DO WE CARE?

INDIA’S HEALTH CARE SYSTEM

Session 3

02-07-2021 HETP – Session3 1

 Key Learnings of Week 1:
• Why are there differences in levels of health?
• Role of health systems in managing this link
• How to think about Markets in “Health”
• Analytic/Economic tools for Analysis
• “Congruence of Complexity”
• Similar priority on health care spending across nations
• Even upper middle-income countries spend 10 times less than high income countries.
• Substantially, less total dollars per person goes to health
• Health and education are thought to be two of the most important ways to improve one’s human capital
• Low-intensity health interventions can have strong + effects on the working-age population’s health (Developing)
• Absorption of productive resources by “oversized” health-care sector and medical progress may compromise
economic performance (Developed)
• Hence problem of “flat-of-the-curve medicine,” with even high-intensity treatments having little impact on the
population’s health status

02-07-2021 HETP – Session3 2

 The Preamble and the Directive Principle of India’s Constitution
Article 14 – all citizens have an equal right to life

Article 38(1) – the constitution refers to the Indian state as a welfare

state

Article 41 – state to strive towards extending public assistance in “case

of unemployment, old age, sickness and diablemment and in other cases NOWHERE
of undeserved want
DOES INDIA’S CONSTITUTION
EXPLICITLY STATE
Artricle 42 – provides ‘maternity relief’ HEALTH AS A HUMAN RIGHT

Article 47 – ‘level of nutrition and the standard of living of its people,

and improvement of public health as among its primary duties’

02-07-2021 HETP – Session3 3

 Life Expectancy in India

100

80

60

LEt = 0.4372*Decadet - 813.43

40

20

0
1901 1911 1921 1931 1941 1951 1961 1971 1981 1991 2001 2011 2021 2031

Source: Census data.

02-07-2021 HETP – Session3 4

02-07-2021 HETP – Session3 5
 Measuring Development, Poverty and Equity

Late 1980s the World Bank categorised countries

into high - , middle - , and low-income, based on
their gross domestic product (GDP)
In 1990s, Human Development Index (HDI) placed the life expectancy,
female literacy, infant Mortality Rate (IMR) and Under Five Mortality
Rate(U5MR) alongside GDP. Due to shortfall they followed further
refinements such as the inequality- adjusted HDI, gender inequality index,
gender development index and so on. Gini coefficient is not an absolute
measure of a country's income or wealth - measures the dispersion of
income or wealth within a population.
Of late, the Multidimensional Poverty Index (MPI) has gained
traction to capture poverty in terms of the consequential deprivation
that a poor person faces in accessing basic goods and elements that are
required to enhance one’s capability to live life to the optimum and for
one’s betterment.

02-07-2021 HETP – Session3 6

 MULTIDIMENSIONAL POVERTY INDEX (MPI), 2010

02-07-2021 HETP – Session3 7

 India

• India still does not define poverty in all its multidimensional aspects.

• It defines poverty in terms of consumption rather than state of being that induces low

self-esteem, and when combined with illiteracy, hunger and sickness becomes a morass

from which it is almost impossible to pull oneself out

• Information on the consumption expenditures and its distribution across households is
provided by the NSS consumption expenditure surveys;

• These expenditures by households are evaluated with reference to a given poverty line.

02-07-2021 HETP – Session3 8

 SOCIO-ECONOMIC & CASTE CENSUS (SECC), 2011

02-07-2021 HETP – Session3 9

 The Purpose of a Health System

• One that must achieve improvement in the health of the population it serves, respond

to people’s expectations , and provide financial protection against the costs of ill

health by measuring then through the function of certain actions and policies of the

government , namely stewardship, resource creation, service provision and financing.

• Defined by WHO in its World Health Report of 2000

02-07-2021 HETP – Session3 10

 Conceptualizing Health System by William C Hsiao
Financing

Organisation of
service delivery In India, healthcare is based on
other countries’ (UK, USA,
Thailand tor Mexico)
experiences in defining our own
Payment system model.

Regulations

Persuasion

02-07-2021 HETP – Session3 11

 Evolution of India’s Health System

• Traditional (Yoga and Ayurveda) - Understanding health in a holistic manner

• Emerging modernism in seventeenth and eighteenth centuries.

• Portuguese first introduce the modern (allopathic) medical system

• British imposed modern medicine who mistrusted traditional practices.

• When British ruled India during the period from 1889 to 1894, they spent

0.15% of their revenues to health compared to 4 percent on education.

02-07-2021 HETP – Session3 12

 Evolution of India’s Health System
Sanitary Commissioners
• In three provinces of Madras,
Bombay and Calcutta.
Village Sanitation Act
• To Improve quality of water , Merging the post of sanitary
public sanitation and better Helped in empowering villagers to commissioner with the post of
housing helped to reduced levy a tax to mobilize resources for director general (DG) of the Indian
mortality sanitation workers Medical Service

1864-1869 1897 1943

1863–1869 1889 1914

Contagious Disease Act Epidemics Control Act Bhore Committee

Regulated prostitution for reducing To control Plague and so on To examine the state of health in
the prevalence of venereal diseases India under Joseph Bhore was
among soldiers constituted

The vigorous implementation of these

acts , created huge resentment among
local populations

02-07-2021 HETP – Session3 13

 Bhore Committee Recommendations
Being close to the people
Provision of care regardless of
the ability to pay
Active promotion of positive
health through community
engagement and linking ill
health to environment hygiene
It envisioned – one bed for every
550 people and one doctor for
every 4600 people to be
provided in every district that
was to be the unit of
implementation
02-07-2021
During the conference of provisional ministers held in October 1946 – it
resolved to make plans for
• Establishing health centre for every 40000 people ,
• 30 beds for every five centres,
• 200 beds in every district and to recognize and support traditional
medicine practice,
• Provide safe water to 50 percent of the population in the next 20 years
and 100 percent in 35 years and
• Ensure adequate sewerage in towns having a population of 50000 within
10 years
The conference also accepted to merge the two departments of medical
services and public health
Bhore Committee’s recommendations were accepted partially.
One primary health centre for every 30 thousand population.
6 beds in each primary health centre.
One doctor.
Truncated paramedical staff.
The situation has remained largely unchanged.
HETP – Session3 14
 BHORE & BEYOND
• The recommendations of Bhore Committee and the availability of preventive and curative medical
technology resulted in the evolution of hospital-based [public health] system.

• The public health arrangements created during the colonial period were replaced by hospitals and
health centres.

• Public health services were merged with the medical services

02-07-2021 HETP – Session3 15

 After Independence
Strengthen PHCs before
establishing new ones. Creation of bands of During the first three decades of India’s planned
paraprofessional and
PHC should provide
semiprofessional health
development, the health system was shaped by
preventive, promotive
and curative services. workers from within the
Strengthen sub-divisional community itself.
and district hospitals. Development of a
Creation of All India “Referral Services
Health Services Complex.”
National Health Mudaliar Mukherjee Shrivastava
Scheme Committee Committee Committee Limited resources
+ weak
prioritization +
Organization of
poor investments
primary health
for building a
1947 1953 1959 1963 1965 1972 1975 … foundation of
primary care

National Malaria Chadha Committee Kartar Singh

Control Committee
Malaria worker to About 25 The focus was on teaching
Programme Concept of MPW(M) and
function as MPW(F). Committees hospitals to produce the
multipurpose worker One PHC to cater to 50 over the last required human resporces
thousand population. seven decades
Each PHC should have 16
SC (3-3.5 thousand
population)

02-07-2021 HETP – Session3 16

02-07-2021 HETP – Session3 17
 Overview
Ministry of Health and Family Welfare (National) Ministry of Women and Child Development (National)
Level 1:
Policy making
Director General Health Services (State) Director Social Welfare (State)
District Chief Medical & Health Officer (Districts) District Social Welfare Officer (Districts)

H& FW NRHM/NHM RSBY Out-of Pocket Payments Private Insurance

Level 2: Dept.
Financing
Public Hospitals/Community Health Centers
Private Hospitals
Level 3:
Primary Health Centers
Supply

ASHA Private Clinics

ANMs/
Worker
MPWs

02-07-2021 HETP – Session3 18

 Alma-Ata Declaration (1978 )

WHY ?

Implementation of family planning during the emergency in 1976 and Congress political
loss in 1976?

WHAT ? HEALTH FOR ALL

All countries committed themselves providing universal access to comprehensive primary

care

02-07-2021 HETP – Session3 19

 1990s

Healthcare became specialist dependent.

Growth rates spiked but the gap between
rich and poor widened, absolute poverty
did not decline
• Face of technological innovation in
medical devices, Thus, government had to rely on the
• discovery of new drug, market for investment and to establish
• rapid changes in disease profile towards hospitals to meet the demands.
non- communicable diseases,
• better diagnostic tools,
• sophisticated laboratory facilities

02-07-2021 HETP – Session3 20

 Private Sector Growth

61 percent of the doctors of
whom only 11.4 percent were
working in a private hospital
21.5 percent of beds
16 percent of hospital
58 percent of hospitals and
29 percent of beds.
Three quarters of outpatient treatment
60 percent of inpatients
Three- quarters of the specialists and
technology

1963 - 4 1990 2004

Apollo – First corporate hospital established in 1984

02-07-2021 HETP – Session3 21

 Government Health Spending:

1974 1990–1991
Total government expenditure 3.2 2.7
Salaries 39.3 59.87
Capital expenditure 4.37 2.58
GDP 0.98 1.28

02-07-2021 HETP – Session3 22

 1990-2005 Launch of
National Health
Mission with
National Urban
Universal Health Health Mission
Establish IRDA (Insurance Regulatory Insurance (NUHM) and
Development Authority) - Stimulated the National Rural
India abandoned Alma- Scheme with a Health Mission
Ata declaration due to insurance markets and entry of private premium of Rs 1 (NRHM) as sub-
lack of resources. companies in a big way per day mission

1990 1993 2000 2002 2003 2005 2013

In 1993 India received first Second NHP launched In 2005 National

World Bank loan for with recommendation of Rural Health
HIV/AIDS control followed the first NHP Mission was
by other national disease launched
control programme.
World Bank pushed the
private-sector agenda
introducing PPPs
02-07-2021 HETP – Session3 23
 2005 & Post

2005 – NRHM
Based on two 2007- Andhra
2008 – Rashtriya
principles: Pradesh launched
Swasthya Bima
Decentralization and 2005 – Karnataka Rajiv Aarogyasri
Yojana (RSBY)
Community launched Health Cashless treatment for
engagement through Insurance Scheme for It was launched to
high end surgeries with
CHW and other farmers enhance social security
an assures sum of Rs
community – based for the unorganised
A trust was constituted 0.2 million per family.
sector. With the aim of
initiative. wherein farmers'’ The premium was paid
extending access to
Objective: To revitalize contributions were by the state
quality care and
the rural primary deducted from the state government on behalf
reducing out of picket
healthcare system. To capital. More than 200 of the beneficiaries to
and catastrophic health
address the issue of hospitals were the government owned
expenditure being
financial risk empanelled to provide trust with the scheme
incurred by families
protection - Health over 900 surgeries at being administered by
below poverty line and
ministry deflected this fixed rated a private insurance
other vulnerable
task to the Department company in the initial
groups.
of Financial Services years
that handled insurance

02-07-2021 HETP – Session3 24

 NRHM
On the one hand , the government, by deliberate
policy, injected into private sector over Rs 200
billion per year as premium for health insurance,
and also invested an equal amount of money
under the NRHM for strengthening public sector
delivery system
The health ministry was unimpressed with UHC
and instead demanded the Planning commission
to fulfil the simpler assurances of providing
universal access to free reproductive and child
health services and treatment against minor
ailments and infectious diseases.
And NRHM was renamed as National Health
Mission (NHM) to include NUHM
02-07-2021 HETP – Session3
Review of the NRHM in 2010 stated
• the states, particularly the lagged ones, were
not only increasing their absorption capacity
by incurring high spending of the resources
assigned to them by the central government
but also increased their own allocations.
• NRHM needs to focus and expanding the
scheme to the urban areas
But Planning Commission abandoned the NHM
and adopted the Universal Health Coverage
(UHC) model
25
 National Health Mission
• Improve the availability of and access to quality health care by people, especially for those residing in
rural areas, the poor, women, and children

• Components of NHM

– NHM Finance

– NHM- Health Systems Strengthening

– Reproductive, Maternal, Newborn, Child Health and Adolescent (RMNCH+A)Services

– National disease control programmes - priority

02-07-2021 HETP – Session3 26

 Objectives and Goals
Reduction in Infant Mortality Rate (IMR) and Maternal Mortality
Rate (MMR
Population stabilization, gender and demographic balance
Achieve Universal access to public health services like women’s
health, child health, water, sanitation & hygiene, immunization,
and nutrition.
Promotion of healthy lifestyles
Access to integrated comprehensive primary healthcare
Revitalization of local health traditions and mainstream AYUSH
Prevention and control of communicable and noncommunicable
diseases, including locally endemic diseases
02-07-2021 HETP – Session3
• Reduce IMR to 25/ 1000 live births
• Prevention and reduction of anemia in women aged 15- 49 years
• Reduce Total Fertility Rate (TFR) to 2.1
• Reduce MMR to 1/ 1000 live births
• Reduce household out –of-pocket expenditure on total health care
expenditure
•Prevent and reduce mortality and morbidity from communicable, noncommunicable, injuries and
emergency diseases
•Reduce annual incidence and mortality from Tuberculosis by half
•Reduce prevalence of Leprosy to <1/10000 population and incidence to zero in all districts
•Annual Malaria incidence to be < 1/1000, Less than 1 per cent microfilaria prevalence in all districts
•Kala- Azar Elimination by 2015 , <1 case per 10000 population in all blocks
27
02-07-2021 HETP – Session3 28
 HEALTHCARE AS HUMAN RIGHT
Government has no legally enforceable accountability to its citizens to ensure access to or denial

of health service.
Concerns:

• One fall out of the hospital-based public health approach has been neglect of public health
legislation.
• A Model Public Health Act was drafted in 1950 by the Government of India. Revised in 1987.
• This Act is yet to be adopted by any of the constituent States of the country.
• The hospital-based public health system led to the over-medicalization of the system.
• The focus has been on medical services/curative services.
• Public health services have largely been neglected.
• Poor public health services result in cascading costs of illness, debility and death.
• Significant impacted the poor and deprived populations and limited access.

02-07-2021 HETP – Session3 29

 Finance Commission
Twelfth FC
Health sector had to wait till
Twelfth FC to develop
framework for resource
allocation.
Two steps approach
• All states to spend a certain
proportion of their total
revenue expenditure on
health, education
• Identifying those falling short
and providing cover of 30
percent of the distance to
reach the group average
Seven states were provided
with Rs 58.87 billion for health
out of a total grant of Rs 1.42
trillion
The grant was not linked to
lower resource availability and
demand for health expenditures
02-07-2021
Thirteenth FC
To states conditional to the
improvement in IMR,
Thus the higher achiever states
availing more funds.
Out of 15 billion releases in the
first instalments , six states and
high achievers got almost Rs 10
billion
HETP – Session3
Fourteenth FC
It removed the artificial FC Failed to define equalization
construct of Plan and Non- Plan and basic services in the context
It enhanced the unconditional of public goods and merit goods
component of central .
devolutions from 32 percent to If FCs had successive
42 percent of the devised pool continuity, the disease burden
It removed all discretionary would have been half of what it
grants other than what was is today and the overall
required for meeting post- productivity levels higher
impacting economic growth
devolution revenue gap,
disaster relied and local bodies
It sought to bring in a measure
of fairness by providing
revenue grants to overcome
fiscal disability
The change lay in the states
having the discretion to spend
their resources than being
determined by the centre.
30
 Planning Commission (1950-2015)

• Planning Commission provides the divisible resources to states as

loans and grants under three broad heads
– Central Sector Project
– Additional Central Assistance and
– Centrally Sponsored Schemes

02-07-2021 HETP – Session3 31

 Immunization

Expanded Programme on Universal immunization programme

Immunization (EPI) (UIP)

1978 1985

02-07-2021 HETP – Session3 32

 Constitutionally, health is the State’s responsibility

The UIP is an exception; it is one of the few 100 per cent centrally
sponsored schemes
All infrastructure needs specific
Provides support for vaccine Training of medical and
to delivering immunization to
storage, paramedical staff,
infants at the village level.

02-07-2021 HETP – Session3 33

 Availability of rural health infrastructure in the child's village, By Wave

NFHS I (1993) NFHS II (1998) NFHS I (1993) NFHS II (1998)

Best health facility in the village: Other health infrastructure in the village
None 42.9 46.6
Dispensary or clinic 20.7 10 Mobile health unit in the village 16.2 11.3
Subcentre 20.2 21.9 Pharmacy or medical shop in the
Primary Health Centre 5.1 6.5 26.9 23.9
village
Hospital 11.2 14.9 Community health workers in the village
Best health facility within 2km of the village Village health guide 45 33.2
None 28.1 29.5
Trained birth attendant 50.1 57.8
Dispensary or clinic 21.8 9.1
Subcentre 24.3 28.2 Anganwadi Worker 46.2 62.1
Primary Health Centre 7.3 11 Estimates were based on weighted NFHS I and II data
Hospital 18.5 22.2 Sample consist of children between the age o 2 -35 months of age
Best health facility within 5km of the village whose immunization records were complete for each category of
None 8.8 9.7 immunization
Dispensary or clinic 18.9 4.8 NFHS, National Family Health Survey
Subcentre 21.8 26.1
Primary Health Centre 11.8 18.7
Hospital 38.8 40.7

02-07-2021 HETP – Session3 34

02-07-2021 HETP – Session3 35
02-07-2021 HETP – Session3 36
 Healthcare in India
HEALTHCARE SECTOR GROWTH TREND (US$ BILLION)
CAGR 16.28%
372

160 194
140

2016 2017 2020F 2022F

Number of doctors reached
GOVERNMENT HEALTHCARE EXPENDITURE (AS A PERCENTAGE OF 1,255,786 in September 2020
GDP)
2.5
1.8

FY20 FY25F Number of medical colleges

reached >562 in FY21*(as of
HEALTH INSURANCE PREMIUM COLLECTION (US $ BILLION) February 2021)
8
6.6 7
5.9
4.6
3.8

FY16 FY17 FY18 FY19 FY20 FY21

Friday, July 2, 2021 HE:TPFM 37

Trends in the Indian Healthcare Sector

Shift from
Focus on universal communicable to
immunization lifestyle diseases
programmes (UIP)

Increasing
Expansion to tier ii
penetration of
and tier iii cities
health insurance

Introduction of
Emergence of
vaccine delivery
telemedicine
digital platform

Rising adoption of
artificial
intelligence (AI)

Friday, July 2, 2021 HE:TPFM 38

 Healthcare Ecosystem
Providers

Corporate Government Home care Hospitals in Diagnostics Clinics Physiotherapists Psychologists

Hospitals tier 2 cities

Payers

Regulators

Friday, July 2, 2021 HE:TPFM 39

 Poor Health Outcomes

Friday, July 2, 2021 HE:TPFM 40

 Public Health in India

• Focus on medicalization of services.

• Neglect of public health services.
• No modern public health regulation.
• Lack of systematic planning.
• Poor sustainability of public health efforts.
• Absence of epidemiological and statistical skills at district and
below district level.
• No micro-level planning, no public health action.

7/2/2021 41
 National Public Health Performance Standards (NPHPS)[CDC, USA]

1. Monitor health status to identify and solve community health problems.

2. Diagnose and investigate health problems and health hazards in the community.
3. Inform, educate, and empower people about health issues.
4. Mobilize community partnerships and action to identify and solve health
problems.
5. Develop policies and plans that support individual and community health efforts.
6. Enforce laws and regulations that protect health and ensure safety.
7. Link people to needed personal health services and assure the provision of health
care when otherwise unavailable.
8. Assure competent public and personal health care workforce.
9. Evaluate effectiveness, accessibility, and quality of personal and population-based
health services.
10. Research for new insights and innovative solutions to health problems.

7/2/2021 42
 Essential Public Health Services

7/2/2021 43
 India – China: Some similarities

• Size – India will overtake China before 2050; only countries

with > 1 billion population
• Rural-urban – rapidly urbanizing but still > half the popn. is
rural; rising inequality
• Rapid growth – China over 30 years; India over 20 years
• Federal structure
• Governance challenges

7/2/2021 44
 …. But many differences…

• Stage of demographic transition - Age structure – India has

higher dependency ratio
• Stage of epidemiological transition – communicable v/s non-
communicable diseases burden – China much further along
• Availability of funds for health – China has much more due to
earlier rapid growth + high savings rate
• Governance – India has older private sector in health care
delivery, drugs – vis -a - vis public sector

7/2/2021 45
 HEALTHCARE SPEND

02-07-2021 HETP – Session3 46

 SHORTAGE IN BEDS, PHYSICIANS, NURSES?
As Private Sector expands, post market liberalization reforms of 1991, increase in Private medical
insurance & ability to pay more OOP – need for private equity and venture capital?

02-07-2021 HETP – Session3 47

SERVICES AT LEVELS

02-07-2021 HETP – Session3 48

 CAUSES & SOLUTIONS
Imbalances: lack of accurate data, leakages in demand, failure to diagnose early, stakeholder incentives?

Clinical right siting – type of provider, type of condition, type of disease, progression?

Geographic right siting – physical access, information, referral?

Economic right siting – liquid funds, insurance based, how to select right provider?

02-07-2021 HETP – Session3 49

 INNOVATIONS
Public Sector –
• Akha - Health Ship for 2300 floating villages in Brahmaputra
• Tribal Treatment Centres – SEARCH, Gadchiroli, Gond
• Low-cost diagnostics – CMC, Vellore & AIIMS

Private Sector –
• Vaatsalya – Tier II cities, 50-70 beds hospitals
• Narayana Hrudayalaya – focused factories / single-specialty approach – product line, attract physicians
• City of focused factories? – scale volumes, savings? Micro health insurance model?
• Health city in Cayman islands

Major Private Players:

1. Horizontal integration – M&A, multi-plant operation (chain stores)
2. Vertical Integration – upstream supplier / downstream distributor? Funnel approach
3. Diversification – synergy, related value chains?
4. Fortis – efficient, low cost, high-volume operations, ARPOB, high base salary for physicians, ‘star’ physicians
5. Apollo – build rather than acquire, centres of excellence, diversification – TPA, Healthstreet, labs, telemed,
Doctors allowed to have their own practice, more freedom, no ‘star’ physicians,
6. Max Health care ?

02-07-2021 HETP – Session3 50

 CONTINUING CONCERNS
• The hospital-inclined/based public health system led to the over-medicalization of the system.
• The focus has been on medical services, inclusivity failed and local contextual concerns such as social and cultural issues/ behavioural
issues sidelined.
• Poor public health services result in high cost of illness, debility and death – leading to traction in private sector growth.
• The epidemiological and statistical dimensions of public health have been grossly neglected.
• Lack of epidemiological and statistical database affected public health planning.
• In the absence of reliable data, planning is reduced to a normative, mechanical exercise, often out of context to people’s needs.
• Complicated by social, economic, cultural and environmental diversity that leaves normative planning virtually redundant.
• Decentralisation of the health system could not succeed because of the lack of epidemiological and statistical information necessary
for planning for public health services.
• Public health in India is ‘hospitalised.’
• Health planning is focussed more on the health of the health care delivery system (hospitals and health centres) rather then the
health of the people.
• Remedy was sought in terms of specific national health and disease control programmes currently in vogue today

02-07-2021 HETP – Session3 51

 Questions

02-07-2021 HETP – Session3 52