Public health

Blueprint for privatisation

Print edition : October 13, 2017

The outpatients block of the Neyyattinkara District Hospital in Kerala. The PPP scheme is proposed to be rolled out in district hospitals. Photo: S. MAHINSHA

Narendra Gupta, convener of the Jan Swasthya Abhiyan. Photo: Rohit Jain Paras

Patients waiting for consultation at a hospital in Mysuru. Sharing infrastructure with private players will put additional pressure on an already-strained system. Photo: M.A. Sriram

NITI Aayog pushes for a PPP model to treat non-communicable diseases in tier 2 and tier 3 cities, allowing private players to provide service at a cost using already existing public infrastructure and other facilities.

FOR the first time in independent India, it has been openly admitted in a national health policy document that critical gaps in healthcare would be filled by the private sector. The draft three-year action agenda (2017-18 to 2019-20) of the National Institution for Transforming India, or NITI Aayog, talks of making a quantum jump in health outcomes in the next 15 years and about public-private partnerships (PPPs) as “growth enablers”. A concerted push to make PPPs an integral part of the health delivery system seems to be under way, the ostensible reason being to strengthen health systems without a corresponding increase in health budgets.

A project proposal and a draft model concessionaire agreement (MCA), drawn up by NITI Aayog and the Ministry of Health and Family Welfare (MoHFW) in June this year advocates adopting the PPP model in healthcare and health delivery services. The framework for such a partnership is outlined in a project which goes out of its way to accommodate and facilitate private players in the healthcare system in the name of augmenting select healthcare services for non-communicable diseases (NCDs) in tier 2 and tier 3 cities, which, as is commonly known, already have better infrastructure compared with smaller mofussil towns and cities. The concessionaire agreement is to be drawn between State governments and selected private partners in the form of a PPP for the treatment of NCDs.

These services are primarily aimed at preventing and treating NCDs to “augment” the government’s NCD response capacity, especially at the secondary level, to “decongest tertiary facilities at the State level and expand access to secondary and basic tertiary level services at the district level.”

Letters were sent to Chief Secretaries of States in the first week of June asking for responses to the proposed MCA document that attempts to put in place a “robust, scalable and a sustainable PPP model in the health sector”. Interestingly, the model and the agreement aim at “prevention and treatment services for non-communicable diseases—(cardiac sciences, oncology and pulmonary sciences)”. This fits in with the growing global emphasis on NCDs, despite the fact that communicable diseases such as multidrug- resistant tuberculosis (MDR-TB), vector-borne diseases and hunger-induced morbidity still constitute a major challenge to the morbidity and mortality burden in developing countries such as India. The objective to create infrastructure and develop capacity in the assigned district hospital to provide basic tertiary care and advanced secondary care related to the three NCDs does not, therefore, indicate a seriousness regarding the health challenges facing the country, more so in the context of more than a hundred infant deaths in two district government hospitals (BRD Medical College, Gorakhpur, and District Hospital, Farookhabad) that have underscored the need for greater government expenditure on health as a whole.

The reasons cited for this PPP push in the area of NCDs include goal number 3 of the United Nations’ sustainable development goals which aims at a one-third reduction in premature mortality from NCDs through prevention and treatment. Other reasons include “large infrastructure gaps”, especially in rural areas, significant gaps in human resources, especially at the level of specialists, and constrained fiscal space for States to provide increased allocations for NCDs. Quoting the National Sample Survey Office’s (NSSO) 71st Round (January-June 2014): Key Indicators of Social Consumption in India, which found that 72 per cent of the rural populace and 79 per cent of the urban populace sought healthcare in the private sector owing to shortage of infrastructure and human resources, the draft note makes a strong argument for augmenting infrastructure and addressing the gap in the “operational capacity” and in human resource. The implementing authority (the State government) would not only hand over built-up space or vacant land to the project, but allocate “designated constructed area for establishment of allied commercial services as cafeteria, bookshops, ATM, that add value for visitors at the hospital”.

NITI Aayog had engaged the World Bank as a technical partner and apparently held wide consultations with the States, industry and other stakeholders in the run-up to the draft MCA. In order to give a direction to enhanced private sector engagement through PPPs to address the “growing burden of NCDs”, NITI Aayog’s project aims to “improve access to quality screening, diagnostic and treatment services related to cardiology, oncology and pulmonology in district hospitals through public-private partnerships”; decongest tertiary facilities at the State level; reduce out-of-pocket expenditures on diagnosis, treatment and care; and create infrastructure and augment capacity at district hospitals to provide tertiary care and advanced secondary care in the three NCD specialities in the medium and long term. Under the scheme, the services can be accessed by everyone; the patients referred by the State government will receive cashless NCD services and the costs will be reimbursed to the private parties at agreed rates. Another category of “patients”, designated as “self-paying” patients, will pay at agreed rates. The concept of “free treatment” at government hospitals does not appear to be part of the scheme though the draft aims at reducing out-of-pocket expenditure.

Augmenting private players at public cost

The district hospitals to be short-listed for the project in tier 2 and tier 3 cities are expected to have not less than 250 functional beds. As part of “augmenting the capacity of the district hospitals”, hospital authorities are expected to allocate 30,000 square feet for a 50-bed facility and 60,000 square feet for a 100-bed facility as the minimum space for setting up the PPP facility. The project framework further suggests that for a 50-bed facility, a minimum of 75 per cent of the space requirement should be met by the built-up structure of the hospital and for the remaining, vacant land within the premises of the hospital could be allocated by the State government. State governments, the framework suggests, have the freedom to change the minimum requirement of built-up space to be allocated within the district hospital depending on the situation and space available. But in the same vein, the NITI Aayog proposal says that “lesser the allocated space within the existing structure of the district hospital, higher will be the construction cost and time required to construct and operationalise the facility,” which means that district hospitals will have to allocate more space, all in the name of augmentation. This means that space that could have been used by the district hospital for providing healthcare, presumably free healthcare, for the treatment of diseases that were the priority in that particular area, would now be siphoned off to set up a PPP facility.

The processes by which these formulations have been arrived at are equally revealing. The document states that the minimum services to be offered at the district hospital was “determined through a series of intensive consultations over a period of three months with the working groups constituted by the NITI Aayog (including the participation of key private health providers, MoHFW, a few States and an expert group of healthcare providers), four regional workshops organised by the CII [Confederation of Indian Industry] and inputs from representatives of the MoHFW, select State governments and district hospital representatives”. The choice of minimum services to be provided was based on feasibility factors that included availability of specialists, infrastructure, patient load, equipment, etc. Clearly, only a few States and a few stakeholders were involved in the process.

PPP services

Clinical services and clinical support services will be provided around the three specialities of oncology, cardiology and pulmonology. State governments are expected to “endeavour to establish linkages with population based screening programmes under the NPCDCS [National Programme for Prevention and Control of Cancer, Diabetes, Cardiovascular Diseases and Stroke] at the level of sub centres/health and wellness centres, PHCs [primary health centres] and CHCs [community health centres]”. Perhaps to ensure the success and viability of the PPP project by a constant flow of patients, the NITI Aayog document says that “State governments will ensure appropriate communication to all PHCs and all the NCD clinics functional at the CHCs under the NPCDCS for referring patients to specialised services under the project”. In what seems to be a further push for such arrangements, State governments have to “establish linkages with existing national and State initiatives such as the emergency transportation/ambulance services for patient referrals and health protection schemes such as RSBY [Rashtriya Swasthya Bima Yojana]/National Health Protection Schemes/State level insurance schemes to leverage upon the facilities and resources to arrive at greater synergies”.

District hospitals will also “share” ambulance, blood bank, physiotherapy, biomedical waste disposal, mortuary, parking, inpatient payment counter, hospital security and sanctioned electric load services with the NCD services under the project, which means that the already overburdened services in district hospitals will be linked with those offered under the PPP project.

Further, the project envisages that the “private partner will in co-ordination with the Medical Superintendent of the District Hospital develop an inventory of services that would be shared with the district hospital” and “will develop a Standard Operating Procedure [SOP] in consultation with the district hospital authorities documenting the process of accessing the support services. The MS will approve this SOP and it will be binding on both the private partner and the district hospital authorities.” The operative word here, “will”, negates any element of choice that a hospital administration might have in the best interests of the institution run on public money. Revenues will be generated by the State government and the paying patients.

The proposal also recommends a concession period of 30 years for the project to become financially viable and attractive enough for private partners to invest in. Under the section detailing the “financial structure” of the PPP, the NITI Aayog document clearly states that there would be “no reserved beds or no quota of beds for free services”. The State government will reimburse the private partner for the patients referred to and approved by the designated authority in the district hospital. The proposal also lays down the volume share of diseases to be treated at the inpatient departments thus: 75 per cent cardiac cases, 10 per cent oncology and 15 per cent pulmonology cases. It says that these “assumptions might change from State to State or district to district based on epidemiological profile and existing patient load”, though the recommended percentages, it says, are based on national data.

Apart from the conceptual tilt towards NCDs in the project, there is a more specific bent towards a particular kind of NCD that are lifestyle-related and are likely to afflict the upper middle classes. In a paper titled “Trends in Coronary Heart Disease Epidemiology in India” published in Annals of Global Health (Volume 82, Issue 2, March-April 2016), the authors, Rajeev Gupta, Indu Mohan and Jagat Narula, write that the geographic distribution of coronary vascular disease mortality in India indicated that in less-developed regions, in the eastern and north-eastern States with low human development indices, there was a lower proportionate mortality compared with better-developed States in the southern and western regions.

The project proposal conveys the impression that all State governments will be on board with such a proposal, which clearly involves the overburdening of existing services for emergency transportation and for patient referrals. It is revealing that sections in the document explaining the run-up to the project framework indicate that not all State governments, or all stakeholders such as public health experts and representatives, had been consulted before drafting the concessionaire, the guidelines and the project proposal. The CII, on the other hand, seems to have been deeply involved in the consultations.

Challenged in Rajasthan

If the NITI Aayog proposal was about carving out spaces in district hospitals for private healthcare operators in the garb of addressing NCDs, in Rajasthan, entire PHCs face the danger of being handed over to private providers. The experience of PPP in healthcare has not been encouraging as two petitions filed in the Rajasthan High Court with similar content, one by the Jan Swasthya Abhiyan (JSA) and the other by Narendra Gupta, convener of JSA (Rajasthan) show. The core concern is that PPP is a privatisation scheme aimed at destroying the public healthcare system.

The issue concerns some 213 PHCs that were handed over to private parties under the “Run a PHC scheme” mode. The Rajasthan government, through short-term e-tender notices issued in December 2015, invited bidders (the bidder could receive up to Rs.30 lakh per annum to run a PHC) for this scheme. The JSA contends that PHC-related issues were the responsibility of the government. The State chapter of the organisation had successfully campaigned for free medicines and free check-ups, resulting in the formation of two schemes in the State. The petitions also contend that the principle of handing over PHCs to private operators in PPP mode was against the National Health Policy 2002. (The NHP 2017 endorsed this mode wholeheartedly.) The JSA petition also points out that the Central government had, through the Health Secretary, written a letter in August 2015 to express concern over the manner in which the Request for Proposal (RFP) was issued. In July 2015, the BJP government led by Vasundhara Raje had floated a similar tender but it did not take off. The Health Secretary had cautioned that similar schemes in other States had not worked out and suggested that the government take up a few PHCs as a pilot project. The National Health System Resource Centre also examined the RFP and recommended that the State government experiment with a few PHCs.

The petitions point out that preventive and health-promotion activities, an important component of primary health services, will not be carried out competently by private providers.

Another concern was that the referral system, from the sub-centre level to the medical college level, would be broken if PHCs were privatised, as private operators would refer patients to private hospitals. The tender did not make it mandatory for private operators to refer patients only to public hospitals. Moreover, PHCs in the 17 districts selected for PPP mode were not in desert or tribal areas with a significant tribal population. The “critical gaps” in health delivery services, therefore, were not being filled. “The PHCs have been selected so that they can serve as feeder centres for the private medical college and for the purpose of referring the patients to private medical colleges and hospitals,” says the JSA petition. The majority of the selected PHCs were on State or national highways.

The matter is in court, and the State government is supposed to give a status report in September providing information regarding the working of the PHCs which have been given to private players on PPP mode.

NITI Aayog speaks about a course correction and a critical analysis of the factors that undermined the implementation of PPP projects in the past. But the radical course correction under way in healthcare is not in the public interest. While the government waxes eloquent about making generic medicines available and healthcare affordable, the direct push to involve the private sector in healthcare in an already hugely privatised healthcare system ignores the interests of the public.

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