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Managing Healthcare Resources

In accordance with constitutional requirements, the Centre constitutes a Finance Commission every five years to recommend the devolution of shareable resources between the Union and the states. For such determination, the FC holds detailed meetings with every state government and UT, besides commissioning sectoral papers.

The 15th FC, in an unusual departure from convention, constituted a High Level Committee (HLC) with an unusual set of Terms of Reference that had little to do with resource devolution and more to do with state policy. As per the report, the HLC provided recommendations under four heads:
1.  Regulatory framework—
a) declare health as a human right; b) bring public health under the concurrent list of the VIIth schedule of the Constitution.
2. Human Resources for Health—a) banning private practice in medical colleges and suggesting that the FC constitute a committee to study the financial and governance implications of implementing such a policy; b) improving teaching of medical and nurse graduates.
3. Public Health Expenditure—a) increase public spending to 2.5% of GDP by 2025; b) base state funding on eight parameters such as increasing health budgets, universal immunisation, etc.
4. Strengthening delivery by focusing on primary health care—a) earmarking 70% of resources for primary care; b) managing resources for building infrastructure estimated to require about `2 lakh crore.
What is unclear is how these recommendations, falling in the domain of public policy, help the FC in allocating resources. The banning of private practice is an issue that requires painstaking negotiations with doctors, particularly because a large number of private hospitals depend on dual practice by government doctors. This clearly falls outside the FC’s ambit.

Though amending the
VIIth Schedule for a more rational distribution of powers and responsibilities between the Union and the states is an important issue, the report does not provide justification for its recommendation to bring public health under the concurrent list. If accepted, the immediate implication would be the further centralisation of policymaking and empowering the Centre to legislate on these issues. For example, a favoured recommendation of the Centre is converting district hospitals into medical colleges that many states are resisting, particularly NITI Aayog’s idea of handing them on a 60-year lease to private investors. In this situation, the Centre can legislate taking over district hospitals and hastening privatisation without any accountability to the consequent distortions it may create in the development of the state’s health system.

What instead would have been useful and of immediate value is listing medical education and drugs under the Union list and shift maternal care, family planning, etc., that are key components of primary health care, to the state list, making funding, if any, from the Centre subject to achieving measurable targets and milestones. This is because the immediate need is to ensure the strict uniformity and quality standards of education as well as drugs at an all-India level.

Likewise, primary care is highly contextual, necessitating local solutions and innovation to achieve the goal of universal access to primary care that also includes health determinants—water, sanitation and nutrition. Yet, a barrier to such full realisation is the overbearing control of the Centre by way of conditionalities, funding and guidelines that are most often out of sync with the state’s needs. What is needed is fiscal arrangements like block grants subject to measuring outcomes. The HLC did not consider these issues nor consult the states. Instead, it reiterated the same recommendations of raising health spending to 2.5% of GDP and earmarking 70% of the funds allocated for primary care.

The HLC Report made useful recommendations on medical and nursing education that, if implemented, could help improve quality. However, here again there are contradictions—even while the HLC recommends further relaxation in rules to expand the availability of teachers and teaching sites by converting district hospitals to medical colleges, it fails to address the affordability of implementing such recommendations by cash-strapped states. Likewise, the recommendation to deepen the role of the private sector by providing more incentives to establish medium level hospitals of 200 beds, private medical colleges and so on lack justification.

Instead, what ought to have been discussed and examined in greater depth—considering that all six members were from tertiary care sector, two from the corporate sector—was why the corporate sector is sick, what needs to be done to stall further sell-outs to foreign capital, why the corporate sector has not added even a single bed in India in the last couple years and why medium and small hospitals are under closure in states like Kerala. The crisis in the private sector is as acute as in the public sector. Without addressing the financial model of the private sector, providing tax-based incentives is like pouring money into a black hole.

As such, the HLC deliberations will be of little utility in helping the FC determine the resources to be devolved to the states. The whole range of recommendations are more for the Ministry of Health and the National Medical Commission to consider. The financial model of healthcare in India needs straightening with a mix of policy and fiscal measures and ought to have been the central focus of the HLC. Once again, an invaluable opportunity to positively discriminate in favour of the high need and low resource states to bridge disparities and ensure equitable access to a guaranteed minimum standard of health and well-being, has been lost. The health sector is indeed jinxed.-Authored by Sujatha Rao, Former Union Health Secretary and author of Do We care? India’s Health System for New Indian Express