World Bank’s prescription to heal India’s health sector; use private bodies, they meet 60% of demand

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Published: July 8, 2020 12:11 PM

India needs to design its health budget execution and resource allocation based on population needs rather than historical norms.

healthcare sector, health sector, world bank, private sector, PPP, national health missionHealth spending is not just a social expenditure but also important for economic growth and development of the country, says World Bank.

The World Bank said that there is a need to take advantage of India’s private sector to improve health facilities in India as more than 60 per cent of health demand in the country is met by private bodies. Leveraging private clinics along with Direct Benefit Transfer (DBT) may be used as tools to increase engagement with the private sector, said Junaid Ahmad, Country Director, World bank. In a meeting held between the 15th finance commission, representatives of the World Bank, Niti Aayog, and High-Level Group (HLG), for a better understanding of the shape of India’s health sector, Junaid Ahmad added that the health spending is not just a social expenditure but also important for economic growth and development of the country.

The World Bank highlighted that there is scope for service delivery reforms by using innovation, leveraging technology, institutional strengthening, coordination, and empowering states. It further said that the quality of care has emerged as a key issue in India’s health system and there is huge variability across states and care providers.

In order to improve health spending, the World Bank noted that there is a need for Public Financial Management (PFM) reforms to improve budget execution and resource allocation formulas as it should be based on population needs (mortality/morbidity/equity) rather than historical norms. Further, to analyse the population needs, it underlined the need to relate the National Health mission (NHM) to per capita spending on health and increase spending per beneficiary in poorer states.

Watch | News with Financial Express July 8, 2020

Public-Private Partnerships

The World Bank also emphasized that the service delivery innovations such as technology solutions, primary health care centers in urban areas, etc, need to be encouraged and run by contracted private providers or public-private partnerships. Using the private sector for TB diagnosis and treatment, performance-based incentives to states and districts through TB Performance Index were also among the World Bank’s recommendations.

Meanwhile, the 15th Finance Commission will devote an entire chapter on health financing for the first time, said N K Singh, Chairman, 15th Finance Commission. He added that the High-Level Committee on the health sector will dove-tail their study and analysis to come up with suitable recommendations while the government’s spending through centrally sponsored schemes will also be studied in detail by the Commission before it gives its recommendations to the central government.

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