Privatisation Of Health Sector

Introduction

The increased role of the private sector in the Health sector has raised a concern whether India is moving from the UK based patient-centric model to the American insurance-driven health delivery system. A careful analysis of the privatization of healthcare is needed to elucidate its ramifications.

The recent NHP, 2017 lays emphasis on systemic strengthening and strategic engagement with the private sector to comprehensively improve health service delivery in the country.

Why necessity?

Lack of public investment in the health sector means there is a huge demand-supply mismatch with regard to the provision of healthcare services. Partnerships with private sector entities enable quality screening, diagnosis, treatment services accessibility to patients with better infrastructure and technical expertise

NITI Aayog Guidelines

Co-habitation of private sector entities engaged in the provision of such services within public hospitals to provide specialized healthcare and treatment for cardiovascular, pulmonary diseases and cancer

Conditions for entering into PPP – State government

Must accommodate a minimum number of state referred patients who are eligible to avail NCD services for cashless treatment of their ailments (To avoid commercialisation)
In selecting public hospitals, a criteria of minimum patient strength and bed strength needs to be followed so that hospitals with largest inflow of patients gain most from partnerships
Minimum services to be offered – IPD, OPD, Emergency services, critical care
State governments need to leverage national and state initiatives and schemes for maximizing potential of privatisation – RSBY and NHPS

Benefits of Privatization

Access to Specialized Healthcare: PPP model would improve accessibility to specialized health care in terms of human expertise, technology and equipment
Enhance Infrastructural Quality: PPP model would provide a mechanism for private sector to engage with the public utilising government facilities and infrastructure of district hospitals. A viability gap funding by the state government needs to be set up for this.
Economies of Scale: Private parties would share ambulance services, mortuary services and blood banks with the district hospitals while public hospitals benefit from superior quality of human resources as well as increased capital of private players
Better Diagnosis: It would ensure timely diagnosis and detection of diseases given the expedition of advanced medical devices reducing regional disparity in provision of such services
- GeneXpert devices to diagnose TB
Holistic Medical Growth: Expansion of Private-sector servicesà Greater investment in research and developmentà Greater procurement of medical infrastructureà Job creation and growth in the medical field

Way forward and Concerns

Commercialisation: Privatized healthcare model works on pure economics of demand and supply. If there is no effective regulation, the citizens may fall prey to the exploitation of the private health sector machinery
- India has the highest Out of Pocket expenditure of 86% according to WHO
Unethical Practices: An unregulated private sector can breed unethical practices like false diagnosis and testing of medicines. Such practices may have adverse effects on the health of patients.
Health being a state subject, NITI Aayog has limited advisory powers and hence a top down approach may not be suitable for a subject in the state list. Hence different states may adopt different guidelines which can lead to coverage disparity between them
Neglected Diseases: The demand supply chain invariably works on the purchasing power of citizens. Diseases which affects the poor and vulnerable may continue to lie ignored in the face of privatization of health care
- India continues to fight against WHO classified neglected tropical diseases like Lymphatic Filariasis
Regional Disparity: Danger of private sector institutions cherry picking districts with individuals who have high paying capacity thus widening the existing regional disparity in provision of quality health services
Inefficiency of Public Healthcare System: Handing over public healthcare services to private sector reflects inefficiency of public health care services and abdication of governments duty from providing affordable quality healthcare to all citizens

Conclusion

The primary responsibility for providing affordable universal healthcare services rests on the state. A well regulated private sector based on the pillars of trust, accountability and efficiency can be a boon to India’s citizens.

Parameters for Assessing Health Sector

Total Fertility Rate

Ideally should be around 2.1 – Currently around 2.3
Huge regional disparity with backward regions having higher TFR close to 37 (Bihar) and other regions having lower fertility rate (as low as 1.24 in Sikkim) – National Family Health Survey
Hence targeted differential policy is required

In areas of High TFR – Solutions

Empower women by providing with skilling and livelihood opportunities – As women are empowered and gain voice within households gradually the population decreases. A high correlation currently exists between women’s illiteracy levels and TFR rates as witnessed in the EAG states.
Poverty Alleviation: The lower economic rung in the society always looks upon children as economic assets rather than liabilities. Hence alleviating them out of poverty can have a contraction effect on population
Family Planning and Use of Contraceptives: Precisely what Mission Parivar Vikas under MHFW seeks to implement targeting the UP, Bihar belt
Discouraging early marriages: Sukanya Samriddhi Yojana and Beti Bachao Beti Padao
Provide opportunities and scholarships for higher education of women: The West Bengal government’s Kanyashree Prakalpa is an astute initiative in this direction.

Infant Mortality Rate

Number of deaths per 1000 live births in 1 year

India – 41 per 1000 live births

Neo-Natal Mortality: 29 per 1000 live births

Causes of Child Mortality

Maternal Health Issues: Poor nutritional status of the mother can affect the survival of the child. NFHS notes 20% children born with low birth weight in the country having high risk of mortality
- The government has launched the National Nutrition mission with convergence across departments. This can address the nutrition requirements of the mother and child through the Anganwadis
Poor Institutional delivery: The lack of expertise in delivery, poor antenatal and neo natal health services can cause infant mortality. The lack of infrastructure like warm towels can increase risks of infant mortality
- The PM Matritva Suraksha Abhiyan and the PM Janani Suraksha Yojana emphasizes on providing vital ante-natal and neo-natal care to reduce IMR
Vulnerability to Diseases: The lack of hygiene and sanitation facilities render the children vulnerable to pneumonia and diarrhoea. Diarrhoeaà Low capacity of nutritionà Stunting, Wasting and Child mortality
- The Swachchh Bharat Abhiyan and the NRDWP aim to provide households with clean drinking water
Under Nutrition: The NFHS notes that 33% of under 5 deaths in India are due to malnutrition among children
- Through the ICDS, NNM and mid day meal schemes, the government aims to address issues of malnutrition and hidden hunger
Exclusion from Immunization: India is yet to achieve 100% immunization. This renders children vulnerable to vaccine preventable diseases like Japanese encephalitis as witnessed in the Gorakhpur tragedy.
- Mission Indradhanush aims to universally immunize children and mothers from 11 vaccine-preventable diseases by 2022.
Gender Discrimination: IFPRI’s GHI illustrates that Indian girl child is relatively deprived to the boy in access to nutrition and healthcare. The Economic Survey notes a similar son preference culture. This may lead to increased mortality among the ‘unwanted girl children’

Maternal Mortality Rate (MMR)

Number of delivery deaths per 1 lakh live births: 167 MMR in India (RGI 2013)

Why delivery Deaths?

Lack of institutional delivery
Insufficient antenatal and neo natal care
Forced Re-entry into work after pregnancy
Adolescent Pregnancy and Child Marriages
Insufficient spacing between child births
Gender Discrimination
- Access to nutrition
- Agency of Reproduction
- Agency to access health care services
Poor Nutrition: 53% of women in the reproductive age in India suffer from anaemia according to the

Schemes to reduce IMR and MMR

Janani Suraksha Yojana – MHFW
- Incentivizing institutional delivery by providing cash incentives
- Targeted delivery differentiating between low performing and high performing states
- Free neo-natal care and monitored ASHA linked antenatal care
- Under NRHM
Mathrithva Suraksha Abhiyan
- Free ante-natal care on 9^th of every month
- Private doctors are free to voluntarily participate and render their services
Integrated Child Development Services (ICDS): Maternal factors have a key bearing on the child health beyond the pregnancy. It is therefore prudent to consider them as a single unit rather than compartmentalizing them.
- Free Supplementary Nutrition and Immunization
- Beneficiaries – Pregnant women, Children and lactating Mothers
Maa – Breast Feeding Initiative – Mother’s Absolute Affection
- To reduce under five mortality of children
- Generate adequate awareness among mothers regarding benefits of breastfeeding
- Strengthen inter-personal communication through ASHA

Under Nourishment parameters

Global Nutrition Report – IFPRI and IDS

Parameters used: Stunting, Wasting and Anaemia

Global Hunger Index by IFPRI

Stunting, Wasting, Child Mortality and Undernourishment

Child Sex Ratio

The number of females to 1000 males in the population.

The Economic Survey elucidates a strong meta son preference as parents continue to have children until they get the desired number of sons. This leads to a skewed sex ratio in different directions: favouring males in case it is the last child and females in case it is not the last child.

Schemes to Improve CSR

Beti Bachao Beti Padao (Save the Girl Child, Educate the Girl Child)

Reduce female infanticide and sex-selective abortion
Generate mass awareness in targeted areas to overcome patriarchal and cultural aversion to girl child
Incentivize birth of girl child by passing on social benefits in form of education and financial support – Sukanya Samriddhi Yojana
Reduce the gender disparity in access to education and achieve gender parity in literacy levels

Sukanya Samriddhi Yojana

The main objective is to incentivize the birth of a girl child by enabling a savings account scheme in the name of the girl child which can be used in the future for her own education or marriage

Features

Can be opened anytime after the birth of the girl till she is 10
A minimum deposit of 1000 Rs
Maximum – 1.5 lakh per year
The account remains operative for 21 years or till the marriage of girl after she is 18
Partial withdrawal of balance at 18 years for higher education
Can avail tax benefit under SSY

Regulatory institutions in Health Sector

Dealing with Quality – MCI

Functions of MCI

Accreditation of medical courses and universities
Registration of practitioners, nurses
Recognizing medical qualification

Issues

Parliamentary committee report pointed out rampant nepotism and corruption in MCI which has affected management and administration of all institutions under the MCI
Conflict in a jurisdiction with MHRD and MHFW –National Council for Human Resource in Health– Umbrella organization of dentists, nurses, pharmaceuticals (NCI, DCI, PCI)
Standardisation of tests has caused strife to several students owing to lack of uniformity in syllabus and difficulty in language
Although tests are standardised, MCI fails to ensure uniform quality education for all those who qualify

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NITI Aayog Recommendations

Replace MCI with National Medical Commission to streamline regulation and avoid nexus between bureaucrats, politicians and corporate
Exit eligibility test for doctors
NEET – Common entrance test all over country to award seats to meritorious students to reduce commercialisation of medical education

National Medical Commission Bill,2017

The bill introduced in Lok Sabha seeks to replace MCI with National Medical Commission as per the recommendations of NITI Aayog
NMC would have a government nominated chairman and members, board members will be selected by search committee under cabinet secretary
Medical Pluralism: It calls for a joint sitting between Central Council of Indian Medicine, Central Council of Homeopathy and National Medical Commission once a year to enhance interface between Indian systems of medicine, homeopathy and modern medicine
Bridge Courses: The joint sitting may approve educational modules or programmes for developing bridges between various medical streams allowing Ayurveda and Homeopathy doctors to practice allopathy after passing of the same
Autonomous Regulation: Provides for constitution of 4 autonomous boards that deal with graduate and post graduate medical education, assessment and rating of medical institutions and registration of practitioners under NMC
Licentiate Exam: The Bill proposes an exit (licentiate) exam that is mandatory for all medical graduates to get practicing licenses and for post-graduation
Only 40% of seats in private colleges are under government regulated fees

Critical Response to the Bill

Unitary Character: The centre governments right to nominate members also affects the federal character of the regulatory institution as it subverts powers of state medical councils
Representativeness of Doctors: The IMA has criticized the bill for doctors may not find nomination in the NMC. This reduces the legitimacy and expertise of the body for medical education regulation
Commercialization of Medical Education: The NMC bill raises concerns of commercialization of medical education as private medical colleges have been provided freedom to fix fees for 60% of the seats
Enforcing Medical Singularity: Bridge courses endanger the medical variety of Indian medicine being subsumed by the homogeneous allopathy. This deprives consumer of the diverse medical choices available to them.
Coordination between professions lacking: The NMC does not provide for an inter-personnel education platform that connects medical, nursing and allied health professionals’ education that would reduce doctor dependence particularly in PHCs.
Overlapping Jurisdiction: NMC has been asked to regulate research and prepare roadmaps for health infrastructure. This puts its functioning in overlapping domains with ICMR and central and state ministries respectively

Dealing with Safety and Standards – Drug Regulatory Authority

Ensure safety and quality standards of drugs
Implement legislations and regulation on pharmaceuticals in India

Central Drug Standard Control Organisation

Standardise and regulate medical devices

Dealing with Affordability – National Pharmaceutical Pricing Authority

National List of Essential Medicines – upper limit of drugs and assistive devices fixed
Drugs under Non-scheduled list can be hiked 10% yearly maximum

Why NPPA?

Gain access to affordable medicines – highest out of pocket expenditure- Heightens importance in lieu of the low coverage of health insurance
Nexus between doctors and pharmaceutical companies leaving citizens at the wrong end of an exploitative system

Consequences of Price Control

Discourages Research and Development: Frequent capping of price for drugs discourages research and development as it may not prove to be economically viable.
Discourage production of APIs: Placing the ceiling too low on companies can discourage the production of active pharmaceutical ingredients
- Excessive ceiling on Furoped reduced its availability to 40% and later NPPA was forced to increase the ceiling

Way Forward

Government procurement and distribution through Gen Oushadi shops can help prevent the need for market intervention thus ensuring affordability and viability of R&D at the same time.

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Issues with Drugs

Pharma-Doctor Nexus: The patient is a victim of nexus between pharma companies and doctors that leads them to demand high cost drugs
Quality and Safety of Drugs: Many of the doctors are sceptical about the quality and safety of generic drugs that are sold in the market. They invariably tend to prescribe costly branded alternatives
Lack of Awareness among patients: The patients are not aware of generic medicines and gullibly accept prescriptions without question
IPR policy: India’s IPR policy is not rewarding for research in drug production. Thus, pharma companies fail to innovate to find cost effective drug solutions for several diseases

What can be done?

Quality Control: A robust quality control regime can ensure safety and quality of drugs. Only such a system can pave way for mandatory prescription of branded drugs in the country. Recently, the bio-equivalency test for generics was made mandatory ensuring the generic drugs retain the standard of the original
Quality Testing Facilities: Drug regulation needs to be ensured at every stage: testing during production, post market monitoring, drug alert and drug recall after usages. A skilled human resource base across pharma industries and testing facilities is the need of the hour
Penal Provisions for pharma companies manufacturing substandard drugs. Drug Regulatory Authority can be empowered to identify and take action against such companies
Drug Information Dissemination: Through the portal of PHARMA SAHI DAAM, the government has sought to provide real prices and composition of drugs to educate and empower consumers.

Health Insurance Policy

Rashtriya Swastiya Bima Yojana (RSBY)

An insurance policy of the government that targets lower class workers, street vendors, disabled and senior citizens in India. All stakeholders under RSBY have a lot to gain:

Government – Health of its citizenry, Demographic Dividend
Private insurance companies – Premium through increased coverage
Hospitals- Patients to provide service
Public – Health benefit

Features

Low Premium: Health insurance is provided at frivolous rate of 30 rupees annually
Mandatory Hospitalization: A patient must get hospitalised to avail benefits under RSBY
Vulnerable Sections: Targeting senior citizens, street vendors and differently abled
Freedom of Choice: Patients can avail services from any hospital- private or public using RSBY
Limit of 30k as insurance

Criticisms

Mandatory Hospitalization: 70% of India’s OOPE is on outpatient care while RSBY addresses affordability on the inpatient hospitalization part
Low insured amount: RSBY provides for only 30,000 Rs insurance coverage which is considerably low considering the expenses incurred in tertiary hospitals for specialised diseases – CVD, cancer etc.
Nexus between hospitals and insurance companies
False diagnosis

Evaluation

RSBY has been largely unsuccessful in reaching its coverage targets or reducing OoPE significantly among the poor.

Poor Targeting: Half of those enrolled in RSBY belong to the non-poor category
Low Utilisation: Although coverage was substantial, the hospitalization cases that ended up using RSBY was limited
Low Impact on OoPE: Payment requirements for drugs, diagnostic, inpatient and transport services have hindered the reduction of expenditure as envisaged by RSBY.
Regional Disparity: RSBY performs better in states such as Kerala that have a robust healthcare delivery system
Ineffective Regulation and Monitoring: RSBY has been manipulated by private health centres and insurance companies to exploit the patients through unethical practices and false diagnosis.

National Health Protection Scheme

Launched in the 2018 budget, the NHPS has greatly enhanced its coverage to 10 crore families for 1Lakh insurance amount. It is targeted at reducing out of pocket expenditure of vulnerable sections of society. According to world bank, 62.4% of total health expenditure in the country was out of pocket as of 2014.

Features of the Scheme

Funding: NHPS is a centrally sponsored scheme where funds are shared between centre and state. The NHPS is also backed by the revenue generating power of 1% cess.
High insurance amount: While the RSBY suffered from a lowly insurance fixed at 30k, the NHPS has stepped up the insurance covered for hospitalization to 1 Lakh.
Greater Coverage: The NHPS aims to cover 40-50 crore individuals in vulnerable sections of the population and is thus mandated as the largest healthcare scheme in the world

Issues in the NHPS

Centralized Scheme: The NHPS is introduced as a centrally sponsored scheme but the role, consent or the fiscal capability of the states are not clearly elicited or evaluated by the centre
Ignorance of Primary Healthcare: The NHPS is an addition to the many insurance schemes that focus solely on secondary and tertiary health care expenses. The poorest in India continued to be plagued by diseases that need treatment at the primary level.
Privatization of Healthcare: NHPS creates an insurance-driven culture of healthcare that may lead to private sector domination in the healthcare system. This entails concerns of regional disparity, commercialization of healthcare and neglected diseases and sections
High Fiscal Burden: NHPS is the largest health insurance scheme in the world. Providing insurance for 50 lakh people poses a huge financial challenge to the state given its FRBM commitments