The road to Universal Health Coverage in India

Indian Express

3 days ago

At the recently convened 78th World Health Assembly, India reaffirmed its commitment to health equity — a timely resolution to address stark disparities in access to care. Central to India's pledge to achieve Universal Health Coverage (UHC) by 2030, Ayushman Bharat is positioned as a game changer, ushering in transformative gains by expanding comprehensive healthcare, strengthening health infrastructure, and accelerating digital adoption.
A key pillar of India's flagship Ayushman Bharat initiative is the Pradhan Mantri Jan Arogya Yojana (AB PM-JAY), offering comprehensive hospitalisation cover and financial risk protection to an estimated 500 million beneficiaries — roughly the bottom 40 per cent of India's population. Historically accounting for 60-70 per cent of total healthcare spending, out-of-pocket expenditure (OOPE) in India has declined to 39.4 per cent, according to the latest National Health Accounts estimates (2021–22) — a positive shift, though it remains to be seen whether this trend will sustain over time.
The post-Covid period has seen a surge in healthcare listings on Indian stock exchanges, with corporate hospitals, diagnostic chains, pharmaceutical firms, vaccine makers, medical device companies, and health insurers entering the market. As per industry projections, India's healthcare industry — valued at $370 billion in 2022 — is estimated to reach $610 billion by 2026. The hospital sector alone accounts for nearly 50 per cent of all foreign direct investment in medical care, with strong interest from private equity firms. Concurrently, there have been inbound mergers and acquisitions by corporate hospitals in Tier 2 and Tier 3 cities, with the objective of greater market penetration and maximising revenue.
Amidst the rapid expansion of the for-profit medical industry, insurance models are critical for financial protection, but more in a complementary role. Rhetorically seen as a panacea for UHC, insurance-led models may lead to cost inflation and, as seen in the US, exacerbate access barriers, exclusion, and widen disparities in health outcomes.
Amid a surge in investments by business entities and a decisive shift towards an insurance-led framework, India's health system stands at an inflection point, making it imperative to examine the implications of this model in ensuring equitable and accessible healthcare.
Enabled by a confluence of demographic shifts, an epidemiological transition, and supportive policy measures such as 100 per cent foreign direct investment (FDI) in health insurance, the healthcare landscape is becoming increasingly conducive to private sector growth. The elderly population (60+ years), as per the UN World Population Prospects, is projected to rise from 10 per cent to 30 per cent by 2050. Simultaneously, there is an upsurge in the burden of non-communicable diseases — diabetes, cancers, heart and chronic respiratory diseases — with studies showing mortality rates now accounting for over 60 per cent, up from 37 per cent in 1990. Competitive costs and a skilled workforce have made India a hub for medical tourism, with a compound annual growth rate (CAGR) of approximately 17–19 per cent.
Yet, infrastructure gaps persist, with a bed-to-population ratio of just 1.5 per 1,000 — well below the WHO norm — and with a skewed spread concentrated in metros. These supply and demand dynamics are expected to drive hospitalisation rates and tertiary care utilisation, boosting demand for specialised services, predominantly met by the private sector. The growth of corporate healthcare shares a symbiotic relationship with the expanding health insurance ecosystem, with each reinforcing the other.
The National Sample Survey Office's (NSSO) 75th Round survey (2017–18) revealed that over two-thirds of OOPE in India is on outpatient care, with more than 70 per cent of outpatient services sought in the private sector. However, both PM-JAY and private health insurance schemes primarily cover hospitalisation, serving as financial buffers against catastrophic inpatient costs, while outpatient care remains largely excluded.
According to NITI Aayog's Health Insurance for India's Missing Middle report, nearly 30 per cent of the population — about 400 million people — lack any form of health insurance, leaving them vulnerable to financial shocks. This cohort is a heterogeneous mix of diverse socio-economic groups, cutting across wealth quintiles.
The geriatric age group — often with multiple chronic conditions — incurs substantial spending on outpatient services, medicines, and diagnostics, all largely excluded from insurance packages.
Upper-income quintiles opt for private insurance packages, while lower-income quintiles rely on government-funded schemes like PM-JAY, which have capped procedure rates often significantly lower than what private insurers or cash-paying patients are charged for the same procedures. This results in differential pricing and unfair pricing practices, especially for vulnerable patients who lack the power to negotiate. With little incentive to contain costs, both insurers and providers may perpetuate a cycle of over-treatment and rising premiums, pushing even the middle class toward financial hardship. This model undermines the principles of UHC, where access should be based on need, not purchasing power.
India can draw valuable lessons from global health transition models towards universalism — Japan's standardised pricing and mandatory insurance, or Thailand's tax-financed comprehensive coverage with public sector investment, among other exemplary inclusive models. The private sector has played a role in most countries; however, over-reliance without parallel public sector investment can undermine equity and long-term sustainability.
According to NFHS-5 (2019–21), roughly 35 per cent of under-five children are stunted, and 57 per cent of women aged 15–49 are anaemic, reflecting broader socio-economic challenges. This underscores the need for multisectoral engagement and strategic investment in preventive and primary healthcare, targeting biomedical and socio-economic determinants.
For a resilient public health system, it is imperative to reaffirm the principles of the Bhore Committee and the Alma-Ata Declaration — emphasising equitable distribution of essential healthcare and community participation, with structured and incremental investment as a higher proportion of GDP in health and social sector schemes.
Equally important are stringent regulatory frameworks for drugs, diagnostics, medical devices, and corporate hospital advertising. Taking a cue from China, information technology can be leveraged to develop effective prescription audit systems to detect unnecessary medical procedures and promote rational drug use.
India's public sector investment, especially in preventive and primary healthcare, needs to outpace the for-profit market trajectory to prevent widening disparities in healthcare access and outcomes. As Martin Luther King Jr said, 'Of all the forms of inequality, injustice in health is the most shocking and inhumane.' The road ahead demands inclusivity — moving away from dominant narratives and putting the invisible at the centre stage.
The writer is a public health professional and social entrepreneur