Will COVID lead to a more privatized healthcare in India?

While the world wages a battle against Covid-19, it’s disconcerting to see most private health facilities and practitioners sitting on the sidelines as their counterparts in the public health sector fight the burgeoning pandemic. The withdrawal of private healthcare providers has proven particularly catastrophic in India, where they provide 70% of the healthcare. With a few exceptions, as private healthcare either shutters down or refuses care, patients have been hit hard.

The market-led healthcare model has never faced such ubiquitous disdain. It seems natural that learning from experience, India will strengthen its public health system and look at private healthcare more critically in the future. However, scrupulous analysis of the nation’s health policy landscape suggests India would continue to promote and incentivise the private sector in healthcare. I base this counter-intuitive prognosis on four interrelated factors.

Investment in healthcare: The Indian government’s expenditure on healthcare is one of the lowest in the world, lower than nations with similar economic growth rates. Though our economy has grown robustly post-liberalisation, investment in healthcare has consistently hovered around 1% of the GDP. In the 2020-21 Budget, it was 1.02% of overall expenditure. Although prima facie there was a nominal increase of 3.9% vis-a-vis the previous year, adjusted for inflation it’s negligible and funds allocated to the National Health Mission (NHM) were reduced. Additionally, the overall increase was mainly attributed to a significant rise in the allocation towards the Ayushman Bharat Scheme (ABS). Pruning NHM funds to boost ABS will lead to further weakening of the healthcare system.

This decreased allocation was despite a GDP growth of 6.8% in 2018-19 and 4.5% in 2019-20. The pandemic has now walloped an already tottering economy, with projections of India’s GDP growth reduced to zero in 2020-21. It is unlikely a nation that invested miserably in public healthcare with a robust economy will increase health investments when its economy is hit by an unprecedented crisis. A weakened public system will only make it easier for the private sector to plug the gap and fulfil the huge demand for healthcare in India.

Predisposition to privatise: Fiscal distress is known to increase privatisation and an overtly pro-privatisation policy dispensation will only be too eager to oblige. The National Health Policy 2017 recommends changing the role of the government from healthcare provider to strategic purchaser. NITI Aayog had already rolled out plans to outsource some district hospitals to private players in December 2019. The draft proposal allows private contractors, called ‘concessionaires’, to set up medical colleges attached to these district hospitals: a masterstroke to privatise healthcare and health education simultaneously.

Approximately half of the beds in these hospitals, labelled “markets beds”, would be open to “appropriate charges” by the concessionaire. A similar proposal in 2017 was floated to promote PPPs in treating noncommunicable diseases at district hospitals. The concessionaire could bid for a 30-year lease of ‘reasonably well-functioning’ district hospitals with ‘fair patient load’. Why any government would outsource a reasonably well-functioning hospital is for anybody to guess. So, the post-corona health policy and planning landscape will only embolden the government’s resolve towards privatisation.

Development finance prefers private partners: The third factor is the binge borrowing India has resorted to, to fight the pandemic. In the last two months, India has borrowed close to $7.4 billion from international lending agencies to battle Covid-19. These borrowings, arguably necessary, also carry significant financial risks. An increased fiscal deficit and high interest payout will worsen the impact of a declining GDP. Global finance institutions prefer private partners for their project implementation as they consider them more efficient and amenable to work. Documents of the World Bank loan and ADB loans propose engaging private partners in diagnostics, research and healthcare services. A strategy, as argued, also strongly endorsed by NITI Aayog.

Vertical programs as facilitators: Global funding agencies have a penchant for funding specialised health programs targeting a particular disease, known in public health parlance as ‘vertical health programs’. Over-reliance on such programs weakens the public health system, increasing opportunities for private healthcare providers. These programs, although effective as an emergency measure, lead to fragmentation of health systems and underutilisation of resources in the long run.

Though India has relied on targeted programs since Independence, the World Bank-led restructuring of the economy in the late 1980s has provided an impetus to these programs like never before. Other than their failure, one common feature of many of these programs is their dependence on private partnerships, incentivising them on money initially paid by international institutions and then by Indian taxpayers. A 2019 review found that 36 such programs are currently running in India. In all likelihood a Corona Control Program would be added to that list.

With its top think tank unambiguously advocating further privatisation of the health sector and the influence of global funding agencies, it is very plausible that a ‘market-friendly’ government would increase the rate of privatisation in the post-pandemic years.

Pratyush Singh, research scholar at the Center of Social Medicine and Community Health, JNU. – The New Indian Express

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