Privatisation in the Universal Health Coverage (UHC)

Salil Kalianpur

Recently, the Indian government announced plans to offer Universal Health Coverage (UHC) to Indian citizens. This is not new. India had embraced this vision at the time of its independence. But, over the 65 years since then, India’s public spending on health — currently around 0.9-1.2 percent of GDP — is among the lowest in the world.

The result is that public health facilities are funded almost negligently. Apathy by successive governments led to faulty planning and combined that with inefficient management of public health over the decades. Schemes like the National Rural Health Mission (NRHM) and the several government-funded health insurance schemes provide merely a partial response. Out-of-pocket expenditure still remains at 71 percent of all spending, without coverage for outpatient care, medicines and basic diagnostic tests. This effectively leaves the sick and the ailing – especially the poor – out in the cold.

India’s future lies in its demographic dividend – the advantage of having a young, healthy and productive work force. And to reap the benefits of this work force that is expected to form the foundation of India’s growth in the coming decades, it must reform its public health system. It is impossible that the system, in its present form, can ever meet the future needs of the population at large.

To address this socio-economic problem, the government simply decided to throw more money at it and hope for a solution. It announced that it would triple its spending in the health sector in the 12th Five Year Plan and increase spending from an average 0.9 percent of GDP to 2.5 percent of GDP by 2017. Amongst other things, it announced a $5.4 billion plan to distribute medicines free of cost to its citizens. The question is, can it?

A very obvious analogy lies in the Right To Food (RTF) Act. The imbalance between the expansive vision expressed by the Act and the narrow means it seeks to achieve it is uncannily like the state of public health care. Huge quantities of food grain are produced every year yet millions of Indians starve to death or are malnourished because of the government’s shocking inability to get that produce from “farm to fork”. The infrastructure is simply inadequate. Similarly, just by procuring medicines in bulk and offering it for free, the disease burden in India will not miraculously decrease.

India simply does not have the medical infrastructure required to provide health care to all its citizens by itself. It currently has one of the most privatised medical systems in the world where the government meets only 17 percent of the total healthcare costs compared to 46 percent in the United States and almost 92 percent in Britain.  This might lead the average person to perceive that India is woefully under-resourced in the health sector. On the contrary, India has the largest number of medical colleges in the world producing among the largest numbers of doctors in the developing world. India gets “medical tourists” from many developed countries reflecting the high standard of medical skill and expertise here. They seek care in its state-of-the-art, high-tech hospitals which compare with the best in the world. India is the fourth largest producer of drugs by volume in the world and is among the largest exporters of drugs in the world.

Leaving aside a few government run institutions such as AIIMS and PGI, all the noteworthy achievements listed above, were made possible by the private sector. While India has the capability and the resources (less but surely present), the government has woefully failed to create equitable distribution of the services that are produced. The statistics are staggering. A decade old report by the World Bank estimated that 93 percent of all hospitals, 64 percent of beds, 80-85 percent of doctors, 80 percent of out-patients and 57 percent of in-patients are in the private sector. At Independence, the private sector provided only 8 percent of health care facilities.

It is obvious that the private sector is well entrenched in delivering health care. Instead of discouraging it, strategic encouragement can help build UHC more quickly. For example, in rural India, the public health facilities are inefficient and marked by chronic absenteeism. The private sector considers rural India unprofitable since affordability is very low in the population. Through direct cash transfers or health vouchers, the government can create affordability in rural India. This will encourage private sector entry, create competition and improve overall health delivery in the region. Slowly but surely doctors who avoid rural practice may find it lucrative to return. Alongside the government must also focus on finding solutions that will decrease the need to seek health services. It must encourage its citizens to lead healthier lifestyles by creating the environment for increased physical activity, better nutrition, avoidance of behavioral risks, and wider use of preventative care.

Today, India does not have enough doctors or nurses. The government can chip in here by using all the capacity that the country has.  It can train hundreds of “community health workers” across the country to diagnose communicable diseases and direct patients to hospitals. At present, it is doing so but not in a systematic or an effective manner. India has rarely, if ever used radio broadcasts and text messaging allowing rural citizens faster access to vaccinations, examinations, and treatment.  In a country with the highest television-density in the world, it can effectively use cell phones to send and receive information about disease outbreaks and health updates. These steps maybe small but the impact on health outcomes can be immense.

The good news is that the government seems to have realised that it must relinquish its role as a provider of primary healthcare, making way for private companies and individual medical practitioners to take the lead in offering clinical services, and focus its energies and resources on preventive interventions such as immunization and HIV testing. Whether or not the government will follow through on allowing the private sector to deliver, while it focuses on ensuring that the distribution is equitable, remains to be seen.

Salil Kallianpur is a health care marketing professional with experience in the pharmaceuticals and medical device industry. He blogs at “My Pharma Reviews” (salilkallianpur.wordpress.com). Views expressed are his own and not those of his employer

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