift Mutuals when we sat with poor women to design a mutual solution they were very clear that they would need this protection when they are old and hence the elderly should not be excluded from entering the risk pool.

PG: As a counter to globalization, fiscal mutualisation is known to build resilience at local levels. So should an insurance mutual?

SK: We must realize the principle of proportionality in that every solution has its strong points and limitations. When only one size fits all kind of solution is available is where disproportionality affects. India has had only one model of doing insurance when there are others available too. What we need is a multiplicity of models in insurance for insurance is a very perception driven product. Mutuals build solidarity and responsibility from bottoms up. They are the building blocks that can be utilized by either public or private insurance to build better larger covers. Without a mutual base which focuses on risk reduction and good insurance behaviour neither public or private insurance solutions can last for long or will last with massive exclusions and control. It is this mutual platform that works as the first line of defense in any problem.

Without a mutual base which focuses on risk reduction and good insurance behaviour neither public or private insurance solutions can last for long or will last with massive exclusions and control.

PG: Moreover, a women led and run Self Help Group (SHG) is bound to succeed in an insurance situation as well?

SK: By design, yes, but we can’t leave all to the women (they are already doing majority of the housework) and the SHG model – we need handholding, technical training, technology infusion, transparency &  good governance protocols and the ability to take feedback from everyone without fear or favour. There is a gestation period of about 3-5 years where all this should happen. Yes, once the system is in place, it works without supervision, has quality checks and controls – an SHG design is one of the most suitable of institutions to run insurance. At Uplift Mutuals we have taken all the technical work away from women and women participate mostly in decision making across the functions (product design, process design, risk reduction design, claims settlement, policy governance) aided by a technical team.

An SHG design is one of the most suitable of institutions to run insurance. At Uplift Mutuals we have taken all the technical work away from women and women participate mostly in decision making across the functions

PG: What is your ultimate vision?

SK: I wish to make Uplift Mutual the Amul of health insurance.

PG: Truly inspiring! My best wishes.