Private Healthcare

Private Healthcare

Alleviating the scourge of private healthcare

#GS-02 Healthcare

For Prelims

Healthcare Expenditure in India:

  • India’s public health expenditure as a percentage of its GDP is 1.28%.
  • While its share of general government expenditure dedicated to health remains 8%.
  • Due to these parameters private spending still constitutes nearly 60% of overall expenditure on health.


For Mains

The Issues with private Healthcare:

  • Indian Healthcare system suffers from income disparities, backwardness, and under-regulation.
  • The increasing number of healthcare providers in urban areas has only served to drive prices up.
  • The private healthcare sector in India is divided geographically as well as economically, with marked inequities between rural and urban areas and widespread market failure.
  • This has resulted in the private sector differentiating into a multitude of organisations of varying sizes and scopes, each serving its own customer base.
  • Many of these organisations provide care at inexpensive rates but lack adequate quality.
  • Public health insurance schemes have often been criticised for imposing unreasonable package rates on private providers without any consideration for actual costs of care.
  • Another major concern is the high costs of medical education which forces people to recover the cost through resource-intensive ways of practice.

What needs to be done:

  • There is an increasing need to make private healthcare more affordable without reducing care
  • This can be achieved through creating a wide range of policy instruments that change the operating conditions of the private sector which needs to be enshrined in our national health policy.
  • There can also be measures to create networks of providers such as health maintenance organisations (HMOs), which can be regulated easily.
  • We can also create a change by incentivising and propagating many business process innovations (BPI) which make use of costreducing innovations.
  • Another innovative idea is value-based healthcare, which seeks to improve patient outcomes for the money spent.
  • Task shifting in healthcare is another tool which is an evidence-backed instrument to hold down costs, especially in under-resourced settings.
  • India can learn from countries such as Canada who have created regional health boards which organises care equitably within regions, exploits economies of scale, and brings down healthcare costs.
  • These boards should be given representation from communities and enough power to determine local policy and resource allocation, impose caps on the maximum number of healthcare providers, and build working networks of care.

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