New Delhi, Dec. 1: If you are a salaried or individual taxpayer, brace for more deductions. The High Level Expert Group on health, headed by Dr K Srinath Reddy, has proposed mandatory tax deduction for funding universal health coverage (UHC). In a report submitted to the Planning Commission recently, Dr Reddy said for the “vision of the UHC to be recognised, a tax-based system of health financing is essential.” The UPA Government intends to increase public financing of health to 2.5 per cent of GDP from 1.2 per cent currently, during the 12th Plan period.
Citing examples from international case studies, Dr Reddy said countries that had introduced successful UHC had mostly depended on general revenues, rather than on unsteady streams of contributory health insurance.
The report also proposes higher taxes on tobacco and alcohol. This will “have the public health benefit of reducing consumption of these harmful products, while adding to the general revenue pool,” it says.
USER CHARGES
With the exception of one member, the panel is unanimous that user charges of all forms should be dropped as a source of Government revenue for health.
“Global experience suggests that imposition of user fees in many low and middle income countries has increased inequalities in access to healthcare,” it said.
INSURANCE POLICIES
The report has come out strongly against using insurance companies or independent agents to make people buy healthcare services on behalf of the Government.
“The use of independent agents fragments the nature of the care being provided, and over time, leads to high healthcare cost inflation and lower levels of wellness,” it says.
Instead, it suggests engaging the private sector through a well defined “contracting-in” mechanism, to harness its power, but with adequate checks and balances. (Contracting is a purchasing mechanism used to acquire a specified service, of a defined quality and quantity, at an agreed on price, from a specific provider, for a specified period).
The panel also proposes that all Government-funded insurance schemes be integrated with the UHC system, and all health insurance cards be replaced by National Health Entitlement Cards.
DRUG COMPANIES
To check indiscriminate use, the panel has proposed price controls and regulation on essential and commonly prescribed drugs.
Also, caps on trade margins to rein in drug prices while ensuring reasonable returns to manufacturers and distributors could be considered.
With regard to alternate therapies, such as Ayurveda, it has sought revision and expansion of the National Essential Drugs List. However, in a note of caution, it says new drugs should be included only after scientific evidence and due consideration to safety, efficacy and cost-effectiveness.
STRONG REGULATION
The Reddy panel report proposes a National Health Regulatory and Development Authority to regulate and monitor public and private healthcare providers, with powers of enforcement and redressal, as well as oversee contracts, accreditation, etc.
Finally, it wants all public-private partnerships (PPP) projects on health to be brought under RTI, social audits and selective CAG audits.