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Last updateTue, 17 Mar 2015 2pm

#Inclusive: India unveils $26 billion universal healthcare plan

The Indian government has unveiled plans for its $26 billion universal healthcare plan which will provide all citizens with free drugs and diagnostic treatment as well as insurance cover to treat serious ailments.

The plan by Narendra Modi's government will be rolled out in phases from April 2015 and cover the entire population by March 2019, according to health ministry officials. 

When the entire population is covered, it would cost an estimated $11.4 billion annually.

Healthcare experts caution that it could take decades before India's 1.2 billion people are adequately covered and that the costs of provision could face significant upward pressure.

If approved by the various ministries involved - including, crucially, the finance ministry - India would need to drastically raise its healthcare spending.

In the last budget, the government allocated a total of $5 billion to healthcare. 

Despite rapid economic growth in the last 20 years, the government spends only about 1 percent of gross domestic product on healthcare.

That compares to 3 percent in China and 8.3 percent in the United States.

More newborns die in India than in poorer neighbours such as Bangladesh, and preventable illnesses such as diarrhoea kill more than a million children every year.

Government hospitals are overcrowded and lack resources to meet the growing demand, while access to basic health services in rural areas and smaller towns remains poor.

A 2012 study by Indian business lobby FICCI estimated that universal health cover in India was feasible in a decade and would require government health spending to rise to 3.7-4.5 percent of GDP.

The new plan will focus on improving preventive healthcare services by ensuring adequate availability of doctors in rural areas, while new infrastructure will be created under existing welfare programmes.

Tertiary care services would be provided through an insurance-based model and the government will offer more than 50 drugs free to all its citizens.

Along with the drugs, about 12-15 diagnostic treatments will be offered in the package.

Health officials say states will be encouraged to enter into outsourcing agreements for the provision of treatment.

In recent years, thousands of small private hospitals and test centres have flourished, betting on high demand created by lack of adequate public facilities.

Such providers opened 80 percent of India's new hospital beds during 2002-2012, according to statistics.

The World Bank and Britain's health cost-effectiveness agency NICE are also assisting India, providing technical assistance and advice on treatments the government should offer in the package, the bank said last week.

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