Supervision of private healthcare sector to be considered: Eco Survey

Tribune News Service
New Delhi, January 30

The Economic Survey 2020-21 has called for enhancing government spending on health from the current 1 per cent to 2.5 to 3 percent of GDP saying the shift would decrease out of pocket expenditures from 65 percent to 30 percent of the overall healthcare spend.

In another radical suggestion the Survey bats for the regulation of private healthcare sector noting that an unregulated market was leading to suboptimal outcomes for patients who often don’t know anything about the quality of the service they are buying.

Citing a series of global examples from the UK, US, Australia where federal governments has passed legislations to create government or quasi government bodies to regulate the health sector, the Survey said: “A sectoral regulator to undertake regulation and supervision of the healthcare sector must be considered given the market failures stemming from information asymmetry; WHO also highlights the growing importance of the same. The mitigation of information asymmetry would also help lower insurance premiums, enable the offering of better products and help increase the insurance penetration in the country.”

The Survey suggests the UK’s Quality and Outcomes Framework introduced by the National Health Service in 2004 as an example of quality assessment practices worth emulating.

“In addition to providing healthcare services and financing healthcare, a key role for the government is to actively shape the structure of the healthcare market,” said the survey encouraging regulation of private general practitioners as in the UK which pays doctors to perform well.

Private sector dominates in total healthcare provision in India.

Around 74 per cent of outpatient care and 65 per cent of hospitalisations is provided through the private sector in urban India—an unregulated sector with no guarantee of standard quality care to patients.

It also warns the government against overinvestment in communicable diseases with the mind on the pandemic advocating a balance between addressing communicable and non-communicable diseases burden.

COVID-19 may not repeat in an identical fashion in the future, the survey suggests.

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