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Symposium 2009

Proposal - Rural Health Insurance

The Challenge

Poverty reduction has become the central objective of development policy, as reflected in the United Nations’ Millennium Development Goals (MDGs). While economic growth is seen as an important ing ...

Poverty reduction has become the central objective of development policy, as reflected in the United Nations’ Millennium Development Goals (MDGs). While economic growth is seen as an important ingredient in achieving sustainable poverty reduction, the emerging consensus is that growth has to be pro-poor to reach such ambitious targets as the MDGs.

There exists a disparity in the cost and quality of health services in rural areas as compared to urban areas – the rural people have to spend a larger proportion of their incomes on health services as compared to urban people. In India, as per the estimates of the National Commission on Macro-economics and Health (2005), the proportion of total outpatient expenditure in total household expenditure is 4.72 per cent in rural areas as compared to 3.62 per cent in urban areas. Also, the proportion of total inpatient and outpatient expenditure in total household expenditure is 6.09 per cent for rural areas as compared to 5.06 per cent in urban areas. Thus, despite the ‘supposed’ government subsidies on rural healthcare, the rural people spend a larger proportion of their household incomes on medical expenses as compared to the urban people. The relatively widespread presence of private clinics and private doctors (at times even quacks) as compared to public healthcare services like primary health centres have led to serious cost (and quality) implications for the rural people, especially the poor.

A number fo schemes have been launched by provincial governments aimed at supply of free health care at private facilities for the very poor. They seem to have reaped great political dividend from such measures. The federal government has launched a rural health insurance scheme for the poor that it bank rolls totally. Its too early tp judge its success, but it does seem to be a solution to the abject quality of public health care in rural India.

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