Opinion » Lead

Updated: January 30, 2013 01:23 IST

No sweetening this bitter pill

K. Sujatha Rao
Comment (12)   ·   print   ·   T  T  

Unless the government regulates the growth of the private sector and makes it accountable, the worn-down public health infrastructure cannot be revitalised

The absence of a well thought out policy framework for strengthening the health system is the most important issue facing the health sector in India. In the government, there is no clarity on what the nation’s health system should be 10 years hence. Should it be a public sector dominated system like Brazil or China; or a regulated private-led like the U.S.; or one where both sectors function but have only one payer as in the U.K.? In Japan, delivery is private but the government sets the prices. Each option has its costs, benefits, tradeoffs and systems to ensure control on costs and quality.


India is a unique laissez faire model with a private sector-led health system that is unregulated and has no rules of the game spelt out, not even as minimal as those laid down for opening a liquor shop. And so, one can set up a nursing home in a residential colony; throw infectious waste anywhere, charge any amount that the market allows and have no systems of oversight to assure quality. The private sector is further incentivised by excise duty waivers, subsidised loans for establishing hospitals, tax breaks and a liberalised health insurance market with tax exemptions for the premium.

More recently, a new innovation has emerged known as government sponsored insurance schemes (Rashtriya Swasthya Bima Yojana, Arogyashri, Kalaignar, etc.) under which governments buy the insurance on behalf of the people/target group for providing cashless services for inpatient care, mainly surgeries. Under this scheme, the providers charge on a DRG basis, the insurance companies have assured incomes and the entire risk is borne by the government. While such schemes have widened access by making private sector facilities available, their impact on addressing the three critical issues of the health sector — equity, quality, and efficiency — has not been addressed. Instead, pricing structures are distorted and new dimensions of fraudulent and corrupt practices have entered the health sector that continues to register inflation at 30 per cent, with negligible impact on reducing catastrophic expenditures, impoverishing millions in the process.

Privatisation of the health sector started in late 1980s, accelerated in the 1990s with the further withdrawal of the state under the punishing conditionality of the IMF structural adjustment, and got further emboldened with the extensive incentives provided. In 2005, the state bounced back with a three-fold increase in the budget to revitalise the rural health delivery systems under the National Rural Health Mission, running as a parallel track to the private eco system. It is this duality and dysfunctional policymaking that is haemorrhaging the sector and requires to be stopped without delay. The worn down public health infrastructure cannot be revitalised without changing the rules of the game, bringing in legal provisions to regulate further growth of the private sector, make it efficient and accountable and provide a level-playing field.

Bihar experiment

It is time to recognise the market failures inherent to this sector and the role of the political economy that is sustaining it, making it increasingly impossible to regulate and establish institutional mechanisms with the requisite capabilities to effectively manage the mess. Bihar’s recent experiment of outsourcing diagnostics to the private sector is telling — unqualified persons were employed at some centres, but no action was taken due to political pressure. It is scary to think that a number of innocent people might have been given the wrong diagnosis and put on needless medication. This is just a small example to illustrate the kind of mess we are in.

The policy confusion is worsened by the push for greater decentralisation without ensuring the availability of capacities at those levels to manage such complex systems. It is against this scenario that Chhattisgarh’s recent policy initiative needs to be viewed. The policy of contracting out diagnostic services to private sector networks in 379 public facilities for 10 years, guaranteeing a minimum patient load and permitting paying patients in addition and prices pegged to those paid for under the Central Government Health Scheme (CGHS), monitored and managed by a third party, is fraught with adverse implications for the strengthening of the public sector and huge costs for the government, should it choose to pay for them.

Absence of strategy

It is not the outsourcing that is wrong. It is the absence of a strategy to draw on the strengths of the public and private sectors. If the government is unable to recruit staff to establish laboratories in, say, an area like Bastar, it is unclear how the private sector can be lured to set up, for instance, a radiology unit, there unless huge amounts are paid to it to cover the sustainability risks involved. Likewise, outsourcing is being attempted in areas that already have laboratory facilities. While the value addition is not clear, it will undoubtedly result in the closure of the public sector services and also entail paying three times more to the private sector. And it will be three times as the CGHS prices that are being taken as a benchmark, based on the average of prices quoted on a tender basis. There is no scientific basis for CGHS rate-fixing and such a system will only result in overpaying the private sector in Chhattisgarh where the prices of inputs vary from those in Mumbai or Delhi and between Raipur and Bastar. More worrying are the qualifying criteria that only large private sector networks like corporate hospitals can meet. Small but excellent not-for-profit hospitals like the Shahid hospital in Dalli Raja in Durg or the Jan Swasthya Sahayog at Giniari in Bilaspur will both be disqualified.

What needs to be done

Knee-jerk solutions and unintelligent tinkering have had a disastrous effect on the health sector in India. The government needs to look at health system development and put in place requisite conditions, such as an institutional capacity to control provider behaviour through well laid down national protocols and standard operating procedures, penalties and incentive structures. It should explore cost-effective options such as the intensive use of technology that enables electronic transmission of samples for diagnosis at centralised laboratories, pricing of services, develop IT systems to closely monitor not quantitative but qualitative outcomes as well, put in place grievance redress systems, tightening and insulating the enforcement systems at all levels from political pressures to make individuals from the ANM to the specialist, the ward boy to the laboratory technician — public or private — accountable to outcomes and patients, before opening up partnerships with the private sector on such a large scale.

What needs to be done is known, but sadly how to do it is not. Governments, at the Centre and in the States, need to allow people with field experience and practical knowledge of the health system to contribute their expertise. What is also needed today more than ever is the need to listen to the ground — as patients, women in villages, front line workers, the hapless doctor in the PHC, all have a different story to tell. We cannot afford any more blundering!

(K. Sujatha Rao is former Secretary, Ministry of Health and Family Welfare, Government of India)

More In: Lead | Opinion

In India there is no dearth of brain that is needed to conceive and implement any welfare project. What we lack is heart!

from:  mvrangaraajan
Posted on: Jan 29, 2013 at 21:11 IST

(1) Why do poor go to private hospitals? If our public hospitals can
provide reasonably good service, not many would think of going to
private hospitals. (2) We spend money on our government hospitals but
how much of that money is actually utilized for the patients? And how
much is pocketed by the corrupt bureaucracy? (3) No one in the
bureaucracy has shown the necessary administrative will to improve
management of government hospitals and as a result private hospitals
are making huge money. I believe that if funds are properly utilized,
there can be considerable improvement in the public health system. Let
us make a start in this direction.

from:  Narendra M Apte
Posted on: Jan 29, 2013 at 19:44 IST

India being a developing nation there can be seen a lot of demand in the future in all the sectors. SO government should quickly contemplate a regulated public-private partnership health system.And provide free service to the poor people who deserve. As people who cant afford for food can neither afford proper health care.

from:  N V Adithya
Posted on: Jan 29, 2013 at 18:55 IST

With the private sector, what is required is, setting basic standards of hygiene, patient
facilities of acceptable standard, transparent waste disposal policies and rules against kick
backs with appropriate fines and penalties for each of the mentioned. Public system reflected
the wider neglect of infrastructure development of the nation at large and absence of policies
and practices as well as the questionable supervision of even the existing rules. Substantial
amount of tax money needs to be invested in bringing the Government run hospitals up to
standard,all over the country! Even the tertiary medical institutions suffer from serious
problems of hygiene and room for cross infection. The bottom line is, it is another outcome of
serious corruption at all level of governance and administration!

from:  Saratchandran
Posted on: Jan 29, 2013 at 17:11 IST

health is one of the parameters where every country spent as much as
they can but our govt spent only 2% of GDP .which itself a indicator how
our govt is concern about country and countrymen.every policy is just
only on papers or limited only to manifesto of political parties.only
lip services but no action for improvement.Thats why we stands at 134 in
GHI. Even our neighbors spent more on this sector.

from:  shadman ansari
Posted on: Jan 29, 2013 at 13:49 IST

Key to derive the best out of Private/public hospital lies
holistically outside the hospital.How ?The test about how the facility
are seen only during a disaster or an emergency.In the 2011 disaster
of Calcutta hospital the rich patients who were admitted in the
hospital were ready to pay Rs.9000/- per day for good treatment. Post
mid-night when the fire broke out and poisonous smoke was reported the
slum dwellers staying outside the walls of the AMRI Hospital rushed to
help. They complained and volunteered rescue operations but young boys
were hounded out by Hospital guards and were asked to go and sleep.
What was lacking in Calcutta fire Tragedy was good governance,
security plans, regular drills and team work in this AMRI super
speciality Hospital.

from:  Rakesh Manchanda
Posted on: Jan 29, 2013 at 12:56 IST

there are no fixed regulatory measures that can control the pvt
capatisation of health sector as the govt knows that thr is
inadequate infrastructure established in govt hospitals to tackle the
issue if pvt sector is tightened .need to bring in more workforce ,
increase the health spending atleast to 2.5 % of GDP, need to bring in
more tightened measures ,effective implementation rather just policy
making ,improve the govt hospitals infrastructure , remove the
overlapping Health schemes ,institute a health grievence addressal
mechanism at every taluk level etc

from:  praveen
Posted on: Jan 29, 2013 at 12:36 IST

An appallingly bad article.

No measures are suggested as to how the rotting government health service providers
should be fixed but uninformed and outright ignorant statements are made about private
medical establishments.

Instead, the author wants to try and shut down as many private medical institutions as
possible on imagined violations and impose heavy costs on patients by burdening hospitals
with more regulations in addition to all those already applicable.

The starting premise of this article seems to be that economic freedom in this country does
not exist and should not be allowed to exist so that people have to depend on the whims of
government for everything in life.

A typically bureaucratic attitude.

from:  Alok
Posted on: Jan 29, 2013 at 09:30 IST

"Unless the government regulates the growth of the private sector and
makes it accountable, the worn-down public health infrastructure cannot
be revitalised." In other words you (Writer) are conveniently saying
that others should be punished for the gross failure of the public
health sector, and I'm not surprised that you are a secretary of the
ministry. Great.

from:  Narasimha Rao
Posted on: Jan 29, 2013 at 07:39 IST

I am an Indian medical graduate currently practising medicine in the U.K. and cannot agree
more with you. Private hospitals have mushroomed in every nook and cranny in India and
these have zero quality control.Allopathic, Homeopathic ,Ayurvedic doctors and unqualified
quacks all practise under the banner of "doctor" and no one ensures that these people have
the right qualifications or that they keep up to date with current medical
guidelines.Consequently , even people who pay get substandard care and with the public
health system in complete shambles, as with all other institutions in India, it is the poor who
suffer.I hate to say this, but I am very glad I got away from the unethical, greedy and morally
bankrupt world of Indian medicine.

from:  Dr Neginhal
Posted on: Jan 29, 2013 at 04:38 IST

Being a NRI doctor, I am scared whenever anyone from my family in India goes to a hospital. The doctors there in India are among the best but not the providers. Practicing medicine has become a business and profit is the main aim, not best treatment. For example, >95% of bypass operations on the heart are done on beating heart mainly to save the cost of using the heart lung machine( but the patient is charged for the same). Nowhere in the world does this happen where people listen to their conciousness and do the best for the patient. Even petty things like treatment for asthma, diabetes do not have any guidelines and whims and fancies of individual doctors take priority over evidence based medicine. Inida needs a revolution in treatment of patients.

from:  Kamaraj Radhakrishnan
Posted on: Jan 29, 2013 at 03:59 IST

Governmental Control is the only thing that can bring efficiency to
any sector.This religious zeal should be eulogised considering the
wonders it has created in the field of Human Resource Development in
this country after successful interventions in the functioning of
The sweet nectar of The Govt farsightedness in it's approach towards
school level education will be for all and sundry to taste in the near
And the author should know well,the Bachelor of Rural
Medicine(emphasis on rural) and The Clinical Establishment Act are
just around the corner.
The most important part of the above article- " tightening and
insulating the enforcement systems at all levels...." shows how
"public good" and the bogey of "laissez faire" is raised to pave the
way for bureaucratic control over the profession of the "hapless
doctor in the PHC.
Private control is ok in India as long as it's in the hands of
Private,unregulated megalomaniacs in the Govt.
Long live License Raj!!

from:  Kunal
Posted on: Jan 29, 2013 at 03:24 IST
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