Even after 70 years of independence, healthcare facilities for the common Indian are in a dismal state. The contrast is quite remarkable—on one hand we have made rapid strides in medical technology, and have top quality doctors to the extent that we are promoting medical tourism even amongst developed world patients, on the other 70% of India’s population in rural areas has very limited access to quality healthcare facilities. Even in urban areas the healthcare facilities are not enough to take care of the country’s burgeoning requirement. Over 63 million people in India are pushed to poverty every year due to health care costs.
In India, the number of hospital beds per thousand people is at a paltry 0.7 as against 3.8 in China. Similarly, the number of doctors per thousand people is 0.6 versus 1.8 in China. There is stark inequity in the health outcomes in rural and urban areas. For instance, the infant mortality rate in rural areas is 44 as against 27 in urban areas.
Not surprisingly a major factor behind such sorry state of affairs has been the inadequate resources available with health care planners and government and non-government agencies. With an abysmal expenditure of 3.9% of GDP on healthcare (comparable numbers for China and Brazil are 5.1% and 8.9%, respectively), it is difficult to expect any other outcome.
It is surprising that a country that has always fancied itself as a welfare state, with emphasis on socialism and an intent to reduce inequality by the central policy planners, and where poverty alleviation and rural welfare have historically been used as vote catching slogans has consistently neglected this important sector that can be the bedrock of its demographic dividend.
Another distinguishing characteristic here is an even lower share of government expenditure on healthcare. The share of government in the total expenditure on healthcare is at a low of 30.5% in India compared to 77% in Thailand, and 55% in China. Among the developed countries, UK and European countries have a high public expenditure at around 75-80% of total health expenditure.
Given the limited public healthcare facilities in the country and the poor quality of the service offered at these facilities, India has high dependence on private sector for healthcare requirement. While the private healthcare sector is growing rapidly, supposedly driven by free market economy, there is little monitoring of the quality and price at which services are provided. This results in huge and often unjustifiable price differentiation in the private versus government hospitals. As per a study, the average amount spent per child birth in private hospitals was nine-times that spent in public hospitals for both rural and urban areas across all quintiles (2014).
To make matters worse, there is very low insurance penetration, at around 17%. As a result, India has one of the highest out-of-pocket expenditure at 61%. In comparison out-of-pocket expenditure is much lower at 34% in China and 11% in the US. In the National Health Policy, the government has set a target of increasing the public expenditure as percentage of GDP to 2.5% by 2025 from the current level of 1.15%. While increase to 2.5% by 2025 in itself appears inadequate, the policy emphasises public-private partnership in the healthcare sector. It talks about strategic purchases from private sector to bridge the demand-supply gap.
Even as PPP models are needed, the government needs to be cautious in designing these models. For instance, in strategic buying from private sector, there are chances of abuse of the system by the private players. For instance, in Andhra Pradesh, under the state government health insurance scheme, there were reports of sharp increase in some medical surgeries prescribed by private hospitals. The other problem with strategic buying from private players is that it leaves out the rural/semi-urban areas.
Hence, what is required is a sharply defined arrangement leaving less scope of leakage or abuse. For instance, Andhra Pradesh has got into an arrangement with a private player for providing dialysis services across 13 district government hospitals. The PPP project will provide free access to dialysis for patients, while the government will pay to the private player a fixed amount per dialysis session per patient. Another model could be that the government invites bid for private sector players to open up hospitals in rural/semi-urban areas.
These hospitals though run by the private sector should be regulated by the government to ensure that pricing of services is affordable and there is no other abuse of the system. The government aims to achieve universal health coverage by 2030. A successful PPP model in the field of medical treatment/tests, medical colleges and medical insurance will go a long way in helping achieve the goal of universal health coverage.