Shruti Rajagopalan talks to Nachiket Mor on rethinking and reforming India’s healthcare system.
Mor says India does not face a funding problem but a design problem:
RAJAGOPALAN: Yes, I have been reading a range of your papers. You have almost had like two careers: one in more traditional finance and now one in more traditional health policy. If I had to try to summarize your very wide-ranging work, which I encourage everyone to read and not just go by my summary, it would be that India’s health crisis is not just a funding failure but fundamentally a policy design failure.
We’ve built a tertiary care infrastructure for a few people while neglecting primary care for the masses, for almost everyone. Our insurance model and financing models basically reward hospitalization over health. What ends up happening is people have massive out-of-pocket expenses. Healthcare does not just become a question of health policy. It is also a risk management issue at a household level. You’re skeptical that the current private sector system can deliver value the way it’s currently set up. You are also skeptical that the government can ever fund healthcare adequately, such that it is a universal healthcare system in India.
Your argument is really that we need to redesign the system in a way that all these different pieces of the puzzle – which is insurance, financing, state-provided healthcare, private healthcare, primary, tertiary healthcare – need to be redesigned to work such that people get more value. That puts you a little bit at odds with the public health left who want more funding, tax finance, universal care, and also the market liberals who think competition and insurance ought to fix everything. Is that a good way to think about where you are in this particular literature or this conversation?
MOR: I would say yes and no. To some degree, what you said is completely spot on as to how I’m thinking about it. In some degree, not quite. First, I have a paper in The Lancet Southeast Asia that came out in 2023, in which we looked at how much money is actually needed to deliver universal health coverage and what I like to call global health for all or good health for all, because coverage is not the same as good health, as we have discovered in some states.
What we were amazed by is that Indian costs and talent are such that it’s inappropriate to use the nominal exchange rate or even the PPP-IMF exchange rate, but a more appropriate exchange rate for rupee-dollar conversion is more like 5 rupees to the dollar. At that 5-rupee conversion, then the Indian expenditure of, say, 5,000 rupees, now suddenly $1,000 per capita, which puts us squarely in the middle-income country range of Thailand, Brazil, some of these places, and it’s more than enough money to deliver universal health coverage.
I certainly believe that the public sector is adequately funded in many states. Most states by 2030 will be adequately funded from their government budgets. There are four states that still need extra money, but the center can provide that money relatively easily, which means that this idea that funding is a gap—many people talk about 3% of GDP, it’s not entirely obvious where this number came from, and certainly Indian costs are such that even with a number that is much lower – we are able to deliver.
Then, of course, you might ask, which is the point you were making, is, okay, if the money is there, why don’t we have universal health coverage, say, in a state like Kerala, say, in a state like Goa, in the high-capacity states? This is where your point about it being a design problem, not a funding problem, comes up. In some ways, what we have done is created a system in which 1920s Russia features in our public sector, and 1960s America features in our private sector, so ideas from the Kenneth Arrow era, Medicaid, Medicare, when they were signed into law, is what reflects in our current private sector design.
A lot of the work that happened in the ’90s with Mrs. Thatcher, with Thailand, with Turkey, with what happened in the European markets for private healthcare, that entire set of reforms, we seem to have missed. It’s not even a conversation we are having here.
Lots of interesting ideas which forces one to relearn and reflect…
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