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Public Private Partnerships: A Troubled partnerships in healthcare sector ?

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Troubled partnerships in healthcare sector

Keenan, 3 March 2008

Markets and partnerships can be effective only when there are strong

and enforceable regulations, meaningful competition, and an informed

consumer base. These are rare in rural India.

With less than one per cent of the Gross Domestic Product (GDP)

invested in public healthcare provision, India is currently one of

the world's most privatised health economies. It is a country which

is home to one-fifth of the world's diseases, where the regular level

of malnourished children is higher than that of sub-Saharan Africa,

and with higher rates of anaemia and maternal under-nourishment.

The buzzwords inscribed into current government policy, including the

Eleventh Five Year Plan, are Public Private Partnerships (PPPs) —

contracting out, franchising, voucher schemes, subsidies.

However, even proponents of PPPs in more developed states are

suspicious of their application in emerging economies where there are

high proportions of people living on or below the poverty line who

have never experienced healthcare as a contractual, democratic right.

Solid investment, motivated and well-paid staff, established and

integrated audit and regulatory systems, excellent political

communications, citizens who expect well-performing public services —

without these as a starting point, can marketisation realistically be

expected to create equitable and sustainable delivery of essential

services like healthcare?

Government policy — including the National Rural Health Mission

(NRHM) — does not presently make clear whether PPPs may be developed

along the lines of further privatisation of resident public health

services or, alternatively, public funding for the existing private

health sector. Experience has shown that both of these routes

frequently translate into demands for payment from service users, and

in particular from those in the poorest districts.

It is of real concern, therefore, that the supposedly " pro-poor " NRHM

places an emphasis on user fees as a potential generator of income.

Time and time again, research has demonstrated that charging for

essential services decreases usage and disproportionately affects the

poorest sections of society — with or without

compensatory " accountability measures " such as subsidies, exemption

cards, and voucher schemes.

INSAAF International brought out a report in 2002 which cited cases

of patients in Punjab being ejected from public hospitals when they

lacked the resources to cover the costs; exemption cards were

repeatedly not issued to those entitled to them, and only one out of

150 women in the slums of Bhatinda, a city of 2,70,000 people, had

even heard about the cards. Reports suggested a 20-40 per cent

reduction in outpatient cases.

The alternative — and it is the only alternative for those without

access to any form of direct cash — is not seeking treatment or

medicines, a decision which has ramifications for India's

disappointing performance in curbing the spread of communicable


Access denied

According to the Universal Declaration of Human Rights (UDHR), every

citizen has the right to social security (Article 22). Access to such

provisions, however, proves to be difficult for those in the rural or

unorganised sectors — who currently account for around 90 per cent of

India's population. More often than not, it is those who live closest

to subsistence level who dig into their pockets to make direct

payments for essential healthcare services. Private expenditure forms

more than 80 per cent of the total outgoings on health in the

country; the vast majority of this is out-of-pocket, and the second

most common cause of debt in rural India is healthcare provision.

Nearly half of the households that are in debt or have been forced to

sell off assets have done so to finance hospital expenditure. This is

a vicious cycle, where expenditure on healthcare creates poverty,

which contributes to malnourishment, decreases economic productivity

and perpetuates further ill-health.

As a point of contrast, public financing of health in China,

Malaysia, and Sri Lanka is between 30 per cent and 60 per cent. In

lower income Sri Lanka, almost everyone now lives less than 1.5 km

from the nearest health centre. In Europe, average levels of public

sector investment are near 75 per cent; they are 85 per cent in

Britain. Of all the developed nations, the United States channels the

least public resources into healthcare. Here, one in three citizens

living below the poverty line is without health insurance; according

to the Institute of Medicine, 18, 000 Americans die prematurely each

year because of this deficiency, whilst the country has a higher

Infant Mortality Rate than many other industrialised nations.

And the system is also incredibly inefficient: the U.S. spends more

on health both on a per capita basis and as a proportion of GDP than

any other country. When China moved from public to private investment

in health, household health costs rose 40-fold; at present, health

insurance covers only one in five of those living in rural China.

Markets and partnerships can be effective when there are strong and

enforceable regulations (and somebody to enforce them), meaningful

competition, and an informed consumer base. It is rare that these

exist in rural India. Even in the cities, lack of regulation in the

private sector impacts upon the wealthy as well as the poor: in some

private hospitals in Mumbai it has been estimated that 65 per cent of

births are delivered by caesarean, an operation which demands more

costly surgical procedures and substantive aftercare. Deliveries by

caesarean are only around nine per cent in the public hospitals.

Without effective oversight mechanisms, it is easy to mislead

patients into buying unnecessary or more expensive services and

medicines — especially when, as in many rural areas, patients do not

have a choice of provider.

In the ideal situation, collaboration between providers allows

sharing and redistribution of resources. This is incompatible with a

competitive health economy, where providers must market themselves to

attract the most profitable patients or, alternatively, government


Different needs

Seventy per cent of India's population is rural; 300 million live

below or on the poverty line. Their needs are for cheap, scientific

alternatives, and not the latest, most financially lucrative medical

technologies. Up to one in three doctors' posts remains vacant in

rural India; of those filled, around two thirds may be absent at any

given time. There is one bed for 6,000 people, Public Health Centres

(PHCs) often are closed, and, according to the Indian Institute for

Population Sciences, just 20 per cent have a phone and only 12 per

cent undergo " regular maintenance. " In some States, the majority has

no electricity. The government promised to increase allocations to

health by 30 per cent between 2006 and 2007.

Reports suggest that this target has not been met, and that increases

have only been channelled into particular projects, selective

interventions, and targeting of diseases — not into strengthening

infrastructure and widening access.

Proponents of PPPs would argue that partnership can resolve these

issues: the government works to instil a public sector ethos, the

private sector focuses on efficient service delivery and meeting

targets. According to the Working Group on Public Private Partnership

for the Eleventh Five Year Plan, " partnership is not meant to be a

substitution for lesser provisioning of government resources nor an

abdication of government responsibility, but a tool for augmenting

the public health system. "

Generally, however, initiatives to form PPPs around the world have

been implemented at a time of crisis when state funding for the

healthcare sector needed to be reduced, not when the starting point

is a 0.9 per cent level of investment. In India, it is difficult to

see what " public health system " or ethos can be harnessed.

Strategic state investment in health systems can enable a holistic

approach to healthcare, providing access without barriers to a multi-

sectoral range of services that incorporate health promotion, disease

prevention, diagnoses and rehabilitation. PPPs can be effective

in " augmenting " such a system when there is an equal-footed public

partner, mutual trust and extremely well-functioning regulatory and

audit systems. At present, there is not even an operational

accreditation body for medical providers.

Ultimately, private partnerships cannot be an alternative to adequate

government investment, and it must remain the obligation of the state

to ensure access to treatment for every citizen; this is not

something that the market can be relied upon to provide.

In the interim, there are preliminary measures that the national

government needs to take before wider implementation of any

partnership initiatives — and particularly in the poorest States

where commercial schemes will struggle to generate profits.

There must be a set of guidelines, parameters and standards with

clearly defined roles for different agencies; the framework provided

by the Indian Public Health Standards should be extended to the

private sector, and there must also be effective audit, review and

accreditation procedures.

Until this basic infrastructure is in place, the cure could well be

worse than the disease.

(The author is a Researcher at the Centre for Legislative Research

and Advocacy, New Delhi. The views expressed in the article are the

author's own.) Copyright 2000 - 2008 The Hindu;

URL: http://www.thehindu.com/2008/03/03/stories/2008030370371100.htm

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