PHM-Exch> Press statement by PHM-India on proposed health sector reforms in India

[Amit Sengupta]

*PRESS STATEMENT*

* *

*Planning Commission of India to hand over Health Care to Corporate Sector*



The draft health chapter of the 12the Five Year Plan document is being
discussed for final adoption by the Planning Commission by the end of
August, 2012. The Jan Swasthya Abhiyan (Peoples Health Movement – India)
expresses concern regarding the present recommendations and plans outlined
in the draft chapter. *The chapter fails to build on the recommendations of
the High Level Expert Group (HLEG) set up by the Planning Commission,
misquotes the Group’s recommendations in many places and ends by proposing
a plan for restructuring the country’s health system that would effectively
hand over health care to the corporate sector.* It is particularly
problematic that the plan document invokes the concept of Universal Health
Care, while actually proposing a strategy that is far removed from the
basic tenets of Universal Health Care.



*The Plan document recommends increase in public expenditure on health from
the present 1% to 1.58% of GDP. This is in sharp contrast to the HLEG
recommendation of increasing this expenditure to at least 2.5% of the GDP
and also at variance with the earlier pronouncements by the Prime Minister.
Secondly it proposes that the Central government’s (which collects most of
the taxes ) share in the additional health expenditure would be less than
half of what states would contribute and that Centre’s contribution would
be conditional on states’ contribution!  * The Planning Commission seems to
have decided that *India** will continue to be among the bottom 10 nations
in terms of percent GDP spending on health.*



What is of even greater concern is the strategy proposed for restructuring
of the country’s health system in the document. The Plan document proposes
a transition from: “….*the present system which is a mixture of public
sector service provision plus insurance, to a system of health care
delivered by a managed network*”. There is, thus, a road map envisaged
where the *Government will abandon its central role of providing health
care and become primarily just a ‘manager’ of the new system envisaged. *



The document’s vision of ‘universal provision of public health care’
includes two components.  “*..preventive interventions which the government
would be both funding and universally providing*” (see annexure) and
“*clinical
services at different levels, defined in an Essential Health Package, which
the government would finance but not necessarily directly provide*”. What,
in essence, this formulation proposes is that the Government would, over
time, confine itself to providing a small package of services and would be
primarily just a purchaser of virtually all clinical services from the
 corporatised private sector. *The Government would thus finance (with
public money), strengthen and bolster an already resurgent corporate sector
providing medical services.* On the face of it, this appears an almost
diabolical ploy to hand over the profit-making clinical services sector to
corporate hospital chains. *It would also decisively halt and eventually
reverse the moderate achievements of the National Rural Health Mission, in
expanding public health infrastructure and services in parts of the country.
*



The public health system will now be asked to compete with the private
sector to attract patients. A system is envisaged where: “*each citizen
family would be entitled to an Essential Health package in the network of
their choice. Besides public facility networks organized .. private and NGO
providers would also be empanelled to give a choice to the families*”. Even
this truncated role of the public system is qualified by the proviso that” “
*..public facilities will have to be strengthened, networked, and their
managers provided sufficient autonomy to purchase goods and services to
fill gaps as per need*”. In other words, *public only in name, but would be
vitiated by the logic of the market and by the incorporation of private
players into its fold.*



The HLEG had, in its report, commented that: “*…**since there is virtually
no focus** **on primary level curative, preventive, and promotive** **services
and on long-term wellness outcomes, these** **traditional insurance schemes
often lead to inferior** **health outcomes and high health care cost
inflation*”. Yet the Planning Commission’s document repeatedly talks about
expansion of the health insurance scheme called RSBY and its vision of
Universal Health Care is nothing but a more expanded version of the RSBY
scheme.



The document announces another bonanza to the corporate medical sector in
the form of grants to set up hospitals and private medical colleges. It
says: “*Health has now been included with other infrastructure sectors
which are eligible for Viability Gap Funding up to a ceiling of 20% of
total project costs under a PPP scheme. As a result, private sector would
be able to propose and commission projects in the health sector, such as
hospitals and medical colleges outside metropolitan areas, which are not
remunerative per-se, and claim up to 20% of the project cost as grant from
the Government*”. It may be noted that the only eligibility requirement is
the location, and not any contribution to public health goals.



This document proposes that  public health facilities will have
“flexibility” to raise their own finances. The Plan document says: “*Tertiary
care facilities would have an incentive to generate revenues if they are
provided an autonomous governance structure, which allows them flexibility
in the utilization of self-generated resources within broad policy
parameters laid down by the Government*”. There are several ways in which
such flexibilities can be misused, including in the form of levying of user
charges and arrangements with private entities that seek to extract
benefits that conflict with the public health goals of public institutions.



The HLEG  had recommended : “*enforcement of price controls and price
regulation on essential and commonly prescribed drugs*”. However, this
document does not even  mention* drug price regulation, in spite of a
pending Supreme Court directive that the Government should expeditiously
put in place a system to control the prices of drugs*. Neither is the
recommendation of the Expert  Group, that the production of drugs and
vaccines in the public sector be incentivised, reflected anywhere in this
 Planning Commission’s chapter.



The ideological bias of the Planning Commission’s report is clear when it
says: “*A pure public sector delivery system involves funding a large
public sector health system, with little incentive for the service
providers to deliver a quality product”*. *Such an assertion flies in the
face of global evidence that the best performing health systems are those
that are publicly financed and where health care is provided either almost
entirely by the public sector or by a combination of the public sector and
non-corporate  providers.* Neighbouring Sri Lanka has been long held as an
example of such a system, where over 90% of in-patient care and over 50% of
out-patient care is provided by the public sector. Mortality and morbidity
rates in Sri Lanka are far better than in India, in spite of the country
having a lower per-capita GNP. Thailand, in recent years, has made rapid
strides in providing universal access to health services by increasing
public finances and by significantly expanding public provisioning of
health services. In contrast, the United States, provides ‘choice’ between
public and private providers but is by far the worst performing health
system among all developed countries, in spite of spending over 8% of GDP
on health care.



The Planning Commission’s recommendations, perhaps make some sense if seen
purely in the context of neoliberal economic policies. Injection of public
funds into a floundering economy through the financing of the private,
corporate controlled, hospital sector may seem attractive in such a
context. But the strategy is disastrous in public health terms, and is
designed to finish of the vestiges of a public health system that still
survives in the country.
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