Health Care Sector in India: Some Key Issues VR Muraleedharan Dept of Humanities and Social Sciences Indian Institute of Technology Madras

Outline The Fundamental challenge in public finance Basic Features of Indian Health Care Sector –Status of Health –Access to health care (use of health care services) –Cost of health care Distribution of Benefits of Public Spending Key Policy Questions

Fundamental Challenge in Public Finance How much should the government spend for health care? – role of government in financing and providing health care to the people How should the benefits of public spending (on healthcare) should be distributed across various socio-economic groups? Who deserves how of much of financial support for health care? Fundamental principle: A rupee spent on one person is a rupee denied to another person.

Objectives of Healthcare System Improve health status Provide protection against financial risks arising from illnesses – poverty reduction strategy Institute mechanisms to meet “legitimate” expectations of patients

Health Status Indicators

Per-capita spending in international dollars (PPP) Government health spending to total government spending (%) Government share of Total Expenditure (%) Health expenditure as % of GDP Births by skilled attendants Fully Immunized (%) Under-5 mortality /1000 live-births 1582<3068IMR/1000 live-births Thaila nd Sri Lank a USAChinaIndiaIndicator Health Status Indicators: India in comparison with other countries

Use of Health Care Services Dependence on Public and Private Providers:

Costs of Health Care Financial Burden of Ill-health

Two major Health Policy Challenges Reduce inequity in health status –Social and economic strata Reduce the impoverishing effects of catastrophic health expenditures

Income inequality and health status Recent Evidence Increase in Income, Education, Health Personnel exert a statistically significant negative impact on health status (IMR) But Increases in income inequality cause health status (IMR) to increase. (evidence holds good for both high income and low income countries)

Utilization of Inpatient Days in Public System: TN and Orissa (NSS 60 th Round 2004)

Utilization of Maternity Services in Public System: TN and Orissa (NSSO 60 th Round, 2004)

How Much Do Governments Spend on Health Care? And How much Should Government Spend?

Trends in Per-Capita Public Expenditure Rs. 64 ( ) Rs.184 ( ) Rs.214 ( )

All States West Bengal Uttar Pradesh Tamil Nadu Rajasthan Punjab Orissa Madhya Pradesh Maharashtra Kerala Karnataka Haryana Gujarat Bihar Assam Andhra Pradesh –921985–86States (B.E.) Share of health in revenue budget of major states (in %)

Evidently, government’s spending spent is LOW

Policy Options How should the health care system be organized? –(Financing and Provision) – Public vs Pvt sector PPP strategy?

PPP or PPM? Some Common Questions Why PPP? How to assess whether PPP works well? Conditions for PPP’s success? What is PPP?

Why PPP? : Some Familiar Answers Private sector already widely present – utilize their resources for improving public health Better delivery system – better geographical access Lack of funds in public sector to expand; will outsourcing reduce public expenditure? Peoples’ dependence on private sector and better satisfaction.

35 “Nature” of participation: examples Financial Non-Philanthropic Joint ventures Subsidies and concessions to private sector Philanthropic Contributions BGF Local Industrialists’ contributions (TN) Drugs (from MNCs – case of DEC for Filariasis ) Non-financial Philanthropic In-kind contributions Community labour for construction of PHC (TN); Non-philanthropic Health Camps by corporate hospitals

36 “Forms” of participation: examples Curative /Diagnostic Services Hiring clinical staff (OBGYN/Anesthetists/ medical officers) Blindness Control Hiring nursing staff Contracting-out of laboratory work Preventive /Promotive Services HIV-AIDS – role of NGOS TB control: role of NGOs, Hospitals, Private practitioners, Microscopy centres

37 “Forms” of participation : examples Supportive services Ambulance Catering Security Laundering Rehabilitative Mental health programme? Reconstruction of cleft formation (BGF)

Policy Justifications for PPP PPP is not an end in itself. PPP should eventually: –Reduce cost of care –Improve access to care –Improve quality of care –Reduce inequality in health status (geographic, gender, socio-economic groups)

Thank You