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Health Care and New Economic Policies: The Further Consolidation of the Private Sector in India

Authors : Duggal, Ravi

Published Year: 1998

Paper Presented at the National Seminar on the Rights to Development, University of Mumbai, December 10-11, 1998, 13 p.

Economic reforms towards liberalisation began in the early eighties. The classical 'Hindu' rate of growth in the eighties had doubled from 3% to 6%, without much inflation and with declining levels of poverty. Thus we were already liberalising our economy and speeding up growth without the World Bank running the show. Infact, the post (1991)-reform period slowed down growth, increased poverty and inflation, and reversed many trends of the eighties. Today health care has become fully commodified and the private sector is the dominant provider of health care globally, as well as in India. New medical technology has aided such a development and the character of health care as a service is being eroded rapidly. This process of commodification has created a unique characteristic of the health sector making health care a supply-induced demand market. Provision of routine medical care for a wide range of diseases and symptoms in India is mostly in the private sector. As regards the public sector the large investment in health care is being wasted due to improper planning, financing and organisation of the health care delivery system. While public health services are inadequate to meet peoples health care needs the private health sector whatever be its quality and / or effectiveness has filled the gap. Private medical practice flourishes almost everywhere. Medical practice in India is a multi-system discipline and in addition is also burdened with a large number of unqualified practitioners. Private general practice is the most commonly used health care service by patients in both rural and urban areas. This translates into a whopping Rs.400 to 600 billion private health care market in the country at today's market prices. This large private health care market has grown with direct and indirect state support. The government provides concessions and subsidies to private medical professionals and hospitals to set up private practice and hospitals. The government has pioneered the introduction of modern health care services in remote areas by setting up PHCs. While the latter introduces the local population to modern health care it also provides the private sector an entry point to set themselves up. Construction of public hospitals and health centres are generally contracted out to the private sector. In recent years the government health services have introduced selectively fee-for-services at its health facilities. The government has allowed the private health sector to proliferate uncontrolled. The above are a few illustrations of how the state has helped strengthen the private health sector in India. In today’s liberalised scenario, and with World Bank’s advice of limiting state's role to selective health care for a selective population, the private health sector is ready for another leap in its growth. And this will mean further appropriation of people's health and a worsening health care scenario for the majority population. 2 Finally a very clear impact one sees is declining state investments in the health sector. New medical technologies have helped complete the commodification of health care and this has attracted increased interest of the corporate sector that has jumped into the health care business in a very big way. This has led to the further consolidation of the private health sector in India.

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