Healthcare PulseDigital health, decoded · by Mayank Madhur
Healthcare PulseDigital health, decoded · by Mayank Madhur
Healthcare Pulse · the argument
India runs four health systems under one name. Each breaks in a different place, so each needs a different fix. Here is what every tier has now, what it should have, why, and how.
Two things happened over the same four years. Household health cover rose from 41.0% to 60.2%, per NFHS-6. The share of health spending paid out of pocket rose from 39.4% to 43.4%, per National Health Accounts. Coverage went up and the household burden went up with it.
What we insure is not what households pay for. And what they pay for is different in each of the four tiers, which is why one national fix has never worked.
Each tier below gets the same treatment. Six stages of care across, three flows down: the patient, the money, the record. Pick a tier. The first block is today. The second is the same chain with the breaks closed. Then the argument for why it should change, and the mechanism that would do it.
"Pan-India" hides four separate health economies. From the narrow, well-served top to the wide, thinly-covered base, each sits in a different place on the same six-step chain, which is why one national fix cannot reach all of them.
↑ smaller, better served · larger, thinner cover ↓
Self-pay and premium insurance. Access complete, coordination absent. Sets the prices and holds the data the other three tiers are measured against.
Employer cover, ESIC, CGHS. Best access, worst continuity. Money stops at the first visit and again after discharge; the record does not survive a job change.
The missing middle. Own pocket and borrowing, no pool at all. Where a single admission manufactures poverty.
PM-JAY and state schemes. Free once admitted, paying at every step before it.
Access is complete and coordination is absent. Every flow carries until discharge, then the record stops and nobody owns the follow-up. Outpatient care is paid in cash even by people holding a policy, because most retail cover excludes it.
The record belongs to the patient rather than to whichever hospital group they last used. Prices for common procedures are published before the decision, not billed after it. Outpatient care sits inside the policy.
India A sets the prices the other three tiers are measured against. Private tariffs negotiated with A’s insurers become the reference point public package rates are argued against, and the benchmark an uninsured household pays in full. Opacity at the top raises the cost of care for everyone below it.
A holds the only large-scale picture of private clinical practice in India, and it is invisible to planning. Roughly half of hospitalisations happen in private facilities. If that activity never enters a shared record, the system forecasts demand with half the data missing.
So the case for regulating this tier is not about protecting the people in it. They can look after themselves. It is that they sit on the price signal and the data the other three tiers depend on.
The money flow stops at the first visit, because outpatient care and medicines are excluded from most group cover, and stops again after discharge because no bundle covers the months that follow. The record does not survive a change of employer.
Cover follows the person rather than the employment contract. Every member has a named primary doctor who is paid to manage them. The discharge summary returns to that doctor.
This is the tier where chronic disease gets diagnosed and then abandoned. A salaried 45-year-old is told at a company check-up they have diabetes. The cover that found the condition does not pay to treat it, and the insurer changes at the next renewal. Best access, worst continuity.
Fixing it costs the exchequer nothing. The money is already being spent, on admissions that better outpatient management would have avoided. This is the one tier where the reform argument is efficiency rather than equity.
Fragmentation here is administrative, not financial. ESIC covers ~13 crore, CGHS ~42 lakh, employer policies the rest. Three pools, three networks, three sets of paperwork, one population.
The worst pattern in the set. Money and record stop at every stage except the admission itself. Prevention and first visits get postponed because both cost money up front, so people arrive at hospital late, when treatment costs the most and works the least.
A pool exists. Primary care is bought by subscription so a first visit is not a spending decision. The months after discharge are funded, so treatment does not stop the day the cash does.
This is where poverty gets manufactured. These households have assets and no pool, precisely the condition under which one admission converts a solvent family into an indebted one. Subsidy here prevents a household falling into the tier below, and that is cheaper than treating it after it has fallen.
The obvious objection is that this tier can afford cover and chooses not to buy it. Partly true, mostly irrelevant. A voluntary market with no subsidy and no mandate selects adversely and prices out exactly the people whose risk makes them want it. That is a market failure, not a preference.
NFHS-6 puts household cover at 60.2%. Roughly forty households in every hundred have nothing at all, and this tier is most of them. It is the largest single design gap in Indian health financing and the only tier with no institution arguing for it.
Free once admitted, paying at every step before it. The money flow works at the health centre and at the hospital and nowhere in between. The real first contact is often an informal local provider who sits outside every system.
Outpatient consults, listed tests and listed medicines are covered, not only admission. The local provider has a paid referral role. The discharge summary comes back to the health centre with a funded follow-up window.
The scheme covers the cheapest part of the journey. Travel, lodging and food account for 23.6% of inpatient out-of-pocket spending. So even a fully covered admission leaves close to a quarter of the household’s cost unpaid, because getting to the hospital is not an insurable event.
And the cover itself is a state lottery. NFHS-6 puts household cover at 21.1% in Bihar and 90.5% in Chhattisgarh. That gap does not track income, it tracks whether a state government built and enrolled a scheme. ‘India C is covered’ is a statement about Chhattisgarh, not about India.
Which means the first join has to be solved twenty-eight times. Funding the confirmatory test after a positive screen is a state financing decision. Anyone proposing a single national fix for this tier has not looked at the state table.
Medicines are 60.3% of outpatient out-of-pocket spending. That holds for the affluent household paying cash for a monthly refill and for the scheme-covered household whose health centre has run out. It does not depend on income, employer or state.
India already built the fix. Jan Aushadhi sells at 50 to 80% below branded equivalents and sits in 776 of 784 districts. It captures about one percent of a roughly ₹1.5 lakh crore medicine market.
The shops are there. The prescriptions are not. Put the molecule name on every prescription, on a digital rail, with the price difference shown at the point of writing. No new pool, no actuary, no premium. It needs less new money than anything else on the table, though it still needs stock on the shelf, pharmacists allowed to swap, and states willing to enforce it. It is the only line on this page that helps India A and India C on the same day.
The four-tier frame is an analytical heuristic, not an official classification. No population figures appear here, because none of the circulating tier sizes has a traceable source.