Revitalising the country’s health-care

The Niti Ayog has said that after the path-breaking reforms of Goods and Services Tax, Bankruptcy Code and Real Estate Act, the Government now needs to initiate the reforms in the health and education sectors. The Gorakhpur tragedy of few months ago had also highlighted the shoddy state of our government health system.

It appears thata certain doctor was running private hospitals under the ownership of his wife. The government hospital was only a conduit for him to send patients to his private hospital. Other staff members of the government hospital were actively involved in thecorruption and unscrupulous system that was put in place.

On the other hand, fleecing of hapless patients by for-profit private hospitals and educational institutions is well known across the country. Doctors write a number of unnecessary tests because they get commissions from the ever-obliging laboratories and diagnostic centres, who, of their own, pocket handsome money. Such doctors tend to prescribe branded drugs because drugmajors dole out lucrative commissions on the number of medicines prescribed and sold.

We are therefore caught between two equally troublesome alternatives, between the devil and the deep sea, so to say. The government system is inefficient and corrupt while the private system fleeces the hapless patients. A way forward can possibly be found by taking cue from the approaches adopted by the United States of America (USA) and United Kingdom (UK). The US hasgone in for private provision while the UK has adopted government provision. In a way, both are worthy of emulation.

The distaste of the intrusion of the government in every facet of the people’s life has led the Americans to embrace private health care. The positive aspect is that it is hugely effective if one can afford the cost. They have the best technologies and results are more precise than most other countries. American drug companies are at the frontier of innovations.

Patent protection is good and enables them to sell their products and services at very high prices. They plough back part of their incomes in research leading to more innovations and quality medicines. The bane of India is that most people make a self-diagnosis to save on a doctor’s fees, which, incidentally, costs a bomb. For example, if one contracts ordinary cold, he self-prescribes and goes to a shop and buys antibiotics for about Rs 50 and is done with.

Ironically, in the United States, the same antibiotics are not given across-the-counter by the chemists without appropriate prescriptions. The patient has to shell down around $200 (Rs 13,000) to get a prescription from a doctor before he can buy that drug. The American system has also managed to reduce the supply of doctors by imposing high costs of education and restrictions on immigration. Doctors, therefore, charge astronomical sums as fees.

Thus, a large number of Americans cannot afford healthcare. About 60 percent of the bankruptcies there are due to such healthcare expenditures. The private healthcare approach of the US has the positive of good results and research. But due to the absence of pro-people regulation, there is short supply of doctors and high cost of drugs, because of which a large number of people are going bankrupt.

The lesson for India is that private health care produces good results but this should be accompanied by aggressive promotion of competition among hospitals and drug companies (which we are doing), and aggressive increase in supply of doctors (which is in shortfall here). There is a need to do away with the requirement of obtaining a MBBS or BAMS degree in order to practice.

A certification program that examines the basic knowledge of the applicant should be introduced so that the supply of doctors is increased and the cost of private healthcare is brought down. The United Kingdom has taken a diametrically opposite approach of patronising government hospitals. Every UK citizen has access to cheap and quality healthcare.

The government hospitals are rated as the best across all industrial countries.However, this has led to an overload on the hospitals. One has to wait many months to get an operation done. Two patients died waiting on the stretchers in the corridors. Overall, they have about 50,000 doctors and nurses while the requirement is for at least125,000. The government is not able to increase budgetary allocation.

As a result, those hospitals are like goods fit for window-shopping. Healthcare is good but often inaccessible. The lesson for India is two-fold. One, that it is possible to provide quality healthcare at government hospitals. Our ESI hospitals, for example, are better managed than the Primary Health Care Centres. The second lesson is that it is not possible to provide universal good healthcare through the government hospitals due to a heavy demand.

Our condition is worse with 1.3 billion people; and endemic corruption as evinced in the Gorakhpur tragedy. Therefore, we must not try to emulate the UK approach of government provision of healthcare. At the same time the Constitution mandates a welfare state and it is a solemn responsibility of the government to provide access to health care. The way out is to dismantle the government health care provision (and follow the US in this), and use the money to provide healthcare vouchers to the people with which they can buy from private providers.

Overall we are doing quite well. We have espoused private healthcare provision which is more accountable and efficient. We have less regulation so that large number of drugs are available over-the-counter and that keeps the cost of healthcare low. We have successfully promoted competition between drug manufacturers, which has ensured that the cost of drugs is among the lowest worldwide.

We have successfully promoted competition between hospitals thus we are emerging as a global destination for health‘tourism’. Yet we have problems like the Gorakhpur tragedy. Thus the Niti Ayog has rightly said that the next reforms should target health and education sectors.

My suggestion is that we must dismantle government hospitals and give healthcare vouchers to the people with which they can buy healthcare from private providers. This will rid our country of the corruption that exists presently. Also we need a better regulation of the private sector to prevent excessive tests and prescription of unnecessary drugs.

Perhaps we should create a parallel ‘health police’ where an affected person can file FIR against the errant doctor and hospital and get immediate relief. (The writer is a former Professor of Economics at IIM Bengaluru).

By Dr Bharat Jhunjhunwala