India turns to private sector to boost health coverage

By Sophie Bader

New Delhi : India’s new New Health Policy 2017, the first issued in 14 years, takes a sharp turn toward embracing the private sector in its aim to achieve universal health coverage. The government will seek to plug gaps in service for its 1.2 billion people through “strategic purchasing” of care from private facilities and clinics.

The aim is to improve not only access but also affordability and quality of service. The private sector already provides almost 80 percent of outpatient and 60 percent of inpatient care. Now, the plan promises to reduce out-of-pocket costs for patients, which help drive some 55 million Indians into poverty each year, according to the country’s 2015 draft National Health Policy.

To fund its initiatives, the government policy pledges to boost health care spending overall up to 2.5 percent of gross domestic product by 2025, from its current 1.5 percent.

Supporters of the plan say the arrangement could open up new opportunities and create demand for better services. Some critics and civil society actors, meanwhile, worry that the plan will leave persistent gaps, particularly in rural areas that the private sector has little incentive to serve. Still others worry the injection of government cash could incentivize more or complicate procedures, rather than placing the emphasis on the results of care.

Actors across the sector will now be watching how India manages its new relationship with the private sector, as it redefines the government’s role in shaping the health system.

Reaching those in need

The NHP is in some ways an acknowledgement that government services won’t be able to keep up with growing health demand. The policy calls for “strategic purchasing” of private care to fill critical gaps in public health facilities. If no government-provided care is available, health officials would turn first to not-for profit facilities and then to the commercial private sector if need be.

Government purchasing is also intended to “create a demand for the private health care sector, in alignment with public health goals,” the policy states. “Such strategic purchasing would play a stewardship role in directing private investment towards those areas and those services for which currently there are no providers or few providers,” the policy reads.

Daljit Singh, president of Fortis Healthcare Limited, a private hospital chain in India with more than 20 hospitals across the country, said public private partnerships, or PPPs, had the potential for setting higher benchmarks for quality health services.

He argued that a robust PPP framework would better enable the private sector to participate in and contribute to the government’s agenda, and provide services at subsidized rates. Singh said he, along with other private sector actors, was participating in deliberations set up by the National Institution for Transforming India to finalize PPP guidelines that are clear and effective.

Some analysts have also welcomed the government’s nudge in aligning private sector priorities.

“We’ve let the private sector grow on its own without the government acting in the sector. Now however the policy says the government will engage with private sector only to enhance its public health goals,” said Oommen C. Kurian, public health fellow at the Observer Research Foundation, an independent think tank in India. “This is good news.”

Yet others worry that government funds won’t be enough to incentivize health companies and hospitals to expand into rural areas, where neither public nor private facilities currently exist. “The goal of the private sector in India is to make money. It has no incentive to reach rural areas,” Dr. Vivek Jha, executive director of the India branch of the George Institute for Global Health, an independent medical research organization.

Another concern, Jha said, are the adverse incentives the policy could create: Doctors could be encouraged to refer patients to tertiary facilities that would incur higher costs to the government. He said this could be a particular problem for patients from rural areas, where primary care alone may not be profitable.

“I’m very concerned about the government handing over the health care system to the private sector. It will always come up with ways of making money regardless of public interest.”

Dr Prashanth Nuggehalli Srinivas, a public health researcher who focuses on health equity at the Institute of Public Health in Bangalore, Karnataka, sees another variation of that problem: The consolidation of care among a small number of large providers.

He said it was “dangerous” to assume that the private sector could both deliver good high-quality care, and fuel competition to drive down prices. Large hospitals are able to see large volumes of patients, winning them credibility and capital to expand as chains across the country. Smaller-scale providers have a difficult time competing.

“The problem is that you need markets to be operating in a semi-competitive environment. India doesn’t fit into that context,” he said. “I suspect that large super specialist hospitals will immediately capitalize and become monopolies of this purchasing scheme.”

Strengthening the public health care sector

Despite the policy’s emphasis on engaging with the private sector, its overarching goal is to strengthen the public health care sector and increase utilization of government facilities by 50 percent by 2025.

One major barrier to the strengthening of the health care system is the lack of skilled workforce — a deficit calculated by Save the Children in 2011 to be about 2.6 million health care workers. The NHP seeks to optimize use of existing manpower, and proposes financial and non-financial incentives to lure health care workers to rural areas. It pledges to build medical colleges in underserved areas.

Compensation could still deter health care workers from rural areas, Dr. Jha said. Specialties are generally better paid than primary care, meaning that more medical students are inclined to specialize. “Unless the government levels out the playing field in terms of compensation for those who should be adequately rewarded for performance and preventing disease then there’s not much hope. Everyone does private practice or becomes a specialist, because that’s where they see the money.”

One solution might be to empower India’s large nurse practitioner workforce to prescribe essential medicines, Dr. Jha said. Patients could seek local care rather than relying on far away doctors and losing day’s or weeks earnings.

Inequalities are likely to persist, said Nuggehalli Srinivas. He pointed to statistical gains in India’s national child and maternal health, for example, which mask persistent gaps.

Oxfam India said it is concerned that the engagement of the private sector will be required for the long term if India fails to increase spending on public health to at least 2.5 percent of its GDP.

“[The government] is shying away from its responsibility of providing quality health care to all,” said Pallavi Gupta, Oxfam India’s program coordinator for health. She said increased reliance on the private sector “can’t help India attain its national goals,” citing loose regulation and poor monitoring as major barriers.

Public private partnership

India’s new National Dialysis Program may offer a window into how health care could look under the NHP. Launched last year, the NDP is the first disease-specific PPP to be implemented on a national scale. It seeks to address the skyrocketing number of End Stage Renal Disease patients, whose care placed considerable burden on existing dialysis infrastructure.

Thirty-six states and Union Territories have so far been approved for funding of dialysis services for the poor through the National Health Mission. Prior to the program, patients were forced to pay one of the 4,950 private dialysis centers across the country, usually costing up to 3000 rupees ($47) per sitting. The prohibitive cost, along with a lack of machines, has meant that less than 30 percent of patients suffering from ESRD receive dialysis, according to a study published in the Lancet.

Now, private partners across India will provide human resources, dialysis machines and other logistics, while state governments will provide space in district hospitals along with power and water supply.

Another Lancet study estimated that India could require 70,000 dialysis machines to treat more than 200,000 patients this year — a figure that will eventually rise to more than 2 million patients.

Care under the new program is technically free for patients, though that doesn’t always mean there are no costs, said Dr. Jha, who is a nephrologist. “Once a patient enters the dialysis unit and goes through treatment, that process is free but the fact that the patient might have to travel to get to the centre and need to purchase additional medicines, that’s all additional expenses,” he said.

He also complains that the plan emphasizes care itself, rather than the result of treatment. “As physicians our goal is to improve quality of life and reduce morbidity and mortality but those measures are not included in this model,” he said.

Physicians and patients across the country will not be watching the new plan unfold. As health care requires more government resources going forward, all eyes will be on where it is spent, on whom, and what results it delivers.

Source: Devex