National Council of Applied Economic Research
Opinion: Sanjib Pohit
No doubt the pandemic has exposed the fragility of India’s health sector. The shortage of doctors hospital beds ventilators oxygen medicine etc. is the stark reality of the day. The story is true across all over India. Incidentally none of the metros have stood apart in this pandemic disaster even though health infrastructure is quite well developed in metros than small towns.
Frankly speaking few of us are aware of the ground realities in peri-urban/small towns as India media hardly covers them in their stories as most of their clientele are located in metros/urban India. Unlike in west very few papers are published from small towns.
In recent years the health sector reform in the Indian context has basically given push for bigger role for the private health sector provider to curb out inefficiencies in the government health systems. In earlier times the under privileged used to go to public hospital for medical care. However this trend has now been reversed.
While the privatisation of the health sector has been going on since quite some time it got a big push with the introduction of Ayushman Bharat a flagship scheme of Government of India to achieve the vision of Universal Health Coverage (UHC). This initiative has been designed to meet Sustainable Development Goals (SDGs) and its underlining commitment which is to “leave no one behind”.
Ayushman Bharat has adopted a continuum of care approach comprising of two inter-related components which are (a) Health and Wellness Centres (HWCs) and (b) Pradhan Mantri Jan Arogya Yojana (PM-JAY). HWCs basically involved in transforming the existing Sub Centres and Primary Health Centres. These centres are supposed to deliver Comprehensive Primary Health Care (CPHC) bringing healthcare closer to the homes of people. They cover both maternal and child health services and non-communicable diseases including free essential drugs and diagnostic services.
On the other hand PM-JAY was launched in 2018 as the largest health assurance scheme in the world which aims at providing a health cover of Rs 5 lakh per family per year for secondary and tertiary care hospitalization to over 10.74 crore poor and vulnerable families (approximately 50 crore beneficiaries) that form the bottom 40% of the Indian population.
The scheme provides cashless and paperless access to services at the point of care. Till January as per the provisional report over 40000 beneficiaries were treated for covid-19 under the scheme. Also over 400000 diagnostics tests for covid-19 were performed.
However when the pandemic struck in India and continued for more than a year we observe that privatisation by itself did not lead to capacity augmentation in the domain where it is the need of the hour. All over India the government/army has to step in for human well-beings. The access to insurance does not automatically lead to access to health facility even in urban India. If in the end the government has to step in what is the point of this privatisation push? Or are we overlooking crucial issues in health eco-system?
Firstly the private health service provider is purely governed by profit motive. They are more inclined to invest in capacity augmentation where there is chronic demand and profit per person is high. By the same logic they would not like to increase their capacity of beds with ventilator support significantly as these asset will not be in demand when pandemic is over. For this reason even though private health service provider have got a year time to increase their capacity of Covid related treatment they did not invest on same.
Also as many of the State governments have capped the rate on Covid related treatment private health service provider have limited leverage to spike their charges on Covid treatment. Thus private health service provider has played safe: it is best not to build up health assets which are primarily used for Covid treatment.
If in the end government has to step in what is the point of privatisation push? Are we overlooking crucial issues in health eco-system?
Secondly how does the profit per patient in case of Covid treatment stands vis-a vis other diseases? This is the other yard stick which private health service provider takes into account while deploying resources for augmenting health infrastructure. Of course profit numbers are hard to obtain. We are thus tempted to draw our inferences based on cost numbers which are publicly available.
Typically on an average 10 days treatment cost of a normal Covid-19 carrier with ICU ventilators ranges between 1 lakh to 3 lakh depending on the States and capping of expenditure in private hospital by state governments. Of course the treatment in most patients continue on an average for 14 days. By contrast the treatment cost in India of cancer treatment can go upwards of ₹10 lakh for heart ailment the expenses can easily reach ₹3-5 lakh or even more.
On the other hand a kidney transplant costs around Rs 7 lakh whereas dialysis can cost you anywhere between Rs. 18000-20000 per session. Moreover the cost can go up to Rs 20-30 lakh if you choose to take treatment at reputed private hospitals. And in case one chooses to go for a Robotic surgery – which is becoming quite popular in India – the cost of treatment may further increases by Rs 5-7 Lakh.
Moreover the private health service providers are not at all regulated in their costing structure in these diseases unlike in case of Covid treatment. Thus it make sense for them to invest their resources for capacity augmentation in these diseases than solely for Covid related infrastructure (ventilators etc.) which may be of little use once the Covid phase is over.In sum insurance-led private health care is not a remedy in times of pandemic and especially if the treatment cost is not in par with other critical diseases. This is very true even in case of metros. May be the government need to have rethink on the health policy and the role of government in the same.
The writer Sanjib Pohit professor at the National Council of Applied Economic Research. Views are personal.