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Swallow the bitter pill now

More than additional resources, India needs to engage in innovative thinking for improved delivery of health services, writes Peter A Berman.

india Updated: Apr 16, 2007 23:34 IST

India’s health system is at a crossroads. Since Independence, the country’s health status may have improved significantly, but too many still suffer and die from easily preventable infections, childbirth-related complications, and under-nutrition. These continuing challenges, together with communicable diseases such as tuberculosis and malaria, remain high on the country’s unfinished health agenda.

At the same time, new health threats are emerging. The rise in chronic adult diseases such as cardiovascular illnesses and diabetes is stretching the system’s capacity to respond. And, HIV threatens some of the gains of the recent past.

Fortunately, positive action is underway. Political concern with health is higher today than before. The National Rural Health Mission (NHRM) has been launched. Even states’ finances are looking up. The Prime Minister and the Finance Minister have called for a doubling or more of public spending on health, from the current 0.9 per cent of GDP to 2 to 3 per cent over the next five years. Budgets are increasing for disease control, including for Aids, reproductive and child health, and nutrition.

But, simply providing more resources is not enough. Health services suffer from systemic problems that limit efficiency of resources. The need of the moment is innovation. While there is progress in new efforts, fresh thinking is called for in critical areas.

Improving children’s health is a human imperative as well as the basis of India’s much-touted demographic dividend. Infant and child mortality rates can, and should, fall much faster. Today, India accounts for nearly 30 per cent (1.2 million out of 4 million) of neonatal deaths worldwide. Its child malnutrition rates are among the highest in the world. Because India invests so little in basic promotive, preventative, and treatment services, greater allocation of resources and effort will indeed be required. But, governments must also find innovative ways to improve the delivery of priority health services. For instance, NGOs and private actors can partner with government. Bangladesh today has better child mortality indicators than India, although it started from a worse position years ago, in part because of such successful partnerships.

Ensuring efficient outpatient services is another priority. This is where the public has the most contact with the health system. National Sample Survey data have shown that most outpatient treatment is provided by the private sector, even for the rural poor, and for many problems of public health importance. Most private providers are ‘less than fully qualified’, provide services of questionable quality, and account for a large share of the financial burden on the poor. They are generally unorganised and unregulated. Public Health Centres (PHC) were initially established to provide many of these services, but they often fail to reach the public. Will more funding alone for PHCs solve this problem? Innovations are needed. These may involve improving the functioning of lower level public facilities as well as engaging existing non-government service providers.

Health problems are a major cause of financial insecurity. Nearly all private health service providers require families to spend out-of-pocket at the point of service. This leaves people, especially the poor, highly vulnerable. Without adequate financial support, hospitalisation often results in financial catastrophe. Only 10 per cent Indians — most in government and industries — have insurance, much of it inadequate. More than 40 per cent of hospitalised Indians borrow money or sell assets to cover medical expenses. Creative uses of healthcare financing can be a powerful means to reduce the financial burden as well as improve healthcare delivery. Bolivia has had notable successes by providing additional funding to health facilities based on their care of poor women and children. Some experimentation is underway with health insurance, cash transfers, and community financing.

The challenge now is to chart multiple paths forward. India’s dynamic IT sector has shown that the country has what it takes to adopt fresh ways of thinking. A new generation of creative thinkers and doers is emerging in fields like management, communications, distribution, and finance. In the health sector too, new initiatives like NRHM, have opened up fresh space for the government to innovate. The question now is: can the system deliver?

Peter A Berman is Lead Economist, Health, World Bank