Health financing for primary healthcare in rural India: Prospects and options

Authors : Duggal, Ravi

Published Year: 2004

Paper presented at IRMA National conference, December 2004

Primary healthcare in rural India is provided on the basis of a system of entitlements – a sub-centre with two health workers for 2500-5000 population, a 4-10 bedded primary health center with one doctor and various paramedic staff for 10,000-30,000 population, and a 30 bedded Community Health Centre with six doctors including basic specialists for every 5 PHCs. Apart from this there are sub-district and district hospitals for secondary level referral. While this is the stated norm not all states have as yet achieved these levels. These are reasonable levels (though not adequate or optimal) of provision provided all expected facilities in terms of staff, medicines, diagnostics, maintenance, transportation etc are adequately provided for. That is adequate resources are made available for these services to function optimally. In reality this does not happen even in a developed state like Maharashtra. This paper addresses issues related to resource mobilization and resource use in rural health services and develops a framework that can be used to improve allocative efficiency of existing resources as well as tapping additional resources. The paper begins with a review of rural health services, utilization and expenditure patterns, both in the public and private sector. It highlights the various dichotomies existing in the healthcare system vis-à-vis rural health services. It next looks at how resources are presently being used in the public health system and provides a critical and analytic assessment using data from Finance Accounts of various state governments, and uses an illustration from Maharashtra to highlight resource related concerns, constraints and opportunities within the state. After presenting the above analysis the paper goes on to develop a framework for a universal access healthcare system based on equity. It not only discusses the possibilities within the public system but goes beyond to present a comprehensive framework of a public-private mix which works on the principle of universal access and equity, debunking the iniquitous system of usercharges. The paper concludes with how the framework can be made workable, including a profile of financial requirements for the reorganized healthcare system.

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