India Health Document 2020
Revamping India’s Public Health System
India Health Document 2020 (IHD 2020)
The current pandemic has brought back the focus on health the world over. India spends a meagre 1.29% of GDP on health. For a country that aspires to be among the top 3 economies of the world (1) by 2050, this is an insignificant amount.
India Health Document 2020 (IHD 2020) is a vision document for the next 20 years which guides the state on interventions it should take to increase the well being of its
citizens. IHD 2020 proposes interventions only when there is any of the 4 market failures — market power, asymmetric information, externalities, public goods.
First the basics: Direction of IHD 2020 — Public health Vs Healthcare
Often people confuse between public health and healthcare. The two terms are as different as chalk and cheese, and different market failures ail the two.
Public Health: Public health interventions are at the level of population that address externalities and provide public goods. Air pollution, water pollution, adulterated food are negative externalities. Controlling communicable diseases, vaccinations and road safety are public goods as these are non rival and non excludable.
Healthcare: On the other hand, healthcare is a private good. My using a hospital bed reduces your chance of getting it. This is a rival and an excludable good. Asymmetric information and market power are the two market failures prevailing in healthcare.
Health spans prevention on one end and cure on the other. While public health deals with prevention, healthcare deals with the cure aspect. Prevention is less expensive than cure, hence public health is less expensive and has simple interventions while healthcare is more expensive and complex. Both public health and healthcare are related, as a well developed public health system will lead to few patients and consequently lesser spend on healthcare.
In India, the Bhore committee report of 1946, shifted the focus from public health to healthcare. Healthcare is downstream, while public health is upstream. Less focus on public health led to higher expenditure and chaos in downstream healthcare.
Advanced countries of the world have mature public health systems. Clean air, water and food systems are in place in these countries and they don’t have to bother about these externalities. In India, our public health system is not well developed. In fact over the last few decades, our public health system has deteriorated further. There has been success in reducing infant and maternal mortality rates and eradication of smallpox and polio. However, epidemics like dengue have become common along with increase of tuberculosis and HIV/AIDS cases. Only 65% of our children are vaccinated. India has not been able to manage its growth properly with 9 out of 10 most polluted cities of the world being in India. Around 5 lakh road accidents happen annually in the country leading to around 1.5lakh deaths. (5)
IHD 2020 tries to put focus back on public health. At the same time, we need regulations and consumer protection to address market failures on the healthcare front. These interventions are also proposed in the document.
The Plan — IHD 2020: 10 Point Plan
Our proposal to the Prime Ministers Office (PMO) enlists current challenges, state interventions needed to correct the market failures along with the timelines to achieve the desired outcomes. IHD 2020 is a 10 point plan which identifies market failures and relevant state interventions to address these failures. It tries to re-invigorate public health systems through higher spends and increase in scope and coverage, change incentives and better regulation for healthcare, creating safety net for our citizens, addressing human capital issues, using technology and simplifying jurisdiction and unified healthcare plans.
A gist of the challenges and the proposed outcomes with the timelines is given below:
“Never waste a good crisis” — Winston Churchill
Covid-19 has enlarged as well as moved the Overton window towards public health in India. This crisis should not be wasted. Below, are the 10 proposals to address the above challenges:
Proposal 1: Change begins from the top. Time to revamp it.
1. Change the name of Ministry of Health and Family Welfare (MoHFW) to Ministry of Preventive and Curative Health (MPCH)
2. MPCH to work across ministries and not in a silo. It’s structure should be a horizontal aligning with different ministries and not work as a vertical.
Reason: Health consists of preventive and curative care. Preventive care is the foundation of public health and a name change will get the focus on prevention which is more important than cure. MPCH needs to work across ministries since preventive regulations are needed in different public goods which come under different ministries (e.g. road safety, food processing, air pollution). Each state policy should try to identify whether it improves, alleviates or deteriorates the health condition of its citizens. For example, road ministry is making highways and express ways at a rapid pace. There should be a MPCH representative who works with road regulator (NHAI) to ensure that road safety guidelines are in place. Similarly, we should ensure for other public goods clear air, water, etc.
Timeline: This is a low hanging fruit. The name change can happen immediately. To work across ministries, MPCH would need to provide and train personnel in a phased manner. By end of 2022 we intend to achieve the horizontal structure. MPCH personnel can start working with different ministries and a legislation needs to be passed which mentions how an intervention in public good is improving or deteriorating public well being.
Proposal 2: Its always the incentive. Change the incentives from transaction based to Health Maintenance Model (HMO)
1. MPCH to bring a law where states can implement HMO schemes in the spirit of cooperative federalism
Reason: To put focus on prevention over cure, incentives need to be redesigned. The current curative model of doctor and patient is transaction based which leads to high unnecessary costs. A transaction based model gives the incentives to healthcare provider to overprescribe and over diagnose. We need to address this market failure of asymmetric information and change the incentives. An HMO model like Kaiser Permanente can be introduced where the incentive changes to preventive care.
Timeline: MPCH to issue guidelines on the model with options given to states to implement it. We expect at least 2 states to implement this model by the end of 2023.
Proposal 3: We need capital but fiscal constraints are there. Let states raise capital for health infrastructure
1. States to be given freehand to raise capital to improve the primary health centres. Fiscal space limits the government to raise money for healthcare.
Reason: India’s spend on healthcare by state is a measly 1.3% of GDP (around Rs. 27,000 crores). Our out of pocket expenses are 69%, one of the largest in the world (2). The government spends on salaries, gross budgetary support to various institutes and hospitals and transfer to states under central schemes like Ayushman Bharat.
We need to keep in mind the Marginal Cost of Public Funds(MCPF), as defined by Shah and Kelkar. For public financing, we have an inefficiency of 3x. It means that we should spend Rs. 1 only when we feel the gains from that spend will be more than Rs. 3.
To reach 2.5% of GDP by 2025, the centre cannot raise this capital given its fiscal constraints. The time has come to decentralize the capital raising process and let every state raise the money on its own for its public health systems. States can make strategies best suited to them and can raise money in foreign markets.
MPCH will create a index for all states in the spirit of competitive federalism.
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Timeline: States should draw up their own fund raising plans for public health spends. We should aim at spending 2.5% of GDP by 2025 and 6% of GDP by 2040 on public health.
Proposal 4: Primary health is paramount. So is the efficient use of resources. Primary health centres (PHCs) to be run as a centre-state public sector company.
1. Primary health centres in a state can be run as a state public sector company.
2. The charter of the company would be to increase the coverage of the PHCs across India. At the same time it needs to increase the scope of PHCs to 8 essential components (3) of public health.
3. MPCH to create a Primary Health Index for all states. Top performing states will get additional funding of up to 25% from the centre.
Reason: Primary health relates to public goods which needs state intervention. PHC are the touch points of primary health. Their coverage needs to be increased and also the scope of services. At the same time they need to be run efficiently. For this, we need to run PHCs under the umbrella of a state run corporation. This organization will plan and implement the coverage of PHCs for the states.
In the spirit of competitive federalism, MPCH will create a primary health centre index for all states.
Timeline: After creation of corporation, the implementation of PHC coverage and scope can start from 2022. Also, we can start seeing favourable outcomes from 2023 onwards.
Proposal 5: We have capacity in the tertiary market though it is unregulated. Regulate secondary and tertiary health
1. MPCH to ensure that The Clinical Establishments Bill 2010 is implemented in true spirit.
2. Use technology to address asymmetric information. Create a transparency index for different states which shows how the states are faring on The Clinical Establishments Bill.
Reason: Private players constitute 70% of the secondary and tertiary health market. This market is complex and requires expenditure, and suffers from market failures of asymmetric information and market power. The state should address these failures through regulations. MPCH needs to ensure that The Clinical Establishment Bill should be implemented in true spirit. The provisions of the bill like private players being transparent about cost of procedures and credentials of the doctors should be strictly adhered to. The government should not put price ceilings on different procedures and medicines — let the market forces determine it.
MPCH should come out with a transparency index which shows how states are performing on the implementation of the bill.
Timeline: With the bill already in place, we need to ensure its proper implementation. The bill can be implemented in its true spirit by 2021. At the same time, we would need to create fast track courts for litigations arising out of this bill.
Proposal 6: Around 6 crores Indians went under poverty because of no safety net. Reduce of out of pocket expenses by successful implementation of Universal Health coverage plans
1. Increase human resource capacity and analyze more datasets for successful implementation to Pradhan Mantri Jan Arogya Yojana (PM-JAY)
2. Critically analyze the fiscal prudence of Government Funded Health Insurance Schemes (GFHIS).
Reason: India has one of the largest out of pocket expenditure in the world (around 57% ) on health. It is a major reason for people returning to poverty. To reduce this burden on people we need to create a safety net for people. PM — JAY, started in 2018 is a step in that direction. But we should ensure that this scheme should be implemented well, otherwise it will suffer the same fate as its predecessor Rashtriya Swasthya Bima Yojana (RSBY). For successful implementation, we need to ensure that we arrive at the right cost of treatment. For this, we need to analyze datasets and ensure qualified personnel who act as conduit between third party insurance providers, hospitals and patients. PM-JAY has correctly identified ‘Arogya Mitras’, but these personnel should not be on the rolls of the hospitals as there will be a bias.
India currently is still stuck in the Bhore Committee outcome where emphasis is still on healthcare and not public health. We have currently 49 GFHIS (4) covering 7% of the population. Cumulatively, for every Rs. 100 of premium collected, these schemes are spending Rs. 109. We are sitting on a time bomb as these schemes will no longer be fiscally prudent to run. The government needs to critically analyze these schemes and look at ways of funding them.
Timeline: Building human capital for successful implementation of PM-JAY and analyzing datasets to discover the right cost of health treatment needs capacity building. At the same time, analyzing the health spends of various GFHIS and planning to subsume them into a simpler scheme would need expert committee recommendations. If done in right earnest, we can start seeing results here by 2025.
Proposal 7: When the world is getting connected, why should health remain isolated. Use technology in a big way in public health
1. Build physical infrastructure to ensure digital technologies for health. Ensure interoperability and standardization of technologies
Reason: Around 52% of in person health interventions can be solved through technology. Technology is an effective way of delivery both public health and healthcare. Telemedicine will also result in lesser trips to PHCs by patients as in-home treatments would be possible in future. Interventions are needed here to address market failures of asymmetric information and market force. Physical infrastructure should be enabled, inter operability of the standards ensured. The market forces need to be unleashed here to develop the technology and the market. Like the telecom sector, we can see unleash a telemedicine sector as well.
Timeline: With physical infrastructure of using technology in place, we expect the first favourable outcomes by 2023.
Proposal 8: Need to focus on supply sides issues. Increase quality and quantity of human capital on the health side
1. Explore Public Private partnerships (PPP) to setup more medical schools for health care professionals
2. Regulation to sieve out false medical professionals from public health.
Reason: India faces a shortage of 600,000 doctors and 2 million nurses across public health and healthcare. MPCH proposes that states should explore PPP models to set up more schools. Also, we should look at ways to enhance intake in the current medical colleges. With demographic favour towards India, we should try to create medical professionals for the world. Already over 25,000 people of Indian origin are working for NHS UK. (6)
Regulation and technology can be used to sieve out false medical practitioners from the actual ones.
Timeline: Increasing the existing infrastructure, and creating new one for medical colleges/schools, we should start filling this shortfall by 2025.
Proposal 9: A changed behaviour towards public health will ensure India remains healthy for generations to come. MPCH to run marketing campaigns and nudge programs to change people’s outlook towards public health.
1. MPCH to run campaigns and to sensitize people towards public health. These campaigns should be run for different public goods like road safety, clear air and water, etc.
Reason: A people’s movement on public health will ensure that Indians are healthy for a long time to come and will reduce burden on health systems. The ministry should run campaigns, marketing and nudge, which make people aware about public health — citizens should demand that the air, water and food that they have are clean. The roads that they use are safe, the medicines they have are not spurious, the conditions in work and home are healthy, the surroundings are clean. Campaigns like Swachh Bharat need to be strengthened and increased in scope.
When citizens ask questions, the state will strive to create capacity and provide solutions to the problems.
Timeline: Changing behaviour towards anything does not happen overnight. With sustained campaigns and nudge programs, we would see people understanding the benefits of public health by the next decade.
Proposal 10: Too many cooks spoil the broth. There should be a single authority on public health
1. MPCH to set up a single regulatory authority to set up guidelines and compliance of public health standards
2. To pass a legislation which makes its binding to settle health related cases in 30 days
Reason: MPCH will set up a regulator which will setup guidelines and compliance for public standards. The states are free to pursue the implementation of public health infrastructure in the way them deem fit.
Cases related to health should be settled in a month through fast track courts.
Timeline: Formation of a single regulator can happen by 2023. At the same time, we will need changes in our judicial system to create fast track courts so that cases pertaining to public health are solved within stipulated timelines.
Conclusion: The Road Ahead
“Health care is vital to all of us some of the time, but public health is vital to all of us all of the time”
C. Everett Koop
They say there is no human endeavour that is outside the realm of public health. Public health is the basis of a strong country because an unhealthy citizenry will make a weak country. Our policymakers have not prioritized it because investing in public health does not throw immediate results. Covid 19 has given us an opportunity to re look at this important aspect again.
We should work towards improving our public health systems and be mindful of the fact that a problem that is decades old will not have an instant toolkit to solve everything at once.
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References:
1. https://www.pwc.com/gx/en/issues/economy/the-world-in-2050.html
3. https://www.slideshare.net/RakeshVermatheboss/joshi-sir-phc
4. https://www.nipfp.org.in/media/medialibrary/2018/05/WP_231.pdf
5. https://www.prsindia.org/policy/vital-stats/overview-road-accidents-india
6. https://commonslibrary.parliament.uk/research-briefings/cbp-7783/