The private sector’s ability to provide an array of healthcare services to the common masses needs to be put under a microscope.
Many healthcare interventions, which are preventive and promotional in nature — communicable diseases, efforts to minimise pollution, improving food safety, protection from adverse health behaviour and childhood immunisation — need the help of the public sector.
Therefore, the core element of public health that manifests collectivity and benefits all, is essential for improving the health of the population and maintaining a healthy workforce.
However, the other variety of health services, which are exclusively curative in nature, can be provided by the market after charging a price.
Despite the fact that a large part of curative services is subject to a market transaction, state intervention must be considered mandatory for a majority of people, who cannot afford quality healthcare.
Evidence in India and other low and middle-income countries suggest that millions of people are pushed into poverty due to high out-of-pocket expenditure on accessing healthcare.
A recent study estimated that 55 million people had fallen below the poverty line due to exorbitant out-of-pocket health expenditure. The debilitating public health system caused by underfunding, mismanagement of staff, administrative and failure of governance, adds to the woes.
However, the recent rollout of Ayushman Bharat, providing financial protection to a targeted population and strengthening primary care for all citizens, covers the ground for universal health coverage. The all-encompassing approach, which does not exclude anyone from basic services, is certainly forward-looking.
In this scenario, the private sector plugs the gaps in the delivery of services, where they provide quality healthcare, with a price that is paid by the government.
The share of out-of-pocket expenditure is 63 per cent of the total health expenditure in India, which is largely used to purchase medicines, diagnostic services and related services in the private sector.
According to one estimate, the size of the private sector was 8 per cent after independence and in six-and-a-half decades, it has grown nine times, while the public sector has declined in absolute terms by a third of what it was, during the corresponding period.
The structure of the private sector is diverse and functions as single doctor clinics, tiny nursing homes and large corporate hospitals operating in Tier I and II cities. Add to it various health facilities run by faith-based organisations. It can also be said that private healthcare services are demanded by all income groups.
Though limited, there are precedents of partnership with the private sector in specific disease control programmes, without tenable strategies for a scale up.
Several models of public-private partnership (PPP) have been experimented - contract services, joint ventures, demand-side financing, telemedicine and mobile health units in several parts of the country, leading to diverse results.
The country has vast experience of buying healthcare from the private sector through government revenue in the Rashtriya Swasthya Bima Yojana (RSBY) and state- specific insurance programmes.
From experience, major uncertainties that drove trust deficit in the private sector were pricing, quality, transparency and accreditation of services. There are examples galore of over hospitalisation, redundant procedures and diagnostic tests inflating costs.
The private sector often raises prices of packages in many insurance schemes that do not deliver commensurate services. This issue assumes critical proportions. However, it is difficult to judge the merits of this argument in the absence of comprehensive costing data on different services by various types of health facilities. The unit cost of a service in a big corporate hospital is significantly different from similar service at a district-level hospital.
Land, building and vast administrative machinery propel costs in these hospitals. Do we really need the participation of big corporate hospitals in these schemes, where high-frequency-low cost episodes are more than the low frequency-high cost episodes?
We could negotiate to reserve some extremely critical procedures with a different payment mechanism in these hospitals.
Private hospitals have been given concessional land, customs exemption and liberal tax breaks with a commitment to reserve beds for poor patients, who would be entitled to free treatment.
But the manipulation of this provision is acute. Their behaviour is guided solely by profit motives, which is heightened by the information asymmetry in clinical practice, where the provider is more knowledgeable than the client.
Regulatory frameworks in several forms –National Pharmaceutical Pricing Authority (NPPA), Drugs Control Authority and the Clinical Establishment Act, are hampered by inadequate capacities in the public sector.
Despite these limitations, the private sector has certain advantages - better management of diseases, efficient utilisation of skills, accessibility, active response to patients’ need, use of technology, good hospitality and superior administration, which need to be appreciated.
Forgetting the dichotomy between public and private sector for the moment, can we make effective collaboration between the two to uplift provision of services?
When the scope of collaboration has widened after the rollout of PMJAY, each other’s merits and pitfalls need to be discussed for meaningful collaboration.
The success is contingent upon how transparent and accountable the private sector is in delivering affordable care.
For any partnership to be successful, accountability, transparency, equality, mutual obligation and commitment to achieve common objectives is the need of the hour. Is the private sector ready for this?