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Business News/ Opinion / Views/  Healthcare privatization has not served India well

Healthcare privatization has not served India well

Our neglect of public health facilities has given private services an outsized role in this sector. A well-funded reversal of this trend would be sensible from a long-term economic perspective

Photo: ReutersPremium
Photo: Reuters

India opened up markets to private participation 30 years ago and reaped its benefits on multiple dimensions. As the general pattern shows, the value delivered for prices charged—or ‘value for money’—has risen in arenas that have come to be dominated by private players and also boast of a fair degree of competitive intensity. However, two critical sectors that have gone the private way, even as state provisions withered, should cause us profound unease: education and healthcare. Neither can operate on a laissez-faire model, given their special need for oversight, nor can our trend of service privatization (so to speak) be relied upon to give us the base of human capital needed for long-term economic success. At another level, both are welfare assurers and thus ought to have the government as their predominant provider. With state inadequacies exposed by the covid pandemic, our need to attain a balance is particularly acute in healthcare, where less than a fifth of all Indians avail of public facilities, as estimated. Circumstances have led us down the American path in this vital sector, while a European-style state delivery model would serve us far better.

For a snapshot of the sorry state of Indian healthcare, look up the recent Oxfam Inequality Report 2021. It uses data from the National Family Health Survey and National Sample Survey to outline vast disparities on health measures as well as access to healthcare. These gaps are along parameters that do not surprise anyone. The rich are healthier than the poor, just as the general category is better off than Scheduled Castes and Tribes, Hindus are better off than Muslims, urban-dwellers better off than rural, and men better off than women. Those who perform well on health indicators are also better served. Indian towns and cities, for example, have over two-thirds of our health infrastructure serving just about a third of our population. If this lopsided distribution of facilities is one big drawback, then a socially-observed reluctance among chief household decision-makers to seek medical attention for women is another. The inadequacy of the care that women get is reflected in our dismal numbers on maternal mortality and female life expectancy at birth, not to speak of the scandalous gender attitudes revealed by our starkly uneven sex ratio. Some of these problems cannot be resolved by mere budgetary allocations. Yet, greater use of public money can make a notable difference. States with higher public expenditure on healthcare are seen to have less inequitable outcomes. As the Oxfam report notes, these states have seen a higher recovery rate from covid.

To achieve universal health coverage by 2030, the Indian government has accepted a recommendation of the 15th Finance Commission to roughly double public funding on it to 2.5% of gross domestic product by 2025. This scale-up needs to be hastened, and while health may well be the turf of state administrations, it is for the Centre to lay out a cohesive plan that shifts emphasis from an insurance cover to actual service delivery. As long comparisons of cross-country performance show, looking after people’s physical well-being directly is not a socialist tic, but a sensible enterprise from an economy’s perspective. All dividends of our demography are projected on assumptions of education as much as health. For millions, this is still partly a matter of nutrition. Yet, recent surveys suggest a loss of earlier gains made on human-development indices. A big correction on public healthcare is in order. With covid having awakened voters to this area of neglect, it should hold electoral appeal too

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Published: 26 Jul 2021, 10:14 PM IST
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