PRIVATE SECTOR'S CLOUT

PRIVATE SECTOR'S CLOUT

Ravi Duggal

Since private health care sector dominates the Indian health care Scene, focus should be on creating health policies that will help the poor benefit from this sector.

Historically, provision of health care services has moved away from the traditional, non-institutionally trained and home-based petty-commodity producer, to the sophisticated, institutionally qualified, market-and-commodity-dependent service-provider on the one hand, and the completely corporate, institution-based service on the other hand. Today, health care has become fully commodified and the private sector is the dominant provider of health care nationally and globally. New medical technology has aided such a development and the character of health care as a service is getting eroded rapidly. Given the basic nature of health care services being governed by a supply-induced demand market, such commodification is not good for people's health.

Provision of routine medical care for a wide range of diseases and symptoms in India is mostly in the private sector. Government health centers throughout the county have failed to provide people with the basic health care. A large investment made by the public sector in health care gets wasted because of improper planning, financing and organisation of the health care delivery system. The national public health expenditure today is bout Rs. 130 billion a year (Rs. 133 per capita, or less than 1% of GDP), being spent on 5000 hospitals and 500,000 beds, 11,500 dispensaries, 24,000 PHSs, 15,000 sub centers and various preventive and promotive programmes, including family planning. The State employs only 14.0 doctors although it produces each year 1,40.000 doctors of just modern medicine in the 108 medical colleges it runs. However, the services provided by the state do not meet the expectations of people. Just 20% of routine morbidity and about half of the hospitalisation are treated through public institution providers. The rest is taken care of by the private health sector, whatever be its quality and / or effectiveness.

When people fall ill, the first line of contact is usually the neighborhood general practitioner (GP), or some government facility like a dispensary, primary health center or a hospital. That the GP is the most sought after health care provider has been confirmed now by a number of studies, and this ranges from 60% to 85% of all non-hospital care which patients seek. But there are different types of GPs in the market place (including outright quacks and cross-practitioners). They are more so in the rural areas where the majority of the population resides. These quacks may be more a risk than a help to patients.

While modern medicine has simplified treatment of most illnesses and symptoms to a few drugs (even making many of us self-prescribes) its commercialisation has brought in more problems than benefits. The pharmaceutical industry and the medical equipment industry have both caused many harms to the ethics of medical profession. Their marketing practices have lured a large majority of medical professionals (and not the unqualified quacks alone) to increasingly resort to unnecessary and irrational prescription of drugs, overuse of diagnostic tests, like CAT scan, ultrasound and ECG. And uncalled-for references to specialists and super-specialists. For all of these, an well-organised kickback system operator – the giver and beneficiaries calling it commission!

PRIVATE HEALTH CARE SECTOR DOMINATES

As the public health infrastructure in the country is very small and grossly inadequate to meet the health care demands, the private health care sector has taken a dominant position Private general practice is the most commonly used health care service in both rural and urban areas.

The dominance of the private health sector is not something that has emerged recently or out of specific policies favoring privatisation under the new economic regime of liberalisation and globalisation. It has always been there, including the state's support for it to grow and flourish. In the eighties, date from small micro-studies as well as national level studies by the National Sample Survey and the NCAER, provided necessary evidence to show the overwhelming dominance of the private health sector in India. These studies show that 60-0% of health care is sought in the private sector of which households contribute 4% to 6% of their incomes. This means a whopping Rs. 400 to 600 billion private healthcare markets in the country at today's market prices. This includes the hospital sector where the private sector has about 50% of the market share. While some policies of the state have actively promoted the private health sector's growth, others have done this through sheer inaction and lack of concern. Some examples:

Medical education is almost wholly state-financed and its major beneficiary is the doctor who sets up private practice after his / her training. More than three-fourths of medial college graduates from state institutions work in the private sector or migrate abroad. Though they are rained using public funds. Their contribution to society is very little because they engage in health care as a business activity
The government provides concessions and subsidies to private medical professionals and hospitals to set up private practice and hospitals. It provides incentives, tax holidays, and subsidies to private pharmaceutical and medical equipment industry. It manufactures and supplies raw materials (bulk drugs) to private formulation units at subsidies rate / low cost. It allows exemptions in taxes and duties in importing medical equipment and drugs, especially the highly expensive new medical technologies.
The government has allowed the highly profitable private hospital sector to function as trusts, which are exempt from taxes. Hence they don't contribute to the state exchequer even when they charge patients exorbitantly.
The government has been contracting out its programs and health services selectively to NGOs in rural areas where its own services are ineffective. This will further discredit public health services and pave the way for further privatisation.
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 centers are generally contracted out to the private sector. The latter makes a lot of money but a large part of the infrastructure thus created, especially in rural areas is inadequately provided and hence cannot meet the health care demands of the people.
Medical and pharmaceutical research and development is largely carried out in public institutions but the major beneficiary is the private sector. Development of drugs and medical and surgical techniques are pioneered in public institutions but commercialisation, marketing and profit appropriation is left with the private sector.
The government has allowed the private health sector to proliferate uncontrolled. Neither the government nor the Medical Council of India have any control over medical practice, its ethics, its rationality, its profiteering etc. There is no regulation of quality of practice and standards in hospital care of any kind whatsoever.

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.

IMPACT OF NEW ECONOMIC POLICIES

Poverty constitutes the core of the macro-economy and in Indian anti-poverty programs are a big business and crucial for political survival. It is precisely these investments which have prevented a collapse, although poverty statistics have shown an increasing trend in proportions and numbers in the nineties. Health care is a very crucial part of this poverty syndrome because unlike education you cannot avoid it.

One very clear impact is the declining state investment in the health sector. With rising debt burdens of the state the social sectors are the first to receive the axe. There has been a declining trend since 1991 in social sector expenditures, especially by the Central government and this is best reflected in the compression of grants to the states for social sector expenditures (Tulasidhar, 1992 and Duggal, 1995). Health care expenditures too have been affected both in quantitative terms (declining real expenditures) and qualitative terms (increasing proportion of establishment costs and declining proportion on medicines, equipment, maintenance and new investments). Another very striking impact is the rapidly rising cost of medicines. With a large dependence on the private health sector even by the poor, this has meant extreme hardship. With the drug price control virtually on its way out and with India having signed the WTO treaty on IPR, we are moving closer to international prices of drugs. The combined effect of both the above facts makes a deadly mixture that results in reduced access for the poor to health care.

Health Action, Vol.12, No.9 (Special Issue), September 1999, pp. 44-45.

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