National Health Policy must not push privatisation of healthcare in India

A market solution to the problems plaguing India’s healthcare sector is not possible because of problems such as information asymmetry and externalities inherent in the market

opinion Updated: Sep 14, 2017 10:52 IST
National Health Policy,healthcare,Gorakhpur medical college
Two mother along with newly born babies sharing a bed at Mahatma Gandhi Memorial Medical College hospital, Jamshedpur, September 7. The Annual Health Survey data records 66 deaths per 1,000 live births, and that’s similar to the numbers in war ravaged Afghanistan (Manoj Kumar/HT)

In Gorakhpur, more than 75 children have died since August 7 at the Baba Raghav Das Medical College Hospital. A closer look at the statistics related to the child mortality at the Gorakhpur hospital speaks volumes about the successive governments’ apathy towards health in UP. The infant mortality rate (IMR) at Gorakhpur is one of the highest in the world. The Annual Health Survey data records 66 deaths per 1,000 live births, and that’s similar to the numbers in war ravaged Afghanistan. Importantly, Gorakhpur is not a deviant case; Uttar Pradesh’s IMR is one of the highest in India. In fact, barring a few states, the rest of India is not very different from UP.

The chronic fund deficiency has greatly affected the ability of the public health facilities in India to meet the healthcare needs of the rising population. While the public sector is on the decline, governments have been promoting the private sector in health through various policies. Interestingly, the public expenditure on health was 0.9% of GDP in 2005 when India’s high economic growth was being celebrated with much fan-fare. India’s tax to GDP ratio increased from 6% in 1950-51 to 17% in 2015-16 but the money has not been used to enhance the capacity of the public healthcare delivery system.

As the government had almost withered away in the health sector, private hospitals have devised ways of extract money from the hapless patients. This could happen partly because the medical professionals have enjoyed complete impunity. As a result, India has some pathetic healthcare statistics, like: More consumption of antibiotics than anywhere else in the world, excessive use of diagnostic tests, and, caesarean delivery rates is as high as 87% of live births in some states against the WHO norms of 10-15% of total deliveries in a country.

A major reason for this is the corporatisation of hospitals. Earlier, doctors used to take decisions in the best interests of the patient. Now, they also serve the interests of their employers. Doctors hardly have any options as most corporate and large private hospitals set revenue targets for their consultants, which then force them to pass it on to patients in the form of unnecessary clinical tests and even unnecessary surgical procedures. Consequently, hundreds of thousands of crores of rupees is being wasted each year due to over-diagnosis and overtreatment, even as millions of people still do not have access to medical care.

A leading contributor to many of the above mentioned issues is commercialisation of medical education, which has been pushed too far with the massive increase in the number of private medical colleges across India. The proponents of this policy argued that the privatisation push was necessary to meet the demand for doctors, particularly in the rural areas. As expected, this policy backfired. About 80% of the doctors are located in urban areas, serving 28% of the India’s population. Also, around 60% of the medical seats are in private medical colleges and the medical graduates passing out from these colleges pay “capitation fees” running into crores of rupees to get an MBBS degree. No wonder that they would be averse to the idea of practising in rural areas as their primary concern becomes the recovery of the capital they’ve invested in their education.

India’s new National Health Policy 2017 has gone a step ahead with its call for strategic purchase of healthcare from the private sector with public money. It is worth noting that the key mechanism of strategic purchasing is insurance. The NHP envisages that purchasing should be separated from provisioning of healthcare, particularly for hospital care. It seems the architects of India’s NHP have faith in the market solutions for efficient allocation of resources, completely oblivious to the fact that the market actually fails because of problems such as information asymmetry and externalities inherent in the healthcare market.

Soumitra Ghosh is assistant professor at Tata Institute of Social Sciences, Mumbai

The views expressed are personal

First Published: Sep 14, 2017 10:52 IST