{"id":82313,"date":"2020-01-15T05:00:10","date_gmt":"2020-01-15T05:00:10","guid":{"rendered":"https:\/\/thepubliceconomist.com\/?p=82313"},"modified":"2020-01-15T05:04:17","modified_gmt":"2020-01-15T05:04:17","slug":"transforming-indias-healthcare-sector-a-detailed-analysis","status":"publish","type":"post","link":"https:\/\/thepubliceconomist.com\/?p=82313","title":{"rendered":"TRANSFORMING INDIA\u2019S HEALTHCARE SECTOR: A DETAILED ANALYSIS"},"content":{"rendered":"\n

Decoding\nthe NITI Aayog\u2019s Report on Health System for A New India<\/strong><\/p>\n\n\n\n

In the last couple of decades, has seen noteworthy improvements in the health indicators. The recently released United Nations Development Programme\u2019s Human Development Report (HDI)<\/ins><\/strong> highlights that India\u2019s gross national income has more than doubled over the last 15 years, from $2,522 (PPP) to $5,497 between 2000 and 2014. This period also registered better human development outcomes; it registered a 0.15 increase from 0.46 to 0.61 between 2000 and 2014.<\/p>\n\n\n\n

 India has eliminated\npolio, guinea worm disease, yaws and maternal and neonatal tetanus. Our Total\nFertility Rate (TFR) has reduced sharply from 3.4 in 1992-93 to 2.2 in 2015-16.\nContrary to expectations, we were able to achieve the Millennium Development\nGoals (MDGs)<\/ins> in respect of the Maternal\nMortality Ratio (MMR level of 130 against a target of 139) and almost succeeded\nin meeting the Under-5 child mortality target (U5 MR level of 43 against a\ntarget of 42).<\/p>\n\n\n\n

Continuing and expanding this journey of healthcare\ntransformation is critical to setting up an improved system, which accelerates\nhealth outcomes, prevents poverty due to illness and improves the patient\u2019s\ninterface with the health sector.<\/p>\n\n\n\n
By introducing critical health systems transformations, India can:<\/strong>
1. Save more than a million additional children lives and reduce working-age adult deaths by an additional 16% by 2030.
2. Accelerate economic growth. Additional 16% decline in working-age adult mortality would increase real GDP by 64% by 2030.
3. Reduce avoidable out-of-pocket expenses to less than 45%.
4. Will save at least 1.5 million additional households from falling into poverty due to illness.
5. Have a positive impact on the productivity of the working-age population, enabling India to realize its demographic dividend over the next 10-15 years and boosting economic growth.
6. Improve consumer experience and citizen satisfaction and trust in the healthcare system. 
7. Grow a globally competitive healthcare insurance and service provision industry with a potentially substantial increase in medical tourism.   <\/td><\/tr><\/tbody><\/table>\n\n\n\n

CHALLENGES IN THE HEALTHCARE SECTOR:<\/strong><\/strong><\/p>\n\n\n\n

The evolution of India\u2019s health system is still a work in progress and there remains a large unfinished agenda. Currently, the Government (Union and the States put together) spends roughly 1.13 per cent of GDP on health, which is grossly inadequate compared to similar spending by other countries. As a result, 62 per cent of healthcare spending is financed by households through out-of-pocket expenditure.<\/em><\/strong><\/p>\n\n\n\n

There are significant inter-state and intra-state differentials in health outcomes<\/em><\/strong> with socio-economically disadvantaged groups being particularly vulnerable to gaps in access as well as the quality of healthcare available to them. <\/p>\n\n\n\n

\"\"<\/figure><\/div>\n\n\n\n

Further, the Double burden of disease<\/strong> \u2013 with a rising burden of non-communicable diseases in addition to the persistence of communicable diseases<\/em><\/strong> \u2013 stretches the system thin and makes the task of health policymakers all the more complex. <\/p>\n\n\n\n

India\u2019s health system reveals a story of multiple fragmentations:<\/em><\/strong> a fragmentation of payers and risk pools; deep fragmentation of providers of healthcare services; and also,<\/ins> of the digital backbone running it. This prevents the standardization of purchasing procedures and imposes a huge compliance burden on the providers.<\/p>\n\n\n\n

India also suffers from inadequate\nand fragmented delivery of healthcare services.<\/em><\/strong> Over 98 per cent of healthcare facilities in India\nare those which employ ten persons or less. A consequence of the fragmented\nprovider space is that the health records of patients lie buried <\/em><\/strong>in\nmanual systems or in some cases disparate IT systems with little standardization\nwith almost no possibility of inter-operability or cross-sharing, thereby\nlimiting the availability of information that could potentially guide the\ndecisions on health policy.<\/p>\n\n\n\n

India also faces the additional challenge of a federal decentralized health policy<\/em><\/strong>. Similar\nto most federal countries, health in India is the primary responsibility of the\nStates. This increases the complexity of avoiding fragmentation of policy\nformulation and implementation, regulation as well as sector and organization governance.<\/p>\n\n\n\n

Severe fragmentation, compounded by market failures and\ngovernance challenges, at all levels of the system (financing, service\nprovision, policy formulation, regulation, governance, among others) determines\na vicious circle that fuels low performance across all system functions.<\/p>\n\n\n\n

STEPS TAKEN BY GOVERNMENT:<\/strong><\/p>\n\n\n\n

The Government of India has initiated the first steps to\nbuild a robust health system. Coupled with the strengthening\nof the public health system under the National Health Mission (NHM), the recent\nroll-out of Ayushman Bharat<\/em><\/strong> \u2014\nwith its twin components of the Health and\nWellness Centres <\/em><\/strong>to provide comprehensive primary and preventive\ncare at the community level; and the PM Jan\nArogya Yojana (PM-JAY)<\/em><\/strong> with its\nRupee 5 lakh health cover to the bottom 40 per cent of the population.<\/p>\n\n\n\n

NITI Aayog\u2019s <\/strong>recent\nreforms on health sector involves two key components \u2014 financing<\/em><\/strong>\n(revenues, risk pooling, and strategic purchasing), as well as organization\nand provision of health service delivery. <\/em><\/strong>Additionally, it also devoted\nits attention to digital health<\/em><\/strong>, which will be a key enabler of\nsystem performance.<\/p>\n\n\n\n

Successful health sector transformation in India will require reducing funding and provision fragmentation simultaneously This will facilitate effective strategic purchasing, which in turn will determine the incentives for consolidating service providers and improving India\u2019s capacity to enforce much needed patient protection, fair competition, as well as quality and efficiency regulations.<\/p>\n\n\n\n

Suggestions on Restructuring the Health Sector in India:<\/strong><\/p>\n\n\n\n

India has a unique opportunity to transform its healthcare system over the next decade or so. Seizing this opportunity requires action and implementation with respect to six pillars of transformation:<\/p>\n\n\n\n

1. Further develop and deliver on the unfinished population and public health agenda:<\/strong><\/p>\n\n\n\n

India is in the midst of an epidemiological transition.\nThere is a marked burden of communicable diseases as well as Maternal, New born\nand Child Health (MNCH) related morbidity and mortality, particularly among the\npoor. <\/strong><\/p>\n\n\n\n

All these health challenges are amenable to promotive and\npreventive health interventions, vaccination, contraception, safe delivery,\nnutritional interventions, infectious disease control, sanitation, clean air\nand water and health education among others. <\/p>\n\n\n\n

The immediate need is to prioritize high-impact and cost-effective interventions<\/em><\/strong> at India\u2019s current stage of development \u2014 such as finishing the agenda on infectious diseases, which the government should fund fully. The Health & Wellness Centres<\/em><\/strong> \u2014 with their promise of comprehensive primary care \u2014 has to be accorded top most priority and if implemented well, could lay down a solid foundation of our health system.<\/p>\n\n\n\n

2. Change health system financing structure away from the predominant undesirable out-of-pocket spending into larger risk pools, with strong strategic purchasing capabilities.<\/strong><\/p>\n\n\n\n

While India may well need to increase its overall level of spending on healthcare, this may not necessarily imply more public resources on health as the only response. The solution lies in improving the performance of the existing risk pools<\/em><\/strong> which will better serve beneficiaries as well as reduce wastage of resources. Further, there is need to address the high level of out-of-pocket spending<\/em><\/strong> to reduce its negative impact on access to care and poverty as well as to leverage it as a source of additional risk pooling funding.<\/p>\n\n\n\n

3. Reduce fragmentation of risk pools and health service provision, incentivizing much needed provider consolidation and organization in networks.<\/strong><\/p>\n\n\n\n

Severe fragmentation in risk pooling hampers the ability of the health system to ensure access to quality, affordable and timely healthcare as well as continuity of care and portability of benefits. It also impedes the ability to set the right incentives for efficiency and long-term sustainability for insurers and healthcare providers. <\/p>\n\n\n\n

4. Harness the power of digital health as a critical enabler for the overall transformation of the health system.<\/strong><\/p>\n\n\n\n

Given the fragmented nature of the market, good information\nsystems become even more critical for tracking patients, activity and money,\ntherefore driving efficiency. India requires its own widely accepted data\nstandards, platforms for data exchange across hospital information systems and\nhealth insurance information systems. <\/p>\n\n\n\n

A powerful IT backbone can also provide real-time information on expenditures, utilization, fraud, quality metrics and drive more value for money for India\u2019s limited health expenditure. Given the IT powerhouse of India, this should be leveraged effectively.<\/p>\n\n\n\n

5. Empower patients to become better purchasers of health insurance coverage and health services. <\/strong><\/p>\n\n\n\n

In the dominant out-of-pocket market, the maximum spend is happening for health service provision and purchase of health insurance coverage. Empowering patients to become better purchasers is important for both, purchasing health insurance coverage (when the time comes) and direct purchasing of health services. Consumer information and education plays a critical role here.<\/p>\n\n\n\n

6. Implement PM-JAY with an eye on its potential to influence the overall healthcare transformation in India, beyond its current explicit mandate.<\/strong><\/p>\n\n\n\n

The PM Jan Arogya Yojana\n(PM-JAY)<\/em><\/strong> with its Rupee 5 lakh\nhealth cover to the bottom 40 per cent of the population for secondary and\ntertiary care against 1350 odd disease conditions \u2014 has laid down a solid\nfoundation on which a good health system can be crafted. It needs to be\nproperly implemented so that services reach the rightful beneficiaries.<\/strong><\/p>\n\n\n\n

CONCLUSIONS:<\/strong>\n\nIndia has a unique opportunity to transform its\nhealth sector, which currently lags behind the performance of other comparable\neconomies in the region and worldwide. In doing so, India will not only be able\nto save millions of lives and avoid millions of households from slipping into\npoverty due to catastrophic illness but will also further strengthen the\nvirtuous circle of better health and faster economic growth.\n\n\n\n<\/p>\n","protected":false},"excerpt":{"rendered":"

The immediate need is to prioritize high-impact and cost-effective interventions at India\u2019s current stage of development \u2014 such as finishing the agenda on infectious diseases, which the government should fund fully. The Health & Wellness Centres \u2014 with their promise of comprehensive primary care \u2014 has to be accorded top most priority.<\/p>\n","protected":false},"author":44,"featured_media":64089,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_mo_disable_npp":"","footnotes":""},"categories":[6],"tags":[143,66,205],"class_list":["post-82313","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-healthcare","tag-health-expenditure","tag-healthcare-in-india","tag-healthcare-sector"],"yoast_head":"\nTRANSFORMING INDIA\u2019S HEALTHCARE SECTOR: A DETAILED ANALYSIS - The Public Economist<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/thepubliceconomist.com\/?p=82313\" \/>\n<meta property=\"og:locale\" content=\"en_GB\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"TRANSFORMING INDIA\u2019S HEALTHCARE SECTOR: A DETAILED ANALYSIS - The Public Economist\" \/>\n<meta property=\"og:description\" content=\"The immediate need is to prioritize high-impact and cost-effective interventions at India\u2019s current stage of development \u2014 such as finishing the agenda on infectious diseases, which the government should fund fully. 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