Sustainable economic development in India requires more than just a healthy economy: It also requires a healthy workforce, nurtured by a society that invests adequately in broad-scale public-health initiatives. Although capital investment is often recognized as a priority for government agencies and the corporate sector, investment in human capital—and in keeping society, as a whole, safe from large-scale health threats—should be no less of a priority for nations seeking to make the most of their productive resources.
In the 20th century, we recognized that health and economic development are inextricably intertwined. As the 21st century progresses, we need to ensure that the health of India’s people and the economic advancement of our nation march in tandem, while adapting to the new dynamics that globalization brings to both health and development. And if a society affirms that health is an inalienable human right, its focus on investing in health becomes all the urgent.
Ill health imposes vast economic and social costs—not just on individuals and families, but on society as a whole. Health should therefore be measured not just by the absence of illness: It should also be seen as a critical factor in optimizing a company’s business performance and a nation’s economic productivity.
The improvement of a nation’s health services—judged by fewer worker illnesses, lower absenteeism rates, better nutrition and improved learning among schoolchildren—also pays measurable economic dividends. If India can achieve socially-equitable and financially-responsible ways to ensure improvements in public health, it will improve its chances of achieving sustainable economic growth within a cohesive society. Improving the overall level of society’s health should therefore be a priority, not only for stakeholders in healthcare-related industries, but also for government, business, non-profit organizations and all of civil society.
The 10th Five-Year Plan has highlighted India’s critical health and demographic challenges. Government plans and policies recognize the threats posed by India’s double burden of communicable and non-communicable diseases. Even as we are still grappling with the basic challenges of poor nutrition and hazardous childbirth—and the continuing high prevalence of preventable infectious diseases as diarrhoea, pneumonia, cholera, malaria and tuberculosis—we must confront the growing incidence of chronic diseases such as diabetes, cardiovascular disease and cancer. And India has the largest population of people living with HIV/AIDS of any country in the world.
There are also social and managerial challenges in the sphere of health services. There is a demand for quality-based and affordable healthcare, and there is the need for wiser management, including the capacity-building needs of the public health systems. Inadequate government spending and disparities in the allocation of funds represent impediments to providing a ready response to these needs. Among our peers and competitors in the global economy, India’s government health spending is lagging, amounting to only 0.9% of GDP—only half of the proportion that China spends. Worse, within this already-inadequate level of spending, not even one-quarter of the nation’s funds is spent on programme delivery.
The private sector, in addition to the government, has an expanding role to play in ensuring a strong and accessible healthcare system. India’s health-care sector is today valued at more than Rs1.5 lakh crore (or $34 billion)—about Rs1,500 per capita, or 6% of the nation’s annual GDP. Only about 15% of that total is financed through the government: The rest relies on payments by businesses and individuals. A report of CII-McKinsey in 2002, for instance, estimated that current private expenditure on healthcare is Rs72,000 crore, with a prediction that expenditure will more than double to Rs156,000 crore by 2012. The cost of providing healthcare is thus a critical factor, for our society is approaching the realistic limits of self-financing as out-of-pocket expenses impose an ever-larger burden on the poor. Social equity and human rights must be central considerations in effort to strengthen the healthcare system.
The Report of the Macroeconomic Commission (2003) and other government policy directives have begun to address these concerns. They have identified the need to develop institutional capacity in health manpower; to ensure professionalized service delivery skills; to improve monitoring; and to develop innovative models of healthcare financing. Capacity-building in public health is a priority in the government’s flagship programme, the National Rural Health Mission (NRHM). That effort—in keeping with the commitments in the Common Minimum Programme—focuses on comprehensive primary healthcare, the village/hamlet-level health worker (christened “ASHA”, an Accredited Social Health Activist) and decentralization. The strain on human resources will be severe: More than 10,000 public-health managers must be deployed at various levels of the grass-roots healthcare system, as well as in district and state health initiatives.
The Public Health Foundation of India (PHFI), with which I am involved, is an innovative model of a public-private partnership that has evolved from these new approaches. PHFI was launched by the Prime Minister in March 2006 as an integrated and multi-pronged initiative. By enhancing institutional capacity in public health education and research, it will help address the critical gaps in delivering high-quality medical treatment.
PHFI was created with the mandate of establishing new Institutes of Public Health (IPH) to enhance the capacity of existing institutions It seeks to link them in a network, hoping to form a closely integrated group that can strengthen public-health-related training, undertake research and develop new policies. It seeks to pursue both context-specific and resource-sensitive training of public-health professionals.
Organizing the delivery of high-quality healthcare and providing the resources to ensure access for all, is an economic issue that, over time, will lead to a stronger, healthier, more productive economy—if we devote the resources to getting the process right.
Rajat Gupta is the former global managing director of McKinsey & Company.