Covid-19 pandemic shows how India’s thrust to privatise healthcare puts the burden on the poor

This is an excerpt from the sixth edition of the India Exclusion Report, a collaborative effort involving institutions and individuals working with a shared notion of social and economic equity, justice and rights. The report seeks to inform public opinion around exclusion and the role of the state and to influence policy-making towards creating a more inclusive, equitable and just society. The annual publication is anchored by the Centre for Equity Studies and edited by its director, Harsh Mander.

The current pandemic is one of the most severe crises in global public health that the world has ever faced. On April 29, 2020, speaking at a global United Nations event, the organisation’s secretary general, Antonio Guterres, made a statement regarding medical products to combat the pandemic: “These new tools will help us to fully control the pandemic and must be treated as global public goods available and affordable for all.”

This declaration was soon re-enforced by a resolution in the 73rd session of the World Health Assembly in May. Similar pronouncements from the WHO Director General and a number of world leaders.

Despite this revival of the discourse about healthcare as a public good, follow-through actions on the policy front has been weak and inadequate. This is not only due to lack of political will, but because of limited and incomplete acknowledgment of what establishing the right to health requires. One of the most important lessons of the Covid-19 pandemic is the need to consider all health services, not only vaccines, as public goods. Yet clarity in both theory and practice is lacking on this issue.

Systematic neglect

The pandemic of Covid-19, with its devastating impact on the health of the population and the country’s economy, knocked at our doors when India was in the third decade of its health sector reforms. The newly Independent Indian state had once considered health as a right which would be provided to all citizens through government engagement in the healthcare sector. This was expressed in the Bhore Committee report in 1946, which declared in the very beginning of its preamble that ‘No individual should fail to secure adequate medical care because of inability to pay for it.”

But, the waves of reforms introduced in the economy post the 1990s intensified and legitimised the systematic neglect of public health services in India.

The first wave of reforms was introduced as part of structural adjustments in India, in the 1990s. This was based on the World Bank promoted model of limited state intervention in the health sector. The role of the state was defined as investing in public health management, focussed only on those health services characterised as non-excludable and non-rivalrous, where markets are considered to fail in efficient resource allocation. The consequence of these reforms was privatisation, soaring costs of health care with exclusion of large sections of the population from any healthcare services.

In India, the National Rural Health Mission was introduced as an effort to strengthen public health systems and address the failures of the first reform wave.

At the global level, the criticisms mounting against the earlier reforms necessitated a change in approach in the early twenty-first century. This second wave of reforms has commonly been termed as “Universal Health Coverage”. In this approach, government intervention in health care is broadened to ensuring medical care for individuals and not limited to public health measures. But the form of delivery of the services is restricted to financing of care, rather than governments being the provider of health services.

The legitimate role of the government is considered to be contracting private providers and ensuring quality of care and reimbursement at negotiated prices. The availability of multiple providers is expected to build competition and provide choice to the customer. This, it is hoped, will persuade public providers to improve their services, failing which business/utilization shifts to private providers according to the preference of consumers.

The main institutional form of enabling this shift in the role of the government from the provider to a purchaser of services is through the introduction of government-funded health insurance programmes. In India, state-level publicly funded health insurance programmes began in Andhra Pradesh and Karnataka, which soon spread to other states, and the formation of national government funded health insurance scheme, the Rashtriya Swasthya Bima Yojana.

By 2014, it was clear that many of these schemes were not providing either financial protection or even increased access to healthcare in private sector, or improved quality of care in the public services. Yet within the government, funds were directed to the publicly funded health insurance programmes while funding for the National Health Mission stagnated.

In 2018, this culminated in the announcement of a large government funded insurance programme, the Prime Minister Jan Arogya Yojana, managed by the National Health Authority. This was to cover close to 500 million people and incorporate all the existing states health insurance schemes. By these estimates, the majority of India’s population, including all those below the poverty line would be completely covered by health insurance schemes.

The National Health Authority was created under the Niti Aayog, instead of the health ministry, with the explicit purpose of managing PMJAY and to catalyse market-oriented reforms across the health sector. It has since mooted numerous proposals for outsourcing different government healthcare facilities to the private sector, especially outsourcing district hospitals and medical colleges.

Health inequalities

These schemes continue or exacerbate existing health inequities. Data from the National Sample Survey (2017-18) shows that out-of-pocket expenditure in private hospitals is almost six times of that in public hospitals for inpatient care, and two or three times higher for outpatient care. There is convincing evidence from both the 71st and the 75th round of NSSO surveys that even those who have insurance cover do not have less catastrophic health expenditure.

Further, though the poorest section in rural areas have a Catastrophic Health Expenditure of about 53.9%, even richer sections have high levels of CHE, reflecting how medical prices are often determined by the client’s ability to pay. The privatisation of healthcare places a greater burden on the poor, and there is insufficient evidence to establish increase in financial protection among these sections through insurance-based programmes like the PMJAY. Cashless service which is what all PHFIs are contractually obliged to provide remains a rare or non-existent event.

Affordability is not the only barrier in access to health services. Social discrimination mediates access to care, affecting more vulnerable sections like women, young children and the elderly, and disadvantaged communities like scheduled castes, tribal populations, minority groups. Market-based reforms did little to address these weaknesses of the system that generate inequity and is perpetuated through factors such as geographical location, social status, residence or occupation. Where lack of providers is the problem, as in many of the rural or remote areas in the country, insurance or other forms of purchasing care has little to offer.

These forms of marginalisation can act to create exclusion with both the public provider and the private provider. But the big difference is that denial of health care with the public provider is a justiciable right, and there is a strong public perception of access as an entitlement. In contrast, there is no such right with the private provider and its enforceability, even if included as part of the contract, is negligible. Even the National Human Rights Commission refuses to hear petitions of denial of care in the private sector, even where the private hospital is empaneled under PMJAY.

A policy shift to purchase of care from private providers is thus more likely to lead to increasing levels of health inequity and exclusion of the poor and marginalised from essential health services. Further, if proposals for outsourcing all health care in a block or district to corporate managed integrated provider networks work out, the role of the government as a purchaser, would over time, reduce competition and lead to development of corporate monopoly and profits.

It is not only an issue of corporate profits, but concerns that a healthcare sector driven by market considerations will influence consumer choice and create demand according to profitability for the providers. For instance, there have been several media reports, which show how private health providers resort to unnecessary hysterectomies amongst women belonging to vulnerable communities. The growth of insurance schemes acts as a major driver for unscrupulous practices in the commercialised private health sector which is largely unregulated in India.

The clarity of crisis

The failure of an approach built around purchase of care as compared to government provisioning of health care is best seen in times of a crisis, like the one created by the Covid-19 pandemic. Despite bringing Covid-19 treatment under the PMJAY scheme, the proportion of Covid hospitalisation cases that availed of PMJAY benefits was much smaller than expected. Data on what fraction of PMJAY utilisation was from the private sector is not available in the public domain, but given that most hospital care was given in public hospitals it is likely to have been small.

Despite the fact that the private health sector claims to have state-of-the-art technology, higher number of beds and ventilators in country it is estimated to have handled less than 10% of total Covid-19 cases. During the later months, many private hospitals did start providing for Covid-19 care, but usually without using insurance cover and at exorbitant rates. In contrast, however under-financed, under-staffed and weak its service delivery, it was the public services that were required to save the day.

The experience of the pandemic and the failure of market-based reforms of the last decade makes it evident that the scope of the government cannot be restricted to setting the price, regulating markets or contracting services. The state must intervene in shaping the organisation and financing of health services in such a manner that market forces are ring-fenced from influencing clinical or public health decision making, even for those who can afford to pay. And when the goal is universal healthcare, and the commitment is to prevent exclusion, the role of the government not only in financing, but in the organisation of service delivery becomes even more central.

Such an organisation of healthcare services must be based on a principle that the production of healthcare must be as a public service, and not as a commodity to be sold for profits. People who are using the health services are not “consumers” of a product but they are willing participants in the co-production of good health for themselves and all others. Their participation at both the individual and collective level is important.

Here, the concept of a public good is widened to mean “the common good” and associated with value-based goals of social equity, social justice, and environmental sustainability.

The recent farmers movement on withdrawing the farm laws has given an impetus against the imposition of the market based pro-corporate reforms in the agricultural sector. Despite the governments protestations to the contrary, the farmers movement has rejected portrayal of these reforms as enhancing competition and providing choice that would eventually benefit farmers. They have called for strengthening the role of the state in managing agricultural markets and food distribution systems, rather than ceding control of these to corporate interests.

Widening of the movement to reiterate the role of the state in provision of public services and as a safeguard of peoples interests from predatory corporate privatisation is the need of the hour. A critical part of this struggle would be to regenerate the discourse of health and health care as a public good, demand strengthening of public health services and build a movement on the health for all as a basic right.

Read the other excerpts from the India Exclusion Report for 2019-’20 here.

T Sundararaman is the global coordinator of the Peoples Health Movement.
Daksha Parmar is an Assistant Professor at the Department of Humanities and Social Sciences, IIT, Guwahati.
S Krithi is an Assistant Professor at the Tata Institute of Social Sciences, Hyderabad.