COMMENTARY
Aspiring for Universal Health
Coverage through Private Care
Bijoya Roy
The National Health Policy 2017
makes a case for expanding
private sector participation
through collaboration. The
policy offers little assurance of
providing integrated and
universal healthcare.
Bijoya Roy (bijoyaroy@gmail.com) is a public
health researcher with the Centre for Women’s
Developing Studies, New Delhi.
Economic & Political Weekly EPW APRIL 22, 2017
T
he healthcare system in India is
remarkably privatised with stagn-
ating healthcare expenditure over
the past few decades. The poor and vul-
nerable groups have limited access to it.
The third National Health Policy (NHP)
2017 assures progressive universal health
coverage (UHC) with general taxation as
one of the main elements to finance care.
It assures free comprehensive primary
care through “Health and Wellness
Centres,” and reorientation of the public
sector hospitals with free drugs and
diagnostics with an overall emphasis on
a larger role for the private sector in pro-
visioning. It also recognises the need for
retaining doctors in remote areas, dis-
ease surveillance and integrating health
system information. Even though the
focus of this policy is to improve health
system performance, it opts to go slow in
achieving the targets of infant mortality
ratio (IMR) and under-five mortality com-
pared to other South Asian countries.
This policy departs from the two previ-
ous health policies in terms of the ways it
envisages the financing and purchase of
healthcare services. It advocates purcha-
ser–provider split (PPS) through contrac-
tual relationship. The framework of the
NHP 2017 needs to be understood in the
context of two World Health Reports
(WHR) of 2000 and 2010. WHR 2000
vol lIi no 16
recommended strategic purchasing as
means to improve health system perfor-
mance. Strategic purchasing will entail
active decisions as to what healthcare
services will be bought, how, and from
whom. The main tools for purchasing ser-
vices are contracting and prepaid schemes.
The WHR 2010 pointed out that to achieve
UHC, besides increasing health budget and
reducing financial barriers, how services
are purchased is important, as it links
health financing and quality of service.
The rationale behind this PPS model
is to increase efficiency of the services
purchased utilising market mechanisms
of competition or collaboration among
different providers.
The focus of this article is to understand
how NHP 2017 envisages to practise stra-
tegic purchasing and what it means for a
low- and middle-income country like In-
dia where organised private health sector
has moved beyond metropolitan cities and
is facing the triple burden of disease.
Public Healthcare Services
In an environment where India over the
past seven decades has fallen short in
building its healthcare services, this policy
guarantees that the public sector will
“remain the focal point of healthcare
delivery system,” and these services will
be expanded. To achieve this, NHP 2017
calls for reform in service production
across the three levels of care.
Primary healthcare services will be
mainly funded through taxation. From
the UHC perspective, at the level of pri-
mary healthcare it seeks to expand the
service basket by including non-commu-
nicable and occupational diseases. It
15
COMMENTARY
emphasises on choices for patients bet-
ween service providers through “collab-
oration with non-government sector on
pro bono basis” when in real life, the
purchaser of the service exercises this
choice. It prescribes the need for target-
ing public sector provisioning for tribals
and socially vulnerable population groups
through Mobile Medical Units (MMUs) in
collaboration with the non-government
sector. In Chhattisgarh, public–private
partnership (PPP) model of MMUs shows
that they are expensive and less sustain-
able endeavours when compared to
strengthening of existing government
system (PHRN and JSA 2017).
In continuation with the draft NHP
2015, this policy too intends to “reorient
public hospitals” where it suggests “pre-
paid” funding through a combination of
taxation and health insurance along
with free drugs and diagnostics. It pro-
poses strategic investment on “ten cate-
gories of … currently specialist skills” at
the district hospital level and a subset of
hospitals below it. At the tertiary care
level, NHP suggests developing partner-
ship with the private sector and buying
select services to address the “specialist
gaps.” It recommended shift in the fund-
ing model for these hospitals “from an
input-oriented to an output-based strategic
purchasing,” that is, hospitals will be
funded based on the number and type of
activities (procedures or surgeries) they
perform. Overall, this funding model
does not address the actual problems
and inefficiencies in the public sector
hospitals that are systemic in nature.
This reform in public healthcare services
across the three levels of care raises cer-
tain concerns. First, beyond the free uni-
versal coverage of primary healthcare
services, the entire conception of hospital
services is based on targeting through
strategic planning and purchasing. For
coverage, expansion hospitals will depend
on collaboration with the private sector.
This furthers fragmentation, and fails to
promote integration of the delivery of
care. Second, it makes referrals across
primary healthcare and hospital-oriented
services, and between the public and
private sector more complex. Third, over
the years, purchasing of services from the
private provider has increased. This has
16
happened through contracting of clinical levels of care, the state endeavours to
services (diagnostic services), empanel- “align” the private sector along the public
ment of private hospitals or nursing homes health goals and make it more inclusive.
in the Rashtriya Swasthya Bima Yojana There is enough evidence to show that
(RSBY) or under the state-funded health the private sector cannot associate to
insurance in secondary and tertiary hos- health as a public good, undermining
pitals. This has led to an increase in con- values of universal and comprehensive
tractual relationships. One of the reasons healthcare and distorting care through
behind this is to help in replacing the irrational therapies (Basu et al 2012;
traditional hierarchical relationship. But Gadre and Shukla 2016). Emerging liter-
in doing so, new avenues for the private ature on contracting from different
sector are opening up. This impacts the states shows that private sector involve-
power relationship as the decision-making ment has increased in the delivery of
process becomes more plural in nature health services in public sector, and is
(Buse and Harmer 2004). gradually expanding its market.
The backdrop note recognises the
Scaling-up Private Participation heterogeneity, size and structure of the
NHP 2017 overall emphasises on collabo- private healthcare industry in the country.
ration with private provisioning through It notes the huge presence of the own-
contracting and strategic purchase of account enterprises and smaller medical
services from the profit and not-for-profit establishments besides the increasing
private sector. The reason for scaling-up number of corporate hospitals and the
the private sector participation in health- merging of the small and medium with
care provisioning is grounded on the fol- large medical care entrepreneurs. Thus,
lowing: “Over 70% of ailing population the policy puts forth the existing struc-
in rural areas and almost 80% in urban ture of healthcare market within which
areas utilize private facilities” (GoI 2017a). the purchaser has to operate. To encour-
A wide range of areas are laid out for age private participation, it speaks about
collaborations or PPPs. Thus, through a mix of incentives either through fees/
this act of buying care across all the reimbursement or preferential treatment.
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It foresees collaboration and strategic
purchase “through insurance, direct pur-
chase from private sector and from public
sector” (GoI 2017a), and in the process,
develops a market that would help to
harness the necessary resources.
These agencies would also be charged with
ensuring that purchasing is strategic—giv-
ing preference to care from public facilities
where they are in a position to do so—and
developing a market base through encour-
aging the creation of capacity in services in
areas where they are needed more … The
payments will be made by the trust/society
on a reimbursement basis for services pro-
vided. (GoI 2017)
Based on the level of care (rural–
urban; primary, secondary, and tertiary
level care) and the kind of healthcare
services to be purchased, it distinguishes
among the different types of private
sector providers to collaborate with. The
policy brings back user charges in the
context of urban primary healthcare and
involving for-profit enterprises in areas
where it can maximise profits.
One form is through engagement in public
goods, where the private sector contributes
to preventive or promotive services without
profit—as part of CSR work or on contractual
terms with the Government. The other is in
areas where the private sector is encouraged
to invest—which implies an adequate return
on investment that is on commercial terms
which may entail contracting, strategic pur-
chasing, etc. (GoI 2017)
In India, over the past 15 years, contract-
ing in healthcare has emerged. These are
of different kinds such as service con-
tracts, management and operation con-
tracts, and build, manage, operate and
transfer (BMOT/BOT) contracts. Shift to
the PPS model requires huge amount of
consistent data work to draw up success-
ful purchase of services. Drawing up
healthcare packages and flexibility
within it is crucial with an increasing
population suffering from complex needs
(communicable/non-communicable dis-
eases and disabilities). Contracts with
an appropriate service mix will remain a
continuous challenge in this context.
Another challenge is whether local
and small private providers will be able
to bid for the contracts and create a com-
petitive environment or whether this will
be taken over by big companies to gain
local monopoly. Uttar Pradesh government
Economic & Political Weekly EPW APRIL 22, 2017
has invited an international competitive
bid to outsource primary healthcare
centres with the Bill & Melinda Gates
Foundation. The qualifying criteria for
private providers are such that it will dis-
qualify local and small private providers.
Many European countries as well as New
Zealand are facing difficulties in imple-
menting the PPS model with high ad-
ministrative and transaction costs.
Stewardship for Purchasing
With ushering of market through strategic
purchasing, the policy calls for the role of
stewardship as incumbent on the govern-
ment. It is the central, state or local level
government money that will be entrust-
ed to purchase services. The effect of
purchasing will depend on how well the
purchaser can plan the population health
needs annually and long-term for the
quantity of services required, quality stand-
ards, and budget estimates. Its impact
will be also dependent on how well the
providers meet the contract objectives.
PPS at all levels (centre/state/local) of
healthcare services demands administra-
tive reforms and strengthening of purch-
aser capacity. The emerging studies on
outsourcing and PPPs show that state
governments face a series of challenges
in their role as stewards. Thus, to play
the role of stewards, the government
needs huge investment in developing
skills as a steward and purchaser.
Healthcare Workforce
In view of expanding the primary health-
care services, reaching out to the commu-
nity, and increased administrative role
with strategic purchasing in the hospitals,
the NHP 2017 suggests revival of the multi-
purpose male health worker cadre (second
auxiliary nurse midwife or ANM post),
increase in the intake of paramedics,
and starting public health management
cadre. This policy categorically states that
accredited social health activists (ASHAs)
will “remain mainly voluntary and rem-
unerated for the time spent” with mea-
gre scope of regularisation (GoI 2017).
Over time in remote and rural areas,
ASHAs have emerged as major producers
of healthcare services connecting com-
munities to formal health services and
continue to remain “lowly paid, honorary
vol lIi no 16
COMMENTARY
worker of the government health service
system” (Som 2016). This policy continues
to marginalise women’s labour at the
lowest rung and compromise labour
rights. Despite increasing informalisation
within healthcare workforce, NHP 2017
is reluctant to invest in organised work-
force that can play a pivotal role in
providing quality healthcare services.
Concluding Remarks
It is now recognised that to achieve pro-
gressive UHC in low- and middle-income
countries, government spending for
healthcare has to be increased at least to
5% of the gross domestic product (GDP)
of a country (Mcintyre et al 2017). NHP
2017 proposes to increase health expendi-
ture as a percentage of GDP from 1.15% to
2.5% by 2025, of which 1% would come
from the union budget. This year’s
allocation of the union budget is at 0.29%
of GDP, and budget allocation continues
to be concentrated in the tertiary and
secondary care. This trend is unlikely to
elevate health system performance or
strengthen the public sector.
As per the Fourteenth Finance Commis-
sion’s (FFC) recommendation in 2015–16,
the share of tax pool to the states in-
creased, but majority states used it for
other sectors and not on health and edu-
cation (Scroll 2016). Post the FFC recom-
mendation, only Sikkim, Mizoram, Goa,
Meghalaya, Himachal Pradesh, Jammu
and Kashmir, and Kerala invested more
on health (Scroll 2016). A recent study on
the relationship between different types
of tax and varied health indicators
shows that direct tax can be linked to
better health outcomes and increased
levels of health spending (Reeves et al
2015). Therefore, it is critical for coun-
tries like India to pay greater emphasis
on public finance, and how and where
they are used.
Overall the NHP 2017 falls in line with
the growing emphasis to provide univer-
sal access to primary healthcare, functio-
ning as a “gatekeeping mechanism” and
opening up secondary and tertiary levels
of care to market-based reform. It, how-
ever, fails to address the existing crisis
within the public sector and strengthen-
ing of public sector continues to remain
a misnomer.
17
COMMENTARY
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18
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