The Union Budget has given no indication of the central government’s plans to double India’s public health spend from 1.2 per cent of GDP to 2.5 per cent in the next five years. At Rs 30,702 crore, the health allocation in the Budget is approximately 15 per cent higher than the previous year’s Rs 26,897 crore, but as a proportion of the country’s GDP, it remains stagnant at 0.3 per cent over the past several years. In an interview, Srinath Reddy — president of Public Health Foundation of India – who headed a panel that suggested the increase in health spend and a government-funded framework for providing accessible and affordable healthcare tells Joe C Mathew that it is too early to doubt the Centre's intentions. Edited excerpts:
The High Level Expert Group (HLEG) on Universal Health Coverage (UHC), which was constituted by the Planning Commission and chaired by you, has categorically stated that the state cannot shy away from the responsibility to provide essential healthcare to all citizens. It has downplayed the role of health insurance. How realistic are these suggestions?
I believe the government must commit a higher share of public funding to health. Without that, it is impossible to reconfigure the country’s healthcare system in an equitable manner. The question is how to spend the amount. The easiest way is to put it into an insurance scheme and ask private players to provide the services. But this can only achieve partial results since it will gradually result in the escalation of costs beyond a manageable level and also the services will not reach all people. Second, insurance schemes cover low-frequency, high-cost treatments and not low-cost illnesses that occur commonly. These schemes will not take care of preventive care, early detection or primary healthcare. Moving beyond insurance, an assurance has to be provided by the government, which has to act as the guarantor of UHC and ensure its success and sustainability by mobilising all societal resources and advancing multi-sectoral actions.
Can you elaborate on this point? Also, what will be the role of health insurance providers and the private healthcare sector, which is a dominant player in tertiary care in India?
What the government needs to do is to put in money to build and refurbish public health infrastructure, increase the number of healthcare providers, strengthen the country’s community health centres, primary health centres and district hospitals, and create a network of publicly-funded healthcare institutions.
Private players can be part of this network through service contracts. Primary, secondary and tertiary care must be integrated in such contracts. We are talking about a system similar to the one being talked about in the US by the Obama Administration today. They are now proposing Accountable Care Organisations (ACO) that will provide a full range of medical care for patients. A recent article in The New York Times predicts the end of American health insurance industry by 2020 once such ACOs – groups of doctors, hospitals and other healthcare providers – are in place in that country. We have to develop our own model but the key principles are: don’t fragment healthcare and don’t neglect primary care.
Reviving public health network has been seen by many as a futile exercise owing to its past failure to address the needs of common citizens. How do we ascertain its success now?
Let us admit the fact that we have allowed the public healthcare system to decay. It was under-resourced and ill-managed. Does that mean that the system was a failure? We [HLEG] have suggested measures to strengthen the quality of services, to turn them more accountable and make them work. It is a long-term vision that stretches over two Plan periods [2012-2022]. While there are certain suggestions that can be immediately implemented, others will take time. For instance, free supply of essential medicines in public health institutions can start during this Plan period [2012-17] itself. It would cost the government Rs 6,000 crore to roll out this scheme nationally.
The panel’s recommendations had raised the hope of some changes in budgetary allocations to the health sector. It has not happened. The Planning Commission is yet to adopt your recommendation in the Plan document. Do you see this as the government’s unwillingness to accept your suggestions?
No. All early indications are positive. Prime Minister Manmohan Singh has repeatedly emphasised the need for increasing the total government health expenditure to 2.5 per cent of GDP by the end of the 12th Plan. He has asked the Planning Commission to motivate states to allocate more funds for the sector. Many of the suggestions, including the proposal to supply free medicines have been highlighted by the prime minister
I believe that the final picture will evolve only by July-end, when the full Planning Commission meeting and National Development Council (which has representatives from all states and Union Territories) consider the proposal. Without these approvals, the Union Budget could not have been the appropriate platform for such policy announcements. HLEG members are also sensitising various stakeholders, including civil society groups, on the major recommendations.
There have been three major developments in the sector: the new pharma pricing policy being worked out under a Supreme Court directive, the government’s plans to amend the Competition Act to monitor all pharmaceutical takeovers (by foreign multinational corporations) and the recent Indian Patent Office’s decision to grant compulsory licence to make low-cost version of a patented cancer medicine. Do you think these are in line with your view to make medicines and treatments available at affordable rates?
Yes. Price control is necessary in medicines. And the government is looking at the extent to which it is required. We have recommended pooled procurement of essential medicines as one of the ways to bring down prices. It can be carried out even at the hospital level and several private hospital chains are already doing it. Its value has been best demonstrated by the public system in Tamil Nadu. In the case of mergers, our view is that mergers and acquisitions should be allowed only if they do not interfere with the affordability and availability of drugs. We have suggested a model in which larger financial control can be allowed, but legal voting rights, when it comes to decisions of national interest, should remain with the people representing Indian interests.
On compulsory licensing, we have now given a message to the world that we can do it if need be. We should also strengthen our public drug-making facilities to manufacture medicines in case of a national emergency. I have always believed that non-communicable diseases (like cancers and heart diseases) are public health emergencies in slow motion.
Public-private partnerships (PPP) are the most talked about model in healthcare. Despite some individual successes, the model, by and large, is seen with mistrust by the government and private hospital managements. How do you intend to bring private players on board in the larger UHC system?
As suggested earlier, the contract method allows private hospitals to treat government-funded patients without any formal PPP as we see today. Our position is that a vaguely constituted PPP will be unsatisfactory to both the parties. But if you bring them together through a clearly defined contracting – in mechanism – private players, too, can participate and gain through the huge volume of health services that is needed under universal health coverage.