By G Ananthakrishnan

In the absence of a robust state-funded health infrastructure providing free care, citizens have no option but to seek out private facilities. As a result, we have a burgeoning private healthcare sector, unregulated and often exploitative

A single episode of major illness is enough to eat away the life-savings of most individuals in India . In fact, there is data to suggest that such illnesses push several families below the poverty line. The World Bank reported in 2002 that irrespective of income class, one episode of hospitalisation is estimated to account for 58% of per capita annual expenditure, pushing 2.2% of the population below the poverty line. Even more disconcerting is the fact that 40% of those hospitalised had to borrow money or sell off assets. During 1986-96, the number of people who could not access healthcare because of financial reasons doubled over the baseline.

This obviously suggests a greater role for the public sector in healthcare. Yet, several studies have recorded the growing role of the private sector in the provision of healthcare in India . In a study of World Bank projects operating in India , Kamran Abbasi makes it clear that lack of funding in the public healthcare sector translates into inadequate quality of service, which forces "the poor to turn towards the private sector, which in turn exploits clients by using expensive inappropriate technologies and overprescribing".

Writing on the role of private practitioners in tuberculosis control, Mukund Uplekar et al note in The Lancet that 80% of households prefer to use private sector treatment in India for minor illnesses, and 75% of households prefer to go to the private sector for major illnesses. An examination of healthcare access patterns for the population leads to the startling revelation that the vast majority of people have been forced to rely on private facilities because there is an absence of state-funded alternatives.

According to figures from the National Sample Survey Organisation for 1998, quoted in a study by V R Muraleedharan and Sunil Nandraj, there was a 7% increase in the number of outpatients patronising rural private sector facilities, from 74% in 1986-87 to 81% in 1995-96. In urban areas, this rise was about 8%, from 72% to 80% during the same period. In the case of in-patients, the rise was sharper, from 40% to 56% in the case of rural and 40% to 57% in urban areas.

A snapshot of the private healthcare sector in India emerging from the study by Muraleedharan and Nandraj shows that in absolute terms, the size of the health infrastructure is significant, but its distribution is lopsided and urban-centric. There is one qualified doctor for 802 people and one hospital for 11,744 people, besides one bed for 693 people. But there are serious imbalances in the distribution of these facilities. In Tamil Nadu, at least 70% of 37,733 allopathic physicians are in the private sector while 10,000 are in government service. There are nearly 10,000 doctors in and around Chennai. Therefore, the ratio of doctors to population changes from 1:800 for Chennai to 1:1,590 for the state average.

The National Council for Applied Economic Research reported in 1992 that a study of household surveys showed over 55% of illness episodes being cared for by private facilities, and 33% to 39% by the public sector. PHCs and sub-centres catered to only 8.2% of cases in rural areas.

Why do so many patients seek private doctors?

In some settings, private practitioners are perceived as providing better care because they include injections as part of every treatment, and are willing to make house visits, which are convenient. In contrast, government services are not popular because of long waiting periods, the arrogant attitude of staff and non-availability of medicines.

In the absence of a robust state-funded health infrastructure providing free care, citizens must seek out private facilities. Based on a study of the weaknesses in the tuberculosis control programme, The Lancet reported that among 22 countries with the highest prevalence of TB, private health expenditure as a percentage of the total was among the highest in India , at 87%. The number of patients incurring 'out-of-pocket' expenditure as a percentage of total spending was also unconscionably high at 84.6%.

Acknowledging the rise in patronage of private healthcare in many poor nations, the British Medical Journal traced the phenomenon to greater flexibility of access, shorter waiting time, greater confidentiality, and sensitivity to user needs. However, there cannot be an unreserved commendation of any measure to expand the private sphere without an overarching concern for a state-funded care system. The debate on the debilitating impact of a policy that is guided by private care imperatives has dominated proposals to revamp the National Health Service (NHS) in the United Kingdom , with suggestions that the discourse on expansion is actually driven by a desire to pave the way for the entry of private care providers from the United States and elsewhere. Thus, tax funds would indirectly lead to an expansion of the private healthcare sector at the cost of the public system.

This issue is of particular concern to India , as the private sector has not met its obligations of providing free care to a particular percentage of poor patients as required by law. Citing this little-known and poorly-enforced provision, Members of Parliament Ram Kripal Yadav and Daroga Prasad Saroj wanted to know, in the Lok Sabha, the steps taken by the Centre to ensure that private hospitals provide 30% of their patients free treatment. Union Minister of State for Health and Family Welfare Panabaka Lakshmi replied on July 21, 2004 : "Health being a state subject, it is for the respective state governments to formulate conditions and norms for setting up of private hospitals... (and) with regard to the treatment of poor patients and also to ensure that the conditions and norms are followed by private hospitals."

The issue becomes clearer in the answer of Health Minister A R Antulay to a question in the Rajya Sabha in 1995. The minister said: "The 4th Joint Conference of Council of Health and Family Welfare held in October 1995 also recommended that the private sector which benefits from concessions should provide a minimum of 30% beds and 40% outpatient/diagnostic services free for treatment of the poor. In the past, private hospitals/nursing homes were allowed to import medical equipment at concessional rates of duty subject to the condition that a certain percentage of free treatment would be provided in OPD/IPD to poor patients. The state governments are required to check whether these conditions are being met by private hospitals/nursing homes."

Regulation and the lack of it

There is a complex set of factors that have rendered regulation of medical care practically meaningless in India . Muraleedharan and Nandraj report that the major problems include lack of monitoring by statutory bodies, outdated and inadequate legislation, and inability of the government to enforce even the available regulatory laws.

One of the earliest laws in force is the Delhi Nursing Homes Registration Act 1953, which requires that all private nursing homes satisfy a set of criteria and register themselves. However, a survey reported in 1994 found that there were 1,600 unregistered nursing homes functioning in the national capital, despite the law, indicating that it was not being enforced even in the city where national laws are made.

On the question of costs associated with private care, V R Muraleedharan points out that there is inadequate information on in-patient care to come up with a sound analysis on whether the costs are justified. The lack of sustained data collection was confirmed by the then minister of state for health and family welfare, in answer to a question in Parliament: "Health being a state subject, the details of hospitals run by state governments in the country are not maintained centrally."

There is thus considerable evidence to conclude that the poor are unable to access quality healthcare in India due to inequities prevailing in the system. Health insurance, either taken individually or provided as group cover, is helping some sections, though this remains a minority phenomenon in the overall scheme. The imperatives for policy therefore are to bring about greater budgetary expenditure on public health, institute monitoring mechanisms involving transparent and professionally audited procedures both in the public and private sectors, and ensure that the private sector, which has a legal commitment to share its facilities with the poor, is compelled to do so.

Chennai has 326 private hospitals and only 62 public hospitals

An analysis of the private hospital market in Chennai by V R Muraleedharan et al found that there might be significant excess capacity of beds in the metropolis. In the early-1990s, there were 388 hospitals in the city, of which 62 were in the public sector and 326 in the private sector. Within the latter category, only eight were voluntary institutions. Making a statistical projection on the basis of the meagre data available on bed strength in government and private sector hospitals, the authors think the number of beds in the private sector is half the number available in the public sector, despite there being a greater number of facilities in the private category (this is because there are a large number of institutions, but with few beds). However, the share of private beds to total beds in the city is still higher than the state average (20.7) and the national average (29.9).

The determination of 40% excess capacity is made on the basis of intense price competition among private hospitals. The authors believe the findings for Chennai could be extrapolated to similar urban centres. The costs incurred in maintaining the excess capacity are probably passed on to the in-patient market. There is intense competition in the outpatient market, with an impact on the rates generally charged from patients, while the in-patient area is relatively less competitive, indicating that these patients may be paying more for treatment than in a competitive situation. More studies would be necessary to determine whether these hospital beds remain in excess if patients from all income categories can access them.

Listing the capacity in the public sector, the Tamil Nadu government in its policy note for health and family welfare for 2004-05 says: "At present 11 government medical colleges, one government dental college, 2 physiotherapy colleges and 2 nursing colleges are being run by the government. The total bed strength in the 43 hospitals under the Directorate (of Medical Education) is 21,238. The daily average in-patient and outpatient strengths are 19,802 and 69,381 respectively."

All about quacks: The cost and quality of care in the private sector

In 1989, researchers R Duggal and S Amin interviewed 500 households in Jalgaon taluka, Maharashtra . They found that private services were used more than three-fourths of the time -- more often in rural areas. The poorest people used the public sector most. Numerous other studies have confirmed the dominance of the private sector and the reasons for this dominance: government health services entailed longer travel and waiting periods, arrogant behaviour of doctors and non-availability of medicines. Almost all private expenditure is 'out-of-pocket', and not covered by insurance of any kind.

This kind of expenditure on healthcare in the private sector can have devastating consequences on poor households. In Kerala, a sample of rural households first surveyed in 1987 was followed up in 1996 for health and socio-economic status. Even accounting for an annual inflation rate of 10%, per capita healthcare spending had increased by 517% - with the increase being higher for the poor than for the rich. "Even granting a certain degree of under-reporting of incomes, this is a very high figure and undoubtedly is a major contributing factor to debt and further impoverishment among those on the lower rungs of the social ladder."

In 2001, D Narayana conducted a survey on the effects of macroeconomic policies and health sector reforms on access to the health sector. Kerala was one of the states surveyed. He found that in Kerala, the extensive healthcare infrastructure ensured that very few are deprived of care. However, he also found that 9.08% of the population surveyed in Kerala reported spending more than 100% of their annual income on healthcare - implying that they had had to sell assets for healthcare .

Researchers V R Muraleedharan and Saradha Suresh tracked 1,273 pregnant women in 61 slums in Dindugal, Tamil Nadu, over 16 months. They found that 33% of deliveries took place in private hospitals; 55% in municipal maternity homes or hospitals, and about 10% at home. The cost of deliveries at home and in the municipal home averaged Rs 295 and 238 respectively. They cost more than twice as much in a government general hospital. A C-section cost Rs 8,774 in a private hospital, compared to Rs 2,410 in a general hospital. The researchers noted that a considerable number of women from high poverty-risk groups had chosen private facilities for delivery and had spent as much as Rs 15,000 on a C-section .

S Nandraj visited 24 private nursing homes and hospitals in Mumbai . Some findings:

  • Less than a third had qualified nurses.
  • Fifty per cent were poorly maintained, even dilapidated.
  • 66.7% did not have a generator
  • Most were congested, with narrow passages and entrances
  • Seventy-seven per cent of nursing homes with an operation theatre did not have a sterilisation room
  • Seventy-seven per cent did not have scrubbing rooms.

In a similar study in rural Maharashtra , S Nandraj and R Duggal surveyed 53 private providers and 49 hospitals in two talukas . Some findings:

  • One-fourth of providers were unqualified -- the poorer taluka had almost five times as many unqualified providers. Forty per cent were allopaths (8.3% in the poorer taluka) and 52.5% from Indian systems (75% in the poorer taluka). But 94% practiced allopathy.
  • Only 55% of providers had the appropriate registration. Only 38% maintained any records. Essential equipment and instruments such as thermometers, sterilisers, examination table, weighing machine, sheets, towels and washbasin were lacking. In one taluka, only 36.4% had a thermometer, and only 9.1% had any sutures or ligatures.
  • Not one of the 49 hospitals surveyed was registered . 29% were run by non-allopaths. There were only three qualified nurses in the entire sample. Only 18% of hospitals had the minimum facilities for pathology tests. Only one quarter of the hospitals had uninterrupted power supply, and not a single hospital had an ambulance. 39% of hospitals functioned without a full-time doctor or visiting consultant. 14 hospitals did not have any nurses. Only 10% of hospitals had an ECG monitor, 65% a steriliser, and 56% an oxygen cylinder

(G Ananthakrishnan, a Chennai-based journalist, follows development issues primarily in the areas of sustainability, equity, the environment, education and health. Email: ganant@vsnl.comThis e-mail address is being protected from spam bots, you need JavaScript enabled to view it )


NSSO 1998, Sujatha Rao, 'Health Insurance, Concepts, Issues and Challenges', Economic and Political Weekly , August 21, 2004
Kamran Abbasi, 'The World Bank and World Health, Focus on South Asia II - India and Pakistan ', British Medical Journal , Vol 318, 1999, pp 1132-1135
Private Practitioners and Public Health, weak links in tuberculosis control', The Lancet , Mukund Uplekar et al, Vol 358, 2001, pp 912
'Private healthcare sector in India and options for partnership: Policy challenges', V R Muraleedharan and Sunil Nandraj.$File/09_Yazbeckfinal.pdf
'Factors affecting health seeking, utilization of curative health care', Chirmulay D, BAIF Development and Research Foundation, 1997
'Private practitioners and public health: weak links in tuberculosis control', The Lancet , Vol 358, Sept 15, 2001
Private health care in developing countries', Anthony B Zwi et al, British Medical Journal , Sept 1, 2001
Rajya Sabha, Unstarred Question No 1128, 07.12.1995
Delhi houses 1,600 unregistered nursing homes: survey,
Private Hospital Sector in Madras City : Some Preliminary Observations', V R Muraleedharan


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