*Privatization in health care

*Importance of Healthcare

*Health is Wealth*Relation between economic growth and

development and health of people is well recognized

*Overview

*Health administration in India is governed by the Ministry of Health and Family Welfare

*Health care expenditure in India lowest among the world

*Highly fragmented and dominated by private players

*Industry Composition

Hospitals

Pharmaceuticals

Diagnostics

Medical Equipment

Medical Insurance

Ayurved/Homeopathy

Evolution

1947-1983

Welfare state model

1983-2000

Participation from Private players sought

2000 onwards

Role of government redefinedUtilization of strengths of private players

*Current Scenario

Private sector• 68 %• 80 to 85 % by 2025

Public sector• 32 %

*What is Privatization of health care?

*What is private health care ?

*System in which the health care industry consists of private corporations.

*Health insurance is central to private health care.

*Basic economic principles of supply and demand and competition to regulate itself in the open market

*Premise of Privatization

*Eliminating the government’s role as the healthcare provider or keeping it minimum

*Weak qualitative and quantitative infrastructure

*Outreach to masses - contracting private players in areas where the government cannot achieve expansion is a practical approach

*Debate over privatization

*Public good ?

Liberalization

Commercialization

*Basic Care at Public Hospitals

*Public health facilities – Inefficiently and inadequatelt managed and staffed

*Exception AIIMS

*Poorly maintained medical equipment

*Primary Health Centre

*Govt. Initiatives

*Medical protection by GIC in 1996-97 budget.

*Janarogya Yojana – For poor, 5-70 Yrs, Covers upto 122$ pa, pre-post hospitalization (30-60 days)

*Reasons of failure – Reimbursement basis, took up to six months

*Yashaswini Insurance Scheme in Karnataka (PPP)

*60 + 30, 50000 farmers covered

*Requisite for Privatization

*What can be achieved ?

Budget

No burden of government spending

Focus

Public systems to focus on other prominent areas

Independent

Not dependent on government revenues

*Disadvantages

*Private health care is too expensive

*For-profit philosophy may distort the objective

*Adam Smith that all human beings are motivated by private profits

*Rural areas may be neglected

*Inequality - It will be a bigger burden for those on low incomes to take out health care insurance

*Health Care is a Merit Good – people fail to realize

DisadvantagesExpensive

For-profit philosophy

Inequality

Government intervention being a Merit-good

Rural areas may be neglected

*Is Privatization justified ?

*Trade-off

*It calls for a ‘managed healthcare’ approach where the role of the government is reduced from a provider to that of a manager

*Wait time

*Bureaucratic delay

*Competency

*Quality / efficiency

*Indian context

• Lack of insurance coverage

• BPL/Poor populationTime

not ripe yet

*Public -Private Partnership

*Government’s investment in public healthcare infrastructure coupled with not-for-profit but professionally competent management team

*alternative

* In Indian context time is not ripe yet for full fledged privatization

* Countries with public health care may still allow private health care providers to operate to serve consumers willing to pay more for faster access to more thorough services and treatment.

* PPP to extend health care

* Private healthcare needs to be more carefully regulated to ensure that it achieves standards

* Health Insurance to ensure quality