It’s the wrong medicine, Minister

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SummaryBudget increased allocation to publicly provided medical care. That’s symptomatic of India’s longstanding policymaking confusion: clean water, good roads improve public health much more than government doctors.

While it might be dismissed as a ‘throw-away line’, the budget speech includes a 16% increase in the National Rural Health Mission, addressing one complaint heard frequently that too little is allocated to health. The complaint may be justified but almost certainly not by examining allocations to items in the budget labelled ‘health’. Public policy can make an enormous contribution to the health of India’s citizens but much of that help has virtually nothing to do with the public provision of medical care. Once again, an opportunity to use money that could make an improvement in the lives of poor people is almost certainly going to feed people’s scepticism of government’s abilities to accomplish much in the way of social well-being.

The complication is that budgets for health go disproportionately to medical care—a dramatic understatement. But people’s health is determined by a vast array of factors of which medical care is a minor part. In fact, it is often very hard to find any connection at all between publicly provided medical care and standard measures of health status. In two rounds of the National Family Health Survey, it is impossible to detect any correlation at all of having a public medical facility in your village and having lower infant (or child, or maternal) mortality once other factors are considered. Lots of other things are correlated: income, education (probably mothers’ but that’s debatable), water supply, sanitation habits and even roads but not publicly provided medical care. The most recent round of the NFHS, unfortunately, can’t be used for this purpose since it doesn’t even ask about the presence of public clinics.

How can that be? How can public medical care not be correlated with the simplest measures of health status when so many other things that don’t appear to have anything to do with health are? The answer involves both inadequacies of the public delivery of healthcare (particularly primary healthcare) and the complexity of the determinants of health.

Take roads for example. Students of mine examined data from a recent NCAER survey among other surveys done in Himachal Pradesh. They found that the great majority of people bypassed their local, small, public facility to go to a larger public facility or to a town with a competent private doctor. With a reliable road system, it was preferable for people to travel to where they were sure of receiving good medical care rather than settle for the kind of care that could be brought to them. The current secretary of health is doing a great job of reexamining where and how healthcare should be delivered. Of course, Himachal Pradesh is not a typical state. For one thing, the majority of primary care was provided by the public sector, which is not true in the rest of India where the overwhelming majority of visits for primary healthcare are to the private sector. However, the argument that roads allow people to choose where they can get the best care should apply everywhere.

But even this example gives too much credit to medicine. A debate in the academic literature concerns whether medicine of any sort had anything to do with the rapid decline in mortality in the 19th and early 20th century. None of this involved public provision since there was no such thing. If publicly provided medical care is going to contribute to better health status, medical care in general has to. This debate is ongoing, with some consensus emerging that medicine might have made some contribution to declining mortality. But the consensus is that it is a small effect and, again, has nothing to do with public policy since medicine was private.

The main drivers of improved health in the West were the same as those found in India today—income, education (in conjunction with the development of the germ theory of disease), less crowded conditions and maybe electricity, which allowed fresh fruit and vegetables to be available all year. The main contribution of public policy was in the form of traditional (in the Western sense) public health interventions, not public healthcare. These included sewerage, clean water and the elimination or control of pests such as mosquitoes or rats. What these have in common is that they are what economists would call ‘public goods’—things that simply cannot be provided by private markets, not because we don’t want them to be provided by a private sector but because it is not possible for them to be.

Later contributions were made by medical science but, again, usually without much need of curative care. Immunisations sped the decline in child mortality but these were preventive measures that required very little medical expertise. Before drugs were developed, tuberculosis incidence and deaths fell dramatically simply by establishing sanitariums that prevented the spread of the disease. Again, the degree of medical intervention was limited to diagnosing the problem. When drugs came along, there were further improvements but from a lower base than currently seen in India.

In India today, we are spending large sums of money on curative care. When public budgets for health are discussed, the lion’s share involves curative care. What is not discussed is that many of the public policies that could prevent the need for medical care are starved of funds. These fall outside standard classification of expenditures we call ‘health’ but almost certainly contribute more to the health status of the public than does clinical care. The apparent increase in funding for the Total Sanitation Campaign but its lack of mention in the budget speech—perhaps in the context of a thought-out strategy to help improve people’s health—leaves the observer sceptical of the breadth of thinking, or context, that has gone into the role of specific proposals.

Primary clinical care is a private good. That’s the only reason there can be such a large private sector. Public provision of medical care almost certainly substitutes for the private sector, further attenuating its potential effects. Even this assumes the government can provide medical care that people want to use and that is superior to the private care they can get themselves. Serious doubts can be raised on this score as well but perhaps that is a topic to be taken up another time.

The author is Charles and Marie Robertson Visiting Professor of Economic Development, Woodrow Wilson School of Public and International Affairs, Princeton University

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