Where are we today?

Ravi Duggal

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WAY back in 1978, WHO member nations took a pledge at Alma-Ata to ensure not just universal access to primary health care, but ‘health for all’ by the year 2000.1 Well, the magical year has arrived, but can we claim that the situation has substantively changed? The countries that had not provided basic health care to their people earlier continue to be unable to do so even today. It is not as if there is a lack of resources – more drugs are produced, the private health sector has grown geometrically, people are spending much more out of pocket, newer technologies are available and so on – but the numbers of those without access to primary health care have increased.

In 1946 we had a well worked out plan and strategy to provide health for all in the form of the Health Survey and Development Committee Report (popularly called the Bhore Committee Report). It was a comprehensive plan that guaranteed universal access to health care 15 years down the line. But the first health minister’s conference in 1947 scuttled it, claiming it to be unaffordable. The Bhore plan required only about 1.33% of GNP, including capital expenditures (or Rs 2.98 per capita at 1945 prices).2 This was not a difficult target to achieve. It would also have been a fruitful investment in people who would contribute to the new economy.

We opted instead for a selective programme based approach, perhaps under the influence of American community development model which had become the cornerstone of our development policy in the early years of planning. Many of these were vertical programmes that had their own bureaucracy and which, over time, developed into ‘empires’. No doubt this approach contributed to some well-known successes, like the eradication of small pox by 1976, control over malaria by the mid ’60s (but this was later messed up due to complacency as malaria continues to be a menace), reasonable control over leprosy by mid ’80s, and more recently, the pulse polio programme.

However, access to basic health care, especially in the rural areas, remains unavailable to a large majority. This, despite a large expansion of rural health infrastructure in the ’70s and ’80s under the minimum needs programme. While this infrastructure is in place in many states, it does not meet the health care needs of the people. People need basic curative and preventive care but the existing system is obsessed with providing family planning and related services. From the third five year plan onward, family planning has remained the main concern of the Ministry of Health and Family Welfare.3



Since then, nomenclatures may have changed from maternal and child health to child survival and safe motherhood, and presently reproductive and child health under international patronage, but the underlying emphasis of the health programme remains family planning or population control. As a consequence, even the poor have to seek primary care from private health providers, often from those not qualified in any system of medicine.

Despite the shortcomings we do see improvement in measurable indicators like longevity, infant mortality and crude death rates over the years. But these figures reflect more an improvement in the quality of life of the top 20%, and the concerted efforts in health care in states like Kerala and Tamil Nadu. Overall, the misery of the bottom half of the population continue. This is adequately reflected in disaggregated figures of these same indicators in the BIMARU states.

Health care access and availability in India has a peculiar public-private mix that generates a political economy which makes the health sector purchasing power dependant. This is a contradiction given the fact that the majority do not have the purchasing power even to sustain adequate nutritional requirements. In a country where nearly half the population struggles under severe poverty conditions and another one-half of the remaining manages at a subsistence level, it is tragic that social needs like health and education have to be more often than not bought in the market place.



Today there are over 15,000 hospitals (68% private) with about 900,000 hospital beds (45% private), about 25,000 primary health centres in the country, and a total of over 1,200,000 qualified practitioners (89% private) of all systems of medicine. The skewed rural/urban availability of public health services is well known – 70% hospitals and 85% of hospital beds under the public domain are located in urban/metropolitan areas while 70% of the population lives in the rural and backward areas of the country.

The pattern of distribution of the private health services is not very different. They too tend to concentrate in urban/metropolitan areas – 60% hospitals, 75% of hospital beds and 70% of allopathic doctors are found in urban areas.4 However, the private health sector is not confined to just qualified allopathic practitioners. There are nearly twice as many practitioners qualified in various Indian systems of medicine and homoeopathy, and a larger proportion of them (60%) are located in the rural and backward areas, 90% of them also practicing modern medicine.



Hence, the private sector definitely has a better penetration in areas where the majority live. Further, because of a complete lack of regulation and control there is another large chunk of practitioners, estimated at about half as many as the qualified, who practice modern medicine without proper qualifications in any system of medicine – again a large majority of them are in rural and backward areas. The entire private health sector operates on a profit basis within the context of a supply induced demand economy. Estimates based on various studies show that private health expenditure accounts for 4 to 6% of the GDP, in sharp contrast to less than 1% of the GDP which the government spends.5

In the current scenario of liberalisation and globalisation, the pressure to further reduce state participation in the health sector will be difficult to resist. Even the WHO has diluted its stand and is now in favour of selective health care for a targeted population, an approach which the World Bank has pushed since its 1993 World Development Report, ‘Investing in Health’. WHO’s recent report titled ‘Health For All in the 21st Century’ has debunked the comprehensive approach and is now focusing on selective programmes. The report has also abandoned any concern for equity and social justice. Such is the combined initiative of the WHO and the World Bank. Hence, the challenge has to be at another level – both to strengthen the state’s role in the health sector as well as to make the private sector more accountable.



Over the last nine plan periods the Planning Commission, or for that matter the ministry of health, has not paid much heed to the way in which the private health sector has grown and operated. In fact, the state has subsidised the growth of the private health sector by various means – subsidised medical education even for those who ultimately go into private practice or, worse still, migrate abroad; concessions, subsidies and tax reliefs to private practitioners and hospitals. Many private hospitals function as trust hospitals whose incomes are exempt from tax. Public sector units have supplied bulk drugs and raw materials at subsidised prices to the private pharmaceutical industry and have in the process earned the label of ‘being in the red’ and ‘inefficient’. Import duty concessions for expensive new medical technology which largely benefits the richer sections have also been provided.

The new strategy should focus both on strengthening the state sector and at the same time planning for a regulated growth and involvement of the private health sector. There is a need to recognise that the private health sector is huge and has cast its net, irrespective of quality, far wider than the state sector health services. Through regulation and involvement of the private health sector, an organised public-private mix could be set up to provide universal and comprehensive care to all. The need of the hour is to look at the entire health care system in unison to evolve some sort of a national system. The private and public health care services need to be organised under a common umbrella to serve one and all. A framework for basic minimum level of care needs to be clearly spelt out and this should be accessible to all without direct cost to the patient at the time of receiving care.

We are today at the threshold of another transition which will see some changes in regimes of regulation, price control, quality assurance, rationality in practice and so on. The opening up of private health insurance will bring in new rules of the game, enabling providers to meet their own profit motives. While this may, to an extent, improve quality and accountability, it will be of little help to the poor and underserved who are unlikely to have access to this system. Worldwide experience shows that private insurance only pushes up costs and serves the interests of the ‘haves’. If equity in access to basic health care must remain the goal, the state cannot abdicate its responsibility in the social sectors.



Though the state need not become the primary provider of health care services, this does not mean that it has no stake in the health sector. As long as there are poor people, the state will have to remain a significant player. In fact, as the experience of most developed countries demonstrates, the state becomes an even stronger player when the number of poor people declines!6

While a major reorganisation of the health sector will take its own time, certain positive changes are possible within the existing set up through macro policy initiatives. Medical councils must be directed to put their house in order by ensuring that only those qualified and registered practice medicine. Continuing medical education (CME) should become compulsory and linked to renewal of registration. Graduates passing out of public medical schools must put in compulsory public service of at least five years of which three years must be at PHCs and rural hospitals. (This should be assured not through bonds or payments but by providing only a provisional license to do supervised practice in state health care institutions and also by giving the right to pursue postgraduate studies to only those who have completed their three years of rural medical service.)



The spread of private clinics and hospitals must be regulated through a strict locational policy wherein the local authority is given the right to determine the number of doctors or hospital beds they need in their area (norms for family practice, practitioner: population and bed ratio, population ratios, fiscal incentives for remote and underserved areas and strong disincentives and higher taxes for urban and overserved areas, etc., can be used).

The quality of care provided by hospitals and practitioners should be regulated by laying down minimum standards to be followed. A compulsory health insurance for the organised sector employees should be put in place (restructuring the existing ESIs and merging them with the common national health care system where each employee enjoys equal rights and cover but contributes as per earning capacity). For example, if each employee contributes 2% of earnings and the employer adds another 3% then nearly Rs100 billion could be raised through this scheme alone.



Special taxes and cesses for health can be levied to generate additional resources (alcohol, cigarettes, property owners, vehicle owners are well-known targets and something like 1% of sales turnover for the products and a value tax on the asset could bring in substantial resources). The allocation of existing resources can be rationalised better through preserving acceptable ratios of salary: nonsalary spending and setting up a referral system for secondary and tertiary care. These are only some examples of what can be done through macro policy initiatives.

There is an urgent need to strengthen, restructure and reorient public health services. The urban bias in medical care provision by the state needs to be corrected. The primary health centres (PHCs) and subcentres (SCs) need to be thoroughly reoriented to meet peoples’ needs of medical care and not be obsessed with family planning alone. Facilities for medical care need to be substantially enhanced at the PHCs, both in terms of personnel and supplies.

While supplies can be increased through larger budgetary allocations, it is difficult to get personnel to work in the public system. Since private individual practice remains the norm, it becomes necessary to involve such practitioners to join a public sponsored health care programme on a pre-defined payment system, for instance, a fixed capitation fee per family registered with the practitioner. Such a system needs to be evolved both in the rural and urban areas. This would mean a five-fold increase in primary care costs which would be partly financed from within the existing resources and the remaining from the organised sectors of the economy, including insurance and special health related taxes.

Of course, this would entail substantial restructuring, including stronger regulations and control and a mechanism for regular audit of the system’s functioning. This is the only way of guaranteeing universal access to health care and achieving ‘health for all’. The bottom line would be no direct payments by patients at the time of receiving care. All payments would be made through a statutory authority which would be the monopoly buyer. People with a capacity to pay should be charged indirectly through taxes, insurance premia, levies and so on.



Such restructuring would not disturb the autonomy of the individual practitioner or the private hospitals except that it would strive to eliminate irrational and unnecessary practices, demand some relocation of practitioners, standardise and rationalise costs and incomes, eliminate quackery and demand accountability from the providers. The ministry of health at the Centre has shown some interest in these areas and is promoting processes geared in this direction.7

The public health sector must be made efficient, cost-effective and socially accountable. The response to the malaise of the public health services should not be to ‘privatise’. We already have a large, exploitative and unsustainable private health sector. What makes the private health sector ‘popular’ in usage is its better access (irrespective of quality), a personalised interface, availability at convenience, and its non-bureaucratic nature. The public health services by contrast are bureaucratic, with poor access, especially in rural areas, have inconvenient timings, are generally impersonal, often don’t have requisite supplies like drugs, and are plagued by nepotism and corruption.



There is substantial scope for improvement of public health services with better planning, reallocation of existing resources as well as pumping in additional resources – especially for non-salary expenditures, reducing wastage and improving efficiency by better management practices and separation of primary, secondary and tertiary care through setting up of referral systems, improving working conditions of employees and so on.

One good way of enhancing the value, efficiency and effectiveness of the existing system using available resources is to ensure that all medical graduates who pass out of public medical schools (80% of all graduates every year) serve in the public system for say at least five years with out which they should be denied the licence to practice as well as admission for postgraduate studies. After all the state spends about Rs 1,000,000 per medical graduate!8 This measure, if enacted by law, will itself make available 14,000 doctors of modern medicine every year for the public health care system.

Further, public health services must be made accountable to the local communities they serve. The community must perform both the role of social audit as well as take responsibility for ensuring that the system works properly for the benefit of patients. As regards the private health sector, as mentioned above, there is an urgent need to regulate it, implement minimum standards of care, standardise charges, frame policies for location and distribution and so on. All these are feasible proposals which could be undertaken irrespective of the structural changes suggested in the preceding paragraphs.



Modes of financing and payments: While the public sector is funded through tax revenues the private sector relies on fee-for-services. There is a growing trend of thought favouring at least partial user-charges or fee-for-services for public health services. This trend must be countered as in the given socio-economic conditions such a policy would hit the majority hard. The WHO has been firm about nations spending 5% of GDP on health care. In India the state doesn’t spend even 1%.

The first effort, therefore, must be to get the state to commit a much larger share for the health sector from existing resources. Additional revenues specifically for health budgets may be collected on the lines of a profession tax in some states which funds employment programmes; levies and cesses for health could be collected by local bodies; employers in the organised sector must be made to contribute for health care services; those with a capacity to pay like organised sector employees, the middle and rich peasantry (so far completely untaxed), and other self-employed, must do so through insurance and other pre-payment programmes.

In a vast and varied country like India no single system can work. What we need is a combination of social insurance for the poor (premia paid by the state), employment related insurance for the organised sector employees, voluntary insurance for other categories who can afford to pay, and tax and related revenues. Further, payments at the point of provision of care must be eliminated as they are usually unfavourable to patients. Payments must be made to providers by a monopoly buyer/s of health services who can also command certain standard practices and maintain a minimum quality of care; payments could be made in a variety of ways such as capitation or fixed charges for a standard regimen of services, and fee-for- service as per standardised rates.



The move towards monopoly purchase of health services through insurance or other means and payment to providers through this single channel is a logical and growing global trend. This is perhaps the only alternative available at present to achieve universal access to health care with relative equity. It, of necessity, implies the setting up of an organised system wherein the state plays a leading role while involving the large private sector within this universal health care paradigm.

The above changes, though feasible, are not going to be easy to achieve. The government does not view health care as a major political concern and hence does not see the need for any drastic reforms in the health sector. The private health sector is happy with the government’s unconcern about the manner in which it operates. Yet there is hope because pressures are building up from below. The Consumer Protection Act delivered the first shock to the private health sector thereby forcing a realisation that they cannot ride roughshod over their clients. The government too needs to be administered such shock therapy; this we believe may be just round the corner!




1. The Alma-Ata declaration defined primary health care as ‘essential health care based on practical, scientifically sound and socially acceptable methods and technology made universally accessible to individuals and families in the community through their full participation and at a cost that the community and the country can afford to maintain at every stage of their development in the spirit of self reliance and self determination.’ (WHO, 1978: Alma-Ata 1978 – Primary Health Care, Geneva).

2. GOI, 1946: Health Survey and Development Committee Report, Vol. II, p. 510.

3. In fact, in 1966 a UN Advisory Mission strongly advised that, ‘The directorate (Health) should be relieved from other responsibilities such as maternal and child health and nutrition. It is undoubtedly important for family planning to be integrated with MCH in the field, particularly in view of the "loop" programme, but until the family planning campaign has picked up momentum and made real progress in the states, the Director General concerned should be responsible for family planning only. This recommendation is reinforced by a fear that the programme may be otherwise used in some states to expand the much needed and neglected MCH services.’ (UN Advisory Mission, 1966: Report of the Family Planning Program in India, United Nations, New York.)

4. Given the large size of the private health sector, data becomes a major problem. While public sector data is available, though with a lag of 3-4 years, private sector data is difficult to come by except through surveys. The author has provided estimates based on data from the ministry of health, state medical councils, the Census of India and utilisation surveys carried out by various institutions like the NSSO, NCAER and others.

5. There are a number of studies which have documented private health expenditures. Some of the important ones are: NCAER, 1992: Household Survey of Medical Care, New Delhi; K.P. Kanan, et.al., 1991: Health and Development in Rural Kerala, KSSP, Thiruvananthapuram; R. Duggal, et.al., 1989: Cost of Health Care – Survey of an Indian District, FRCH, Bombay; NSSO,1989: Morbidity and Utilisation of Medical Services – 42nd Round, GOI, New Delhi.

6. Data from OECD countries clearly shows that the state is a major player in health financing and that over three-fourths of the resources for the health sector in these countries, except USA, comes from the public exchequer; even in the USA it is over 40%. But in India the state contributes only about one-fifth, the balance coming out of the pocket of households.

7. The central ministry of health has appointed panels of experts to look into quality of care, systems for accreditation etc. and this is a positive beginning towards development of minimum standards for quality care.

8. This has been estimated from the Maharashtra government’s ministry of health budget from the sub-head on teaching hospitals. It is the net cost to the government to train a medical graduate for five years at current prices.