PPP in healthcare: States may tweak NITI guidelines, bring more diseases under purview

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New Delhi | Updated: Sep 07, 2017 3:19 PM

The states may tweak the NITI guidelines, and perhaps bring more diseases under the purview of the PPP facility later.

NATIONAL HEALTH Policy, healthcare, GDPThe new policy clearly underscores the government’s intention in exploring the possibility of developing sustainable models of partnership with for-profit and not-for-profit private players for urban healthcare delivery.

THE NATIONAL HEALTH Policy, 2017, pegs the total spending on healthcare in the country in the year 2013-14 at 4.02% of GDP. Going by evidence from across the globe, unless a country spends at least 5–6% of its GDP on health—with government expenditure being a major part of such expenditure—basic healthcare needs will be seldom met. Our government’s spending on healthcare is only 1.15% of its GDP. This is 3.8% of the total government expenditure, and accounts for 28.6% of total healthcare spending, translating to about Rs 1,042 per capita at current market prices with the central government’s share being Rs 365 per capita (0.4% of GDP).This is significantly below various comparator economies—for instance, Brazil spends approximately 9% of its GDP on health; public health expenditure constitutes 4.1% of the GDP and 45.7% of total health expenditure.

It is in this backdrop that the need form ore robust participation of private players in the healthcare sector is realised. More so, considering the quality of public health services in India continue to remain below expectations despite showing improvement over the past few years. Given private healthcare providers have done well in providing healthcare services as compared to their government counterparts,the role of the private sector in provision of health services becomes crucial.

The new policy clearly underscores the government’s intention in exploring the possibility of developing sustainable models of partnership with for-profit and not-for-profit private players for urban healthcare delivery. Following up on this,the NITI Aayog released draft guidelines on public-private partnership for non-communicable diseases (NCDs) in district hospitals. The objective of these guidelines is to improve access to quality screening,diagnostic and treatment services for cardiovascular and pulmonary diseases and cancer in district hospitals through public-private partnerships. The guidelines propose that access be provided at these facilities to patients referred by the state government as well as to patients who can pay. The state-government- referred patients can receive cashless NCD services; the state government will reimburse the private healthcare provider for the expense borne on this account. The draft guidelines prescribe the criteria for selection of district hospitals for such PPP—they must be located in Tier 2 or Tier 3 cities, must have a minimum of 250 functional beds, must be able provide a certain minimum area and beds for the purposes of NCD services,have an average of 1,000 patients per day availing their OPD services over the last two years. The state governments are empowered to adopt such criteria with modifications. The minimum services to be offered will be OPD, IPD, emergency services, critical care, ICU,etc. The state governments would be required to establish linkages with existing national and state initiatives such as emergency transportation/ambulance services for patient referrals and health-related schemes such as RSBY/ National Health Protection Schemes/ state-level health insurance schemes to leverage the facilities and resources to arrive at greater synergies.

As regards the private players within this PPP model, they will be required to upgrade and maintain infrastructure, equip the facility and will be responsible for operational management and delivery of services. The draft guidelines have proposed the engagement of private players on a concession model. It is proposed that the concession period could be of 30 years, depending on the capital investments in the project.

While the draft guidelines aim to push for improvement in provision of medical services in the identified non-communicable diseases, it remains to be seen how the various state governments approach the adoption and implementation of the guidelines once these are finalised. One of these would be the time period of the concession agreement. While the 30-year period has been proposed as a suggestion in the draft guidelines,it would ultimately depend on the decision taken by each of the states. Further, since the draft guidelines propose the NCD services be provided in Tier 2 and Tier 3 cities, this could be the other minimum criterion that could vary amongst states.

Other aspects in the draft guidelines, such as the tariff structure in relation to payments to be made by patients to the service-providers, needs some clarity from a commercial feasibility perspective. While the draft guidelines have provided for two categories of patients—those who are covered by a state-sponsored scheme and those who will be paying—considering a sizeable population could be outside the purview of a state-sponsored scheme, it is important for the state governments to calibrate policies to ensure that cost and affordability does not become an impediment to the provision of services. The draft guidelines aim to first provide cardiovascular,pulmonary and cancer-related services. This seems to be a sound approach, keeping in mind the fact that a large section of population is exposed to one of these diseases. In future, the policy could also look at covering other healthcare services.

Given India is on track to become the most populous nation in the world, it would be important for the government to ensure that adequate and efficient healthcare services are made available to the largest section of people across the country.

With contributions from Srikant, senior associate,J SagarAssociates, Advocates and Solicitors

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