A regulator for health sector on lines of RERA likely to be set up soon

A new regulator for the health sector, styled on the Real Estate Regulatory Authority (RERA), is expected to be set up soon, with Chief Economic Advisor K V Subramanian scheduled to make a presentation on the outlines of the proposal to the NITI Aayog next week.
 
The move is expected to have a drastic effect on both the quality and the cost of health care in the country, especially in the private sector.
 
The idea of a regulator was most recently mooted in the Economic Survey (2020-21) which noted a larger proportion of deaths in India were due to poor quality of health care rather than insufficient access.

 

The survey cited unplanned readmission data — considered the most common metric of quality in the hospital setting. “Readmissions typically impose a heavy burden on patients and their families and on the health system generally as a result of unnecessary care,” the Survey noted, adding “in general readmissions are costlier than original admissions”.
 
According to the Survey, the argument that readmissions are lower in the private sector because the quality of care is better, is not borne out by facts. “Public sector patients get readmitted to the same hospital 64 per cent of the time versus 70 per cent for private hospitals,” it had said.

 
So the quality of health treatment in private hospitals is not significantly better than public ones. But there are dramatic differences in costs.
 
“Not only are these uniformly higher in the private sector, the differences are humungous for in-patient treatment of severe illnesses such as cancer (3.7x), cardio (6.8x), injuries(5.9x), gastro (6.2) and respiratory(5.2x),” the survey said.
 
These ‘information asymmetries’ — a concept first devised by Nobel laureate Ken Arrow, whose work on health and welfare economics is considered a benchmark — will be addressed by the proposed regulator.
 
Sources in the Ministry of Finance said Advisor (Health) in the NITI Aayog, Dr VK Paul, was so enthused by the idea that he asked for ways in which it could be rolled out.

 
A meeting scheduled for last week had to be postponed because of the fresh Covid-19 outbreak and will now be held next week.
 
The biggest hitch in implementation is that health is a state subject, leading to jurisdictional problems.
 
A RERA-type regulator would be a perfect solution as there would be political incentives at the state level for better quality of health care.
 
“If we can introduce this health care reform, dovetailed with Ayushman Bharat, it could be a game changer for India’s health sector,” said a source in the finance ministry.
 
As the regulator will need to be created via a legislative process, the government could bring a Bill in Parliament before the year ends, sources said.