Page 38 - Insurance Times May 2019

episode of inpatient and outpatient treatments. You had an for the simple reason it is more equitable than the former
insurance cover of Rs.50,000/- . So you could finance Rs. and far better equipped to handle catastrophic healthcare
50,000 from insurance and the rest 1,50,000/- from part of expenditures.
your out of pocket expenditure. It is possible that the entire
1, 50,000/- was not stressful to you as your annual income However, the growth of PVHI is severely impaired by adverse
was very high. Even then, you had to finance Rs.1,20,000 selection and information asymmetry. But despite these
from your savings. This amount of Rs. 1,20,000 is considered teething problems, PVHI promises to grow in India due to
stressful out of pocket expenditure. Rs.30,000/- you could various factors like epidemiological transition, the ever
afford without much hardships and Rs.50,000/- received growing geriatric population and higher share of public
from insurance would not constitute part of OOPS. financing. PVHI growth follows a particular pattern.

Take another scenario. An aged person from a poor rural Its growth is low in low income countries and high in higher
household needs a surgery which would require Rs.50,000/ income countries. Its share was merely 2.8%, 3.7% and 7.2%
- along with transportation and accommodation cost of of total healthcare expenditure in low, lower middle and
another Rs.25000/-. He forgoes the treatment as he cannot upper middle-income countries, However it contributed as
afford the treatment due to financial constraints. The above high as 20.6% of the total healthcare expenditure in high-
amount of Rs.75,000/- would definitely add to health income countries.
protection gap resulting from financial reason. It is difficult
to quantify health protection gap arising from treatment not The private voluntary health insurers can address health
taken due to reasons like non availability of healthcare protection gap by designing a health delivery system that
services. is acceptable to the people it servesby taking into
consideration the social and cultural aspirations of individual
The health protection gap in Asia stands at USD 1.8 trillion. users and communities.
The OOPS constitutes alarmingly 18% of net household
income in Asia. The average size of the estimated gap as a Reference:-
percentage of annual household income of India at 18% is Healthcare in Emerging Markets: Exploring the Protection
one of the highest in the world. Only Vietnam (22%) and Gaps-The Geneva Association-https://
Malaysia (20%) have more gaps. China with US$ 805 billion www.genevaassociation.org/sites/default/files/research-
has the highest health protection gap in the world followed topics-document-type/pdf_public/
by India (US$ 369 billion). The yawning gap in both these health_protection_gap_web.pdf
countries is understandable given their huge population and 1. The health protection gap in Asia:a modelled exposure
low per capital GDP income. of USD 1.8 trillion Swiss Re -https://www.swissre.com/
dam/jcr:99947f3a-e192-4c9c-9d87-6782e598b7d9/
The high protection gap in Japan (US$ 218 billion) is largely Expertise_Publication_The_health_protection_gap_
due to high population but also because of rising medical in_Asia_short_version.pdf
expenses. India today stands at a very delicate crossroads. 2. Funding Indian healthcareCatalysing the next wave of
The Modicare that promises to provide 5 lac financial growth -PWC -http://www.nathealthindia.org/pdf/
succour to more than 10 crore marginalised families would PwC%20NATHEALTH%20Funding%20Indian%20
certainly bring down the share of OOPS in days to come. Healthcare%202017.pdf
But at the same time rising middle class with their
preference super speciality hospitals coupled with medical Corrigendum
inflation would push up the level of OOPS. The Out of In April 2019 issue in the Non Life Insurance Plan segment
on Page 40 the logo of Magma HDI General Insurance
pocket expenditure (OOPE) constitutes more than 60% of was printed incorrectly. Here is the correct logo. We
all health expenses in India largely because the public
regret the error.
spending is around 1.4% of the GDP.

There is across-the-board consensus that private voluntary
-Editor
health insurance (PVHI) can bring down the share of OOPE

38 The Insurance Times, May 2019