Great question. It certainly seems likely that this may effect may be contributing to the trend in some places. But hard to answer definitively because of the lack of standard definition and lack of monitoring of near-miss events in general. There are also other reasons why morbidity could be rising in some contexts - e.g. rising obesity levels and older age of mothers and in principle it could also be that most of the gains in mortality have come from reducing mortality causes that, if survived, don't typically cause chronic disability, so don't give to r...
On paternalism, just a note to point out that unlike Nussbaum, Sen and others have resisted offering specific capabilities, the idea being that these should not be handed down by economists but democratically derived. (I'm not sure how workable this is in practice or to what extent it's been tried, would be interested if anyone knows more!)