Home / Politics / Policy /  Though it can’t be quantified, poor health affects economic outcomes: Stefan Kapferer

New Delhi: India’s healthcare system is arguably one of the worst compared with other middle-income countries and public spending as percentage of gross domestic product is relatively low. A recent paper by health journal Lancet shows India has a weak primary healthcare system, human resources are not optimally utilized and the sector largely remains unregulated. Drawing from his experience working in the field of healthcare across the world, Stefan Kapferer, deputy secretary-general of the Organisation for Economic Co-operation and Development (OECD), a club of rich nations, spoke about the solutions that can work in India and the immediate steps that could improve the system here. Edited excerpts from an interview:

How much effect does poor health have on an economy? Is there a way to put it quantitatively?

I think it is difficult to quantify but it is very clear that in a situation where most countries in the world are ageing, I know it is not the case in India, but in the long-term, it will age, the question of the health status of people who often have to work longer is relevant for the productivity and employability. It means that the countries where health status is bad have less good outcomes.

The second aspect is if the share of GDP (gross domestic product) going to the healthcare system is increasing, one fact is clear is that there is an increasing demand for people working in the healthcare system. This is evident in all member countries of OECD. So it is clear that health is closely related to employability and to the labour market of the people—meaning that bad health affects the economic perspective of a country.

Stefan KapfererStefan Kapferer is from Germany and holds a diploma in administrative science. Before joining OECD, he was state secretary at the German federal ministry for economic affairs and energy. Kapferer was also state secretary at the federal ministry of health and the ministry of economics, labour and transport of Lower Saxony, a German

We may increase spending on healthcare but how do we bring in accountability?

Of course it is relevant that value for money is guaranteed. It is not enough to say that we spend more money for the healthcare system and then we will have better outcomes. Some Indian states spend a lot in upgrading skills of healthcare professionals. There are some states which train a lot of nurses but often they migrate, which means that India invests in the education of these nurses and then they leave the country. So, organizing better working conditions or a career path for nurses is a relevant part of improving the outcome.

Another example that was recommended in our OECD review last year for healthcare sector in India was about pharmaceuticals. We have a relatively high availability of pharmaceuticals in the private sector in India but not in the public sector. One reason for that is that the supply chain is not really well organized and public procurement process is not well organized.

How can the imbalance in public healthcare system across states be addressed?

I can imagine the way for India to go, since most of the money is given by centre to states, could be to define a package. The more the states organize equal access to the package of different treatments which are covered by the funding, the more will they get. But this does not mean that one state cannot allocate more money for one particular disease which is more prevalent there. Mexico employed a similar defined package for different diseases and this worked very well.

Will it be a good idea for the government to just become a regulator and leave the choice to the people regarding where they want to access healthcare?

Every system in the world which is successful in terms of outcomes has strong regulatory framework and you need a strong monitoring process and clear regulatory framework. Then there is quality control with hospitals, primary care centres and doctors. Only if the quality is guaranteed will you get reimbursement for the treatment. Then I think it is not important if this hospital is run by state or private.

Like a pilot project in Bihar where pregnant women, when they register, the cost of the treatment is directly transferred to their bank account, can it be replicated for other healthcare needs?

This is a very traditional discussion we often have in every welfare state. It is not only linked to the healthcare system. Do we give subsidies only to the beneficiary or do we give direct payment to the provider? The main risk in the healthcare system is finding out if there is a reason that this person is a beneficiary. It is very easy to check if someone is pregnant or not. But think about other diseases, it is very difficult to assess if the person is sick or not sick.

An open area is that you have a lot of out-of-pocket payment in the country, especially in pharmaceutical. This could help cut out-of-pocket payments and reduce corruption.

Can we can directly put money into their pockets?

But I cannot imagine the administrative burden to check if this is really is a treatment which is necessary for someone.

Think about illnesses, it is much more difficult to organize a treatment process and to know what will be needed in next two months. I would not recommend it and I do not know any country in the world where such a system is working.

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