Big lesson from Covid is that India must abandon the US healthcare model: Jean Dreze

Just to cite the most recent survey, by the Centre for Economic Performance at the London School of Economics, the authors found that 40 per cent of respondents in their sample of informal-sector workers from Bihar, Jharkhand and Uttar Pradesh had not earned anything in the week preceding the survey, either because they had not worked or because they were yet to be paid. That was earlier this year, from January to March.

The second wave is now receding, but a third one may not be far off. With vaccination progressing quite slowly, we have to be prepared for intermittent crises until the end of the year and possibly beyond that.

A fresh stimulus package is essential and so are relief measures for poor people. Income transfers in cash or kind is a useful way of combining the two. Last year, the central government had initiated limited but still useful transfers such as double food rations under the public distribution system, expanded employment under the National Rural Employment Guarantee Act, and cash transfers to pensioners and women’s Jan Dhan Yojana accounts. No provision for any measures of this sort were made in this year’s budget.

What are the big lessons from the two Covid waves, with respect to fixing our public healthcare system? 

I think the big lesson is that India must abandon the US model of health care. The US model is a fragmented system where some people, like war veterans, enjoy free healthcare as a public service, others rely on health insurance, others still pay for medical expenses out of pocket, and a substantial minority is effectively deprived of any healthcare worth the name except in emergencies.

The US model is a colossal failure, with massive health expenditure, very poor results, and pervasive inequity. Most affluent countries other than the US, and also some poorer countries including Sri Lanka and Thailand next door, have understood the value of a different approach, where quality healthcare is considered as a basic right of all citizens.

There are different ways of applying this principle. In the UK, for instance, healthcare is provided to everyone for free under the National Health Service. In Canada, health care is provided by private as well as public institutions, but everyone is part of a common health insurance system funded from general taxation.

Many countries rely on a mix of public service and social insurance. Whatever the approach, the basic principle is that if you are sick, the society takes charge and covers most of the costs. That is what India should also aim at.

India's vaccine strategy is plagued by shortages, differential pricing, friction between the Centre and the states on procurement and distribution. How can we ensure vaccination for all?

The vaccination strategy document released on April 21, called “liberalised pricing and accelerated vaccination strategy”, is an abject capitulation to private commercial interests. Before that, all vaccines were bought by the Centre and used to provide free vaccination to gradually expanding priority groups such as health workers, the elderly, those above the age of 45, and so on. That was a fair and rational approach, widely used around the world.

The new strategy aims to supplement public procurement with a vaccine market where oligopolistic manufacturers are allowed to set their own prices and the rich can buy a vaccine like a first-class seat in a crowded train. This exacerbates the shortage of vaccines in the public sector and facilitates vaccine profiteering. This strategy is symptomatic of India’s approach to the health sector, where healthcare is essentially treated as a marketable commodity, with disastrous results.

Do you think loss of livelihoods this time may not be as widespread as last year because the lockdowns in 2021 are less strict and largely localised?

It is difficult to tell. There is no national lockdown this time, but there are local lockdowns of varying intensity and duration across the country. And in some respects, circumstances are more challenging today. People’s reserves are depleted and many are in heavy debt.

The number of infections and deaths is much larger than last year, forcing large numbers of households to contend with heavy health expenditure if not the loss of a breadwinner. With mass vaccination making slow progress, hard times are likely to continue for many months. In economic as in health matters, it is best to prepare for the worst.

Our granaries are overflowing due to back-to-back bumper crops. Does this mean a hunger crisis is unlikely? 

Not at all. They were overflowing last year too, but India went through a severe nutrition crisis as we know from multiple household surveys. The issue is not whether there is food around, but whether people have access to it, through the market, or the public distribution system, or self-provisioning, or other legal means.

The PDS provides some protection against extreme hunger to the bulk of the population, but when people’s means of subsistence have been decimated, it is not enough. Also, a substantial minority of poor households is still deprived of access to the PDS for lack of a ration card.

What was the experience last year, after the Centre announced free foodgrain under Pradhan Mantri Garib Kalyan Yojana and various state governments also launched their own schemes to fight hunger? Did rations reach the hungry? Were they enough?

By and large, free foodgrain rations reached those for whom they were intended, but there were some leakages. We tried to get an idea of the leakages from various household surveys, but it is very difficult. It is astonishing that the central government spent thousands of crores of rupees on relief measures without spending a single rupee on assessing the leakages. Even a simple telephonic survey would have helped in this regard.

Mahatma Gandhi National Rural Employment Guarantee Act (MNREGA) is designed to offer guaranteed jobs in villages. Has it helped alleviate livelihood distress last year, when there was record demand for work? What changes would you suggest to make this program more inclusive and more remunerative?

The top priority, now as before, is to ensure timely and reliable payment of wages. Twelve years have passed since cash payment of MNREGA wages was replaced with bank transfers, but the government is still unequal to the task of paying wages within 15 days as prescribed under the Act. Payment systems have been endlessly rejigged by the central government, with prolonged teething problems each time and workers paying the price.

The latest payment reform is an absurd order requiring separate payment orders to be prepared for scheduled-caste, scheduled-tribe and other workers. Even after a payment order is submitted online, it currently takes 26 days, on average, for the workers’ accounts to be credited, according to a recent LibTech study for Jharkhand.

This is without mentioning the rampant problem of rejected payments, which continues to plague MNREGA as well. The entire payment system needs to be reviewed, simplified and improved on a durable basis. For this to happen, however, the payment system will have to be geared to workers’ interests and not those of software or fintech companies.