Financial sustainability – Questions for future Dr.P.Umanath IAS

Financing of health sector and insurance based health care schemes in States Present – state funded and private Question of 6% of GDP ????? Existing Tax – GDP ratio Fixed expenditure vs Schemes Split in terms of Union and States Predominantly states Union funding under schemes

Fiscal implications and share of insurance model in sector expenditure Tamil Nadu context High social sector investments Sectoral expenditure trend since insurance model was introduced From 2700 crores to 9000 crores Comparative trends in insurance costs Share in overall costs vs. outputs

Sectoral expenditure & supplementary role play by various players Government institutions – increasing role Public investments for that role within the sectoral expenditure Machinery and equipment / Drugs 270 crores to 570 crores Diagnostics - TNMSC Role of various levels – are investments proportionate ?

Financial utility of non-insurance models and their functional sustainability Status Quo – Public Sector approach Trusts versus Insurance model Loaded costs – taxes, interest and overheads Quantifying alternatives Taxation trends – present and future Functional efficiency trade off Role of conflict of interests Criticality of avoiding convergence of interests among players

Choices in investing public resources for better health outcomes Need to go by outputs rather than demands Collateral benefits vs. core objectives Easier availability vs. high end delivery Volumes vs. quality Is parallel strengthening needed ? Transport and communication User choice

Long term effect of health insurance on the premium cost Crucial variables Claim trends Coverages – numbers and verifiability Cost management by hospitals Beds added and competition Bed occupancy and share of scheme in it Fixed costs and added running costs Need to focus on ‘critical nature’

Cost Benefit Analysis Data shows clear divergence Volume play - public sector Complicated play – private Sole objective or wider compromise Variable situations Developed and non-developed delivery situations Early stages - public sector crucial, irrespective of deficient output Later stages – selective strengthening approach

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