Chhattisgarh is all set to allow private diagnostic centres at public health facilities within three months. Critics are appalled by the idea of business space for private players in public health facilities while supporters feel it will improve the pallid health care infrastructure in the State. The architect of the new model, J.P. Mishra, chief of the State Health Resource Centre — the State Health Department’s technical assistance body overseeing the project — is a strong proponent of public-private partnership. He spoke to Suvojit Bagchi defending private enterprise in public health.

Now that the bids are closed for private diagnostic centres vying to set up shop in Chhattisgarh’s government hospitals, can you give us a road map of how and when these centres are going to start operation?

A committee will be formed and bids will be opened by the committee in front of the bidders. By the end of the month we should be able to identify the laboratories [companies]. Then there will be an agreement between the companies and the government. The lab officials will visit the places [hospital and health facilities] and identify the spaces to be allotted to them. In terms and conditions, we have said that within a month of execution of agreement they should set up the labs. So by April-May first lot of labs should be operational, if everything goes right.

Why do you think this model of privatisation of public health infrastructure will improve health care?

This is public-private partnership [PPP], not privatisation of health care. Privatisation is selling of ownership. I am rather buying in, contracting in services. I am inviting the private sector to set up shop on my [premises].

Will this provide better health care?

Why not? Let me give you the example of Compfed, the Bihar milk cooperative. Throughout the 1990s they were making profit, unlike other PSUs of Bihar, because they perfected the art of outsourcing. They started giving incentive for good work and penalising [bad work]. Compfed gave incentives to truck operators for timely delivery of milk and penalised them for sloppy performance — the ‘bonus and penalty’ model. I tried that in health care

You have to understand the importance of outsourcing. If I can get something done cheaper, why should I be doing it myself? That is why the automobile industry outsources 70-80 per cent of production.

The automobile companies are driven by a motive of profit…

Profit is not the only motive, improving upon efficiency is. Yes, I would say my unit cost of providing the same services should become less. Today I have to employ a person or put up a machine regardless of how many people avail the services. Therefore, between a salaried person’s earnings and the work the person does, there is no built-in incentive for the person to be efficient.

Hence a ‘bonus and penalty’ model?

Let us take the example of PPP in diagnostics. The turnaround time [delivery of reports] has to be less than 24 hours for at least 95 per cent of the cases referred to the diagnostic centres by the hospitals.

If the labs manage to do that for a full year then they get an extension of one year. That is, now we are giving the diagnostic labs permission to operate for 10 years, it will be extended for one more year.

If they fail, the tenure will reduce to nine years or even less. That is a ‘bonus and penalty’ model.

How will you monitor this?

I had considered the idea of getting the NGOs involved.

One reason why PPP is getting questioned is because we have seen how the Bihar model of health care privatisation collapsed

The Bihar model did not work because the qualifying criteria were very soft. Then they started with big players. The big players left because the government did not maintain its side of agreement. Payment was not regular. Even the existing players are thinking of going out. In Chhattisgarh, the payments for the patients referred by the hospitals are to be made by an autonomous body called Jeevandeep Samiti, located in the hospitals. One side of my job is to ensure that the laboratories work and on the other side I have to make sure that the payments are done on time.

In remote areas of Chhattisgarh you do not have adequate staff or equipment. So if the government could not manage to take health care to remote areas, why do you think the private parties will be able to do it?

I do not have a direct answer to that. All I can say [is] you will know after we open the bids, whether they are interested in setting shops in Bastar, Sarguja etc. I agree with you that for remote areas there is no alternative to government services. If you look at the focus, the vast majority [of labs] are to be set in difficult areas. [What] we are trying to do is to organise service delivery in such areas where there is no services. For that we can provide incentives to those who are willing to go to remote areas. And I might start only from Bastar and Sarguja. I am not here to make a profit for itself.

What about the diagnostic facilities already existing in the district hospitals? Are you going to shut those down?

It is not a question of shutting those down. It is not like everything is available everywhere and nothing is available in some places. Look at the package — X-Ray is excluded from [proposed private labs in] district hospitals and health facilities as it is available there.

What will happen to the laboratory staff in health facilities?

In some cases we have to redeploy the staff.

You cannot run a parallel lab if you have given it to a private player. So the lab technician has to be redeployed to a place where services are not given through PPP.

There are 500-odd PHCs where we do not have technicians.

That is, from district hospitals a person will go to remote areas?

I have not done that detailed an analysis. There could be a choice of a private player taking the person on deputation.

So in a way, these district hospitals are going to get affected?

To some extent. It has to be seen facility by facility. You cannot generalise.

What about the cost to public?

We will follow Central Government Health Services (CGHS) rates. And give a 10 per cent discount on that. CGHS rate are less than market rates and thus it compels the private players to reduce their rates. It has happened in Tamil Nadu. The money will come from Rashtriya Swasthya Bima Yojana (RSBY) and Mukhyamantri Swasthya Bima Yojana (MSBY) for in-patients. For outpatients, a part of it will come from Jeevandeep Samiti, paid for by the State government. And we have asked for a small amount from State budget for PPP services because we are asking the Jeevandeeps to pay for outpatient cases and they do not have a fund for that.