Health Services in India: Setting
the Record Straight
Public policy in
health care and consequent development of health care services has undergone
several significant changes in the ten years that the UPA has been in
Government. UPA I started on a fairly positive note with the formulation of the
Common Minimum programme, which in the health sector promised the following:
“The UPA
government will raise public spending on health to at least 2-3% of GDP over
the next five years with focus on primary health care. A national scheme for
health insurance for poor families will be introduced. The UPA will step up
public investment in programmes to control all communicable diseases and also
provide leadership to the national AIDS control effort.
The UPA government
will take all steps to ensure availability of life-savings drugs at reasonable
prices. Special attention will be paid to the poorer sections in the matter of
health care. The feasibility of reviving public sector units set up for the
manufacture of critical bulk drugs will be re-examined so as to bring down and
keep a check on prices of drugs”.
By 2009 the Congress was
much more dominant in government formation (than in the case of UPA II) and
unlike in 2004 there was no common programme that was announced or promised.
The Congress in its manifesto promised: “We
will guarantee health security for all. The
National Rural Health Mission has already begun to make a noticeable impact and
will be implemented with an even greater sense of urgency. The Rashtriya
Swasthya Bima Yojana (RSBY) introduced by the Congress-led UPA Government
offers health insurance for poor families. Expenditure on health is a major
cause of indebtedness, particularly in rural areas. The Indian National
Congress pledges that every family living below the poverty line will be
covered by the RSBY over the next three years. Every district headquarters
hospital will be upgraded to provide quality heath facilities to all”.
State of Health
Care Services
It is in this backdrop that we examine the
performance of the 10 years of governance by the UPA. Overall, there is a
severe mismatch today between the needs and aspirations of a majority of
Indians and the actual situation as regards health care services. The public
health sector in India is in a state of neglect and large sections of the
population depend on a poorly regulated private sector increasingly dominated
by big hospitals, which have an infamous track record of unethical practices.
In fact, with private health care accounting for 80% of outpatient and 60% of
in-patient care, India is one of the most privatized systems in the world.
Public health services are marked by poor access,
low quality and limited choice. The National Rural Health Mission has led to
some improvements but much remains to be done. Rampant corruption plagues parts
of the public health system, jeopardizing significantly the possibility of
bringing about positive changes.
Out-of-pocket expenditure on health care continues
to contribute to widespread poverty in India. In
an attempt to protect patients from ‘catastrophic’
health expenses, publicly funded health insurance
schemes have been rolled out. But these only cover
in-patient care at the secondary and
tertiary levels of care. The private medical sector
is growing rapidly and is fast transforming itself into a networked system of
corporate owned hospital chains. This sector is largely unregulated, expensive,
often provides care of dubious quality, and is plagued by complaints of
unethical behaviour.
A large part of out-of-pocket payments are made on
medicines, and public procurement and
distribution of medicines constitute a very small
fraction of drug consumption. In addition, since the protection of the
long-standing1970 Patent Act was lifted in 2005, generic pharmaceutical
companies are unable to produce cheaper versions of new drugs, and most new
drugs are now sold by multinational corporations at prices well beyond the
reach of most Indian patients.
Clearly, thus, we see a huge gap between promise and
delivery. Let us look at some of the key issues.
Allocation of
Finances for Health
The Jan Swasthya
Abhiyan and several other advocates of public health have long advocated for a
major increase in financial allocation by central and state governments to the
health sector – at least to 5% of GDP as recommended by the WHO. India has for too long had among the
lowest levels of public expenditure
on healthcare in the world (see Table 1). The CMP of UPA I and the Eleventh
Five Year Plan had both promised to increase public health expenditure to 2 to
3 percent of GDP. However, current public health expenditure in the country
stands at a fraction above 1.06% of the GDP. Over the years states have been
starved of funds through a variety of fiscal mechanisms, but even during the 11th Plan period the states
actually performed better than the centre in allocation of funds for
health care. The Eleventh Plan had projected an allocation of 0.87% of
GDP by the Centre and 1.13% by States by 2011–12. At the end of the Plan period
the allocation stood
at 0.32% of GDP by the centre and 0.68% of GDP by
states. The major shortfall was a consequence of the meagre Central allocation.
Interestingly the 12th Five Year Plan has further lowered it sights
and now proposes an allocation of 1.87% of GDP.
Table 1: Percent Public Health
Expenditure by Region in the World
Country/Region Public
Expenditure on Health as percent
of
total health expenditure
India 29.20
Average of High income countries 65.10
Average of Low income countries 38.78
Average of Middle income countries 52.04
World 62.76
Source: World Bank Database
(http://data.worldbank.org/)
The
most immediate indication of the huge gap between promise and delivery comes
from the 2013-14 budgets. Table 2 provides the overall figures for budgetary
allocation on health in the past three years.
Table 2: Allocation for Health in 2013-14 Budgets
|
|
Budget
Allocated
2013-14
(in Cr)
|
Budget
Allocated
2012-13
(in Cr)
|
Budget
Allocated
2011-12
(in Cr)
|
|
Total
to MoHFW
|
37330.00
(8.2%
increase of over previous year)
|
34488.00
(12.8%
increase of over previous year
|
30456
|
|
Allocation
for National Rural Health Mission
|
18880.35 (50.5%
of total allocation) --
2%
increase from previous year allocation)
|
18515.35
(53.68% of total allocation -- 14.7% increase from 11-12)
|
16140.76
(52.48% of total allocation)
|
There
has been a mere 8.2 per cent increase in total allocation over the previous
year. These needs to be contrasted with the promise in the 12th Five Year Plan
that allocation for health would be increased by 300 per cent over the
allocation for the 11th Plan. In other words the 12th Plan projects an increase
of around 60 per cent every year, over the previous year’s allocation. The
present increase, however, is barely enough to cover for inflation, meaning
that there has been no actual increase proposed.
More
intriguingly, if we adjust for inflation, the 2 per cent increase
for the National Rural Health Mission actually translates into a decrease in
real allocation. This is so despite the announcement that the NRHM shall now
include two new components – a flexi-pool for communicable disease control and
for urban health (previously not covered by the NRHM, and hence leading to the
proposal to rename the NRHM as the National Health Mission). It is an
indication of the way the government of the day functions that it believes that
it is perfectly rational to announce an expansion of a government programme,
and at the same time actually propose a cut in the budget!
National Rural Health Mission and Public Health Services
The
public health system has continued to function in an adverse climate
– with powerful forces continuing to actively propose that large parts of
public funded health care should be handed over to the private sector -- even
after the launch of the NRHM. Since its launch, funds released have been
only one third of the envisaged funds under the approved framework of the NRHM
- about Rs 66,000 crore was released against Rs 175,000 crores envisaged. Funds
released under 11th Plan are less than half of what was the original Plan
outlay.
It
is necessary to nail the lie that the public sector is inherently inefficient.
Today, public health expenditure accounts for only 20 per cent of
total health expenditure and includes the services of only 20 per cent of
the country’s health workforce. Yet it provides for about 20 per cent of
all out-patient care (33 per cent of all qualified out-patient
care); 40 per cent of all in-patient care, including about 60 per
cent of all hospital based critical pre-terminal care; and almost
100 per cent of all preventive and promotive care. Inefficiencies as
well as corruption do exist in the system. But these are not inherent faults of
the system; they are introduced into the system by the same government that
calls it inefficient.
The situation has started to change in some public
facilities, though the changes have been inadequate and uneven (see Table 3).
What is however significant is that we now have fresh evidence in India that
good quality care, as certified by external assessors, can be provided by
public hospitals.
Table 3: Status of Health
Infrastructure in India
Infrastructure March
2007 March 2011 Percent Required Gap
Increase
Sub-Centre 145272
148124 2 178267 17
PHC 22370
23887 6 29213
18
CHC 4045
4809 16 7294 34
Dt . Hospital 340
613 45 640 4
Source: RHS Bulletin 2007 and 2011, MOHFW
Quality of care is also dependent on the
infrastructure, equipment and supplies being available. The critical gap is not
just in resources -- it also lies in the lack of transparent and efficient systems
by which these can be assured.
The experience accrued from the running of the NRHM
allows us to identify the bottlenecks, which include:
·
The
notion that ‘free services are not valued’ has become an internalized
perception- and there is clear resistance to changing over to free services.
This resistance is more pronounced in the case of tertiary level services.
·
Drug
supplies neither cover all requirements nor are they uninterrupted, making
outside drug prescriptions with out of pocket expenditures common.
·
Diagnostics
are the main source of user fee collections across the nation, and hospitals
are loathe to let this avenue go.
·
The
practice of free diet was given up in the nineties and is being revived with
some difficulty.
·
Informal
charges (read demanding payments by corrupt means) remain and are highest in
states where salaries are very low or not paid on time.
·
Travel
to the facility is a huge cost, though a number of assured patient transport
services have somewhat reduced these costs.
·
Where
referrals to private sector become necessary, because of a lack of services in
the public sector, the government does not accept the costs of care incurred in
such referrals.
Planning
Commission’s Attempt to Delegitimise Public Services
However there is another part of this story. While
even the grossly underfunded and neglected public system shows signs that it
can deliver quality services, votaries of privatization (led by the Planning
Commission) have recently been pressing for a shift towards greater reliance on
private sector provision of health services.
In
2011 the government set up a High Level Expert Group (HLEG), tasked to
recommend ways in which the country could achieve Universal Health Care (UHC).
UHC, by this time, had already become a buzzword in international circles.
Unfortunately, UHC has come to mean different things for different people as
there has never been any conceptual clarity regarding what UHC means. To some
UHC was quickly converted to Universal Health Coverage (rather than care) and
then further coverage was taken to mean coverage by a limited insurance based
package, and not access to comprehensive health services. There was a very deep
game that was played out, and there was a deliberate ploy to limit the discussion
to the financing of UHC and not to how health care would actually be provided.
The
HLEG report made several useful recommendations, including recommendations
to abolish user fees; to move from selective health care to comprehensive
health care; and to replace a system where only BPL was eligible for free care
to where almost everyone was entitled to free care. But the HLEG did not
unambiguously recommend that universal care, to be accessible to all, must
ultimately be provided by public health facilities. Instead the HLEG report
said: “State governments should
consider experimenting with arrangements where the state and district purchase
care from an integrated network of combined primary, secondary and tertiary
care providers”. It thus kept ambiguous the question as to who the
‘integrated network’ would actually represent.
The
Planning Commission, however, used this paragraph for its own purposes and it
became the major part of the HLEG’s recommendations that the Planning
Commission selectively quoted. The Planning Commission understood the phrase
‘integrated network’ to mean a network that was run by a private entity! Thus
the initial draft of the health chapter of the 12th Plan document went on to
elaborate its grand plan of handing health care over to the corporate sector,
very akin to the disastrous ‘managed care’ model in the United States. Fortunately
the Planning Commission’s wishes did not entirely fructify. Several
organisations, including the Jan Swasthya Abhiyan, and even the government’s
own ministry of health, objected to this formulation. Eventually the notion was
watered down in the final 12th Plan document to a recommendation that pilot
programmes on UHC would be run during the Plan period in some districts.
Human Resources for Health
One
of the most important deficiencies in the public health system -- indeed often
the main limiting factor -- is the lack of skilled human resources, especially
in rural and remote areas (Table 4).
Table 4: Human Resources in
Public Facilities
Cadre March
2007 March 2011 Percent Increase Required Gap (%)
ANM 147439
187675 21 393041 52
HW (Male) 62881
52215 -20 207480
75
Nurses 29776
65344 54 138623
53
Doctors 22608
26329 14 109484
76
Specialists 5117
6935 26 58352 88
Pharmacists 17919
24671 27 58389
58
Lab. Tech. 12101
16208 25 80308
80
Source: RHS
Bulletin 2007 and 2011, MOHFW
There
are several important reasons for this crisis. Firstly the deliberate choice made to halt government
investment in public sector
medical colleges and encourage private medical and nursing institutions. This shift has further skewed the
tendency of medical and nursing graduates to avoid serving in rural and remote areas.
The first corrective needed is therefore for public investment in building
medical, nursing and paramedical educational institutions that are primarily
located in regions where the human resource gaps are worst.
The
second corrective is to clearly identify skill requirements at different levels
of care and to deploy health personnel based on such requirements. Effecting
such a change, requires alterations in existing curriculum, requires bridge
courses and specially designed supplementary packages and even requires the
creation of new professional categories.
Another
important reason for the huge deficit in Public Health services is the complete
lack of regulation of the private sector and promotion of the corporate sector.
Doctors graduating from the burgeoning, hugely costly private medical colleges
need to amass money by any means; something which has been made possible by
complete lack of regulation of the growing private sector.
Both
of these measures while necessary are not sufficient – a lot more needs to be
done. First and foremost is preferential selection for education and training
from areas and communities which are under-serviced, and then training them as
close to their areas as possible, in the state language preferably and
deploying them back in these same districts. This should be supplemented with a
package of financial and non-financial incentives and the building of a
positive workforce environment that would retain the employees.
The
large effort by the government to deploy over 700,000 Accredited Social Health
Activists (ASHA), as part of the NRHM, has had some positive impact in rural
areas, but the program is under-resourced and these health assistants are paid
a pittance, which is not commensurate with their heavy workloads. Further,
sporadic attempts to put together a cadre of health workers with three-year
training to address the most common problems at primary levels of care has not
taken off (except to a limited extent in a few states); this is largely a
consequence of opposition from the medical fraternity.
National Health Insurance
The
UPA Government projects the rapid national coverage by its Rashtriya Swasthya
Bima Yojana (RSBY) as one of its achievements. Launched in 2009 the RSBY is
designed to protect patients from the ‘catastrophic’ impact of out-of pocket
expenses incurred on hospital care – as modelled on the state of Andhra
Pradesh’s Rajiv Arogyasri scheme. In the current Twelfth Five-Year Plan,
similar insurance schemes have received even greater attention and support. There
are also state-level health insurance schemes that have been launched or are in
the pipeline in Kerala (Comprehensive Health Insurance Scheme), Tamil Nadu
(originally called the Kalaignar scheme), Delhi (Apka Swasthya Bima Yojana),
Karnataka (Yeshasvini Health Insurance Scheme) and Maharashtra (Rajiv Gandhi
Jeevandayee Arogya Yojana).
These
schemes are meant for hospital care only and cover a specific list of
procedures. Patients are provided a choice of accredited institutions where
they can receive treatment and be reimbursed for costs not surpassing a set
ceiling. This type of health insurance is publicly funded; in the case of the
RSBY the cost of the premiums is shared by central government (75%) and state
governments (25%).
Two
fundamental pillars support these kinds of health insurance schemes. First,
they operate on the logic of what is called a ‘split between financing and
provisioning’, that is, a clear separation between the financing of the services
provided and the facilities where these services are available. While financing
comes from public resources (central or state government funds), treatment can be
provided by any accredited facility, public or private. In practice, when it
comes to provisioning a large majority of accredited institutions are in the
private sector. For example, in the case of the Arogyasri scheme in Andhra
Pradesh, the total payments to facilities accredited under the scheme from 2007
to 2013 amounted to Rs 47.23 billion, of which Rs 10.71 billion was paid to
public facilities and Rs 36.52 billion went to private facilities.
The
second pillar of these schemes is that beneficiaries are insured against a set
of ailments that require hospitalization at secondary and tertiary levels of
care. They do not provide comprehensive health care, and are limited only to a
pre-defined package of procedures. Excluded are almost all infectious diseases
that are treated in out-patient settings, such as tuberculosis that requires
prolonged treatment, most chronic diseases (diabetes, hypertension and heart
diseases), or cancer treatments that do not call for hospitalization. To take
the Arogyasri example again, the scheme draws 25% of the state’s health budget
while covering only 2% of the burden of disease. Such skewed priorities end up
distorting the entire structure of the health system and public money is
squandered to strengthen the already dominant corporate health sector.
The
health insurance system starves primary care facilities. In 2009-2010, direct
government expenditure on tertiary care was slightly over 20% of total health
expenditure but if one adds spending on the insurance schemes that focus
entirely on hospital-based care, total public expenditure on tertiary care
would be closer to 37%.42 In Andhra Pradesh, following the implementation of
the Arogyasri scheme the proportion of funds allocated for primary care fell by
14%.
The
High Level Expert Group set up by the Planning Commission in preparation for
the Twelfth Five-Year Plan clearly stated that the use of independent private
sector agencies and insurance companies under schemes such as RSBY: “fragments
the nature of care being provided, and over time leads to high health care cost
inflation and lower levels of wellness…since there is virtually no focus on
primary level curative, preventive, and promotive services and on long-term
wellness outcomes, these traditional insurance schemes often lead to inferior
health outcomes and high healthcare cost inflation.”
Corporate
takeover of Health care in India
The declining state of India’s public system is undeniably linked
to the ascent of a private sector that now has a majority share in various
components of health care, as illustrated in Table 5. There has been a proliferation
of private medical colleges that have created human resource shortages in the
public system, the growth of an unregulated medical equipment industry
contributing to booming costs of care, and of a powerful pharmaceutical
industry that manufactures and sells overpriced, irrational medicines and drug
combinations.
Table 5: Share of the private sector in India’s health system
Category Share of the
private sector
Medical
graduates and post-graduates 90-95%
Outpatient
care 80%
Indoor
patients 60%
Undergraduate
seats in medical colleges 45%
Manufacture of
medicines 99.5 %
Manufacture of
medical devices 100%
One very visible manifestation of the private takeover of health
services is the mushrooming of corporate hospitals. Hospital chains’ revenues
have grown exponentially in recent years. For example, the total nationwide
revenue of Apollo Hospital, the largest corporate chain in India, rose from Rs
16.1 billion in 2009 to Rs 31.5 billion in 2012. The rules of the game have
shifted from promoting public health to mere profiteering as made possible by corporate-friendly
regulations. There is also a large body of evidence – anecdotal and scientifically
recorded – that shows how private providers entice patients with false claims
and promises, fleece poor patients, and provide inadequate care. Regulatory
agencies such as the Central Drugs Standards Control Organization (CDSCO) and
the Medical Council of India (MCI) have been largely ineffective in controlling
this.
While a transition to a system that is based almost
entirely on public delivery of health services is necessary, in the interim the
large (and growing) private sector cannot be wished away. Comprehensive
regulation of the private medical sector in India is absolutely essential. Key
areas requiring regulation should include the following:
a) Standardization of structures and human-power of facilities
to ensure quality of care
b) Protecting patients rights
c) Equalizing accessibility / distribution of
establishments
d) Standardization and rationalization of process of
care based on standard protocols
e)
Rationalizing and containing costs of care
The
current Clinical Establishments Registration and Regulation Act lays down
certain very broad guidelines for regulation, and it has currently been adopted
by only a few states. On one hand, the act needs to be broadened since it does
not mention the principles of patients’ rights or ensuring public health
obligations of private providers. Such reformulation should be based on a consultative
process; to take into account the concerns of various stakeholders including
health rights organizations and patients groups, so that no serious lacunae
remain. At the same time the act needs to be made universally applicable in all
states.
Medicines for All?
Access
to essential medicines is a major determinant of health outcomes and an
integral, and often crucial, component of health care. It has been estimated by
different sources that 50% to 80% of the Indian population are not able to access
all the medicines that they need. The World Medicine Report of the World Health
Organization finds that India is the country with largest number of people (649
million) without having access to essential medicines. Given that India today
is the 3rd largest producer
of drugs (by volume) in the world and exports medicines to over 200 countries,
this is clearly an unacceptable situation.
It
is only recently that India has tried to implement a national essential drugs
policy that would aim to achieve better access, as part of the NRHM goal to
make all essential drugs available at appropriate levels of the public health
system. However progress has been slow in ensuring access and in many states
medicines cannot be obtained through the public health system when required.
There are several reasons for this, including a lack of adequate supplies due
to funding constraints and procurement policies, and the poor functioning and
outreach of public facilities.
In
2012, Prime Minister Manmohan Singh (in his Independence day speech) announced
a “free medicines” scheme, under which all essential medicines would be
available at no cost in all public facilities. While initially proposed as a
scheme that would be financed by the central government, the responsibility has
now been passed on to state governments. Insignificant progress has taken place
in most parts of the country with the significant exception of Rajasthan. ‘Free
medicines for all’ programs in public facilities have been operational in some
states for a long time, most notably through the Tamilnadu Medical Services
Corporation (TNMSC) in the state of Tamilnadu and more recently in Rajasthan.
These experiences need to be replicated in other states; in addition to
improving access to medicines, they have helped develop transparent norms for
drug procurement and distribution for public sector facilities.
Since
1970, the government has endeavored to regulate the prices of some drugs
through successive Drug Price Control Orders (DPCOs) but the number of drugs
covered has come down from 342 in 1979 to 74 in the latest DPCO of 1995. After
a Public Interest Litigation was filed by the All India Drug Action Network
(AIDAN) in 2003, highlighting that high drug prices were a major cause for catastrophic
medical expenses in the country, the Supreme Court issued a directive to
expeditiously put in place a mechanism to control essential drug prices to
affordable levels.
In
response to the Supreme Court directive, the government has now introduced
price control on 348 drugs listed as essential. However, marginal benefits (if
any) are likely to accrue because the new DPCO fixes ceiling prices based on an
average of existing prices in the market (a departure from the earlier practice
of fixing based on manufacturing cost). This methodology would largely reflect
the price of the brand leaders, serving to legitimize the rampant overpricing
of drugs today. Since the prices of medicines in the bulk market and the costs
for manufacturing formulations are widely known, there is no difficulty in
fixing prices on a cost-based formula that looks at raw materials and
manufacturing costs, after allowing for a fair profit margin.
