Alleviating the scourge of private healthcare

Source: The post is based on the article “Alleviating the scourge of private healthcare” published in The Hindu on 24th December 2022. 

Syllabus: GS2- Issues related to the development and management of health 

Relevance: Issues related to affordable and accessible healthcare 

News: The article explains the dominant role of the private sector and its dispersed nature. It also explains other challenges that make healthcare unaffordable. 

What are the issues faced by the healthcare system in India? 

There is a dominant role in the private health sector. Its public health expenditure as a percentage of its GDP is 1.28%. The share of general government expenditure dedicated to health is 4.8% which remains akin to the poorest countries. Private spending still constitutes nearly 60% of overall expenditure on health. 

The private sector in India is dispersed. There exist inequities between rural and urban areas and widespread market failure. The private sector is differentiated into a host of organisations of varying sizes and scopes.  

Each of these organisations is serving its own customer base. These often provide care at apparently inexpensive rates. But it is of dubious quality. Such a situation provides few natural incentives for consolidation.  

Healthcare provision in cities tells about the stark market failure in healthcare. The booming number of providers in cities has increased the cost of healthcare. 

Indian healthcare faces regulatory challenges and unfulfilled economic promises. For instance, many States have their own Clinical Establishments Acts that are stuck short of full implementation. 

The high costs of medical education trigger cost recovery through resource-intensive ways of practice.  

What is the way forward to improve the healthcare system?

Affordable private healthcare: There is a need for initiatives that seek to make private healthcare more affordable without affecting care quality. This is likely to encompass a wide range of policy instruments that alter the operating conditions of the private sector. Such policies have to be enshrined in our national health policy.  

This should not be confused with driving public funds into public-private partnerships. Rather, India needs overarching policies that drive down private healthcare costs even for the self-paying consumer with little or no government subsidy. 

Innovations in healthcare: There is a need to incentivise and propagate many business process innovations (BPI) that lie scattered across the healthcare landscape such as the cost-reducing innovations by Aravind Eye Clinic and Narayana Hrudayalaya.  

The healthcare ecosystem does not naturally incentivise such innovations. Regulatory and economic policy signals can be facilitative.  

Task shifting in healthcare: It is an evidence-based instrument to cut costs, especially in under-resourced settings. The National Commission for Allied and Healthcare Professions Act, 2021 can be a boost in this direction. Widening the ambit of the practice of nurses and allied personnel should be a strong emphasis of health policy. 

Setting health boards: There is a need to set up regional health boards that organise care equitably within regions, exploit economies of scale, and bring down healthcare costs. Such boards should have adequate representation from communities. 

These boards should have enough power to determine local policy and resource allocation, impose caps on the maximum number of healthcare providers, and build working networks of care.  

Affordable medical education: The high cost of medical education needs policy attention.  

Strong public healthcare: The need for making private healthcare more affordable can not be denied. But, it can not substitute adequate public spending on health. Affordable private healthcare must only come to supplement strong public healthcare.