India needs the private sector to achieve Universal Health Care

To put India on the path to universal healthcare (UHC), the Indian government announced that it would triple its spending in the health sector in the 12th Five Year Plan from an average 0.9 per cent of GDP to 2.5 per cent of GDP by 2017. This includes a $5.4 billion plan spanning five years to distribute medicines free of cost to its citizens. The key unanswered question is: who will deliver this largesse to the people?

A very obvious analogy lies in the Right To Food (RTF) Act. The imbalance between the expansive vision expressed by the Act and the narrow means it seeks to achieve it is like the state of public health care. Huge quantities of food grain are produced every year, yet millions of Indians starve or are malnourished because of the government’s shocking inability to get that produce from “farm to fork”. The infrastructure is simply inadequate. To avoid this fate for the UHC agenda, it is imperative that the private sector be strategically encouraged to participate in the government’s ambitious plan.

India has one of the most privatized medical systems in the world. A decade-old report by the World Bank estimated that 93 per cent of all hospitals, 64 per cent of beds, 80-85 per cent of doctors, 80 per cent of out-patients and 57 per cent of in-patients were in the private sector.

India has the largest number of medical colleges in the world producing among the largest numbers of doctors in the developing world. India gets ‘medical tourists’ from many developed countries reflecting the high standard of medical skill and expertise here. They seek care in its state-of-the-art, high-tech hospitals which compare with the best in the world. India is the fourth-largest producer of drugs by volume in the world and is amongst the largest exporters of drugs in the world.

Leaving aside a few noteworthy government-run institutions such as New Delhi’s All India Institute of Medical Sciences all these achievements belong to the private sector.

Apathy by successive governments has led to decades of faulty planning and inefficient management of public health facilities. The government meets only 17% of total healthcare costs compared to 48% in the United States and an average 72% in OECD countries.

How can the private sector be made to play a more active role in achieving UHC? Consider, for instance, reaching healthcare to rural areas where public health facilities are often defunct. Companies consider rural India unprofitable because of its population’s relatively low ability to pay. This could be amended through direct cash transfers or health vouchers. This will encourage private sector entry, create competition and improve overall health delivery in the region. Slowly, doctors who avoid rural practice may find it lucrative to return.

The government must focus on activities that will complement healthcare delivery and reduce the burden of disease. This includes providing safe drinking water, creating an environment that facilitates increased physical activity, better nutrition, avoidance of behavioral risks, and wider use of preventive care. It can train hundreds of community health workers across the country to diagnose communicable diseases and direct patients to hospitals.

In a country with the highest tele-density in the world, it can effectively use cell phones to send and receive information about disease outbreaks and health updates for prevention and early detection combined with community-based primary care to limit more costly upstream interventions.

Some companies have already made significant inroads in rural India with outreach programmes (such as Novartis India’s Arogya Parivar) already serving 42 million people, most of who earn between $1 and $5 per day. Strategically partnering with such pioneers can work to the benefit of the under-served population. All such measures call for a degree of scale that the state is best-placed to achieve. Their impact on health outcomes can be immense.

In parallel, it must build on the partial progress achieved through publicly-funded health schemes such as the National Rural Health Mission and others by boosting demand for health services in the public sector while monitoring the quality of service and price of delivery.

The private sector’s entry will be crucial to control the sudden surge of demand for quality health care that will get created. The active involvement of both sectors will work to create more supply and drive prices down.  Importantly, encouraging local government oversight will help prevent the blurring of lines between profiting and profiteering.  This has been partially successful in states such as Tamil Nadu and Rajasthan.

The private sector lacks the scale to take on the responsibility of UHC for the 1.2 billion citizens of this vast nation. Nor is the government alone capable of effecting such a change. Each must leverage its strength effectively.

This article was previously published in Apothecurry

3 thoughts on “India needs the private sector to achieve Universal Health Care

  1. Easily the best article i have read on India healthcare industry this year. The ‘Arogya Parivar’ initiative is definitely innovative and worth learning from.

    I agree that the government needs to take support of the private sector if it is even halfway serious of achieving universal health care or even millennium development goals! In the same vein, the ‘approach to 12th plan’ released some time back by the planning commission makes a very interesting read. The ten pages it devotes to healthcare stress on capacity building, quality management, demand generation and use of technology. It does provide glimpses of perceived need for private sector involvement in the national health system.


  2. Thanks Salil…Very true and pertinent article.

    My brother-in-law who is now in Chester with his family (he has migrated to UK 3 months back) had to admit his child yesterday and he says that the facilities offered by the pediatric hospital is on par with any of the corporate hospitals here. The fee charged through insurance is hardly anything.

    Wish our Govt & Pvt enterprises start thinking on those lines.



Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s