Indian Prime Minister Narendra Modi wants to implement a socialized healthcare system in order to expand quality care to India’s poorest families.
The program, which he intends to roll out by the end of 2019, would provide health insurance for the poorest 40% of the population (that’s more than 500 million people).
“Modicare” is expected to be one of the largest healthcare overhauls in the world.
“Our government is working on policies to raise the standards of the poor, neglected, and underprivileged and are devising major programs and policy to ensure a society and not bond by caste, creed, or religion,” explains General Dr. Vijay Kumar Singh.
India’s current healthcare system is “characterized by a yawning gap between the services available in urban and rural parts of the country and between rich and poor,” notes The Washington Post.
In the world’s most populous democracy, medical costs are the number one reason families fall below the poverty line. Inpatient hospitalization costs have increased 300% over the past decade, and an estimated 6 million families have had to sell assets or borrow money to pay medical bills.
India is home to some of the most sophisticated hospitals in Asia. These glamorous facilities attract “medical tourists” from around the world, but are unaffordable for most people living in India. Just 10% of India’s population can afford to visit these hospitals. The rest, if they get any care at all, go to free government-run hospitals where wait times are long and care is of questionable quality.
“They’re poorly staffed. Equipment there often doesn’t work. They have employees who sometimes don’t show up,” says Ravi Ramamurti, a Professor of International Business at Northeastern University. “You may have to bribe every employee at every level of the system. Medicines supposed to be provided for free are often not in stock. So if you really need care, you can’t be sure you’ll get it.”
India’s infant mortality rate is 7x higher than that of the United States, and less than 5% of Indians suffering from heart problems receive treatment. India has the world’s highest rate of tuberculosis. In 2016, the average life expectancy there was 68.6 years.
Modi’s solution to these problems is to increase government spending on healthcare. India currently spends about 1.4% of its GDP on healthcare. To compare, the United States spends about 8.3%.
Modi’s program is expected to cost less than $2 billion per year. Supporters insist the program is affordable, especially considering India’s current economic growth rate of 7.3%.
As Ramamurti points out, the program will continue to get bigger and bigger until the government can no longer afford it.
“One or two billion dollars is not more than what the Indian government can afford, but these programs have a way of exploding over time. Then it can actually get to be a bigger constraint,” says Ramamurti. “These are programs you can never pull back. They can only expand over time.”
And while Modicare will appeal to voters, it is unclear whether India has the facilities and doctors to support the boom in demand Modi’s program would create. India has about 1 physician per 1,300 people – one of the lowest ratios in the world.
Others insist the country would be better off using public funds for healthcare rather than subsidizing private care.
Modi is expected to unveil more details about the program on Wednesday during his annual Independence Day speech.