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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.
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