Public Sector Healthcare Is Dying in India. How Can we Resurrect it?

The proposed takeover of government hospitals by private players will prove disastrous to the majority of Indian patients.

“NITI Aayog unveils plan on takeover of district government hospitals by private players.”

This was one of the many headlines that dropped into the news cycle on New Year’s day. 

The reports said that NITI Aayog has released a document on a “Scheme to link new and/or existing private medical colleges with functional district hospitals through PPP” for stakeholder feedback. The idea seems to be that private entities would run these hospitals – with a certain number of beds (a proposed 50%) to be branded ‘market beds’ for which the operator will charge market rates, with the justification that this will subsidise the remaining ‘regulated beds’. 

A number of statements mentioned in the reports raise concern. By way of example, the report says, “It is practically not possible for the Central/state government to bridge the gaps in medical education with their limited resources and finances.” It also says that this scheme is supposed to help states “struggling to infuse funds in the healthcare sector and where district hospitals are not up to the mark.” 

One has to be an incorrigible optimist to think that the private sector will make investments to help the state achieve its goals of providing optimal healthcare at affordable prices which universal health coverage requires.

In fact if one looks at what is happening currently in private hospitals in India, with takeovers of hospital chains one after the other by private equity investors, it is hard to imagine that they will be motivated by any factor other than financial returns. Further, in terms of quality of care, there is evidence from across low and middle-income countries (including India) that show that private providers more frequently deviate from evidence-based practice, have poorer patient outcomes, and are more likely to provide unnecessary testing and treatment.

Similarly, how will private players bridge gaps in medical education, where the state with its enormous resources has failed, remains a mystery.

The proposal seems to suggest that the current shortage of doctors in India will magically disappear by handing over public hospitals to private sector. One wonders how that will be. Most of the new AIIMS are suffering from faculty shortage – the fact is that there are just not enough academic physicians in India, mostly due to lack of incentive, and focus needs to be on building that cadre. 

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The document was quoted by news portals as having said, “…The concessionaire shall have the right to collect, appropriate and demand hospital charges.” The reports cite the Gujarat model where a private pharmaceutical company runs a medical college and hospital. However, a report in November 2019 by Rema Nagarajan said that the fees were way higher than the government-society run medical colleges, and that the hospital has started charging poor patients for treatment that had previously been free of cost.

The current proposal is a continuation of the road NITI Aayog has been on for a long time. This needs to be read in continuation of the document the Aayog used in its proposal to replace the Medical Council of India with the National Medical Council, which has since come into existence.

Called ‘A Preliminary Report of the Committee on the Reform of the Indian Medical Council Act, 1956‘ it said:

“Currently, only ‘not-for- profit’ organisations are permitted to establish medical colleges. The Committee deliberated whether the draft bill or the regulations issued by the government should explicitly include a provision to permit ‘for-profit’ organisations to establish medical colleges. Given the shortage of providers and in recognition of the fact that the current ban on for-profit institutions has hardly prevented private institutions from extracting profits albeit through non-transparent and possibly illegal means, it was felt that any restriction on the class of education providers would be counter-productive. Therefore the Committee recommends delinking the condition for affiliation/recognition from the nature of the promoter of the medical college.” 

It is a matter of speculation whether patients receiving subsidised treatment and those who make full payment will receive the same attention and care.

When I was a medical student and a junior doctor at Patna Medical College in the early 1980s, it was common to see consultants give differential attention to those who were admitted to the wards through their private clinics and neglect those who came through the non-paying route. Even today, the fact is that private hospitals, who are obliged to have a certain number of ‘free beds’ keep those beds full with ‘cold cases’ that do not necessarily need to say in hospital. The beds are kept occupied with minimal investment. Selective referrals and preferential admission of cases likely to bring revenue are a few of the likely consequences.

The ones most likely to suffer are the one who are already the worst off in terms of access to care.

Despite repeated promises to increase public spending on healthcare by successive governments in their quest for universal health coverage, the actual investment by the government has remained static at around 1% of GDP, amongst the lowest in the world. In many states, this figure is even lower.

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The current document, along with certain provisions of the National Medical Council, declares the public health system – both hospitals and medical colleges – dead, and reveals the intention of the government to abandon it altogether. This is indeed consistent with what the NITI Aayog has said in the past – Aayog adviser Alok Kumar was quoted as having called the Indian healthcare a ‘sinking ship’ just a couple of months ago! 

As already articulated by several experts, abandonment of public healthcare system is a grave mistake. Rather, it needs to be strengthened. That it can be done has been shown, most recently in the Maoist dominated district of Bijapur, where the efforts of district collector Ayyaj Tambol helped turn the hospital around in just two years.

Having said that, the outsize influence of private healthcare system is a reality in India. It makes sense to co-opt this sector in expansion of affordable healthcare service, but this requires putting in place appropriate governance, stewardship and quality control mechanisms. The current document offers few details regarding the development of appropriate referral pathways, governance, monitoring, quality assurance, and accountability. 

To be fair, these caveats apply equally to public  providers, with services rife with absenteeism and poor quality, the absence of many areas of care and corruption at all levels, from doctor training to investment decisions. Arrangements in public hospitals are often influenced by vested interests, creating a system that is not designed to reward positive change.

The stewardship function of the government to monitor the provision of care from providers needs to be strengthened. This could occur in a number of ways, such as through the development of robust referral pathways, quality audits, incentives to improve the efficiency and quality of care, alongside a general strengthening of the capacity of the public sector to effectively contract with and regulate the private sector. Some degree of reorganisation of health system will be required. To do so will need leadership at all levels, careful monitoring of the implementation of the programme to track progress against key budgetary, service, and financial-protection measures, along with guards against unintended consequences. 

Also required is formal health technology assessment (HTA), defined by the World Health Organization as “a multidisciplinary process of systematic evaluation of properties, effects, and/or impacts of health technology” and “the social, economic, organisational and ethical issues of a health intervention or technology to with the purpose of conducting an assessment to inform a policy decision”.

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Originally used in the context of evaluating devices, HTA can play an important role in determining how services and treatments will be delivered and financed in public and private hospitals by using evidence around treatment effectiveness, costs and safety.

Writing in 2016, the public health expert Amit Sengupta, who passed away in 2018, had said: “It is widely acknowledged that the mushrooming of private medical colleges in India has been the principal corrupting influence on medical education in India, and has been responsible for a steep deterioration in the standards of medical education.”

He had also gone on to say, “The logical lesson that could and should have been drawn is that the policy of encouraging private medical colleges, both through diminishing investment in public funded medical education and through regulations designed to facilitate private colleges, needs to be reversed. Instead, the NITI Aayog has made a startling recommendation that can only facilitate deeper penetration of a corrupt private sector driven system of medical education.”

Let us hope that that the worst does not come to pass, but it will require collective will, not only of the medical community, but of the society at large to prevent it from happening.

Vivekanand Jha is a kidney doctor and a medical researcher