Enhancing access to health care is becoming a central component of India’s welfare policy. Central and State governments have now developed a variety of schemes such as better primary health care, health insurance, free or subsidised drugs and mass screening for chronic diseases. However, out-of-pocket health expenditures still remain high. Reasons for this are a widespread preference for ‘quality’ health care provided by the private sector, and the perception that they treat patients with respect in a ‘respectable’ manner. In government settings, either one — or sometimes both — is/are missing. Health care is usually seen as a market failure, and in India, it has, first and foremost, been a government failure. The government has neither provided sufficient care nor the resources to meet the public requirement for health care.
Our life expectancy in 2016 (59 years) was still one year behind what China’s was in 1990. India continues to be a world leader in all levels of premature mortality, with one of the highest levels of out-of-pocket health expenditure and performs poorly on a variety of other health indices.
To counter their failures and be seen as siding with the public, the Central and certain State governments have been expanding the scope of private health-care pricing. It is not as if the private sector is a knight in shining armour. Some argue that the private health sector has connived to keep the public health sector in bad shape so that its own market flourishes. However, given the scale of the government’s failure in health care, either from the perspective of provisioning or financing it, this argument can hardly be true.
Situating the private sector
The private sector emerged and flourished in the first place due to government failure in provisioning health care. As the government has been unable to tackle the issue of financing care, it has tried to shift the blame for high out-of-pocket health expenditures on the private sector. It was able to do so because various segments of the private health sector (doctors, hospitals, pharma and medical equipment companies and diagnostic centres) have colluded in propagating unethical practices to take undue advantage of people in some of their most personal and difficult times, providing an opportunity to the political class to politicise the issue and emerge as guardians in their own right.
However, politicisation is not the solution and will only worsen the already precarious state of health care. Whatever be the evils of the private sector, it has enhanced access to quality care, and by virtue of that, contributed to enhanced productivity and quality of life. Using the instrument of pricing alone to solve the issue of access to quality health care will not work. Government allocation to health care has to increase substantially along with public provisioning of care where the private sector is, and will continue to be, missing. The private sector, on its part, needs to operate rationally and ethically, vis-à-vis pricing as well as in the provisioning of care in neglected areas.
Where the onus lies
The need for regulation of health-care pricing will remain even if the government enhances its allocations. Given the level of demand, no amount of allocation will be sufficient for health care and resources will always be limited. One sustainable way out is for the private sector to self-introspect vis-à-vis pricing and discuss the determinants and challenges of pricing with the government. The government should have a visionary approach. For example, it could revise tariffs and taxes levied on various arms of the private health sector provided it is willing to engage in rational and ethical pricing at its own end. At the end of the day, both sides should think about how best they can improve the health of the citizens.
Dr. Ali Mehdi is Senior Fellow and Project Leader, Health Policy Initiative, Indian Council for Research on International Economic Relations (ICRIER). The views expressed are personal
