Skewed growth

The govt should not abdicate its role in healthcare

Successive governments from the 1990s onwards have developed a predilection for encouraging the private sector to enter healthcare services. Their reason for doing so is difficult to understand and the United Progressive Alliance should speedily reassess a trend that can only be described as unhealthy. Experience since the corporate hospital boom began in the 1990s has shown that growing private investment in healthcare has enriched promoters and shareholders but has neither transformed India’s sub-Saharan healthcare system nor noticeably improved ethical standards and practices.

There is no doubt that, from an investor’s point of view, healthcare is one of India’s more lucrative businesses — it is estimated to cross $40 billion by 2012, from $34 billion currently. Poor public investment in all forms of healthcare, including tertiary care where corporate hospitals play a role — a plan announced six years ago to replicate the AIIMS experiment has been a non-starter — means that the private sector services more than 80 per cent of this market. This shortage economy and the growing prosperity of India’s middle class explain the rush of investment into the sector and the decent valuations that rapidly-expanding corporate hospital chains like Apollo command. Viewed from another perspective, however, it is worth asking whether these smart and profitable hospital chains walk the thin line where profits are the focus more than patient needs. The concern arises because, despite the proliferation of private hospitals built on land obtained from state governments at concessional rates and enjoying significant tax breaks, the average Indian’s access to tertiary medical care remains poor. In urban India, which is the locus of the corporate hospital boom, there are just 178.7 hospital beds per 100,000 people. Not surprisingly, the statistics for rural India are far worse: 9.85 beds per 100,000 people.

It is of course necessary to segment the market and deal with each segment’s needs appropriately. At one level, the primary healthcare centres run by the government continue to be centres of neglect, in terms of proper manning and medicine supply. At the tertiary end of the problem, there is a legitimate market for hotel-style hospitals to cater to the well-heeled, but that is not a substitute for a public hospital network that takes care of the majority. The corporate hospitals, kitted out as they are with costly décor, promotional aids and fee structures, have prompted the scholar Bertrand Lefebvre to describe them as “an enacted utopia for the Indian middle class”. The trouble is that most corporate hospitals follow the bizarre practice of offering their key staff and star doctors productivity-linked bonuses that depend on, say, the number of operations or procedures or tests conducted—a practice that encourages avoidable testing and needless surgical procedures. Equally disturbing, the lightest of government regulation means that even those who can afford such private medical care have little recourse to remedy for negligence, errors or malpractice.

In the final analysis, there is no escaping the government’s responsibility to invest more heavily and imaginatively in India’s healthcare infrastructure — information technology alone offers access to effective low-cost delivery solutions. Abdicating social sector investment in favour of the private sector only does the aam aadmi a signal disservice.