Appropriate Role for Private Sector in Health Care in India (2012)

The paper describes the changing political economy in India with a focus on the growth of the private health sector and provides a sound evidence-based critique of the existing situation. It looks at recent trends in growth of the private sector, especially during the last couple of decades. These years were characterized by liberalization of the Indian economy and the structural adjustment policies that followed. The new direction of health policy is towards reducing the role of government while increasing that of the private sector. The paper discusses various ways in which the state itself has provided direct and indirect support to the private sector - in medical education, in the form of concessions and subsidies to private medical professionals and hospitals, through PPPs, and lack of by lack of regulation. In short, the private sector in India has grown with the support of crutches from the state, which has led to its unprecedented boom. The paper also looks at PPP arrangements in health care critically and identifies policy gaps therein. The paper is particularly important as it raises issues of regulation of the private health care sector, which assumes greater significance in the context of the recommendations by the HLEG on UHC as well as the Steering Committee on Health for the Twelfth Five Year Plan. If UHC means contracting with private providers on an even larger scale without reining them in, it would inevitably result in cost-escalation, large scale corruption and eventual failure.

Team: Ravi Duggal, Oommen Kurian, Padma Deosthali, Suchitra Wagle

Supported by: VHAI