For private plunder

Notwithstanding the goal of universal health care in the 12th Plan document, the government has reduced its role to merely providing a small part of health care, namely preventive aspects like immunisation, and handing over practically all clinical part of health care to the private sector.

Published : Sep 30, 2015 12:30 IST

Tamil Nadu Food Minister  R. Kamraj inaugurating the extended medical insurance scheme in Tiruvarur on January 18, 2012. A choice of “accredited” institutions, which in principle can be public or private, is provided in all such insurance schemes launched by States where the patient can seek treatment. In practice, the majority of the accredited institutions are in the private sector.

Tamil Nadu Food Minister R. Kamraj inaugurating the extended medical insurance scheme in Tiruvarur on January 18, 2012. A choice of “accredited” institutions, which in principle can be public or private, is provided in all such insurance schemes launched by States where the patient can seek treatment. In practice, the majority of the accredited institutions are in the private sector.

THE callous attitude of some private hospitals in Delhi with regard to treating incoming dengue patients, which resulted in the death of two young boys, has brought home the urgent need to regulate the private sector, which at present operates in a completely unregulated environment to achieve its primary objective of making profits in the name of providing health care.

Seven-year-old Avinash Raut died on September 8 because he could not receive treatment in time; he was apparently denied admission the previous day by five well-known private hospitals of South Delhi before he was admitted to the sixth. Shocked by his death, his parents committed suicide. A week later, similar apathy led to the death of six-year-old Aman Sharma.

The question that would naturally arise is why the family did not seek the service of any public health centre, including a public-funded hospital. The simple answer is that an average citizen no longer has any expectation from the public health scheme. This is because of apathy and inadequate funding over the years thanks to the neoliberal policies followed by successive governments for 25 years, which seeks to hand over a major part of health care to the private sector. In other words, the state is slowly abdicating its responsibility of providing health care to its people.

Today, nearly 80 per cent of health care in the country is met by the private sector, making India’s health care system the most privatised in the world (Table 1). This has resulted in a huge out-of-pocket expenditure (OOPE) for the average citizen. According to estimates, in India, over 70 per cent of health care costs are paid for directly by patients. Expenditure towards health care is in excess of 10 per cent of the family expenditure, which has caused an estimated four crore people to be pushed below the poverty line every year. In the past two and a half decades, the cost of health care in the public sector has shot up by over 300 per cent.

More recently, this has taken an insidious form by way of adoption schemes and policies such as Central and State-level health insurance schemes and other public-private (PPP) partnership programmes, which actually use up public resources to benefit the private sector. This move towards the increased involvement of the private sector as part of the neoliberal agenda is premised on the specious logic that the public sector is fundamentally inefficient. The deliberate and slow undermining of the public health care system has only helped strengthen this belief in the public mind.

The premise is ideological and ignores the fact that the most successful health systems in the world, such as in Cuba, Thailand, Costa Rica, Sri Lanka and Brazil, as well as in a number of developed countries, like the National Health Service (NHS) in the United Kingdom, are all based on health care systems that are wholly public-funded. Public funding on health in India today stands slightly over 1 per cent of the gross domestic product (GDP), which is a far cry from the World Health Organisation’s (WHO) recommended level of 5 per cent (Table 2). India’s public expenditure on health is only 29 per cent of the total health expenditure. From among 196 countries, only 17 countries are below India in this respect.

Insufficient health infrastructure Dengue is rarely fatal, and only in a small percentage of the infected does it progress into its more severe form. Avinash and Aman would not have died if they only had access to a public primary health centre (PHC) or a secondary level community health centre (CHC) in the vicinity of where they lived (equivalently, a primary urban health centre (PUHC) or a dispensary in the urban context of Delhi). But, clearly, there was none, and even when the disease was in its initial stage, they were forced to approach a tertiary care private hospital. Given the well-known problems of overcrowding, long queues and inadequate staff in the emergency ward of a tertiary-level public hospital, even in the capital city of Delhi, the families would have preferred to go to a private hospital.

If this is the nature of access to health care in a non-epidemic situation—the current dengue situation in Delhi is just an outbreak—and that too in a low-fatality-rate disease, one can imagine the situation during an outbreak or epidemic of a disease with a higher fatality rate, say a diarrhoeal infection in children, which is a common occurrence in many parts of the country in a rural or semi-urban setting. With no public health service readily accessible, and where the private sector does not see profit to set up health care units, the first contact is with a registered medical practitioner (RMP), who is usually not qualified and in most cases is not much better than a quack. Without access to proper medical care, people would just die and they would perhaps not even figure in the statistics.

Indeed, insufficient health infrastructure is one part of the malaise that afflicts the Indian public health system, in both rural and urban settings. According to National Rural Health Mission (NRHM) statistics, calculations on the basis of prescribed norms and Census 2011 population data show that as of March 2014, there is a shortfall of 20 per cent in sub-centres (SCs), 23 per cent in PHCs, and 32 per cent in CHCs for rural health care. As regards district hospitals (DHs), there are just 1.14 hospitals per district.

This lack of SCs/PHCs/CHCs/DHs has resulted in driving people to tertiary-level centres in nearby towns even for minor ailments, which results in the overcrowding of public hospitals. (A sub-centre consists of one auxiliary nurse midwife and multipurpose health worker and serves a population of 5,000 in the plains and 3,000 in hilly and tribal areas. The PHC, staffed by a medical officer and paramedical staff, serves a population of 30,000 in the plains and 20,000 in hilly, tribal and backward areas. Each PHC has to supervise six sub-centres.)

With hospitals not being able to cope with the pressure, the situation has led to a virtual breakdown of the system, both in rural and urban settings. (The NRHM, along with the National Urban Health Mission (NUHM), is now subsumed under the National Health Mission (NHM), which was launched in 2013 but is yet to take any significant measures, and so similar statistics in the urban/semi-urban setting are not available.) It is the vacuum created by the poorly performing or practically non-existent public health system even in the urban setting that the private sector has tried to fill by building expensive tertiary care hospitals in cities like New Delhi.

Corporate hospital chains

Even within the private sector, provision of health care in the urban context is increasingly dominated by big corporate houses operating hospital chains across the country. Small private clinics and nursing homes are bought up by these corporates and turned into their franchisees so that any patient who first approaches these small clinics ultimately ends up being referred to the big tertiary care/specialty hospital with the attendant hospitalisation, unnecessary tests, diagnostics and other major treatment expenses, which in most cases would not have been required in the first place. That is, a potential outpatient ends up as an inpatient. The reach of the private sector has grown enormously over the years. Today, it attracts about 60 per cent of outpatients and 80 per cent of inpatients, greatly impacting the urban poor in particular owing to the increase in their OOPE.

Notwithstanding the unbridled expansion of the private sector (aided by active government support in terms of land at concessional rates, tax breaks, and so on) and the inefficiency and inadequate access of the public sector to the majority of the population, an estimated 40-50 per cent still relies on the public system. But instead of addressing constraints and bottlenecks of the system and expanding and strengthening the public system with the infusion of sufficient funds and human resource, successive governments have only sought to give the private sector an ever-increasing role in providing health care.

The process began in the 1990s when, in the urban context, for example, PUHCs/dispensaries began to refer outpatients to an empanelled list of private hospitals, with the attendant policy of reimbursement of expenses incurred but with no checks in terms of standardised protocols for treatment and costs of diagnostic tests and procedures. On the other hand, with inadequate testing/diagnostic facilities as well as frequent stock-outs of medicines to cater to the large influx of patients, many public hospitals began to charge for the services provided or, equivalently, ask patients to access tests and medicines in the commercial market.

While any analysis of the amount of public money that would have drained out from the exchequer in this manner is extremely difficult, it is clear that the money would have been utilised far better if it had been channelled towards the expansion and strengthening of the public health care system to serve the long-term goal of universal health care (UHC). Such indirect support has given way to the government actively supporting the private sector with public funds.

National Health Policy

The National Health Policy 2002 (NHP-2002), even as it welcomed the participation of the private sector in all aspects of public health care, stated: “Global experience has shown that the quality of public health services, as reflected in the attainment of improved public health indices, is closely linked to the quantum and quality of investment through public funding in the primary health sector.... Broadly speaking, NHP-2002 focusses on the need for enhanced funding and an organisational restructuring of the national public health initiatives in order to facilitate more equitable access to the health facilities.”

But, as Amit Sengupta, Convener of the Jan Swasthya Abhiyan (JSA), or people’s health movement, pointed out recently in a commentary in Indian Journal of Medical Ethics : “In the 14 years since this policy was announced, there has neither been a significant increase in public funding, nor an adequate population-wide expansion in the coverage and quality of primary health care services or enhanced equity in access to health care services.” Clearly, the policy objective was never meant to be achieved, and this became quite evident in the road map that the 12th Plan document laid out, which now is being given a concrete shape in the Draft National Health Policy of 2015 (see article on page 21).

The road map of the Plan document openly advocated engagement with the private sector in different segments of public health care ( Frontline , January 9, 2013). The Plan document rejected the recommendations of the High Level Expert Groups (HLEGs) that had been constituted by it as well as the Health Ministry, which were basically to strengthen the public health system, particularly in terms of enhanced public expenditure on health. For one, the Plan document recommended a lower target of investment than even the 11th Plan document. As against 2 per cent of the GDP of the latter, and the HLEGs’ recommendation of 2.5 per cent, the document recommended a target of 1.58 per cent. Further, it envisaged a restructuring of the prevailing health system, which, in its own words, “…is a mixture of service provision and insurance”. The restructuring envisaged is “a system of health care delivered by a managed network", which is a clear signal to move away from publicly funded health care to a system in which private players would provide the health services of which the government will be a ‘manager’.

This “managerial” role of the government the document proposes has two distinct components: one, “preventive interventions which the government would be both funding and universally providing” and, two, “clinical service at different levels defined in an Essential Health Package, which the government would finance but not necessarily directly provide”. Notwithstanding the goal of UHC stated in the Plan document, this essentially amounts to the government reducing its role to merely providing a small part of health care, namely preventive aspects like immunisation, and handing over practically all clinical part of health care to the private sector.

As Amit Sengupta points out, this amounts to “the government playing the role of a mere purchaser of health care with public money, which will only go to strengthen and bolster an already resurgent corporate sector. This is a diabolical ploy to hand over the profit-making clinical services to corporate hospital chains.”

The system that the Plan document envisages is to empanel public facilities as well as private and NGO networks “to give a choice to the families”. “Public facilities,” adds the document, “will have to be strengthened, networked and their managers provided sufficient autonomy to purchase goods and services to fill gaps as per need.”

“This,” points out Sengupta, “is asking the public health system to compete with the private sector. In other words, this is public only in name but incorporating larger and larger components outsourced to the private sector.”

Insurance schemes

The currently functioning scheme(s) of health insurance, like the Rashtriya Swasthya Bima Yojana (RSBY), a Centrally sponsored nationwide scheme that the United Progressive Alliance (UPA) government launched, essentially follows this formulation and is illustrative and indicative of the shape of things to come in the near future. In fact, despite expert groups’ recommendation against the extant health insurance schemes, the Plan document envisages an expansion of the RSBY scheme. Harsh Vardhan, when he was Health Minister, is reported to have said that his government “would work to provide health insurance coverage for all through a national insurance policy for health”.

The RSBY, launched at the national level in 2009, is modelled on the insurance scheme launched by the Andhra Pradesh government in 2007, called Rajiv Arogyasri. Many similar State-level schemes have subsequently been launched in States like Tamil Nadu. A choice of “accredited” institutions (like the earlier empanelled hospitals), which in principle can be public or private, is provided in all these schemes for the patient to seek treatment. However, in practice, the majority of the accredited institutions are in the private sector. While the Central scheme has a ceiling of insurance cover of Rs.30,000, State-level schemes offer a much larger cover, Rs.1.5 lakh under Arogyasri, for instance.

These schemes operate on the logic of split between financing and provisioning, points out Sengupta. Here financing is done through public resources, essentially through taxpayers’ money, but the treatment can be provided by public or private hospitals, thus opening the avenue for private sector participation. The way it is structured ensures that there is practically only private sector participation. Also, insurance is only against a set of ailments that require hospitalisation and does not provide cover for all ailments. “It is not a promise to provide comprehensive health care as had been touted, but to provide care for only a package of ailments,” points out Sengupta.

An analysis of the Arogyasri scheme in Economic & Political Weekly in October 2012, by N. Purendra Prasad and associates, showed that 80 per cent of the 491 hospitals empanelled under the scheme were in the private sector. “Although the Arogyasri scheme is meant for poor villagers, there is not even one private hospital in the rural areas, while the distribution of government hospitals in rural and urban areas is almost even,” it says.

It has also come to light that private service providers under the scheme had indulged in many unethical medical practices, most notably the large number of hysterectomies performed when most of them were unwarranted. So unnecessary diagnostic tests, investigations, medication and surgery have become part of the RSBY and other insurance schemes, which have helped the private players to heap huge profits. In comparison, there was hardly any increase in the revenues of public institutions under the scheme. On the contrary, in Chhattisgarh, for example, the previously available maintenance fund was withdrawn against this imagined potential increase in public hospital revenues.

The Arogyasri scheme also distorted the health budget of the State, Sengupta pointed out in an article in June 2014. The insurance cover accounts for nearly 25 per cent of the State health budget while providing cover only to about 2 per cent of the population because the scheme does not cover common but debilitating illnesses, which affect most of the population periodically. “There is thus incontrovertible evidence that the public-funded insurance model has failed to provide equitable access to health care and is resulting in further weakening of public service…. Such schemes are a way to siphon off tax funds into the coffers of the private sector insurance companies that manage these schemes and private hospital chains that provide care,” he wrote. It is clear from the above why the kind of private participation that the Plan document recommended, and which the government is keen to push, is bound to fail in providing any reasonable amount of health care in the long run, let alone UHC as envisaged.

Lack of human resources

Another important component of public health care is skilled human resources required to run and support the public health system. There is a serious shortfall of human resource, especially in rural and remote areas. Under the NRHM there is a gap of about 60-80 per cent in qualified professionals. This is the result of a government cap on investing in the setting up of medical colleges and nursing institutions in the public sector.

The country requires a large number of institutions closer to the health care setting where there are serious shortfalls. At present, there is a serious mismatch of skills and situation. And, as Sengupta points out, in most situations that characterise the country, with poor literacy and health awareness, social skill is very important to deal with patients. Unfortunately, the prevalent system does not really equip medical students with that. This can only happen if medical institutions are situated where they are able to draw upon from the local populations.

While the government may consider establishing seven All India Institute of Medical Sciences (AIIMS)-like institutions in the country, this will have only a negligible impact on the huge shortfall of doctors that the country faces. Moreover, as experience suggests, with greater emphasis on specialised areas, graduates from AIIMS-like institutions tend to be highly specialised, and with limited professional opportunities available within the country—including in the private sector—for such specialisation, a large number of them end up migrating abroad. The more specialised one is, the less the chance one has of getting satisfying employment in the country.

Medical education

Now medical education is another big component of the health care system where the private sector has made huge inroads. Increasingly, private players are being given concessions to set up medical colleges but with little regulation or supervision on the quality of education imparted. These colleges produce doctors of questionable quality on the one hand and, they have, on the other, little interest in serving in areas and fields where human resource is in short supply. This only aggravates the already skewed availability of skills appropriate to a given setting in the provision of health care. None of the policies for human resource development in the health sector is trying to address this basic shortcoming.

India has about one “qualified” doctor for a population of about 1,700-1,800. This might seem low, but Thailand too has roughly the same figure but has a fairly robust health care system. But what Thailand has is a higher number of “health workers” for a given population. In this respect, a poor country like Rwanda has the highest number of health workers for a given population and as a result a good public health system.

What is required in India, too, is an enabling mechanism or system that will ensure adequate number of different kinds of health workers for different situations. But it is proving to be difficult to put such a system in place because of an environment that has been allowed to grow in which qualifying doctors only seek high-paying specialised employment opportunities, a perception to which the burgeoning private medical education centres has contributed greatly.

A feeble attempt was made by the Health Ministry to introduce a new Bachelor of Rural Health Care course, aimed solely to serve at the SCs/PHCs/CHCs, by producing graduates with appropriate skills for that level from local populations. This was strongly resisted by lobby arms of the medical community such as the Indian Medical Association and even the Medical Council of India to an extent that they speciously argued that this would dilute the qualifications required for a qualified doctor and would result in poor health care to the rural poor. With the fall of the UPA government, the proposal too was put in cold storage following repeated attempts to thwart it through litigation.

What the author Hannah Fox said in an article in The Guardian on April 8 is worth quoting here: “India is a stark example of how commodifying health care can lead to corruption, erode doctors’ integrity and damage relationships with patients. Money ultimately distorts decision-making regardless of the culture or country. In the U.K., there is a system that supports ethical decision-making, regulates practice and ensures patients’ best interests are at the heart of NHS care, and we must fight to preserve this. Market forces, competitive health care and the selling of lucrative sections of NHS care to the private sector are solutions we embrace at our peril.”

But the Indian government’s move is increasingly in the opposite direction, which must be resisted through public health movements and political pressure.

Sign in to Unlock member-only benefits!
  • Bookmark stories to read later.
  • Comment on stories to start conversations.
  • Subscribe to our newsletters.
  • Get notified about discounts and offers to our products.
Sign in


Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide to our community guidelines for posting your comment