Indian Health System Delivery: Time for a relook??

As India’s powers on its journey to become a global superpower, she is pursuing a vision of good health and well-being of its citizens delivered through an effective, comprehensive health system.  As per WHO statistics, India with a total population over 1.24 billion and gross national income per capita (PPP international $) 3,590 still ranks low in Human Development Index.[1] The life expectancy at birth for male/female is 64/67 years respectively where the probability of dying under five (per 1,000 live births) is still low 56, compared to 48 globally .[1] Even if the total expenditure on health per capita (Intl $, 2011) 141 and total expenditure on health as % of GDP (2011) 3.9.[1] In India, private healthcare still prevails over government expenditure, with private expenditures as high as 80.4% of total health spending.

Health system background-

Post-independence, India sought to create a Soviet style state health system, geographically distributed and making huge investment in Medical schools. The health system, over the years has developed to now comprise of a set of state-owned health care facilities funded and controlled by the government of India.[2]

Central government institutions like All India Institutes of Medical Sciences (owned and controlled by the central government), Regional cancer centers, Government Medical Colleges (owned and controlled by the respective state governments), District Hospitals or General Hospitals (controlled by the respective state governments) Taluk hospitals (controlled by the respective state governments) and Primary Health Centers (the most basic units)

India, the world’s 10th largest economy, has witnessed a decline in the poverty during the last few decades largely due to economic liberalization.[3]  However, assessments about India’s healthcare—stretch begins from access, spending, and capacity which poorly formed system. Lately, the government has started paying attention to healthcare reform and implementation of universal health coverage, in particular. The Prime Minister announced to increase public spending on health from 1.0% to 2.5% of GDP, with specific emphasis on health in the country’s twelfth five-year plan covering 2012-2017.

Due to years of neglect in public health care system today mostly Indian seek healthcare in private facilities. Why?

State-funded public healthcare facilities have continued to face a variety of infrastructure-related issues. These issues are related to worker absenteeism, state-level practitioners undertaking dual public-private practice and continued shortage of medical supplies. In contrast, the private healthcare have been able to address these specific issues, besides focusing on patient-focused approach. Although private care is an out-of-pocket expense, it is able to improve quality of care, financed largely through payments, ensure availability of adequate health workers.

There are two major healthcare programs in India.

(1)    Ministry of Health and Family Welfare funded – National Rural Health Mission (NRHM) (to improve delivery of services in public facilities)

(2)    Ministry of Labour and Employment –Rashtriya Swasthya Bima Yojana (RSBY) (health insurance program)

NRHM, launched in 2006, showed some success in improvement in maternal healthcare (under the Janani Suraksha Yojana program). RSBY covers the population which is ‘below the poverty line’, by providing selective tertiary care services. Early evidence has shown positive effects in reducing out-of-pocket payments for tertiary care. However, there is not much evidence whether these programs improve population health. 3

The Indian government has pledged to provide “universal health coverage” for its citizens. Can we explain what this means in the Indian context?

The definition and understanding of Universal Health Coverage (UHC) varies from country to country. We accept World Health Organization’s definition of UHC—a definition not without controversy—then UHC means that everybody receives access to needed healthcare and that people do not suffer major financial risk when seeking services.[4] The word “universal” generally refers to the population accessing healthcare, and its “comprehensiveness” of services availability.

Well, it is not clear yet what the Indian government is offering in this package of healthcare services. In the Indian context, UHC is defined as an overarching guiding principle to ‘achieve’ universal access to healthcare. In my opinion, India should get more proactive and explicit in defining the limitations of healthcare package and benefits, so as to aid policymakers in planning for the next stage of UHC. The question that begs an answer is why can’t India focus on creating appropriate priority-setting institutions?

What might be outcome of increasing GDP spending from roughly 1.0% to 2.5% between 2012 and 2017?

Studies have shown that increased government spending on health is directly associated with lower out-of-pocket health spending. India is one of those countries where the level of health spending is low, as a proportion of GDP. An increase in spending will have a direct bearing on the share of private healthcare, which is at 80% currently.4 The increase in spend may materialize in helping increase the quality and availability of healthcare services, across the vast geography. In addition, these funds may also ensure an increased availability of primary and secondary healthcare facilities in remote areas. In addition, I would expect a general improvement in availability of medical supplies, staff with a direct impact in improving the health matrices such as infant mortality rates.

However, in my opinion looking at the current health care spends, the government may need to redistribute funds to additional initiatives, targeted at improving country’s healthcare.

The current healthcare plans do not make it clear how the government plans to invest. Do they want to continue to fund NRHM or if it will use RSBY as a platform to expand services, or a combination of both? But surely investing just money won’t solve health care system, these need to be buttressed with appropriate coverage to increase awareness. Everyone knows what health challenges are?

Indians reportedly pay about 70% of health costs out-of-pocket, and of this, the majority of expenditures are on drugs.3While in my opinion this percentage has slightly decreased over the past decade, but definitely a large proportion of healthcare spending is still paid out-of-pocket. The drugs and major surgery related to circulatory diseases like stroke and CVDs accounts for a majority of this health spend.

More to learn from Tamil Nadu

Tamil Nadu, one of the largest southern states in India has performed exceedingly well in this area. In continuation of the various healthcare schemes, the government has recently announced a program to provide free drugs for all.

However, the jury is still out whether this program will work as intended? Whether people will benefit as expected? Does this scheme take into account the corruption it may? Has anyone assessed how this policy may affect exchequer’s finances?? Personally, I am not very optimistic about the program. Is this a populist model that other states may also need to replicate, to gather vote banks??  

Apart from the issue of analyzing financial and operational challenges, this scheme may promote overuse/ abuse. This may increase the chances for developing drug-resistance. Merely making drugs available, for free, will not be able to solve the problem, unless combined with improvements healthcare delivery.

The country may be attempting to follow the NHS model of United Kingdom, however the chances of success of such a model is very low. Instead, focused and direct intervention to improve public and private health system, while collaborating the delivery with approx. 3 million strong non-profit organizations is expected to bring results, faster.

Criticizing India’s health system is not what I intend to do, but wish to bring attention to the important aspect of utilizing its resources to its best, is what I want to highlight.


[2] Textbook of International Health Birn Chapter No 12 “Understanding and Organizing Health care System Pg 583

[3]  The national bureau for Asian research, Healthcare in India: A Call for Innovative Reform

[4] WHO Programmes and Project-‘ Universal Health Coverage’


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by | November 14, 2013 · 5:07 am

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