“The reality is straightforward. The power of existing interventions is not matched by the power of health systems to deliver them to those in greatest need, in a comprehensive way, and on an adequate scale”.
Health Priorities are changing. As a result of focused action over the last decade we are projected to attain Millennium Development Goals with respect to maternal and child mortality.
- Maternal mortality now accounts for 0.55% of all deaths and 4% of all female deaths in the 15 to 49 year age group. This is still 46,500 maternal deaths too many, and demands that the commitments to further reduction must not flag. However it also signifies a rising and unfulfilled expectation of many other health needs that currently receive little public attention. There are many infectious diseases which the system has failed to respond to – either in terms of prevention or access to treatment. Then there is a growing burden of non-communicable disease.
- The second important change in context is the emergence of a robust health care industry growing at 15% compound annual growth rate (CAGR). This represents twice the rate of growth in all services and thrice the national economic growth rate.
- Thirdly, incidence of catastrophic expenditure due to health care costs is growing and is now being estimated to be one of the major contributors to poverty. The drain on family incomes due to health care costs can neutralize the gains of income increases and every Government scheme aimed to reduce poverty.
- The fourth and final change in context is that economic growth has increased the fiscal capacity available. Therefore, the country needs a new health policy that is responsive to these contextual changes.
The primary aim of the National Health Policy, 2015, is to inform, clarify, strengthen and prioritize the role of the Government in shaping health systems in all its dimensions- investment in health, organization and financing of healthcare services, prevention of diseases and promotion of good health through cross sectoral action, access to technologies, developing human resources, encouraging medical pluralism, building the knowledge base required for better health, financial protection strategies and regulation and legislation for health.
Health Care Industry
Engaging and supporting the growth of the health care industry has been an important element of public policy. The private health care industry is valued at $40 billion and is projected to grow to $280 billion by 2020 as per market sources. The current growth rate of this perennially and most rapidly growing area of the economy, the healthcare industry, at 14% is projected to be 21% in the next decade. Even during the global recession of 2008, this sector remained relatively recession-proof.
The private health care industry is complex and differentiated:
- It includes insurance and equipment, which accounts for about 15%
- pharmaceuticals which accounts for over 25%,
- about 10% on diagnostics,
- and about 50% is hospitals and clinical care.
The private sector growth cannot be seen merely as a consequence of limited public sector investment. The Government has had an active policy in the last 25 years of building a positive economic climate for the health care industry. Amongst these measures are lower direct taxes; higher depreciation in medical equipment; Income Tax exemptions for 5 years for rural hospitals; custom duty exemptions for imported equipment that are lifesaving; Income Tax exemption for Health Insurance; and active engagement through publicly financed health insurance which now covers almost 27% of the population. Further forms of assistance are preferential and subsidized allocation of land that has been acquired under the public acquisitions Act, and the subsidized education for medical, nursing and other paramedical professionals graduating from government institutions and who constitute a significant proportion of the human resources that work for the private sector; and the provision for 100% FDI. Indeed in one year alone 2012-13-as per market sources the private health care industry attracted over 2 billion dollars of FDI much of it as venture capital. For International Finance Corporation, the section of the World Bank investing in private sector, the Indian private health care industry is the second highest destination for its global investments in health. While recognizing that the growth of such industry brings in revenue through medical tourism and that it provides employment, there is a necessity and a rationale for the Health Ministry to intervene and to actively shape the growth of this sector for ensuring that it is aligned to its overall health policy goals, especially with regards to access and financial protection. There is also a need to ensure that excessive capitalization and overcrowding in a few cities does not lead to demands on public financing, and that the basic policy structure, especially as regards costs, standards and regulation is not unduly influenced by the requirements and perceptions of industry.
Role of Private Sector
The private sector today provides nearly 80% of outpatient care and about 60% of inpatient care. (The out-patient estimate would be significantly lower if we included only qualified providers. By NSSO estimates as much as 40% of the private care is likely to be by informal unqualified providers). 72% of all private health care enterprises are own-account-enterprises (OAEs), which are household run businesses providing health services without hiring a worker on a fairly regular basis. These are very different in their needs, perceptions and services from both the medical establishments and within the latter from the corporate sector-which represents the health care industry. But over time employment OAEs are declining and the number of medical establishments and corporate hospitals is rising. There are major ongoing efforts to organize such OAEs within the corporate sector and to regulate these by the Government. Regular information about this sector, their differentiation and their practices, problems and needs are essential for the Government to engage with them. Often for OAEs and smaller medical establishments the main grounds for engagement are not financial partnerships with government, but skill up-gradation, referral support, sharing information of public health importance and improved clinical quality for effectiveness in public health priority areas. In terms of comparative efficiency, public sector is value for money as it accounts (based on the NSSO 60th round) for less than 30 % of total expenditure, but provides for about 20% of outpatient care and 40% of in-patient care. This same expenditure also pays for 60% of end-of-life care (RGI estimates on hospital mortality), and almost 100% of preventive and promotive care and a substantial part of medical and nursing education as well.
Investment in Health Care
Despite years of strong economic growth and increased Government health spending in the 11th Five Year plan period, the total spending on healthcare in 2011 in the country is about 4.1% of GDP. Global evidence on health spending shows that unless a country spends at least 5–6% of its GDP on health and the major part of it is from Government expenditure, basic health care needs are seldom met. The Government spending on healthcare in India is only 1.04% of GDP which is about 4 % of total Government expenditure, less than 30% of total health spending. This translates in absolute terms to Rs. 957 per capita at current market prices. The Central Government share of this is Rs. 325 (0.34% GDP) while State Government share translates to about Rs. 632 on per capita basis at base line scenario. Perhaps the single most important policy pronouncement of the National Health Policy 2002 articulated in the 10th, 11th and 12th Five Year Plans, and the NRHM framework was the decision to increase public health expenditure to 2 to 3 % of the GDP. Public health expenditure rose briskly in the first years of the NRHM, but at the peak of its performance it started stagnating at about 1.04 % of the GDP. The pinch of such stagnation is felt in the failure to expand workforce, even to train and retain them. This reluctance to provide for regular employment affects service delivery, regulatory functions, management functions and research and development functions of the Government. Though there is always space to generate some more value for the money provided, it is unrealistic to expect to achieve key goals in a Five Year Plan on half the estimated and sanctioned budget. The failure to attain minimum levels of public health expenditure remains the single most important constraint. While it is important to recognize the growth and potential of a rapidly expanding private sector, international experience (as evidenced from the table below) shows that health outcomes and financial protection are closely related to absolute and relative levels of public health expenditure.
Of the developing countries in the table above, two nations, Brazil and Thailand, are considered to have achieved close to universal health coverage- Thailand has almost the same total health expenditure as India but its proportion of public health expenditure is 77.7% of total health expenditures (which is 3.2 % of the GDP) and this is spent through a form of strategic purchasing in which about 95% is purchased from public health care facilities- which is what gives it such a high efficiency. Brazil spends 9% of its GDP on health but of this public health expenditure constitutes 4.1 % of the GDP (which is 45.7% of total health expenditure). This public health expenditure accounts for almost 75 % of all health care provision. It would be ambitious if India could aspire to a public health expenditure of 4% of the GDP, but most expert groups have estimated 2.5 % as being more realistic. At such levels of expenditure, “purchasing,” would have to be mainly from public providers for efficient use of resources with purchasing from private providers only for supplementation.
Health as a Fundamental Right
One of the fundamental policy questions of our times is whether to pass a health rights bill making health as a fundamental right– in the way that was done for education. Many industrialized nations have laws that do so. Many of the developing nations that have made significant progress towards universal health coverage like Brazil and Thailand have done so and the presence of such a law was a major contributory factor. A number of international covenants to which we are joint signatories give us such a mandate- and this could be used to make a national law. Courts have also rulings that in effect see health care as a fundamental right- and a constitutional obligation flowing out of the right to life. There has been a ten-year long discussion over this without a final resolution. The policy question is whether we have reached the level of economic and health systems development as to make this a justiciable right- implying that its denial is an offense. And whether when health care is a State subject, it is desirable or useful to make a central law? And whether such a law should mainly focus on the enforcement of public health standards on water, sanitation, food safety, air pollution etc, or on health rights- access to health care and quality of health care – i.e on what the state enforces on citizens or on what the citizen demands of the state? Or does the health policy take the position that given the existence of a large number of laws including the Clinical Establishments Act, and the track record on adopting them and implementing them, a Central law is neither essential nor feasible. To break the deadlock and this vacillation and move forward with determination- the draft national health policy proposes the following formulation- “the Center shall enact, after due discussion and on the request of three or more States (using the same legal clause as used for the Clinical Establishments Bill) a National Health Rights Act, which will ensure health as a fundamental right, whose denial will be justiciable. States would voluntarily opt to adopt this by a resolution of their Legislative Assembly. States which have achieved a per capita public health expenditure rate of over Rs 3800 per capita ( at current prices) should be in a position to deliver on this- and though many States are some distance away- there are states which are approaching or have even reached this target.” Such a policy formulation/resolution we feel would be the right signal to give a push for more public health expenditure as well as for the recognition of health as a basic human right, and its realization as goal that the nation must set itself.
Another significant proposed policy change is that the government actively wants to work towards a “change in mindset” where people move away from “imagining public hospitals as social enterprises that ideally must recover the costs of their functioning, to reimagining them as part of a tax-financed single-payer healthcare system in which, what public hospitals deliver is not free care, but rather pre-paid care.” The other corollary of viewing public services not as free, but as pre-paid services is that quality of care would become an imperative. The policy statement also assures universal access to free drugs and diagnostics in government-run hospitals. Since independence, India has twice drafted a National Health Policy framework—once in 1983 and then in 2002—which have guided the approach towards the health sector in Five-Year plans.
The government is also keen to explore the creation of a health cess on the lines of education cess for raising money needed to fund the expenditure it would entail. “Other than general taxation, this cess could mobilize contributions from specific commodity taxes such as the taxes on tobacco, and alcohol, from specific industries and innovative forms of resource mobilization,” the draft policy states.
While there is an intent to increase spend on health care, the draft policy also stresses on the role of private sector. While the public sector is to focus on preventive and secondary care services, the document recommends contracting out services like ambulatory care, imaging and diagnostics, tertiary care down to non-medical services such as catering and laundry to the private sector.
The draft document highlights the urgent need to improve the performance of health systems, with focus on improving maternal mortality rate, controlling infectious diseases, tackling the growing burden of non-communicable diseases and bringing down medical expenses among other things.