The need to redefine health care financing
This article is authored by Pruthvinath Kancherla, co-founder, Affordplan.
In recent decades, India’s health care sector has undergone significant transformation, driven by advancements in infrastructure, technology, and accessibility. In fact, according to data from the National Health Accounts Estimate, India’s per capita health expenditure has surged by 82% in the past decade. Government initiatives, such as Ayushman Bharat-Pradhan Mantri Jan Arogya Yojana (PM-JAY) and the Ayushman Bharat Digital Mission, aim to build a robust and inclusive health care ecosystem. In India, many individuals depend on a regular health care provider or facility, typically government hospitals, primary health centres, or private clinics. However, the doctor-to-patient ratio remains low compared to global standards, affecting the ability to establish consistent patient-caregiver relationships.
These government schemes have undoubtedly improved access to essential care for some, but they haven’t fully addressed a fundamental issue in India’s health care financing landscape—a complex mix of public and private funding, with much of health care still being financed out-of-pocket by Indian patients.
It is well known that the costs of medical care continue to rise, and it is imperative to recognise the urgent need to rethink our approach to health. We must prioritise our health and integrate it into our daily lives. Many families still face significant health care costs that strain their finances, pushing them to the brink of insolvency. Although private health insurance is growing, it still covers only a small fraction of the population, leaving many to rely on their savings or loans to cover medical expenses.
The gap between health care needs and financial accessibility is growing as medical costs rise, making it harder for families to afford essential treatments and services. With chronic diseases becoming more common and health care expenses continuing to increase, many individuals are finding it difficult to access necessary care. Conventional funding methods like medical loans and health insurance are often seen as the primary solutions, but these come with their own challenges, such as high premiums, exclusions, and interest rates. As a result, there is an urgent need for more accessible and flexible health care financing options.
However, insurance policies often come with exorbitant premiums, complicated terms, and exclusions that force patients to pay large portions of the cost out-of-pocket for treatments that are either not covered or only partially covered. Similarly, loans come with their own challenges, such as high interest rates, difficult approval processes, and strict repayment schedules. Many find that taking out a medical loan leads to increased debt, adding to the financial stress. This highlights the need for individuals to approach health care financial planning in a systematic manner, both individually and as families.
By planning ahead, individuals can avoid emergency loans and out-of-pocket expenses, making it easier to manage medical costs effectively. Key strategies include utilising health savings or flexible spending accounts, keeping insurance policies up to date, and setting aside funds specifically for health care costs. Building an emergency fund for medical expenses is another way to prepare for unexpected costs.
Health care and financial providers are collaborating to make treatment more accessible and affordable by offering flexible payment options, such as EMIs, interest-free loans, and savings schemes, allowing patients to pay for their treatments over time. Technology also plays a vital role by enabling quick access to payment options through user-friendly apps and platforms, where patients can manage their finances, track payments, and get real-time updates on treatment costs.
While health care financing is crucial in making medical treatments more accessible, it is equally important for individuals to take responsibility for their health. By making informed decisions about diet, exercise, and regular check-ups, people can significantly improve their overall well-being and, in many cases, prevent the need for costly medical interventions. Healthy habits such as balanced nutrition, staying physically active, and scheduling routine health screenings can have a profound impact on long-term health, often reducing reliance on medical treatments.
It is also essential to recognise that financial security alone does not equate to good health or a fulfilling life. Even if individuals have the means to afford top-quality medical care, true well-being extends beyond financial wealth. It encompasses self-respect, physical activity, and emotional balance, which are integral to leading a healthy and fulfilling life. While money can provide access to better health care, personal lifestyle choices are equally important in maintaining health and preventing illness.
In conclusion, the key to better health outcomes lies in a holistic approach that combines flexible financial solutions with personal responsibility for health. By planning ahead financially and adopting healthy habits, individuals can better manage health care expenses and enhance their quality of life. Ultimately, a balance between financial preparedness and personal commitment to health can lead to long-term wellness and reduced health care costs.
This article is authored by Pruthvinath Kancherla, co-founder, Affordplan.