People talk a lot about “freedom” these days. Be it freedom from colonial rule or the freedom of expression, the freedom of the Internet, the freedom to watch porn, to have consensual sex in beach-side resorts or the freedom to marry irrespective of faith. At the root of each of these passionate beliefs is the resentment of the State intervening in the freedom of personal choice. Why then, does this resentment dissolve when we think of health and health care?
Health and health care is as much a subject of personal choice as is the right to choose what you want to watch on the internet or do in your free time. Would you like it if the State told you to consult this doctor and not that one? Or if they told you which hospital you could be treated in or to what cost your treatment should be limited to? And yet, that is exactly what a pharmaceutical industry lobby in India, demanded that the government should do!
At a recent event, the Organization of Pharmaceutical Producers of India (OPPI) asked the government to increase public spending in the health sector. This would include subsidizing health insurance and providing universal health care. This sounds perfectly reasonable, doesn’t it? After all, shouldn’t everyone be able to access free healthcare? It isn’t really very reasonable, if you think about how it would actually be done.
The first thing the government would look for is the money to fund this mammoth task. And that money would obviously come from the taxes that we pay! Just as the industry should choose to resist a move by the government to fund universal health care through an increase in corporate taxes, ordinary citizens should also have the choice to pay lower taxes from hard-earned salaries.
As if in preemption, the National Health Policy recommended a ‘sin-tax’ – a tax on fast food, tobacco, alcohol, aerated drinks and other such – to fund healthcare. Do you think companies who sell these products will pay that money – or will you? And do you think the money collected through an indirect tax is enough to fund free healthcare for 1.25 billion people and more? The next step is prioritization. Should money be spent to build new medical colleges, or hospitals, or primary health centers? Isn’t it more important to give away free medicines? Maybe health insurance for everyone is an urgent need too. See the confusion? There are just too many things to do, and the money is too little. Even the NITI Aayog – that advises the government on policy matters – doesn’t think this to be a good option.
I believe the OPPI – as a powerful industry body – should focus on getting the government to simplify if not simply to do away with healthcare laws in their present form. For example, if the laws that require licenses to set up hospitals and medical colleges are simplified, they could attract many more players to the health sector. The result will be more colleges and better trained doctors and paramedics.
Today, despite the attractiveness, even the biggest home bred industrialists running multi-sector conglomerates, fear to tread into this space because of over-regulation. Yet, CEOs of pharma companies have rarely – if ever – called for a simplification of or doing away with the law.
Simple economics tells us that markets immediately respond to increasing demand. The healthcare space in India is bursting at its seams with demand. Why then is supply still regulated by the government? Open it up! Allow anyone who wants to enter the space to come in and set up shop. This will reduce an enormous amount of workload on the government and pressure on the health budget as private capital is infused into the sector. The increased competition will also drop prices, improve quality and allow consumers the freedom to choose instead of being told what to do.
To be sure, a lesser regulated sector will definitely attract the greedy. This is why I do not advocate for public-private partnerships (PPP). PPPs are as full of cronies as any crony organization is, and is as full of opportunists as the government is. PPPs often have a low probability of working efficiently since the government controls private capital and promote “profiteering” over “profit”. Distinguishing “profit” from “profiteering” is an important task the OPPI must undertake. To ensure that players understand the differentiation and stay fair, we need a less-burdened government to run an efficient justice system.
As a representative of the industry, the OPPI must remind the government of what it’s Chief Executive promised India’s people – minimum government, maximum governance. If the government focuses only on governance, we might have a more efficient justice system in India and with it, more providers of service. In such a situation, power moves to the consumer and he is free to reject cronies and cartels and opt for those who serve him well. That is the power of choice.
In a country driven by electoral politics and vote-banks, the most dangerous part of large-scale welfare is that it cannot be rolled back. Look at the newspapers to see how many countries with welfare went belly-up. To continue funding such welfare, the government slowly but surely will begin to control everything else. Is there any part of the state-controlled apparatus that you like? Why should you expect healthcare to be any different then?
State provided insurance will probably be worse. The sums for which you are insured are ridiculously low and rarely keep up with evolving prices. Look up the fines that convicted criminals have to pay! If we still follow a penal code made in 1860, what are the chances of the health policy keeping pace with escalating health costs in the future?
When the insurance sector opens up to competition, the few players who have formed powerful cartels will be forced to break them, resulting in cheaper and better insurance schemes. Also with lesser taxes and benefits to pay, you have more money in your pocket to decide how to use it. Think of it as a 50% increment every year!
With efficient courts, cronyism and cartels will reduce. Pricing mechanisms that are “set-up” or “rigged” will be set free to respond to market realities. More hospitals, more doctors, paramedics and lower medicine prices; health insurance that does not ditch you when you need it the most – isn’t this the stuff patients’ dreams are made of? Why does the OPPI not think of this approach to improve access to healthcare?
The OPPI’s appeal probably reflects a point of view that it is the role of the government to provide healthcare. Not so! It should be the role of anyone capable, to provide it. Instead of asking for access to free healthcare, the OPPI should instead ask for free access to healthcare. The government’s presence hinders that. I would resent having to entrust my healthcare to it, if I had the freedom of choice.
Published in the September 2015 edition of MedicinMan