Health policy: Spend more, regulate better

The nation has a new health policy after 14 years. The long gap itself indicates the priority, or the lack thereof, accorded to a sector that is in need of some urgent attention and has deep linkages with the nation’s aspiration to grow faster and emerge as a strong economy in the global order. The new policy has proposed seven key shifts in organising health care services, among them a welcome change in primary care from selective to assured comprehensive care with linkages to referral hospitals. In secondary and tertiary care, the policy moves from an input-oriented to an output-based strategic purchasing, which indicates an increased reliance on providing health care through the private sector. “Strategic purchasing” involves proactive decisions about which services should be purchased, how they should be purchased and from whom rather than a “passive purchasing” model under which pre-determined allocations are spent and bills are routinely reimbursed.

The mechanics of “strategic purchasing” will be long drawn out and complex in the Indian environment, where the regulatory mechanism is weak, the private sector has grown fast and trust in the public sector health system is low.

In the policy, the strategic purchase of secondary and tertiary care services have been described as a short term measure. The order of preference for purchase of services will be public sector hospitals followed by services from the not-for profit private sector and then from the commercial private sector in underserved areas, “based on availability of services of acceptable and defined quality criteria”. In the long run, the policy sees “fully equipped and functional public sector hospitals in these areas to meet secondary and tertiary health care needs of the population, especially the poorest and marginalised”.

The policy says “strategic purchasing” would play a stewardship role in directing private investment towards those areas and those services for which currently there are no providers or few providers. Theoretically speaking, this is one of the key objectives of “strategic purchasing” – services can be improved by linking plans and priorities to resource allocation and population health needs and customer expectations can be met by building into them purchasing decisions.

But the mechanics of “strategic purchasing” will be long drawn out and complex in the Indian environment, where the regulatory mechanism is weak, the private sector has grown fast and trust in the public sector health system is low. The increased reliance on the private sector, even if this is to be “in the short term” (with no timeframe defined), then becomes an important thrust and change in direction that will mean a new territory for public health services.

In India, the private health sector has by and large failed to align itself to the healthcare needs of the nation. Consider the following facts from the policy document and the “situation analysis” presented as a backdrop to the policy:

  • India has one of the largest programmes of publicly financed antiretroviral therapy (ART) drugs for HIV affected persons. In addition, all drugs and diagnostics in vector borne disease control programmes, tuberculosis, leprosy, immunisation programmes and much of the maternity, newborn and infant care are free. There is limited contribution of the private sector in these areas.
  • The inability to cover the entire spectrum of health care needs, through increased public investment has led to a rise in out of pocket expenditure and consequent impoverishment. Over 63 million persons are pushed to poverty every year due to health care costs.
  • In 2014, the average amount spent per child birth as inpatient in private hospitals was nine times that spent in public hospitals for both rural and urban areas across all quintiles.
  • Another concern is related to denial of services by private hospitals for many categories of illnesses, and over supply of some services. Some hospitals, insurance companies and administrators have also resorted to various fraudulent measures.
  • There is evidence of supplier induced demand and lack of standard treatment practices, leading to aberrations such as unnecessary injections, irrational treatment regimens and excessive medications being provided in the private medical sector.

Some of the bigger ones building on a misread corporatised, revenue-maximising culture have certainly set the trend and unless they are corrected and the law is brought down heavily on the violators, they only become fatter and bigger and their methods become the standard for others to follow.

A lot of these facts in the official government are sourced from non-government studies and reports though each of them merits alarm bells that should make officialdom sit up and investigate. In reality, the picture may be worse. There have been indications of rank malpractices in some of the biggest names in the health care sector. Among them are such obnoxious systems that make in-patients go through diagnostics over weekends only to be charged extra because that is supposed to be a weekly holiday, illegal systems under which senior doctors are allegedly given revenue targets to fulfill and an alliance between some manufacturers of kits and drugs, path labs, practicing doctors and corporate heads.  This works as a double whammy since some of the suppliers work as powerful business lobbies that can push their side of the story to the detriment of patient interests. For an example, in the case of the recent changes in stent prices, there were many efforts made to ensure that the prices were not controlled. All of this is not to speak of concerns like dignity, confidentiality, accountability, transparency and convenience, let alone affordability, equity and professionalism.

The widespread violations don’t mean that the entire private health sector is to be condemned. There are some very good (if rare) examples of non-profits and for-profit organisations and professionals offering robust services to the community. But some of the bigger ones building on a misread corporatised, revenue-maximising culture have certainly set the trend and unless they are corrected and the law is brought down heavily on the violators, they only become fatter and bigger and their methods become the standard for others to follow. This cannot be the road to healthcare for all.

So while it’s is a good policy move to involve the private sector in providing health care for all, what is equally required is a heavy increase in public sector investment to reach out to more people across all strata of society. This showcases what is possible, sets the national health agenda and provides directional momentum to the growth of the sector. The current expenditure by the government at 1.15 per cent of the GDP is among the lowest anywhere, and the proposed increase to 2.5 % by 2025 is still way behind what is required if the targets are to be met. This spending has to rise dramatically, coupled with an approach that rewards those who are able to serve the needs of the people but also an approach that is ready to punish the violators.

(Jagdish Rattanani is Editor, SPJIMR. R K Pattnaik is Professor, SPJIMR)

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