The current political economy of healthcare makes India one of the most privatised health sectors in the world. Out-of-pocket expenditure of the citizens is the main mechanism of financing healthcare.
In India, private healthcare is much larger and more widespread than public health services.
The Centre for Strategic & International Studies, in a recent study said that no challenge "is as certain as global ageing, and none is as likely to have as large and enduring an effect on the size and shape of government budgets, on the future growth in living standards, and on the stability of the global economy and even the world order."
Advances in medical sciences, better medical facilities, preventive measures using vaccines against diseases such as polio, measles, awareness of health issues and improved living conditions for many have contributed to a longer life span, as a result of which today we witness an ageing society.
Not surprisingly, governments are becoming increasingly aware of the need for coordinated policies in the fields of employment, pensions, disability, and health.
With a comparatively young population, India is still poised to become home to the second largest number of older persons in the world. It is anticipated that the number of people over the age of 60 in India will increase from 76 million in 2003 to 100 million in 2013 and to 198 million in 2030. This rapid ageing of population adds to the socio-economic challenges that face India.
Notwithstanding the adage "old is gold", life for many older people is less than happy. When young people leave their villages for the towns and cities, the old are left to fend for themselves. As families are becoming more nuclear, their function as a social safety net for the elderly erodes quickly.
The health sector in India is characterised by:
A government sector that provides publicly financed and managed curative and preventive health services from the primary to tertiary levels throughout the country, and free of cost to the consumer. These account for about 18 per cent of the overall health spending and 0.9 per cent of GDP. In contrast Germany, France and the US invest 6-8 per cent of public spending on health
A fee-levying private sector plays a dominant role in the provision of individual curative care (these account for about 82 per cent of the overall health spending and 4.2 per cent of GDP)
Public health facilities are allocated on the basis of population-based norms and/or on the basis of specific geographic units. Thus, for primary care, there are dispensaries and health centres which provide largely ambulatory care. Rural areas have mostly health centres such as primary health centres and sub-centres through which preventive and promotive care are provided, largely through paramedics. Small towns usually have only dispensaries and a basic hospital.
Private health care is much larger and more widespread than public health services. Individual practitioners in their clinics provide ambulatory care, which may often be within their residence. A peculiar characteristic of private health services is that, unlike the public health sector, they provide almost entirely only curative care. Further, the private health sector is fully commoditised and totally unregulated which raises questions of ethics in practice. The cases of unqualified persons dispensing medical services and masquerading as doctors are not unknown.
The current political economy of healthcare makes India one of the most privatised health sectors in the world. Out-of-pocket expenditure of the citizens is the main mechanism of financing healthcare and in the context of large-scale poverty this not only contributes to widespread inequities but is also unsustainable. With current fiscal policies directed at further reductions in tax revenues the tax- GDP ratios are down to a mere 15 per cent against close to 30 per cent in most developed countries which would further result in shrinkage of social expenditures such as healthcare.
For a strong healthcare system, investment in social insurance programmes together with judicious public sector expenditures and private insurance is required. Suggested steps in the direction could be:
Globalisation of our healthcare system: It can yield many benefits, including improved quality and standards, and more money for investment in the sector. Cross-border exchange of practices, knowhow and technologies, resulting from the flow of capital, consumers, health personnel and information, can help in raising standards and the quality of domestic healthcare.
Gain access to consultations with experts in super-specialty medical institutions through telemedicine: Given the fact that nearly 75 per cent of the population lives in rural areas and more than 75 per cent of Indian doctors are based in cities, telemedicine may turn out to be the cheapest, as well as the fastest, way to bridge the rural - urban health divide. Considering the huge strides in the field of information and communication technology, telemedicine can help take specialised healthcare to the remotest corners of the country
Provision and retention of healthcare providers: Health systems all over the world are highly dependent on their health workers to provide skilled, effective, efficient and compassionate care. According to latest estimates, there are over 39.2 million healthcare providers in the world. Although WHO's South-East Asia region accounts for 26 per cent of the total world population, only 12.8 per cent of those providers are working in the region.
Creating awareness and provision of timely care: This would lower the cost of dealing with chronic conditions later on in life. The corporate sector must also fulfil its social responsibility by committing some resources to non-governmental organisations and holding them accountable for results.
To make health insurance dominant for financing healthcare: This would require appropriate changes in the laws for introducing a contributory scheme which covers a large proportion of the working population through the social insurance route and organisation of the entire healthcare system in the country, public and private, into a defined system which functions according to rules and regulations, uses standardised protocols for treatment and care, is subject to price regulation and is financed through pooling of all available .
Community-based health insurance for people who cannot afford conventional health insurance: India is emerging as a medical tourism destination a rather niche concept as of now. But as figures quoted for developed countries indicate, this is poised to become larger. While this is no doubt good news for the country's forex position, we must pause and think of its effects on public healthcare of the country.
Monetary rewards of medical tourism will certainly exert an irresistible pressure on competent doctors working at miniscule government salaries within the public healthcare system. Inevitably, there will be an exodus of talent to the private sector, with disastrous consequences for the quality of healthcare provided by the public system.
Cuba has taken medical tourism to a level of being a major source of foreign exchange for the country. Though the facilities used by the dollar paying clients are state of the art, the medical attention available to an average person is rudimentary and sub-standard. India could fall in a similar trap.
As in most other things, India needs a strong political will and a civil society which has to be pro-active in demanding healthcare as a right. If we do not take care, we might be heading for a `medical apartheid' health care will be only for the wealthy.
(The authors are Senior Manager and Partner, respectively, Price Waterhouse.)