Themes > Current Issues
31.01.2007
Universalising Basic Services
Jayati Ghosh
The
state of California in the United States has for a while been the standard
bearer of policy measures that reduce state responsibility in critical
areas that were typically the responsibility of public provision earlier.
The privatisation of electricity utilities was one infamous example, in
which California led the world and ended up providing a textbook case
of how not to privatise power distribution.
Similarly, the health system in California has been one of the most private and market-dependent even among states in the US. An aggressively profit-oriented system based essentially on private initiative of health providers and insurance companies have led to a situation where an estimated 6.5 million people - around one-fifth of the state's population - do not have access to any health insurance and are therefore outside the purview of organised health care.
This is not simply an issue about inequality and welfare of citizens - it is also something that has high social costs, both direct and indirect. And this must be why the demand for a universal health care system has now come from a rather unlikely source: the otherwise rightwing “he-man” Governor of California Arnold Schwarzenegger.
Schwarzenegger has just announced a new scheme that would provide universal health care coverage to all of California's residents. The scheme calls for many employers who do not offer health insurance to contribute to a fund that would help pay for coverage of the working uninsured. The proposal would prohibit insurance companies from denying coverage to people because of their age or health status, and require them to put 85 per cent of their profits directly into health care services. It would also require doctors to pay 2 per cent and hospitals 4 per cent of their revenues to help cover higher reimbursements for those who treat poorer patients enrolled in the subsidised state programme.
There is currently a wave of recognition across the United States that health care provision must be universal. If this scheme is implemented, California would be the fourth state in the US to do so, and several other state governments are also considering it. This reflects a sharp reversal from the tendency over the past decade to allow the poor in particular to fend for themselves in terms of health care, which effectively meant denying them access.
Surely we in India, who are otherwise looking so eagerly to the US for so many of our policy models, should also note this important trend. It is particularly important because public provision of health care has so far been so inadequate and even so iniquitous. Everyone in India, but most of all the poor, are acutely aware of the sheer inadequacy and incapacity of the physical infrastructure and human resources required to provide essential health services. These are of course compounded by the inefficiencies that persist in public delivery systems, and the inequalities of access that are determined by gender, caste, community, income and class.
So poor is public health care provision that it forces even the poor to spend out-of-pocket for private health care. As a result, private spending accounts for more than four-fifths of total health expenditure in the country which is one of the highest such ratios anywhere in the world. But this is not inevitable in poor developing countries as examples from within the South Asian region such as Sri Lanka show.
The superior human development performance of Sri Lanka is often recognised, but the critical role played in this by public provision and government regulation is less advertised. In Sri Lanka, universally accessible free health care is provided at a basic level, subsidised by progressive taxation measures, and ensuring that the rich pay for out-of-pocket health expenses more than the poor.
Given the absolute importance of providing free and universal access to basic services as far as possible there is a strong case for the abolition of user fees and the increase in public allocations to provide essential services to all. This is important not only in welfare terms or because the poor have a human right to health and education. It is also because the social costs of poor health and inadequate educational development are large and will be even greater for future generations, so it is in society's interest to invest substantially in these areas.
The call should therefore be for rebuilding public health infrastructure and regenerating the ethos of public service. In this context the proposal currently under consideration by the state government of Kerala of providing free health care to those below the poverty line is greatly to be welcomed and it should ideally be extended to ensure universal health care. Such a commitment to public service provision is essential not only for greater equality and democracy, but also for the very future of our societies.
Similarly, the health system in California has been one of the most private and market-dependent even among states in the US. An aggressively profit-oriented system based essentially on private initiative of health providers and insurance companies have led to a situation where an estimated 6.5 million people - around one-fifth of the state's population - do not have access to any health insurance and are therefore outside the purview of organised health care.
This is not simply an issue about inequality and welfare of citizens - it is also something that has high social costs, both direct and indirect. And this must be why the demand for a universal health care system has now come from a rather unlikely source: the otherwise rightwing “he-man” Governor of California Arnold Schwarzenegger.
Schwarzenegger has just announced a new scheme that would provide universal health care coverage to all of California's residents. The scheme calls for many employers who do not offer health insurance to contribute to a fund that would help pay for coverage of the working uninsured. The proposal would prohibit insurance companies from denying coverage to people because of their age or health status, and require them to put 85 per cent of their profits directly into health care services. It would also require doctors to pay 2 per cent and hospitals 4 per cent of their revenues to help cover higher reimbursements for those who treat poorer patients enrolled in the subsidised state programme.
There is currently a wave of recognition across the United States that health care provision must be universal. If this scheme is implemented, California would be the fourth state in the US to do so, and several other state governments are also considering it. This reflects a sharp reversal from the tendency over the past decade to allow the poor in particular to fend for themselves in terms of health care, which effectively meant denying them access.
Surely we in India, who are otherwise looking so eagerly to the US for so many of our policy models, should also note this important trend. It is particularly important because public provision of health care has so far been so inadequate and even so iniquitous. Everyone in India, but most of all the poor, are acutely aware of the sheer inadequacy and incapacity of the physical infrastructure and human resources required to provide essential health services. These are of course compounded by the inefficiencies that persist in public delivery systems, and the inequalities of access that are determined by gender, caste, community, income and class.
So poor is public health care provision that it forces even the poor to spend out-of-pocket for private health care. As a result, private spending accounts for more than four-fifths of total health expenditure in the country which is one of the highest such ratios anywhere in the world. But this is not inevitable in poor developing countries as examples from within the South Asian region such as Sri Lanka show.
The superior human development performance of Sri Lanka is often recognised, but the critical role played in this by public provision and government regulation is less advertised. In Sri Lanka, universally accessible free health care is provided at a basic level, subsidised by progressive taxation measures, and ensuring that the rich pay for out-of-pocket health expenses more than the poor.
Given the absolute importance of providing free and universal access to basic services as far as possible there is a strong case for the abolition of user fees and the increase in public allocations to provide essential services to all. This is important not only in welfare terms or because the poor have a human right to health and education. It is also because the social costs of poor health and inadequate educational development are large and will be even greater for future generations, so it is in society's interest to invest substantially in these areas.
The call should therefore be for rebuilding public health infrastructure and regenerating the ethos of public service. In this context the proposal currently under consideration by the state government of Kerala of providing free health care to those below the poverty line is greatly to be welcomed and it should ideally be extended to ensure universal health care. Such a commitment to public service provision is essential not only for greater equality and democracy, but also for the very future of our societies.
© MACROSCAN 2007