It's not just that the healthcare system is rickety, in most parts of India, health insurance schemes do not cover expenses related to outpatient care. Express Illustration
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Universal Health Coverage: The medicine all of India needs in 2026 and beyond

Because governments aren't ready to invest the resources needed for strengthening district hospitals, there's a growing tendency to outsource services to the private sector.

Dr K Srinath Reddy

As a new year approaches, it brings hopes and expectations of a brighter future with better lives for all of us around the world. Even as our pre-conditioned New Year's Eve optimism is clouded by the grim current reality of global climate change, armed conflict, trade wars, potential pandemic threats, growing income inequality and narrow nationalism emitting acrid fumes of xenophobia and racism, there is still a prayer in the heart that the world might yet find the road to peace and prosperity.

What of health? What are the hopes public health advocates in India like me are nursing?

Canada recently saw a 44-year-old Indian-origin man tragically die of a suspected cardiac arrest after waiting more than eight hours for emergency healthcare at a hospital in Edmonton, Alberta. India too has seen reports of people dying for want of proper healthcare, sometimes before even getting to a doctor.

The year that went by also brought a grim reminder of the cost of treatment for others who can afford to head to top-of-the-line private hospitals. The revelation by a large corporate hospital chain that their revenue per in-patient grew by 9% to Rs 170000-odd in the second quarter of this financial year would no doubt have been pleasing to its shareholders, but should worry everyone else.

With healthcare such an abiding concern, I would like to continue to believe that the country's commitment to Universal Health Coverage is not merely notional. Instead, I wish to be reassured that it truly represents a firm resolve to ensure that all persons residing in this vast land gain easy and affordable access to all needed health services.

To achieve its economic objective of investing in building a healthy population while fulfilling the moral purpose of respecting health as a human right, Universal Health Coverage must overcome access barriers that are geographical, financial or health system capacity related. These services must cover a wide range—from health promotion and disease prevention to early diagnosis, appropriate and timely clinical care and (when needed) rehabilitation or palliation.

Stark realities

Primary healthcare services have been widely recognised as the firm foundation for an effective, equitable, empathetic and economically viable health system. They are intended to cover the whole population, provide a broad range of basic services at home or close to home, are most resource-optimising in their use of the finite financial and human resources available to the health system, provide a broad platform for community engagement and create a wide channel for convergent multi-sectoral actions at the front-lines of many human development programmes.

Primary healthcare services cannot exist in isolation. Many persons in the population will need advanced care too, at some stage in their lives. While providing care for acute and chronic health problems at home or close to home, primary care must also be bi-directionally connected to secondary and tertiary healthcare facilities. They must ensure timely referrals for persons who need advanced healthcare when needed and assure continuity of healthcare when such persons return home from the hospital.

This ideal state is far from reality in our existing health system.

Rural primary care services are patchy in several parts of India. While rural and tribal areas are often the most underserved, urban primary healthcare has yet to find ownership within the National Health Mission (NHM). When there are forebodings of slashed allocations to NHM in the forthcoming union budget, the urban component of that mission is unlikely to be put on fast track.

The Union Health Minister's statement in late December that more Aayushman Aarogya Mandirs (Health and Wellness Centres) will be established, to achieve a coverage of 2000 persons per centre, gives hope that urban primary care may still evolve over time.

While Aayushman Aarogya Mandirs (Health and Wellness Centres) are being established and equipped in different states, connectivity with secondary and tertiary healthcare facilities is not seamless. Referral systems are still weak.

Also, financial protection of government-funded health insurance schemes like PMJAY is limited to hospitalisation related expenses, leading to a disconnect with primary care. In most parts of India, government health insurance schemes do not cover expenses related to outpatient care, despite the fact that 60-70% of out-of-pocket healthcare expenditure is incurred by families on out-of-hospital medical services and payment for drugs and diagnostic tests.

Ideally, a robust primary healthcare system should not only provide a large part of needed healthcare but also act as an efficient gatekeeper for ensuring that only persons whose medical condition requires advanced care are referred to secondary or tertiary healthcare facilities. Conditions where a person may directly seek care are also well defined in such cases. In some countries, which deploy such a mandatory referral system, persons who directly access an advanced healthcare facility for a non-emergency condition do receive care but must pay out of pocket. That discourages people from needlessly bypassing the primary care facility.

The trouble with privatisation of healthcare

Ensuring connectivity between different levels of care, while preserving a gatekeeper function for primary care, is especially difficult in a mixed health system that has a large private sector component.

The public sector's primary healthcare system can further develop tele-health services to access specialist expertise from district and medical college hospitals. However, with private sector presence dominating what we find instead is that primary care is mostly unorganised, often comprising a mix of qualified and unqualified individual practitioners and small nursing homes. Where the corporate private sector steps into primary care, referrals for upstream consultations, tests and procedures increase to provide profit for the hospital.

Corporate hospitals are mostly concentrated in larger cities. They deliver high-end tertiary care, but often at high expense as mentioned earlier.

The government too is investing in AIIMS-like institutions across the country and tertiary care is also being prioritised in the public sector. Medical colleges, government-run or private-owned, also provide many elements of tertiary healthcare. However, secondary healthcare is becoming the weak link in the health system, due to inadequate attention being paid to the strengthening of district hospitals.

Because neither central nor state governments are ready to invest the resources needed for strengthening district hospitals, there is a growing tendency to outsource services to the private sector or even hand over the management of these hospitals after inviting co-investment for expansion of infrastructure. This will dilute the public commitment to primary-care-led Universal Healthcare Coverage and public-sector-led integrated healthcare systems which provide continuity of care from primary to tertiary levels.

Outsourcing of diagnostic laboratory and radiology services, by government hospitals to private sector, is now being practised by several states to make up for the lack of equipment or trained technical personnel in public sector facilities at the district level. Handing over of district hospitals to enable establishment of private medical colleges is also being proposed by some governments.

These trends essentially reflect a lack of required government funding for strengthening district hospitals through needed investments in infrastructure, equipment and personnel. Diffidence in state capacity to manage integrated healthcare facilities, from primary to tertiary levels, is leading both the political and bureaucratic leadership in many states to seek out the private sector as a saviour.

It must be remembered here that the private healthcare sector's primary commitment is to profit. Only 2% of Covid vaccines administered in India during the pandemic were delivered by the private healthcare sector, despite the government facilitating their supply.

With this being the ground reality, the failure of public sector services to stop the surging spillover into private tertiary care becomes even more glaring.

Also, when the government wishes to advance 'integrated care' in medical education and healthcare, through a combination of allopathy and ayurveda, they must reflect on whether that fiat will be easily accepted and implemented by private hospitals if they take over the management of district hospitals? Ideally, district hospitals should be strengthened so that they can support new government medical colleges.

Privatisation of district hospitals and privatisation of medical education will not serve the objectives of Universal Healthcare. In a mixed health system, the government must engage the private healthcare sector to optimally utilise its services but should not abdicate its role as a guarantor of assured service coverage and financial protection which are the twin pillars of Universal Healthcare.

Last word

At a time when we have bested Japan and become the fourth largest economy, the dream of a healthier India is one that we must pursue and not let go of. An Indian healthcare system that can be the envy of the Canadas of the world can be built if the government's heart is in it. Believe me as a cardiologist when I say it.

(The author is Chancellor, PHFI University of Public Health Sciences, and Chair of Centre for Health Assurance at the Indian School of Public Policy)

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