Creating sustainable healthcare financing models requires a multi-faceted approach that balances cost containment, accessibility, and innovation. Health Savings Accounts (HSAs) and micro-insurance, for example, empower individuals to manage healthcare expenses, ensuring care remains affordable for underserved populations. A significant initiative in this regard is the Yeshaswini Microinsurance model, introduced in 2002. This program has enabled millions of farmers to access life-saving surgeries for as little as Rs. 5 per month initially, with the premium now at Rs. 18, still providing a range of surgeries, including heart procedures. To date, over four million people have benefited from this model.
For instance, Narayana Health recently launched the "Aditi" program, designed to extend high-quality healthcare access to those in the "missing middle" segment, bridging the gap for underserved communities.
Achieving Universal Health Coverage (UHC) in India, with its low tax-to-GDP ratio, remains a significant challenge. However, a well-crafted public health system that serves the needs of the most vulnerable, alongside policies that enable others to secure reasonable insurance coverage, can drive meaningful healthcare outcomes across the country.
Balancing Innovation and Affordability in Healthcare
Maintaining affordability while investing in advanced medical technologies and improving healthcare quality requires a multi-faceted approach. One key strategy is scaling preventive healthcare through public health campaigns and early detection programs. By focusing on disease prevention and health education, the long-term burden of chronic illnesses is reduced, ultimately lowering overall healthcare costs.
Tiered healthcare models also prove effective, where primary care centers handle routine treatments, and specialized hospitals manage advanced cases. This structured allocation of resources ensures that costly medical technologies are used efficiently and only when necessary. Public-private partnerships play a critical role in this, enabling collaborative efforts between government bodies and private providers. At Narayana Health, 36% of admitted patients benefit from government schemes, underscoring the importance of such collaborations. Examples include partnerships with the National Rural Health Mission, Assam, for congenital heart disease and bone marrow transplant programs, and with the Biju Swasthya Kalyan Yojana (BSKY), offering health coverage to vulnerable families, especially women.
Additionally, training and upskilling the healthcare workforce is crucial for improving care quality without inflating costs. Simplifying and making medical education more affordable is essential to building a workforce that can efficiently leverage advanced technologies, resulting in better patient outcomes and reduced waste.
Finally, telemedicine and digital health solutions offer significant cost-saving opportunities by minimizing the need for extensive physical infrastructure while expanding access to healthcare in remote or rural areas. These strategies together promote a balance between innovation, quality, and affordability in healthcare.
Designing Healthcare Financing Models to Bridge Access Gaps While Ensuring Cost Efficiency
Healthcare financing models can be designed to address disparities in access to care, especially in rural or low-income communities, while maintaining cost efficiency by adopting innovative and multi-faceted approaches. Social Impact Bonds (SIBs) and blended financing models offer a compelling solution by encouraging private investments in healthcare with a focus on measurable outcomes. These models attract private capital to support public health initiatives, ensuring sustainable growth and incentivizing positive health outcomes.
To enhance health equity, targeted subsidies and grants for healthcare providers can ensure that underserved populations receive adequate care. Decentralized healthcare delivery models, such as community clinics and mobile health units, can further improve access in remote regions while preventing the overburdening of centralized hospitals.
Additionally, integrating green financing and renewable energy partnerships into healthcare facilities can contribute to sustainability, reducing the carbon footprint while promoting long-term cost savings through improved energy efficiency. These combined approaches ensure that healthcare systems can maintain high-quality care, accessibility, and financial sustainability.
Value-based care models, which shift the focus from the volume of services to patient outcomes, play a crucial role in sustainable financing. Providers are incentivized to deliver quality care that improves health outcomes rather than merely increasing the number of treatments. This model enhances efficiency and cost-effectiveness, aligning resources with patient needs. India's National Health Authority (NHA) has initiated efforts to transition from volume-based to value-based care, a long-term journey that promises to elevate healthcare quality.
Another innovative approach is low-cost insurance, which allows individuals to pay small, manageable premiums to access healthcare. By spreading the financial risk across a large population, this model makes healthcare more affordable and accessible while maintaining the financial viability of the system.
About The Author
Sandhya Jayaraman currently serves as the Group Chief Financial Officer at Narayana Health, a role she assumed in December 2021. With over two decades of experience across FMCG, Global Business Services (GBS), technology, and infrastructure engineering sectors at Unilever and Wipro, she is a seasoned finance professional. Her expertise spans strategic finance, governance, technology transformation, and shared services.
A recognized thought leader, Sandhya is a regular speaker at both national and international conferences, known for her insights on business finance, analytics, technology, governance, and diversity. Her accolades include the prestigious "Best CFO - Healthcare and Pharma" by The Associated Chamber of Commerce and Industry of India and being named one of the "Top 10 Women CFOs of 2024" by Women Entrepreneurs India. She was honored as the "CA Woman of the Year 2023" by ICAI and has been repeatedly recognized for her professional achievements. Sandhya also features in prominent lists such as India's "Top 100 CFOs" by CFO India, "Asia’s 100 Power Leaders in Finance" by Whitepage International, and "India's Top 100 Women in Finance" by AIWMI. An alumna of the Institute of Chartered Accountants of India, she holds multiple All-India ranks across her professional examinations.
