Tax-financing or social health insurance are often considered ideal financing mechanisms to achieve universal healthcare (UHC). However, large informal sectors and low tax bases in low and lower-middle income countries (LLMICs) often preclude them from being feasible pathways. While they await structural changes that would allow a shift to such mechanisms as the dominant form of financing, it is imperative to provide citizens with viable alternatives that would offer access to
affordable healthcare in the interim. Hsiao and Yip (2022) provide such an alternative through a model they call “Cooperative Healthcare.” The model offers a means to ensure effective prepayment and pooling of healthcare expenditures which would otherwise have been spent on an out-of-pocket basis, and to create an adequate healthcare network. We agree that the proposed cooperative healthcare model can act as the potential transition solution for LLMICs aspiring to ultimately provide UHC to their populations, albeit with some modifications. We consider this argument in the case of India and its emergent health financing challenges. We argue that cooperative healthcare can be a viable pathway towards UHC in India only when characterised by some form of managed care structure that is designed to deliver the dual objective of healthcare access and financial risk protection.
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