The problem

INDIA inherited a broken country with a severe famine on its eastern borders, nearly ten million refugees in the West, a divided social fabric mired in acute poverty, illiteracy, disease, a life expectancy not exceeding 32 years and empty coffers. Yet, there was hope. The British had also left behind ideas – of nationhood, equality, rule of law and a host of aspirations enshrined in a written Constitution, and a fine blueprint for action in the health sector drafted by Sir Joseph Bhore in 1946.

India was not alone. Other countries like China and Sri Lanka were also victims of colonial rule. However, looking back, the progress and development achievements of these three countries are very varied. Both China and Sri Lanka have achieved zero open defecation, near universal access to safe water and literacy, and low levels of malnourishment. Compared to that, India’s record is worrying with 40% people defecating in the open, a similar number of children malnourished and only about two thirds to three quarters with access to literacy and safe water. The low performance on the provision of basic goods is also reflected in the poor performance under key health indicators such as maternal and child mortality. While both under five child mortality and infant mortality are three times more in India than China and Sri Lanka, maternal mortality in India has 174 per lakh live births compared to less than 30 in the other two countries.

The initial decades following India’s freedom were focused on containing the spread of infectious diseases, namely small pox and malaria, building a primary healthcare infrastructure in rural areas and hospitals in urban areas. During this period research institutions were established, like the All India Institute of Medical Sciences (AIIMS) to produce the required human resources. Notwithstanding these efforts, financing was far too low and inadequate for healthcare and its social determinants. The lack of strict prioritization backed with funds became a trend that never got reversed, explaining in part the reason for India’s dismal performance. India never really placed health and education as central to the discourse on development. Its polity never acknowledged that education and health were determinants to economic growth. It is therefore not surprising that India stands 158 out of 195 countries in the Human Capability Index of the World Bank published early last year, having improved by only three points since 1990.

Starting with Bismarck in the 19th century, up until the Second World War, health was seen as ‘welfare’ and an obligation of the state to ensure for its people. Underscored by the principle of equity, the focus shifted to ensuring that all citizens received healthcare services of comparable quality irrespective of their social status and ability to pay. It was only in the ’60s and ’70s that health began to be argued as a marketable commodity. With the co-option of this idea in public policy initiated by Margaret Thatcher and Ronald Reagan, the process of privatization of health began to find traction. In this process a clear distinction began to emerge – one that is often overlooked – between private provisioning of services and the element of profiteering and commercialization in the delivery of healthcare services, neutral to the ethical implications. The emergence of health markets witnessed its first corporate hospital in the mid-eighties with the establishment of the Apollo Hospital in Chennai.

The deteriorating economy, culminating with the IMF guided structural adjustment of the ’90s led to a further constriction of government resources for health. The strict target of reducing fiscal deficit meant choking out all revenue expenditures. Training schools got shut, procurement of drugs and equipment postponed and further expansion of facilities stalled. To meet the growing demand for medical care, government extended custom duty waivers and subsidized land to private enterprises as a means of incentivizing them to establish hospitals. The response was phenomenal as seen by the dramatic growth of the private sector for medical services over the last three decades.

Today, India has a substantially privatized health system. Three quarters of outpatient care and 60% of inpatient care is provided by the private sector. The private sector has also established its monopoly in drug and vaccine manufacture and has a dominant position in the training of doctors and paramedical personnel. Over the years, high-end medical treatment and tertiary care got consolidated in the commercialized arm of the private sector while the low margin primary care got pushed to unqualified providers, leaving government a smaller proportion of medical and public healthcare services in all the three segments – tertiary, secondary and primary, largely catering to the needs of the poor.

The government also took over the responsibility of infectious disease control implemented through the nationally designed programmes for malaria, leprosy, TB, HIV/AIDS and maternal and child health. Within this narrowed focus, the government has been able to eradicate small pox, polio, guinea worm, yaws and contain malaria and caseloads under other diseases. However, the gains could have been more impressive if the disease control programmes had been implemented in coordination with the social determinants that are the major causal factors for much of the communicable disease burden. Despite India transitioning to a low middle income country status, it continues to account for a high burden of communicable diseases.

The recently published disease burden estimations show that India has a dual burden of disease with 32.7% of communicable diseases alongside a rapidly increasing burden of non-communicable diseases, albeit showing wide interstate differentials:

Historical reasons, as well as the low fiscal capacity of the poorer states, explain their poor performance. For example: Bihar’s per capita income is three times lesser than that of Tamil Nadu, severely constraining its ability to find the resources to address its huge needs. Ensuring a more equitable system would require a new financing model where the central government would need to intervene more differentially in favour of the poorer states.

India has three National Health Policies. The first was published in 1984, the second in 2002 and the third in 2015. Though these policies laid down goals, objectives and time bound targets, none were achieved within the given time frames. They were, however, useful in providing a certain direction to public policy. The first NHP was in response to the historic Alma Ata Declaration of 1978 that called upon all nations to ensure universal access to comprehensive primary healthcare for achieving the global goal of Health For All by 2000.

The Second NHP was the result of two landmark developments in circa 2000. One, the adoption of the Millennium Development Goals that sought to lay down targets to be achieved by all countries by 2015; and the other, the publication of the Report of the Commission on Macroeconomics and Health. Headed by an eminent economist, Jeffrey Sachs, the CMH provided evidence of the strong linkage that underlies ‘health and wealth’, and called for countries to focus on providing essential care close to the clients. It was around 2004 that the NSSO published its report clearly showing that people, particularly in rural areas, were getting impoverished by seeking expensive treatment in private hospitals – a clear fallout of reduced public investment as a result of the structural adjustment.

The new government in 2004 was compelled by civil society to revitalize the ailing primary healthcare system in rural areas, particularly focused in the northern and northeastern states. The budget was tripled for the National Rural Health Mission. A million community workers were trained and a massive effort launched to tackle maternal and child healthcare. The world’s largest cash transfer scheme was launched to incentivize pregnant women to deliver in public hospitals as the principle strategy to reduce maternal mortality. The rate of decline under all indicators doubled when contrasted with global averages, and footfalls substantially increased in primary health centres. For example, reduction of mortality of under five year olds fell from 126 per 1000 in 1990 to 43 per 1000 by 2015. Maternal mortality fell from 556 to 176 per one lakh live births during the same period. These were real gains.

Priorities changed with the global call to achieve the aspiration of Universal Health Coverage. In 2005, the WHO called upon all member countries to ‘develop their health systems, so that all people have access to services and do not suffer financial hardship paying for them.’ This goal was included in the Sustainable Development Goals of 2015 to be achieved by circa 2030. With the Secretary General of the UN throwing his weight behind this vision, member countries shifted gear from verticalized disease control programmes to a broader systems approach.

The third NHP was articulated in the backdrop of the global goal of achieving UHC. This goal was to be achieved by expanding access to hospital care and treatment of non-communicable diseases by co-opting the services of the private sector through strategically purchasing services from them. The key objective of UHC was to reduce impoverishment on account of medical bills. In India, ordinary households spend close to 7% of their total non-food expenditures on healthcare. In cases of hospitalization or chronic illnesses, it can rise to 15 per cent.

The first decade of 2000 saw a burst of state initiatives to reduce the financial burden on the poor. The Yeshaswani Scheme in Karnataka initiated in 2003 provided cashless surgeries for all farmers. A similar lookalike scheme was formulated by the Andhra Pradesh government in 2007 to include 85% of the population of the state. Called Rajiv Aarogyashri, this scheme enabled the enroled beneficiaries cashless treatment in public and private hospitals. A trust was created to enlist hospitals, do prior authorization and settle the claims. Based on a strong IT platform, this scheme became a game changer. It triggered similar interest in other states, also because of the perception that this scheme contributed to a 5% swing in votes in the 2009 elections favouring the party in power.

While states launched their own versions of government sponsored health insurance schemes under which premiums were paid by the government for the target populations, in 2009 the Government of India launched a national scheme called the Rashtriya Swasthya Bima Yojana or RSBY. This was an initiative by the Ministry of Labour for 93% of the informal labour. Thirty thousand rupees were assured for a family of five on a floater basis and was to be implemented in partnership with the states.

By 2012, India was implementing a two-pronged strategy to address two key objectives of the health system – improved population health and the removal of fiscal barriers to access. The first was to be achieved through the National Health Mission by providing free primary healthcare in rural and urban areas, and the second by expanding access to hospital care through health insurance.

The new NDA government did not give much attention to health in the initial years and funding remained stagnant. The NHM, government’s flagship programme, received an average of about Rs 18000-20000 crore per annum during the period 2014-2018. Within this budget, new initiatives such as a National Dialysis programme (providing free dialysis for the poor in district hospitals on a PPP mode), were also to be accommodated, further reducing the resource available for primary healthcare in rural and urban areas.

India’s health sector faces five structural challenges – a highly commercialized and corrupt private sector functioning in a non-regulatory environment; a dual disease burden; a shortage of human resources for health, both medical and non-medical; low public spending and inequitable access. In order to address some of these challenges, the government, in 2018, introduced three key initiatives that could have far-reaching implications on the nature of the health system. These are discussed below.

A shortage of human resources: One reason for the grossly inadequate number and inappropriately trained doctors is the disastrous functioning of the Medical Council of India. The commercialization of medical education and the non-adherence to quality, has created a shortage of doctors. In response to the Report of the Standing Committee of Parliament in 2016 indicting the MCI as corrupt and inefficient, the government drafted the National Medical Commission Bill that is currently pending approval of the Parliament. The NMC Bill has four important features: (i) it replaces the principle of elected regulators with nominated ones; (ii) it promotes private capital for establishing medical colleges by extending two incentives – a more laissez-faire environment and permission to charge market rates for 50% of the seats; and (iii) it eases the pre-qualifications for foreign doctors to work in India; and (iv) it allows non-medical personnel to prescribe essential drugs as notified by the NMC. This bill, when passed, will enable a larger number of people to provide primary care and also make specialist care very expensive.

In order to improve population health and reduce impoverishment, the government has formulated the Ayushman Bharat scheme that was launched on 25 September 2018. The Ayushman Bharat has two components: First, the National Health Protection Scheme covering the poor listed in the 2012 Socio Economic Caste Census (SECC) with an assured hospital insurance of five lakh rupees. The scheme dispenses with the need for identification cards – an aadhaar or a ration card being adequate – and also enables the beneficiary to avail of cashless treatment in any empanelled hospital in the country. A sum of Rs 2000 crore was allocated for this scheme. It is expected that under the 3% health cess, Rs 10,000 crore will be mobilized. This funding is, however, for the 60% central share, the remaining 40% being provided by the state government.

In view of the supply-demand imbalances in the current situation, the scheme is likely to have a limited impact, more so because it addresses only 30% of the out of pocket expenses and not the expenditures incurred by patients in outpatient situations, on drugs and diagnostics.

In order to bridge the supply deficit in the northern states, public-private partnerships is seen as an effective option. Besides providing an effective market under the NHPS, government is also willing to offer land and electricity at concessional rates to incentivize the private sector to establish hospitals in tier II and III towns. Another guideline facilitates district hospitals to hand over a portion of their facilities to private partners on a long-term lease to build the infrastructure to provide services to treat cardiac, cancer, orthopaedic and respiratory ailments. These guidelines deepen privatization of the health sector and will have budgetary implications.

The second component of Ayushman Bharat, called the Wellness Clinics, is equally bold as it envisages strengthening all the 150,000 sub-centres, located at the rate of one sub-centre for every 5000 population, with capacity to deliver a package of 12 services that range from antenatal care to mental health and other NCD’s, alongside over 30 diagnostic tests free of cost at the point of service. It is envisaged to have these centres manned by mid-level providers – an ayush practitioner or a nurse with additional training in public health. This scheme was allocated Rs 1200 crore.

The vision of the Wellness Clinics is ambitious. It is, however, stymied by two concerns – money and human resources. The existing primary healthcare system that provides a far more limited range of services in accordance with standards laid down by the Indian Public Health Standards of the Ministry of Health, will require a capital investment of one lakh crore rupees with a recurring additional budget of Rs 40,000 crore. This will take the government health spending from 0.4% to 1.3% of the GDP.

The list of 12 guaranteed services requires developing a host of skills ranging from midwives, physiotherapists, counsellors, to nurses and mid-level providers. Training centres to produce these skill sets are few and of poor quality. The success of this intervention hinges on the quality of the personnel appointed. With no pilot project to establish quality benchmarks, budgets, supervisory systems and the monitoring platforms required to be designed and provided for, implementation on a scaled up mode is likely to be varied and non-standardized.

The policies that have recently been formulated could have a huge impact and far reaching implications. Success will depend on the details of the design formulation, the funding allocated and the integrity of implementation. With the strong trend towards privatization without provider regulations, the impact could be adverse because of market imperfections inherent in health markets. The apprehension is that given the compulsions of political economy, the NHPS will always command a higher priority over the routine but vital primary care that address public health needs. Despite evidence clearly showing that effective primary care can reduce emergencies and hospitalization by over one third; promote wellness and reduce the disease burden, and that infectious diseases can have devastating impacts on economic growth as seen in Liberia which lost 4% of its GDP to the Ebola outbreak in 2016, India continues to neglect the importance of primary care and population health.

India is highly vulnerable. Zika, hitherto known only to Brazil, has infected over 150 women in Rajasthan. India is also witnessing a rebound of TB and vector borne infections. India has yet to eliminate leprosy. With this disease profile, India can ill afford to neglect its primary functions of ensuring health security to its people.

In economies like India that have competing demands on its resources, where macroeconomic fundamentals are not strong while the choice to deepen privatization in an unregulated environments are, where standards of oversight and governance are weak and where there is an unwillingness to create a competitive environment to control price escalations, the implications for equity and efficiency can be adverse. It is only fair that the government publishes a white paper indicating the consequences of present day policies for the future status of well-being and health security.

K. SUJATHA RAO

* K. Sujatha Rao is the author of Do We Care? Indi’s Health System. Oxford University Press, Delhi, 2018.