WHY focus on Healthcare Reforms?
The Healthcare crisis in India is neither new, nor unknown. A large majority of Indians pay for private health care despite the existence of a publicly-funded healthcare system across all levels. Despite ensuring accessible, affordable and effective healthcare being a basic state function, the Union and State governments combined spend merely 1% of the GDP on Healthcare; the lowest among major economies. Correspondingly, India has the highest burden of out-of-pocket expenditure among major countries.
With the poorest facing the most debilitating consequences, it is estimated that 5-6 crore people fall into poverty every year on account of Healthcare costs. Despite the need, the patronage for public facilities continues to be less than 30 per cent for several reasons.
HOW can we reform?
Market failures such as asymmetry of information, moral hazard and cream skimming necessitate government intervention in the Healthcare sector. The major reason for low patronage of public facilities is the poor quality and lack of trust of people. However, the testing of different models in various countries provides rich insights into what will work and what will not. The approach has to be different for the each of the three levels of care – primary, secondary and tertiary. Altered incentives and public-funded but privately delivered care can dramatically enhance healthcare outcomes for the people. However, such an approach will not work for high cost tertiary care.
Primary Care
Public primary care system has to move towards comprehensive patient-centric care. Going by the success of programmes like Arogyasri and PM-JAY, a public-funded but privately run Family Physician-led system with choice for the patients and competition between providers would enhance quality and public trust. A pool of 10 Family Physicians per 1,50,000 population, in an appropriately located small town, where the physician is compensated by the government on a fee-for-service basis (i.e. per outpatient consultation) will completely alter the incentives in the system.
Secondary Care
The Union and most State governments have now adopted some form of a social health insurance/assurance programme. However, such programmes are currently applicable to both secondary and tertiary care services and do not cover the entire population. The procedures covered should be limited to secondary care services to ensure cost control and the eligibility must be expanded to the whole population. Empanelment of small private nursing homes should be prioritised.
Tertiary Care
Quality and cost control both are important in respect of such high cost, low impact healthcare interventions. Government cannot be a purchaser of tertiary care services. It has been proven time and again that services offered in Public Teaching Hospitals are several times more cost effective than in private hospitals. Therefore, the focus should be on dramatically improving the facilities and quality of services provided in such hospitals through increased public expenditure.
WHAT has FDR done so far?
FDR has been at the forefront of Healthcare Reform advocacy for several decades now. Some of our interventions are mentioned below:
National Rural Health Mission
During the time that Dr. Jayaprakash Narayan was a member of the National Advisory Council, FDR’s ideas influenced the design of the National Rural Health Mission.
Round Table on Healthcare Reforms
On 23rd April 2016, FDR conducted a Round Table Conference on Healthcare Reforms. The conference dealt with comprehensive reforms across all three tiers of Health Care.
Webinar on Rejuvenating Healthcare System
As part of the Crisis as Opportunity webinar series, FDR organised a webinar on Rejuvenating Healthcare System in the backdrop of the Covid-19 crisis.
Published “Towards Viable Universal Healthcare”
FDR published a book on comprehensive healthcare reform in July 2021. The book was released in a press meet in November 2021.
Representations to NITI Aayog
FDR has made representations to the NITI Aayog on several occasions – in 2016, 2022 and 2024. The representations covered several aspects such as primary care system, limitations of a completely insurance-driven model and approaches to improving public tertiary care.