Alleviating the Scourge of Private Healthcare

In India, private healthcare needs to be made affordable alongside expanding public healthcare.

Key Indicators for Indian Health Sector

• Poor Ranking: India ranks poorly on multiple health financing indicators.
• Meagre Public Health Expenditure: Its public health expenditure as a percentage of its GDP (1.28%) and share of general government expenditure dedicated to health (4.8%) remain akin to the poorest countries.
• Lower Per capita health spending: Per capita, health spending growth has not kept pace with rising incomes.
• Higher out-of-pocket Expenditure: Higher Private spending still constitutes nearly 60% of overall expenditure on health.

Issues with Indian Health Sector

• Dispersed Private Sector: The private sector in India is inexorably dispersed, with significant inequities between rural and urban areas and widespread market failure.
• Disproportionate Burden of Insurance Schemes on the Private Sector: Public health insurance schemes impose unreasonable package rates on empanelled private providers with weak regard for actual costs of care. This deters the active participation of the private sector.
• Lack of Infrastructure: India has been struggling with deficient infrastructure in the form of a lack of well-equipped medical institutes and less-than-adequate human resources.
• Shortage of Manpower: Shortage of efficient and trained manpower and the situation remains worrisome in rural areas.
• Lack of specific competencies: It is common for heads of health services at national, state or district levels in India to be orthopaedic or cardiac surgeons or ophthalmologists who have no training in public health.
• Huge Patient Load: Even prior to the outbreak of the Covid-19 pandemic, healthcare facilities had been feeling the strain due to unmanageable patient load.

How to make private healthcare more affordable without affecting care quality?

• Encompass a wide range of policy instruments that alter the operating conditions of the private sector. Such policies have to be enshrined in our national health policy.
• Need of overarching policies that drive down private healthcare costs even for the self-paying consumer with little or no government subsidy.
• Incentivising and propagating business process innovations (BPI): such as the cost-reducing innovations by Aravind Eye Clinic and Narayana Hrudayalaya.
• Creating affordable and effective private health insurance products is another important option.
• Task shifting in healthcare is an evidence-backed instrument to hold down costs, especially in under-resourced settings. The National Commission for Allied and Healthcare Professions Act, 2021 can be a boost in this direction.
• Global practice: Canada has conceived regional health boards: They organize care equitably within regions, exploit economies of scale, and bring down healthcare costs.

Way Forward

• Health Maintenance Organizations (HMOs):Creating organized networks of providers like Health Maintenance Organizations (HMOs), which can be regulated easily, has been envisioned in recent policy pronouncements.
• BPIs are confined to a few philanthropic organizations and find little mainstream policy or research attention. Healthcare ecosystem does not naturally incentivize such innovations, regulatory and economic policy signals can be facilitative.
• Widening the ambit of practice of nurses and allied personnel with strong emphasis on health policy, along with concurrent mainstreaming of such practice roles across the private sector.
• Multiple steps to reduce entry barriers in medical education have been taken lately, medical education costs have sharply increased over the past decade or so.