4. ROLE OF PRIVATE SECTOR IN HEALTH CARE IN INDIA CHALLENGES, OPPORTUNITIES & STARTEGIES

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1 4. ROLE OF PRIVATE SECTOR IN HEALTH CARE IN INDIA CHALLENGES, OPPORTUNITIES & STARTEGIES * G K Lath Type of Health Care Systems 3 Basic Types Type Finance Sector Delivery Sector Examples I Private Private U.S.A II Public Private (Substantial) Germany, Cannada, netherland III Public Public Sweden, UK Source: Besley & Gouveia, Organisation for Economic Consumables operation & Development (OECD 1994) In most countries a mix of Public & Private Financing & delivery occurs. Classification of Countries by Public/Private Mix of Provision and Finance in Health Care Public/Private Mix Mainly public provision, public finance Mixed provision, public finance Mainly private provision, public finance Mixed provision, mixed finance Mainly private provision, private finance Country Denmark Finland Greece Iceland Ireland Italy Australia Austria Belgium France Canada Netherlands Switzerland Norway Portugal Spain Sweden United Kingdom Germany Japan Luxembourg New Zealand * Chief Executive, Apollo Hospitals, Bilaspur, M.P Role of Private Sector in Health Care in India

2 - Private providers which include qualified & alternative private practitioners account for a large share of all Health care delivered in India. (80%) - This share which is increasing rapidly, is more evident in tertiary health care services. This is because of the perception of better quality of services. - The private health care providers also account for the largest share of India s health expenditure. The Indian Scenario Health Care Funding Sector Population Urban Rural Public 23.5% 30.6% (75-90% state govt. Private 74.8% 66.2% Source: National Family Health Survey. Public & Private Sector Shares in Service Delivery (All India ) Graph(see page 12 on book) Private sector includes Alternative system Private Practitioners untrained in allopathic system & practicing Homeopathy, Unani & Ayurvedic Sustems of medicine. Proportion of Public Expenditure on Curative Care By Income Quintile, All India, Graph (see page no. 13 on book) Private Spending (Out of Pocket Payments) For Health in India Graph (see page no. 13 on book) Hospitalised Indians Falling into Poverty From Medical Costs Graph (see page no. 14 on book) Strengths of the Health Care Industry 1. Health A Need for All vast growth potential 2. Transparency- Shares latest knowledge Medicine Knows no Frontiers

3 3. Rapid Integration of Scientific Principles into useful technology. Ultrasound - Sonography, Echo, Droppler Magnetism - ESWL, MRI Fibreoptics - Endoscopy Radio-Isotopes - Scans, Immunoassay Tests Tele Services - Tele Medicines Weaknesses of H.C. Industry 1. Leadership Crisis - Poor Managerial Skills Poor - Undermined vision & values Strategies 2. Poor Customer Focus Greater dissatisfaction (Behavioural) 3. High costs Poor Affordability Funding problems 4. Poor Accessability 5. No cures for many chronic diseases Poor Credibility & Faith Threats to H.C. Industry 1. Changing Diseases Spectrum 2. Increasing Incidence of Costlier diseases Diabetes, cardiac, polytrauma, stress related. 3. Rising population of senior citizens. 4. Costly drugs & treatment protocols with poor funding. 5. Increasing litigation Opportunities for H.C. Industry 1. Globalisation of Information availability of bench marking data, telemedicine & video conferencing Internet knowledge. 2. Governmental relaxations imports, custom duties etc. 3. Central & State Governments participation in development of the private sector in healthcare 4. Opening of Insurance Sector for Health Care Funding. Growth Trends in Mediclaim Average 40% every year for 3 years No. of Policies No. of People

4 insured(in millions) Pre-claim Premium (in crores) Claims as %age of Premium Benefit in growth is due to: - Increase in group of Health Insurance policies purchased by companies. - Rise in premiums (35% for senior citizens). Third party administrators (TPA s) are now offering group insurance with cashless claim service as an added value. Opportunities for H.C. Industry 5. India s vast trained manpower potential in healthcare services, * Man power export * Increased foreign exchange earnings 6. Spare and increasing bed capacities in the private sector a potential for India a Destination for Healthcare for the World 7. Better Disease Prevention 8. Scientific Development of Holistic / Alternative Medicine for Chronic Diseases with its emphises on self healing & health promotion at less cost. Rationale for use of Alternative Therapies 80% of world population relies on traditional medicine. 1. More then 1/3 rd of populations in developing countries lack access to essential medicine. 2. Global market for Alternative & complimentary therapies is currently pegged at 60 million $ by WHO. 3. Even in wealthy countries growing numbers of patients rely on alternative medicine (France 75%; Germany 77%) 4. Expenditure on alternative therapies: Country Exp. In million $ UK 2300 Malaysia 500 Australia 80 Canada 2400

5 *. After Roti, Kapda & Makaan the most important need of the human being is Preservation of Health. Only 20% of the world s population has access to Doctors & Drugs. This holds true for India also. Thus 60-80% of India s population with a potential Rs Crores annual business is waiting to be tapped by the Health Care Industry. Exploiting this vast potential can generate a boom in the well paying Health Care Jobs; provide opportunities to develop new technologies; give a fillip to biotechnology and Medical devices. Someday India may become exporter of these instead of being an importer earning valuable foreign exchange. Most important all this is expected to make Indians healthier -. Strategies in Health Care for Private Sector He who has health has hope, and he who has hope has everything Arabian Proverb Any strategies by Health Care provisions will have to address the problems of: 1. Accessibility by the consumers. 2. Affordability by the consumers Both the above are dependent upon availability of adequate resources (Manpower, Machines, Medicines, etc.) and the availability of funds. Reformation of the Indian Health Care System has to be founded on four broad principles: 1. Overseeing the needs of the entire population (Pro-poor, Gender sensitive & Customer friendly). 2. Preparing for the shift in disease burden 3. Public & Private sectors synergistic and symbiotic rerlationship. 4. Focusing efforts on quality, efficiency and accountability of Health Services in both sectors. Suggested Role of Public & Private Sector F U N D I N G Provider Sector Type of Care :Public(Govt) Private Public & Private Primary Secondary Tertiary 90% 10-20% 20-30% 80-90% 30-40% 30-50%

6 D E L I V E R Y Primary Secondary Tertiary 80% 20% 60% 60% 30% 20% Suggested Role of Public & Private Sector INITIATIVES PROVIDER SECTOR PUBLIC (GOVT) PRIVATE PUBLIC & PRIVATE Regulatory 100% overseeing 100% compliance of Monitoring Quality & Equity by outside agency Developing Infrastructure Health Care Proff. Govt. Standard 100% 100% Facilitate opening more post graduates training institutes (one for each state) Open more tertiary care centers Train more post graduates in super specialties Provide specialty training facilities to private practioners free of costs. HEALTH CARE RESPONSIBILITIES Stake Holder Responsibility (including funding) Customers (Patients) Prevent Illness, stay healthy Pay for Secondary Health Care Health Care Provider Customer Focus, ethical behaviour Continuous improvement in skills & interactions with customers, cost containment H.C Managers * Stress on Process Management * Strategic Planning, Cost Effectiveness Fund Providers (Govts Insurance Companies Corporates) Arrange adequate funds Demand adequate returns (High quality, low cost & equity) Govt. & N.G.O. s Health of nation biggest assest Provide infrastructure &

7 funding for primary & tertiary care Remove poverty The public and the private sector can, must, and will have to work together to not only take-up the massive job of improving health care services in India but also strive to exploit the massive potential to make India a destination for health care for the rest of the world. 5. INVOLVEMENT OF PRIVATE SECTOR IN HEALTH: SUGGESTED POLICY GUIDELINES AND MECHANISMS M.C. Kapilashrami*, A.K.Sood** and B.B.L.Sharma*** ABSTRACT During the recent years, countries all over the world, at all levels of development, are engaged in a creative search to find out better ways of organising and financing health care. The key concerns have been equity, efficiency and effectiveness. Simultaneously, many developing countries are facing the burden of old unresolved problems and newly emerging challenges. Privatization, globalization and liberalization