Public Health

Driven to distress

Print edition : March 20, 2015

In the general ward at the Ernakulam General Hospital on November 25, 2013. A committee constituted by the Kerala State Planning Board says that the health care infrastructure in the State has come under severe stress. Photo: H. Vibhu

At a community health centre in Poonthura, a suburb of Thiruvananthapuram. Photo: S. Gopakumar

Kerala is facing a situation where health care costs are leading more and more people, not just low-income families, to financial distress.

KERALA is once again drawing attention to itself, this time for a persistent trend of a large number of households being pushed into financial ruin because of the expenses incurred for medical care.

Several studies have now found evidence for the many facets of this worrying development in a State that was known until the mid-1980s for its health care model that offered “good health at low cost” and for its health care indices that were comparable to those in more developed countries. However, today, the highest rate of health-related impoverishment in India is being noticed in Kerala, according to researchers, who also warn that all over the country high private health care spending and high out-of-pocket spending are placing a substantial financial burden on urban and rural households.

A committee of health care experts constituted by the Kerala State Planning Board has also cautioned that the health care infrastructure in Kerala and the finances of the common man have come under severe stress, with the State recording the highest per capita public and private health expenditure among major States. The highest out-of-pocket expenditures on health in the country have also been noticed in Kerala, said a concept note prepared in November 2014 by the committee, which was constituted as part of the implementation of the 12th Five Year Plan proposals on the health sector.

The committee said that the high cost of treatment and out-of-pocket expenditure led to a large section of people falling below the poverty line (BPL). It said, a study done by Peter Berman and Rajeev Ahuja (“The Impoverishing Effect of Health Care Payments in India: New Evidence and Methodology”, published in India Health Beat by the Public Health Foundation of India and the World Bank unit in New Delhi in December 2009) using National Sample Survey Office (NSSO) 2004 survey data estimated that around 12 per cent of rural households and 8 per cent of urban households in Kerala were pushed below the poverty line in that year because of health care expenditure.

“A Kerala Sastra Sahitya Parishad [KSSP, the People’s Science Movement] study in 1987 showed that the average health expenditure per person per annum in Kerala then was Rs.89. It increased to Rs.549 in 1997 and Rs.1,837 in 2004. The results of the latest KSSP survey in 2012 showed that the average per capita out-of-pocket health expenditure in the State was Rs.5,269.05,” said Dr B. Ekbal, public health activist, former president of the KSSP, and national convener of the Jan Swasthya Abhiyan (People’s Health Movement India).

“There is no doubt that the highest annual out-of-pocket health expenditure is in Kerala. The data obtained from the latest [2014] NSSO survey [conducted every 10 years] are being analysed and the results will be known in a few months. That will show if the RSBY [Rashtriya Swasthya Bima Yojna, the Government of India’s national health insurance programme for BPL households] and other government-financed risk protection schemes introduced in the past decade have had any impact,” said Arun B. Nair, a consultant (health economics and financing) with the National Health Systems Resource Centre.

Health care costs are indeed one of the important causes of impoverishment in all States in India. Berman and Ahuja’s study found, among other things, that, compared with other developing countries, private health care spending in India was much higher than government spending; the share of out-of-pocket health spending within private health spending was much higher; and outpatient care, which involved relatively small but more frequent payments, was more impoverishing than inpatient care.

According to the Draft National Health Policy 2015 document prepared by the Ministry of Health and Family Welfare last December, over 63 million people are pushed into poverty every year in India because of expenditure on health care. Nearly 18 per cent of all households in 2011-12 faced catastrophic expenditures because of health costs compared with 15 per cent in 2004-05—a reflection surely of the failure of public investment in health to cover the entire spectrum of people’s health care needs, according to the document.

The Berman and Ahuja study also found that there were significant variations between major States, in comparison with the national average, regarding health-related impoverishment, with Kerala showing the highest effect, and Madhya Pradesh (a State “with high levels of base poverty, low education, and lower access to health care overall”) showing a relatively low rate of health-related impoverishment.

“The cost of health care is very high in Kerala because, one, nearly 87 per cent of the people in the State use modern medical facilities; two, there has been an increase in the number of people suffering from non-communicable and chronic diseases that require continuous care and affordable medicines; three, the State had witnessed large-scale and unregulated privatisation of health care facilities in the past decades and even the poor are now forced to depend on them; and four, the costs of medicines have gone up,” Dr Ekbal told Frontline.

Burden of NCDs

Kerala has been witnessing a “high morbidity and low mortality” trend, which is increasingly influenced by the replacement of infectious diseases and nutrition-related and maternal and child health-related health issues by non-communicable and chronic diseases, including cardiovascular diseases, diabetes, cancer and hypertension.

While the growing burden from non-communicable diseases (NCDs) is a reality all over India, the demographic transition in Kerala has meant a dramatic increase in its population of the aged, a higher burden of NCDs, and increasing health-seeking behaviour by its educated population, a trend marked by a growing preference for new and costly technology.

Kerala, where the foundation for a modern medical care system accessible to all was already in existence at the time of its formation in 1956, greatly expanded its government health facilities from 1961 to 1986. But what followed thereafter until the early 1990s was a period of intense fiscal crisis for successive State governments, when, in order to meet increasing expenditure on salary, they began to cut back spending on supplies, including drugs and other essentials, to the public hospitals. In a historical analysis of the development of health care facilities in Kerala, published in the journal Health Policy and Planning (OUP, 2000), Dr V. Ramankutty, Professor at the Achutha Menon Centre for Health Science Studies, Thiruvananthapuram, recorded how this neglect destroyed Kerala’s secondary health sector, especially the district and taluk government hospitals and the primary sector, consisting of primary health centres. Even as early as 1987, he said, an extensive survey of 10,000 households by the KSSP found that only 23 per cent of the households regularly used government health services for reasons that included “non-availability of drugs in the government hospitals”, “lack of proper attention” and “better behaviour in private institutions”. “There was a shift away from secondary care, with a drastic reduction in funds available for district and taluk government hospitals. Even now, despite the involvement of local bodies and the availability of funds through them, I am not sure all is well with the secondary care centres. Only some are doing well though the primary health system remains largely protected through a lot of direct central funding. Large-scale privatisation of the Kerala health sector took place during the same time,” Dr Ramankutty told Frontline.

Kerala’s Draft Health Policy notes that the public health care expenditure (as a proportion of the gross state domestic product, or GSDP) decreased by 35 per cent between 1990 and 2002, making Kerala one of the States with the highest reduction in public sector contributions and the highest increase in private funding for health care. The decline in public sector spending for health resulted in an overwhelming expansion of the private sector.

For example, the amount allocated for health care in the 2012-13 Kerala Budget was only 0.99 per cent of the GSDP. But, significantly, researchers say, private expenditure on health care was almost nine times as high and nearly two-thirds of the poor sought private sector facilities. According to the National Health Accounts (2004-05), of the total health expenditure in Kerala, the share of the private sector was the highest in the country with 90.27 per cent; the public sector accounted for only 9.7 per cent.

The prospering private super speciality hospitals with high-tech facilities are a result of the failure of the government health system to meet the demand for secondary and tertiary care and to manage the growing NCD burden. “But we have also started seeing a new trend of small and medium private hospitals being closed down in significant numbers in the State, making health care inaccessible to a large number of people or forcing them to approach bigger care facilities,” Dr Ekbal said.

According to Dr Ramankutty, many entrepreneurs are entering the field and buying or selling off established private hospitals. “The profit motive has come to the fore. Hospitals are seen as an investment option for easy profits: there is enough demand; there are no labour disputes in the sector, for example. There is inadequate public health spending by the government and health care is free only in principle in most government institutions. Moreover, facilities for treatment of NCDs are limited and are not completely free in the public sector. The private sector has made use of this opportunity, equipping itself well with the latest technology and facilities, and even the poor are forced to depend on them —at a heavy cost.”

“Government support has been a key factor in the advancement of health care in the State. An expansion or strengthening of the public health system based on today’s requirements has not taken place even as people’s aspirations about health care needs have gone up. The care that the State used to provide in the 1980s is not what is required today,” he told Frontline. Thus, the State is facing a situation where, because of the growing burden of NCDs, health care costs are leading more and more people (not just low-income families) to financial distress. Hospitalisation, even in the government sector, is leading to catastrophic health expenditure, distress financing and its aftermath; existing insurance and similar financial support schemes are inadequate and offer services only for a limited spectrum of diseases and procedures.

A dearth of micro-level studies, especially looking at how this impacts individuals, has meant a general lack of understanding about the seriousness of the evolving situation: of how NCD burden could overwhelm the State’s troubled health sector and drive vulnerable sections of Kerala society deeper into poverty and lifelong dependency.

“It is important to ensure that treatment options and medicines are accessible and affordable to all. The government has to spend more on health care and should not allow a change to a system where despite the availability of all the facilities in the public or private sector, a substantial section of people are still denied health care,” Dr Ekbal said.

Most health care researchers, therefore, argue for the reintroduction of the system of accessible and affordable primary care, like the British system of general practitioners or by strengthening the system based on community (public) health centres; more government spending on health, especially to deal with the emerging NCD burden; better regulation and quality control in the private sector; introduction of better financial risk protection measures and their better coordination to help patients deal with catastrophic health expenditure; and measures to ensure availability of medicines and bring down costs in all government facilities.

“Public health governance has taken a back seat in Kerala, and hospital administrators are not properly trained to deal with the emerging professional and financial challenges. There is a general complacency when it comes to issues relating to health. We tend to bask in our past glory, smug about our early achievements, when new challenges are already overwhelming us and, in truth, other States are stealing a march over us,” Dr Ramankutty said.

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