Regulation of wellness vs wealth offers a contrasting picture

Source: The post is based on the article “Regulation of wellness vs wealth offers a contrasting picture” published in the Business Standard on 18^th October 2022.

Syllabus: GS 2 – Issues relating to development and management of Social Sector/Services relating to Health.

Relevance: About the state regulation in the health sector.

News: Regulation is a form of state intervention to correct market failures. Recent reports of exports of substandard paediatric drugs and the last two years of the pandemic experience have brought attention to the state “regulation” of the health and wellness sector.

Why State regulation is essential in finance?

State intervention is necessary when the free market yields inefficient and poor outcomes. Regulation usually involves the creation of arm’s length statutory authorities that are empowered and autonomous and accountable for outcomes.

The financial sector is much better regulated than it was when the government directly regulated the sector. For example,

The Reserve Bank of India (RBI) regulates banking and payment systems and conducts monetary policy, autonomously.

The Securities and Exchange Board of India (Sebi) regulates the securities market.

How does state regulation in the financial sector evolve?

The implementation of recommendations of expert committees and parliamentary oversight led to changes to keep up with evolving domestic developments and global best practices.

The continuing problems of consumer protection and technological developments, like fintech, call for revisiting these issues periodically.

What is the present status of state regulation in the health sector?

Like in the financial sector of the early 1990s, it is the Ministry of Health that continues to be the primary regulator. For example, the law on drugs and the law on clinical establishments empower the Ministry of Health and not any arm’s length statutory agency.

There are nine national regulators for the “wellness” sector. This includes, recently a regulator has been created for allied healthcare professionals like physiotherapists, optometrists and over 50 other professionals who support diagnosis and treatment.

There are separate regulators for rehabilitation professionals like speech therapists, clinical psychologists, hearing aid and ear-mould technicians; special teachers for educating and training the handicapped and so on.

Why state regulation in the health sector is challenging?

Regulating health sector is an incredibly complex because

a) The Constitution of India allocates the subject of health to both the Union and the states. b) Focusing only on the Union, India has a statutory regulatory authority for setting and enforcing standards for food safety and one non-statutory authority for the safety of drugs and pharmaceuticals and one for regulating the prices of some of them.

c) The regulation of the wellness sector necessarily involves regulating health sector professionals. So, the regulation should have authority for regulating the medical, dental nursing and pharmacist professions.

How state regulation in the health sector is different from state regulation in the financial sector?

a) Financial sector regulators are empowered by law to write regulations to carry out the purposes of the law. On the other hand, eight of the nine regulators in the wellness sector need government approval for issuing regulations. The one exception is the National Medical Commission (NMC) created in 2019 to replace the Medical Council of India.

b) The governing boards of all the financial sector regulators have the power to determine the human resources required by them as well as their terms and conditions of employment. But, none of the wellness regulators have these powers and need government approval for such decisions.

So, the regulation of wellness deserves much greater attention from scholars, policy-makers and the parliament.