Cancer: financial innovation needed

The growing burden of non-communicable diseases (NCD) has, in recent years, become one of India’s biggest health challenges. Today, NCDs are the leading cause of death in the country. Cancer is included in this list of NCDs, and is a big contributor to our high mortality rates.

In the developed world, cancer has become an expensive disease, but a majority of patients are insured. Insurance companies negotiate with healthcare service providers and come to a consensus on the cost. But when you look at value-based healthcare, their cost is quite high.

In India, the cost of healthcare may be high relative to the low per capita income. But there is a divide between those who can afford and those who can’t. For the former, it is not expensive when you look at it in value terms. What is delivered for, say $10, in the US can be delivered for $2 with similar outcomes in India, which makes a huge difference to the patient and the family.

The goal in India should, therefore, be value-based. We should not compromise on quality, but improve affordability and bring in more insurance schemes. For people below the poverty line, we must provide help through subsidies.

In cancer care, affordability and quality have to go hand in hand. As oncologists, we cannot tell our patients, “Let me give you low-cost care but not focus on quality”. Several reports have indicated that low-quality care leads to a rise in patient morbidity and mortality. Providing quality care is of paramount importance and our challenge is, how to ensure that quality is delivered at an affordable cost. We are aware that frequently patients need a certain treatment, such as high-end surgery, high-end radiation, or innovative, targeted drugs, but we are unable to provide them that because cost becomes a major impediment.

Out-of-pocket payments account for more than three-quarters of cancer expenditure in India because most patients do not have health insurance. The situation is even worse for patients who rely on traditional occupations such as farming and agriculture for their livelihoods. This section of the population tries to pay for cancer care by borrowing money from money lenders, who charge exorbitant interest rates, which in many cases leads to economic hardship for years to come.

In this context, the government’s insurance schemes for those below the poverty line are a positive and welcome development. However, these schemes offer limited coverage, insufficient to cover the cost of treatment, and thus limit treatment options. These schemes only provide cover for minimum care and not for the optimum treatment that the patient deserves.

Interest-free loans

Cancer is a complex disease that requires quality treatment in the right way the first time. For us to succeed in managing our cancer burden in India, financial innovation is as important as technological and medical innovation.

Some cancer care providers have partnered with state-owned and private organisations to offer various schemes to patients. Recently, a financial service provider tied up to offer interest-free loans for the first year. From the second year, they do levy a small charge, which I think is acceptable. If the time period exceeds a year, the interest rate is a mere 6% for the 2-year plan and 8% for the 3-year plan.

With the certainty that the funds will be paid for treatment, they can recommend the most appropriate treatment to patients. The payment is completed within 24 to 48 hours, which ensures no interruption or delay in treatment. Moreover, patients have a year before they have to begin paying interest. Clearly, such financial models need to be encouraged, to address India’s specific needs.

We also need to encourage insurance by making it compulsory. There should be two kinds of insurance schemes: government and private. Government insurance schemes for the population below the poverty line, and private insurance for those who can afford it.

It is also important to create a healthcare mutual fund, in which people can start investing at a young age with encouragement provided by the government through a tax incentive. This will help many people who tend to fall ill as they age.

Together, we can work to develop novel models to bridge the existing quality-affordability gap. This, in my opinion, will be a giant step towards our mission of conquering cancer.

(The writer is Chairman and CEO, Healthcare Global Enterprises)