Wednesday, April 10, 2013

EMHN 9: Private Sector Role in India UHC

Another bright and sensible paper from one of our international partners, the Emerging Markets Health Network (EMHN). In a new paper published this week, Indian economist and a friend, Debashis Chakraborty of the Indian Institute of Foreign Trade in Delhi, argued that "PPPs have the potential to help India achieve its healthcare ambitions, although the government should refrain from using its power to dominate the partnership, and will have to allow private partners greater scope both to plan and manage."

In his new seven-pages paper, The private sector’s role in achieving Universal Health Coverage in India, Debashis further argued these points:

  • India’s current public healthcare spending and infrastructure is insufficient to achieve universal health care (UHC). Majority of all healthcare in India -- 93 percent of all health facilities -- is provided by the private sector. 
  • Indian government attempted to achieve UHC since independence in 1947, but private sector role did not grow well, until the National Health Policy of 2002. From 2004, the government provided incentives to the private sector to cater for the poor, and since then, public private partnerships (PPPs) have become the norm.
  • There are several examples of successful PPPs providing care to below poverty line patients,  but there are also many examples of failure. Failures stem from insufficient autonomy granted to the private players by the government.

Debashis showed several tables but Figure 4 caught my attention. Despite high per capita health spending of $8,362 in the US, $4,065 in Japan, $3,368 in the EU, $990 in Brazil, $604 in Mexico, compared to just $54 in India and $77 in Indonesia and the Philippines -- all in 2010 -- out of pocket (OOP) spending  on healthcare for those countries remained high, more than 50 percent of total health expenditure, except the US.

Why is this so, especially in the case of India? Debashis made a good observation:
The poor performance of several PPP initiatives begs the larger question of whether the government considers PPPs as a ‘private initiative supported by the public sector’ or a ‘public initiative supplemented by the private sector’. This distinction is crucial, because if the former is the underlying motive, then the government role will be reduced in the long term to a mere facilitator, and efficiency will automatically be augmented with increasing operational flexibility of private partners. 
However, if the government views itself as the dominant partner in PPPs, they will always prioritise their own political requirements and agendas over the efficient running of the PPP. This could fatally undermine the viability of many PPPs.
And that is one more reason why government role in healthcare should be limited and more focused, so it can optimize its delivery. I believe that government should focus on controlling (a) infectious and communicable diseases, and (b) pediatric diseases like childhood cancer, more childcare especially for those below six years old.

This implies that government should step back on non-infectious, non-communicable diseases (NCDs) for adults. These diseases are mostly lifestyle related. People can buy private health insurance on top of the basic health insurance provided by the government.

Nice work again and congratulations, Debashis. EMHN is doing well with your bright contribution to the network.

See also:
EMHN 5: Free Trade and Markets in Healthcare, January 17. 2013
EMHN 6: Fake Medicines in Asia, February 15, 2013

EMHN 7: Free Trade Improves Public Health, February 26, 2013 
EMHN 8: Brand Protection and Safe Medicines, March 06, 2013

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