Clear presence of private market for medical services in rural areas, says white paper

Health services in rural areas is a topic of heated debate on political platforms, given the popular belief that the private sector, often criticised as profit-oriented, is unwilling to enter villages.

Proponents who raise the pitch for the involvement of the public sector to fill the void in healthcare services in rural areas argue about the market failure of health workers. But a white paper released by noted economist Bibek Debroy of the Centre for Policy Research (CPR) dispels this notion by stating that the availability of medical service providers in rural areas is quite high.

“While there is somewhat of a uniform public health infrastructure in rural areas, it is largely non-existent in urban areas, except in some large centres and metropolitan cities that mostly focus on reproductive and child care services,” the white paper said. More than 65 per cent of the medical personnel in rural areas, however, have no medical qualifications. But 92 per cent of rural households go to private providers and 79 per cent of them to unqualified providers. Contrary to popular expectations that the poor are unwilling to pay, Mr. Debroy said there is a clear private market existing in rural areas. The problem, however, is with its quality and lack of regulation.

In sharp contrast, the public sector provisioning had no problems with regulation, but continues to have problems of access and quality. “It is because of this lack of service quality and access in the public sector that patients are resorting to private sector,” he said in the white paper “The Indian Health Sector: Providing Choice, Competition, Efficiency and Finance”.

Dr. Debroy, who released the white paper here on Wednesday in the presence of Care Hospitals Group chairman B. Somaraju, said that two propositions – everything has to be delivered by the public sector and poor are unwilling to pay – were clear myths. However, there was great deal of distrust of the private sector in formulating public policy on health.

The white paper favoured empowering the Medical Council of India to conduct nationwide examinations and provide licences to those who wish to join the profession.