Rajasthan’s health Bill reflects ground reality
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Take your experience further with Premium access. Thought-provoking Opinions, Expert Analysis, In-depth Insights and other Member Only BenefitsThe Rajasthan government creating the right to health and the opposition to provisions of the law by private medical practitioners have turned the spotlight on the economics and realities of the Indian healthcare system.
The cardinal reality is that the Indian economy spends a very small amount on healthcare and so, a lot of poor people go without proper medical help when they are in acute need of it. According to the latest statistics, India spends a mere 3.2 per cent of its GDP on healthcare, which is even below the average spend of 3.5 per cent by South Asian countries. Sri Lanka has traditionally been ahead of India and stands (or used to till it got into serious economic trouble) at 3.8 per cent. Bangladesh is behind at 3 per cent but it gets better value for what it spends, thanks to its strong NGO network which helps in affordable delivery. Compared to this, the US spends 18 per cent, the UK 12 per cent and Japan 11 per cent.
What is perhaps the most unfortunate part of the Indian scene is that almost half of the spending on healthcare is done through out-of-pocket expenditure. In 2018-19, 48 per cent of the expenditure was out of pocket and government expenditure 41 per cent. So, a country which is still poor (according to the international classification, it is a low middle-income country) is often able to do little to help a substantial section of its citizens when they need serious medical help. The public healthcare system is both utterly inadequate and at best of indifferent quality.
At the other end of the spectrum stands the UK which through its publicly funded National Health Service (NHS) provides a global role model. It delivers every kind of healthcare that its residents need without them having to pay for it.
In such a situation, a state government in India has sought to meet a pressing need by promising healthcare as a matter of right, be it through the public or the private system, even though the person needing care may not be able to immediately pay for it.
The key provision of the Bill which private doctors were opposing was that they had to deliver emergency care even though a patient was unable to pay right away and in case the patient was eventually unable to pay, the bill will be reimbursed by the government. And perhaps, refusal to treat such a patient will lead to the imposition of a penalty. Their other grouse was that already there were several channels through which people could lodge complaints and there should be a single window through which all complaints can be received. Further, doctors said they did not know what would constitute a medical emergency under the new law.
The state government promised that doctors’ concerns would be addressed when the rules were framed. Finally, they called off their protest on Tuesday after reaching an agreement with the government.
The economics of private healthcare, which is delivered at different levels, needs to be understood if a solution is to be found to the objections of the private deliverers. At the top of the economic pyramid of private healthcare are the corporate hospital chains which do not appear to be operating at the borderline, that is, their bottom line will turn red if the margins are squeezed even a little bit. Also, some of them appear to be making and attracting fresh investments, which would not be possible if the margins in the business were so low. Manipal Health, the second largest hospital chain in the country, has just finalised a deal to acquire AMRI Hospitals for Rs 2,400 crore. Earlier reports indicate that Temasek, Singapore’s sovereign fund, is set to acquire a substantial stake in Manipal Health for Rs 13,200 crore.
At the bottom of the pyramid are individual practitioners, often in non-urban areas, who survive on the basis of walk-in patients’ ability to pay. They do have a point that it would be difficult for them to remain in practice if they had to wait for unpaid patients’ claims to be reimbursed by the government. And having to deploy staff to chase unpaid claims would add to the costs. On the other hand, poor and illiterate patients are at the mercy of doctors who often themselves administer the injectables and supply the medicines they prescribe at rates wholly determined by them.
Those requiring treatment often have to perforce go to local private practitioners as a government health centre may not be nearby and will not have some of the following — nursing attendants, doctors, medicines and minimum diagnostic facilities. If, as a result of the Act, the Rajasthan government is able to substantially improve its public healthcare delivery through proper staffing and equipping of public health centres, then that itself will go a long way in delivering on the new legislation.
If patients being overcharged by private practitioners is an issue, then a far bigger one is the way many private hospitals are run. There are frequent complaints of such hospitals adding an irrational number of medicines, tests and non-medical equipment to inflate bills. Also, such hospitals are frequently accused of putting patients into intensive care units when there is no need to or keeping them there for an unnecessarily long period.
Private hospitals often do not allow patients’ families to acquire generic medicines but make them buy branded drugs and, that too, from the medicine shop on the premises. Perhaps, the biggest negative about practitioners attached to private hospitals is that they mostly earn a commission for the diagnostic tests they order. This gives them an incentive to order unnecessary tests and is a part of the general decline in doctors’ clinical skills.
It is impossible for a government to police all these issues. Fortunately, there is a market-related solution. The government can vastly improve public healthcare delivery so that it is able to offer a competitive challenge to private care and force it to bring down its costs or lose business. Another market-based solution to reduce healthcare costs is by making the purchase of health insurance widespread. But since health insurance is affordable only for the better off, the government has sought to widen its ambit by making it available through the Ayushman Bharat PM-JAY programme aimed at 40 per cent of the poorest in the population numbering over 100 million families. Under it, each family is entitled to secondary and tertiary care at Rs 5 lakh per family per year, which is like the sum assured.
But while market-based economic solutions are helpful, nothing equals the benefits and affordability of a programme like Britain’s NHS. It has a customer base equal to the entire population. This spreads the risk cover in a way no privately delivered health insurance can and, thereby, beats them on costs. Rajasthan’s decision to extend the right to healthcare to all those who live in the state, irrespective of whether they can pay for it, is a step in that direction.