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'Modicare': India's PM promises free health care for half a billion

Updated 8:38 PM ET, Mon September 24, 2018

(CNN) - Indian Prime Minister Narendra Modi has launched the world's biggest healthcare program, with the rollout of free coverage for an estimated half a billion of India's poorest citizens ahead of national elections early next year.

The ambitious program, dubbed "Modicare," was unveiled in the federal budget earlier this year and launched at the weekend. It is designed to offer an estimated 100 million "poor and vulnerable" families, or equivalent to an estimated 500 million people, free hospital treatment costs of up to 500,000 rupees ($7,800) per year.

"Such an initiative is unparalleled in terms of scale and extent," Modi tweeted on Sunday. "It shows our unwavering commitment to create a healthy India."

But while the program has raised hopes for better treatment for India's poorest, critics say the announcement was timed to elicit a pre-election boost and questioned Modi's ability to deliver on his promise.

A "game changer"

Research unit Capital Economics said the funds for Modicare are "prohibitively small," observing that only 200 billion rupees, or 0.2% of gross domestic product, have been allocated each year.

"Better provision of health care can bring several benefits, from both an economic and wider perspective," Capital Economics said in an August 17 note. "But we doubt that Modicare will have much of an impact."

India spends only about 1% of its GDP on public health.

If the program is fully taken up, it would cost close to $780 billion, a huge sum for India's $2.4 trillion economy.

Access to healthcare is a major problem in India. Public hospitals are few in number and often underfunded and understaffed. The issue of healthcare is likely to feature heavily in India's forthcoming national election, which is expected before May 2019.

India has just over 1 million registered doctors and fewer than 15,000 state hospitals for its 1.3 billion people, according to government data released last year.

"I'm skeptical because I don't think enough thought is given to recruitment and training, the institutional mechanisms to ensure that you have the right workers. There's also the massive challenge of the quality of care. What we do know about India's public health system is that the quality of care provided is questionable," Yamini Aiyar, president and chief executive of the the Delhi-based Center for Policy Research think tank, told CNN.

But despite the obstacles, the program has also won applause from senior health officials.

"It is going to be a game changer," Dr. K.K. Aggarwal, former president of the Indian Medical Association, told CNN. "Health is a fundamental right and it is the state's responsibility to look after the health of people who can't afford it."

Total spending on healthcare in India averaged $267 per person in 2014 -- the latest year for which data is available -- compared to $9,403 in the United States, $3,377 in Britain and $731 in China, according to the World Bank.

"Large country with diverse needs"

Many Indians have no choice but to use private hospitals, where treatment is unaffordable for someone earning the average annual wage of less than $2,000.

The government is already trying to bring healthcare closer to rural Indians by establishing 150,000 "health and wellness centers," a separate program with $190 million in the budget.

The scale of India, in both population and geography, will be a challenge.

"The government would like us to believe that this is like some version of Obamacare with the twist to the name...but anything that we do in India in terms of context and size is on a magnitude much larger than in other parts of the world," said Aiyar.

"The classic problem with India, which is not particular to this unique government, is that we get the design but the question of implementation is where the challenge lies. Are we going to be able to put in the massive investments and state capacity needed to get this right? This is a large country with diverse needs. There is no such thing as a one size fits all," she added.

Conceding that Modicare was "an ambitious and laudable goal," Rajiv Lall and Vivek Dehejia of the IDFC Institute think tank said in a column for Mint online that the program covers only the costs of treatment and hospitalization at the secondary and tertiary levels.

"Modicare does not extend to primary healthcare, which, we believe, is the weakest link in the provision of public health in India," they said.

The politics of healthcare

Opposition parties have slammed the program.

Four states -- Telangana, Odisha, Kerala and Punjab -- and the union territory of Delhi have opted out of the nationwide program, citing concerns over infrastructure, funding and the potential for corruption.

All five regions are ruled by parties not affiliated with Modi's ruling Bharatiya Janata Party.

In a statement released on Twitter, Delhi's ruling Aam Aadmi (Common Man) Party described the program as "another white elephant in the making," adding that it has been designed in a manner "bound to fail."

Kerala Finance Minister Thomas Isaac labeled it a "hoax" in an interview with the Indian Express.


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