Privatisation Of Health Sector

Introduction

                The increased role of the private sector in the Health sector has raised a concern whether India is moving from the UK based patient-centric model to the American insurance-driven health delivery system. A careful analysis of the privatization of healthcare is needed to elucidate its ramifications.

                The recent NHP, 2017 lays emphasis on systemic strengthening and strategic engagement with the private sector to comprehensively improve health service delivery in the country.

Why necessity?

Lack of public investment in the health sector means there is a huge demand-supply mismatch with regard to the provision of healthcare services. Partnerships with private sector entities enable quality screening, diagnosis, treatment services accessibility to patients with better infrastructure and technical expertise

NITI Aayog Guidelines

Co-habitation of private sector entities engaged in the provision of such services within public hospitals to provide specialized healthcare and treatment for cardiovascular, pulmonary diseases and cancer

Conditions for entering into PPP – State government

  • Must accommodate a minimum number of state referred patients who are eligible to avail NCD services for cashless treatment of their ailments (To avoid commercialisation)
  • In selecting public hospitals, a criteria of minimum patient strength and bed strength needs to be followed so that hospitals with largest inflow of patients gain most from partnerships
  • Minimum services to be offered – IPD, OPD, Emergency services, critical care
  • State governments need to leverage national and state initiatives and schemes for maximizing potential of privatisation – RSBY and NHPS

Benefits of Privatization

  • Access to Specialized Healthcare: PPP model would improve accessibility to specialized health care in terms of human expertise, technology and equipment
  • Enhance Infrastructural Quality: PPP model would provide a mechanism for private sector to engage with the public utilising government facilities and infrastructure of district hospitals. A viability gap funding by the state government needs to be set up for this.
  • Economies of Scale: Private parties would share ambulance services, mortuary services and blood banks with the district hospitals while public hospitals benefit from superior quality of human resources as well as increased capital of private players
  • Better Diagnosis: It would ensure timely diagnosis and detection of diseases given the expedition of advanced medical devices reducing regional disparity in provision of such services
    • GeneXpert devices to diagnose TB
  • Holistic Medical Growth: Expansion of Private-sector servicesà Greater investment in research and developmentà Greater procurement of medical infrastructureà Job creation and growth in the medical field

Way forward and Concerns

  • Commercialisation: Privatized healthcare model works on pure economics of demand and supply. If there is no effective regulation, the citizens may fall prey to the exploitation of the private health sector machinery
    • India has the highest Out of Pocket expenditure of 86% according to WHO
  • Unethical Practices: An unregulated private sector can breed unethical practices like false diagnosis and testing of medicines. Such practices may have adverse effects on the health of patients.
  • Health being a state subject, NITI Aayog has limited advisory powers and hence a top down approach may not be suitable for a subject in the state list. Hence different states may adopt different guidelines which can lead to coverage disparity between them
  • Neglected Diseases: The demand supply chain invariably works on the purchasing power of citizens. Diseases which affects the poor and vulnerable may continue to lie ignored in the face of privatization of health care
    • India continues to fight against WHO classified neglected tropical diseases like Lymphatic Filariasis
  • Regional Disparity: Danger of private sector institutions cherry picking districts with individuals who have high paying capacity thus widening the existing regional disparity in provision of quality health services
  • Inefficiency of Public Healthcare System: Handing over public healthcare services to private sector reflects inefficiency of public health care services and abdication of governments duty from providing affordable quality healthcare to all citizens

Conclusion

The primary responsibility for providing affordable universal healthcare services rests on the state. A well regulated private sector based on the pillars of trust, accountability and efficiency can be a boon to India’s citizens.

Parameters for Assessing Health Sector

Total Fertility Rate

  • Ideally should be around 2.1 – Currently around 2.3
  • Huge regional disparity with backward regions having higher TFR close to 37 (Bihar) and other regions having lower fertility rate (as low as 1.24  in Sikkim) – National Family Health Survey
  • Hence targeted differential policy is required

In areas of High TFR – Solutions

  • Empower women by providing with skilling and livelihood opportunities – As women are empowered and gain voice within households gradually the population decreases. A high correlation currently exists between women’s illiteracy levels and TFR rates as witnessed in the EAG states.
  • Poverty Alleviation: The lower economic rung in the society always looks upon children as economic assets rather than liabilities. Hence alleviating them out of poverty can have a contraction effect on population
  • Family Planning and Use of Contraceptives: Precisely what Mission Parivar Vikas under MHFW seeks to implement targeting the UP, Bihar belt
  • Discouraging early marriages: Sukanya Samriddhi Yojana and Beti Bachao Beti Padao
  • Provide opportunities and scholarships for higher education of women: The West Bengal government’s Kanyashree Prakalpa is an astute initiative in this direction.

Infant Mortality Rate

Number of deaths per 1000 live births in 1 year

India – 41 per 1000 live births

Neo-Natal Mortality: 29 per 1000 live births

Causes of Child Mortality

  • Maternal Health Issues: Poor nutritional status of the mother can affect the survival of the child. NFHS notes 20% children born with low birth weight in the country having high risk of mortality
    • The government has launched the National Nutrition mission with convergence across departments. This can address the nutrition requirements of the mother and child through the Anganwadis
  • Poor Institutional delivery: The lack of expertise in delivery, poor antenatal and neo natal health services can cause infant mortality. The lack of infrastructure like warm towels can increase risks of infant mortality
    • The PM Matritva Suraksha Abhiyan and the PM Janani Suraksha Yojana emphasizes on providing vital ante-natal and neo-natal care to reduce IMR
  • Vulnerability to Diseases: The lack of hygiene and sanitation facilities render the children vulnerable to pneumonia and diarrhoea. Diarrhoeaà Low capacity of nutritionà Stunting, Wasting and Child mortality
    • The Swachchh Bharat Abhiyan and the NRDWP aim to provide households with clean drinking water
  • Under Nutrition: The NFHS notes that 33% of under 5 deaths in India are due to malnutrition among children
    • Through the ICDS, NNM and mid day meal schemes, the government aims to address issues of malnutrition and hidden hunger
  • Exclusion from Immunization: India is yet to achieve 100% immunization. This renders children vulnerable to vaccine preventable diseases like Japanese encephalitis as witnessed in the Gorakhpur tragedy.
    • Mission Indradhanush aims to universally immunize children and mothers from 11 vaccine-preventable diseases by 2022.
  • Gender Discrimination: IFPRI’s GHI illustrates that Indian girl child is relatively deprived to the boy in access to nutrition and healthcare. The Economic Survey notes a similar son preference culture. This may lead to increased mortality among the ‘unwanted girl children’

Maternal Mortality Rate (MMR)

Number of delivery deaths per 1 lakh live births: 167 MMR in India (RGI 2013)

Why delivery Deaths?

  • Lack of institutional delivery
  • Insufficient antenatal and neo natal care
  • Forced Re-entry into work after pregnancy
  • Adolescent Pregnancy and Child Marriages
  • Insufficient spacing between child births
  • Gender Discrimination
    • Access to nutrition
    • Agency of Reproduction
    • Agency to access health care services
  • Poor Nutrition: 53% of women in the reproductive age in India suffer from anaemia according to the

Schemes to reduce IMR and MMR

  1. Janani Suraksha Yojana – MHFW
    • Incentivizing institutional delivery by providing cash incentives
    • Targeted delivery differentiating between low performing and high performing states
    • Free neo-natal care and monitored ASHA linked antenatal care
    • Under NRHM
  2. Mathrithva Suraksha Abhiyan
    • Free ante-natal care on 9th of every month
    • Private doctors are free to voluntarily participate and render their services
  3. Integrated Child Development Services (ICDS): Maternal factors have a key bearing on the child health beyond the pregnancy. It is therefore prudent to consider them as a single unit rather than compartmentalizing them.
    • Free Supplementary Nutrition and Immunization
    • Beneficiaries – Pregnant women, Children and lactating Mothers
  4. Maa – Breast Feeding Initiative – Mother’s Absolute Affection
    • To reduce under five mortality of children
    • Generate adequate awareness among mothers regarding benefits of breastfeeding
    • Strengthen inter-personal communication through ASHA

Under Nourishment parameters

Global Nutrition Report – IFPRI and IDS

Parameters used: Stunting, Wasting and Anaemia

Global Hunger Index by IFPRI

Stunting, Wasting, Child Mortality and Undernourishment

Child Sex Ratio

The number of females to 1000 males in the population.

The Economic Survey elucidates a strong meta son preference as parents continue to have children until they get the desired number of sons. This leads to a skewed sex ratio in different directions: favouring males in case it is the last child and females in case it is not the last child.

Schemes to Improve CSR

Beti Bachao Beti Padao (Save the Girl Child, Educate the Girl Child)

  • Reduce female infanticide and sex-selective abortion
  • Generate mass awareness in targeted areas to overcome patriarchal and cultural aversion to girl child
  • Incentivize birth of girl child by passing on social benefits in form of education and financial support – Sukanya Samriddhi Yojana
  • Reduce the gender disparity in access to education and achieve gender parity in literacy levels

Sukanya Samriddhi Yojana

The main objective is to incentivize the birth of a girl child by enabling a savings account scheme in the name of the girl child which can be used in the future for her own education or marriage

Features

  • Can be opened anytime after the birth of the girl till she is 10
  • A minimum deposit of 1000 Rs
  • Maximum – 1.5 lakh per year
  • The account remains operative for 21 years or till the marriage of girl after she is 18
  • Partial withdrawal of balance at 18 years for higher education
  • Can avail tax benefit under SSY

Regulatory institutions in Health Sector

Dealing with Quality – MCI

Functions of MCI

  • Accreditation of medical courses and universities
  • Registration of practitioners, nurses
  • Recognizing medical qualification

Issues

  • Parliamentary committee report pointed out rampant nepotism and corruption in MCI which has affected management and administration of all institutions under the MCI
  • Conflict in a jurisdiction with MHRD and MHFW –National Council for Human Resource in Health– Umbrella organization of dentists, nurses, pharmaceuticals (NCI, DCI, PCI)
  • Standardisation of tests has caused strife to several students owing to lack of uniformity in syllabus and difficulty in language
  • Although tests are standardised, MCI fails to ensure uniform quality education for all those who qualify

Read Also  Relevance of RTI

NITI Aayog Recommendations

  • Replace MCI with National Medical Commission to streamline regulation and avoid nexus between bureaucrats, politicians and corporate
  • Exit eligibility test for doctors
  • NEET – Common entrance test all over country to award seats to meritorious students to reduce commercialisation of medical education

National Medical Commission Bill,2017

  • The bill introduced in Lok Sabha seeks to replace MCI with National Medical Commission as per the recommendations of NITI Aayog
  • NMC would have a government nominated chairman and members, board members will be selected by search committee under cabinet secretary
  • Medical Pluralism: It calls for a joint sitting between Central Council of Indian Medicine, Central Council of Homeopathy and National Medical Commission once a year to enhance interface between Indian systems of medicine, homeopathy and modern medicine
  • Bridge Courses: The joint sitting may approve educational modules or programmes for developing bridges between various medical streams allowing Ayurveda and Homeopathy doctors to practice allopathy after passing of the same
  • Autonomous Regulation: Provides for constitution of 4 autonomous boards that deal with graduate and post graduate medical education, assessment and rating of medical institutions and registration of practitioners under NMC
  • Licentiate Exam: The Bill proposes an exit (licentiate) exam that is mandatory for all medical graduates to get practicing licenses and for post-graduation
  • Only 40% of seats in private colleges are under government regulated fees

Critical Response to the Bill

  • Unitary Character: The centre governments right to nominate members also affects the federal character of the regulatory institution as it subverts powers of state medical councils
  • Representativeness of Doctors: The IMA has criticized the bill for doctors may not find nomination in the NMC. This reduces the legitimacy and expertise of the body for medical education regulation
  • Commercialization of Medical Education: The NMC bill raises concerns of commercialization of medical education as private medical colleges have been provided freedom to fix fees for 60% of the seats
  • Enforcing Medical Singularity: Bridge courses endanger the medical variety of Indian medicine being subsumed by the homogeneous allopathy. This deprives consumer of the diverse medical choices available to them.
  • Coordination between professions lacking: The NMC does not provide for an inter-personnel education platform that connects medical, nursing and allied health professionals’ education that would reduce doctor dependence particularly in PHCs.
  • Overlapping Jurisdiction: NMC has been asked to regulate research and prepare roadmaps for health infrastructure. This puts its functioning in overlapping domains with ICMR and central and state ministries respectively

Dealing with Safety and Standards – Drug Regulatory Authority

  • Ensure safety and quality standards of drugs
  • Implement legislations and regulation on pharmaceuticals in India

Central Drug Standard Control Organisation

  • Standardise and regulate medical devices

Dealing with Affordability – National Pharmaceutical Pricing Authority

  • National List of Essential Medicines – upper limit of drugs and assistive devices fixed
  • Drugs under Non-scheduled list can be hiked 10% yearly maximum

Why NPPA?

  • Gain access to affordable medicines – highest out of pocket expenditure- Heightens importance in lieu of the low coverage of health insurance
  • Nexus between doctors and pharmaceutical companies leaving citizens at the wrong end of an exploitative system

Consequences of Price Control

  • Discourages Research and Development: Frequent capping of price for drugs discourages research and development as it may not prove to be economically viable.
  • Discourage production of APIs: Placing the ceiling too low on companies can discourage the production of active pharmaceutical ingredients
    • Excessive ceiling on Furoped reduced its availability to 40% and later NPPA was forced to increase the ceiling

Way Forward

                Government procurement and distribution through Gen Oushadi shops can help prevent the need for market intervention thus ensuring affordability and viability of R&D at the same time.

Read Also National Register of Citizens

Issues with Drugs

  • Pharma-Doctor Nexus: The patient is a victim of nexus between pharma companies and doctors that leads them to demand high cost drugs
  • Quality and Safety of Drugs: Many of the doctors are sceptical about the quality and safety of generic drugs that are sold in the market. They invariably tend to prescribe costly branded alternatives
  • Lack of Awareness among patients: The patients are not aware of generic medicines and gullibly accept prescriptions without question
  • IPR policy: India’s IPR policy is not rewarding for research in drug production. Thus, pharma companies fail to innovate to find cost effective drug solutions for several diseases

What can be done?

  • Quality Control: A robust quality control regime can ensure safety and quality of drugs. Only such a system can pave way for mandatory prescription of branded drugs in the country. Recently, the bio-equivalency test for generics was made mandatory ensuring the generic drugs retain the standard of the original
  • Quality Testing Facilities: Drug regulation needs to be ensured at every stage: testing during production, post market monitoring, drug alert and drug recall after usages. A skilled human resource base across pharma industries and testing facilities is the need of the hour
  • Penal Provisions for pharma companies manufacturing substandard drugs. Drug Regulatory Authority can be empowered to identify and take action against such companies
  • Drug Information Dissemination: Through the portal of PHARMA SAHI DAAM, the government has sought to provide real prices and composition of drugs to educate and empower consumers.

Health Insurance Policy

Rashtriya Swastiya Bima Yojana (RSBY)

                An insurance policy of the government that targets lower class workers, street vendors, disabled and senior citizens in India. All stakeholders under RSBY have a lot to gain:

  • Government – Health of its citizenry, Demographic Dividend
  • Private insurance companies – Premium through increased coverage
  • Hospitals- Patients to provide service
  • Public – Health benefit

Features

  • Low Premium: Health insurance is provided at frivolous rate of 30 rupees annually
  • Mandatory Hospitalization: A patient must get hospitalised to avail benefits under RSBY
  • Vulnerable Sections: Targeting senior citizens, street vendors and differently abled
  • Freedom of Choice: Patients can avail services from any hospital- private or public using RSBY
  • Limit of 30k as insurance

Criticisms

  • Mandatory Hospitalization: 70% of India’s OOPE is on outpatient care while RSBY addresses affordability on the inpatient hospitalization part
  • Low insured amount: RSBY provides for only 30,000 Rs insurance coverage which is considerably low considering the expenses incurred in tertiary hospitals for specialised diseases – CVD, cancer etc.
  • Nexus between hospitals and insurance companies
  • False diagnosis

Evaluation

                RSBY has been largely unsuccessful in reaching its coverage targets or reducing OoPE significantly among the poor.

  • Poor Targeting: Half of those enrolled in RSBY belong to the non-poor category
  • Low Utilisation: Although coverage was substantial, the hospitalization cases that ended up using RSBY was limited
  • Low Impact on OoPE: Payment requirements for drugs, diagnostic, inpatient and transport services have hindered the reduction of expenditure as envisaged by RSBY.
  • Regional Disparity: RSBY performs better in states such as Kerala that have a robust healthcare delivery system
  • Ineffective Regulation and Monitoring: RSBY has been manipulated by private health centres and insurance companies to exploit the patients through unethical practices and false diagnosis.

National Health Protection Scheme

                Launched in the 2018 budget, the NHPS has greatly enhanced its coverage to 10 crore families for 1Lakh insurance amount. It is targeted at reducing out of pocket expenditure of vulnerable sections of society. According to world bank, 62.4% of total health expenditure in the country was out of pocket as of 2014.

Features of the Scheme

  • Funding: NHPS is a centrally sponsored scheme where funds are shared between centre and state. The NHPS is also backed by the revenue generating power of 1% cess.
  • High insurance amount: While the RSBY suffered from a lowly insurance fixed at 30k, the NHPS has stepped up the insurance covered for hospitalization to 1 Lakh.
  • Greater Coverage: The NHPS aims to cover 40-50 crore individuals in vulnerable sections of the population and is thus mandated as the largest healthcare scheme in the world

Issues in the NHPS

  • Centralized Scheme: The NHPS is introduced as a centrally sponsored scheme but the role, consent or the fiscal capability of the states are not clearly elicited or evaluated by the centre
  • Ignorance of Primary Healthcare: The NHPS is an addition to the many insurance schemes that focus solely on secondary and tertiary health care expenses. The poorest in India continued to be plagued by diseases that need treatment at the primary level.
  • Privatization of Healthcare: NHPS creates an insurance-driven culture of healthcare that may lead to private sector domination in the healthcare system. This entails concerns of regional disparity, commercialization of healthcare and neglected diseases and sections
  • High Fiscal Burden: NHPS is the largest health insurance scheme in the world. Providing insurance for 50 lakh people poses a huge financial challenge to the state given its FRBM commitments

Way Forward

  • Primary Health Insurance: India should emulate the examples of Thailand (30 Baht scheme) and Indonesia (social health insurance) in strengthening its primary health care system for achieving universal coverage
  • Basic Health Infrastructure: The health insurance schemes can realize their benefits only when backed by adequate infrastructure as illustrated by the success of RSBY in Kerala. The public expenditure needs to be increased by at least 2% of the GDP.
  • Careful Design and Regulation of Private Sector: The insurance company-private healthcare nexus need to be avoided by the state. An independent regulator can be put in place for the same
  • Customized Model: Health being a state subject and each state having different set of problems, a one-size fits all policy is unwanted. A customized model of NHPS can be introduced to protect federal interests

Conclusion

                NHPS is an illustration of the government’s commitment towards Health for All. However, such an ambitious initiative needs to be state led and state owned with participation across governments and healthcare systems to achieve convergence with the SDG of achieving universal health coverage.

Challenges of Ayushman Bharat Initiative

  1. Fiscal Burden: Government would need to significantly raise its expenditure on health to at least 4% of the GDP to ensure the implementation of the programme
  2. Lack of HR expertise: According to the MoHFW’s manpower statistics, there is a shortage of more than 8000 doctor vacancies in primary sector. Unless these equations are corrected, India’s dream of 1.5 lakh health and wellness centres would remain futile
  3. Infrastructure Shortage: Indian hospitals may not be able to accommodate the rising demands of health care on the back of the Ayushman Health programme. The bed to population ratio needs to be raised to 1.7 per 1000 from 0.9 according to FICCI-EY report
  4. Cooperative Federalism: The states need to contribute 40% of the funds as per the programme and Health is a state subject. Great synergy is required to be developed between existing state health insurance schemes and RSBY to NHPS.

Read All Notes by Ravisankar Sarma

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