The private healthcare sector in India is now increasingly being looked upon as a sector that should focus on doing good rather than being run as a responsible business enterprise. The government wants the private hospitals to be good Samaritans and treat patients at such low prices that the business itself becomes unviable!!!
Essentially, the government wants its duties to be discharged by the private sector.
This is a complete abdication of responsibility on the part of the government and totally unfair to the private sector players and their investors. It is a well-known fact that public healthcare expenditure in India remains abysmally low at under 1.4% of the GDP. This compares poorly even with countries in sub-Saharan Africa. According to the WHO World Health Statistics 2015, the public sector in India spent 1.16% on health as a percentage of the GDP, ranking 187th among 194 countries. A recent report in The Wire says ”global evidence on health spending shows that unless a country spends at least 5-6% of its GDP on health, basic healthcare needs are seldom met”.
Another recent report in The Mint pointed out ”The World Health Organization estimates that India spent about $267 per capita on health care in PPP adjusted terms in 2014—China spent three times that amount, Brazil five times, European nations 10 times and the US 20 times”
To make matters far worse is the fact that much of the funds allocated to the sector remain unutilized. This is nothing less than criminal negligence. Sample these facts reported in The Hindustan Times in August 2017.
”More recently, in a performance audit of the Reproductive and Child Health scheme under the National Rural Health Mission (NRHM) tabled in the Parliament last month, CAG said the cumulative unspent amount in 27 states increased from Rs. 7,375 crore in 2011-12 to Rs. 9,509 crore in 2015-16.”
Since the government allocates a minuscule amount for public health and even spends less, the out-of-pocket (OOP) expenditure in India remains high. In the year 2014-15, 62.42% of health spending was borne by the citizens themselves. Unexpected medical expenditure remains the single largest cause of individual families being pushed below the poverty line. The National Health Policy Draft of 2015 estimated that ”nearly 6.3 crore people are faced with poverty every year because they do not have financial protection for their healthcare needs“.With the OOP remaining high, there is a sense of anger and frustration amongst the consumers and the politicians have been cleverly channeling this palpable anger towards private healthcare providers by painting them as uncaring, profiteering and worse.
Now compare this with what is happening in the private healthcare space in India. A recent report (August 2017) in The Scroll cites a PwC study saying that private health spending in India was more than double the government’s expenditure, at 3.3% of the GDP in 2014. The private sector consisting of individual doctors, clinics, nursing homes, diagnostic chains, trust hospitals and corporate hospitals provide care to more than 80% of our people. A report by the India Brand Equity Foundation (IBEF) published last month points out that healthcare sector in India is the largest employer in the country. The sector is expected to record a CAGR of 16.5% between 2008-2020 and the industry size is expected to grow to USD 280 bn.
The same report quotes Department of Industrial Policy and Promotion (DIPP) ”The hospital and diagnostic centers attracted Foreign Direct Investment (FDI) worth US$ 4.34 billion between April 2000 and March 2017.”
A mere glance at this data indicates that while the government has wantonly abandoned its duty of providing good quality healthcare to the citizens of the country, the private healthcare sector continues to make significant investments. Private investments are by definition ”for profit” investments and are made in the rightful expectation of a reasonable return on the capital employed.
Instead of spending scarce public funds on building new infrastructure, decongest government hospitals, ensuring efficient and smooth management of these hospitals and providing greater access to the citizens to public healthcare, the government is busy pandering to the masses through populist measures and what may even be called as bullying.
Populist policy announcements, which are not even clearly thought through are being made every day. It has been announced yesterday that any citizen in the city of Delhi who fails to get timely medical attention in a Delhi government hospital can approach a private healthcare institution and avail of cash-less services, which will be reimbursed to the hospital by the government later at rates, which are very low. The private hospital has no choice but to accept the patient and treat him at government-mandated pricing.
This kind of policy-making, akin to shooting from the hip must stop.
The government should define its own role in the healthcare sector in the country.
It must be said, even though it may sound harsh that the responsibility of providing good quality healthcare to those who cannot afford private healthcare squarely lies with the government.This is a responsibility, which it must not attempt to shirk or palm off to the private sector.
The views expressed are personal