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Fixing India's healthcare system

S Sivakumar | August 25, 2003

India has made remarkable strides in increasing the life expectancy of its citizens. During the beginning of the 1930s, the average life expectancy of an Indian adult was only 32 years.

As of 2000,the average life expectancy stands at 64 years. Advances in medical science and improvements in sanitation have reduced the spread of infectious diseases, better medical facilities, preventive measures using vaccines against diseases such as polio, measles and awareness have contributed to the rise in life expectancy.

This article analyses the state of healthcare in India, indicates some of the deep-rooted structural problems, and highlights possible solutions to address the problem.

J K Arrow, the Nobel Prize winning economist laid the foundation of health economics. His major contributions to the field are medical economics of social choice, social investment criteria, market failure in healthcare, behavioural aspects of healthcare under uncertainty and optimal insurance.

The principles are relevant for India's healthcare research and policymaking. The growth in per capita income, increasing urbanisation, availability of modern biomedical technology, education and overall awareness indicate that demand for healthcare is bound to increase in the country.

There is a two-way causality between health and economic development. Countries, which are economically well developed, tend to invest more on healthcare.

Greater investment in healthcare also leads to longer life expectancy, less morbidity and increasing work productivity that results in economic progress.

Over the last two decades, life expectancy at birth in India has increased by approximately double the increase in life expectancy in middle income and high-income countries.

However, the average Indian life expectancy is 15 years less than that of a citizen of a high-income country.  Notice the low levels of public expenditures on health in India compared to middle income and high-income countries.

The ratio of India's purchasing power parity-adjusted per capita income to that of middle-income countries is 52 per cent and that of high-income countries is 10.6 per cent. The ratio of India's purchasing power parity-adjusted health expenditure per capita is 35 per cent of middle-income countries and 3.6 per cent of rich countries.

Even allowing for some wasteful expenditure in developed countries, we are certainly under investing in health.  Notice the low levels of public expenditures on health in India compared to middle income and high-income countries.

The number of physicians per 1000 people has remained unchanged in India over the last twenty years. Another unique feature in the country is the usage of public health services by the bottom 20 per cent of the population (classified by income), which is only marginally higher than the top 20 per cent of the population.

Hence, there is urgent need to rejuvenate the public healthcare system to ensure that the poor get access to essential medical services.

Though the budget resources are scarce, there is certainly a need to double the public expenditure on health, given the long-term benefits. The emphasis should be on prevention and making essential public health services available to the poor.

About 88 per cent of the pregnant women are anaemic. India is unfortunately leading the world in this risk factor. The surprising issue is that this is not related to income distribution.

Other aspects such as low birth weight babies and child malnutrition are close to the poverty line numbers. While deadly diseases such as Tuberculosis and HIV are receiving public attention, the long-term consequences of in utero problems have been neglected.

Rober Fogel, the Nobel prize winning economist emphasises that "It may well be that a very large increase in expenditures on ante-natal care and paediatric care in infancy and early childhood is the most effective way to improve health over the entire life cycle, by delaying the onset of chronic diseases, alleviating their severity if they occur, and increasing longevity."

In a study published in The Lancet 1996, which evaluated 517 men and women born between 1934 to 1954 in a mission hospital in Mysore, 9 per cent of the men and 11 per cent of the women had coronary heart disease.

Low birth weight, short birth length and small head circumference at birth were associated with the prevalence of this disease.

The highest prevalence of the disease (20 per cent) was in people who weighed 5.5 lbs (2.5 kg) or less at birth and whose mothers weighed less than 100 lbs (45 kg) during pregnancy. In India, coronary heart disease is pitted to become the most common cause of death within 15 years.

Some of the key problems are low public spending on health, lack of emphasis on prevention, enforcing standards of medical care rendered by hospitals and private health practitioners, insurance to provide financial protection from catastrophic events, more research, awareness and communication and greater public involvement in understanding health issues. It is of paramount importance to increase public spending on health.

Given that even the poor are not using public health services, it is time to revamp it to offer basic essential services of good quality to all and charge in a graded fashion for specialised services. 

A significant portion of the spending must be targeted toward prevention by subsidising and making available nutritional supplements for pregnant women.

Substantial efforts must be directed toward acquisition of 'womb to tomb' data on health and ill health.  Such research efforts can yield insights into the risk factors that lead to chronic diseases.

The importance of ante-natal healthcare must be disseminated widely in India. The Indian Council of Medical Research has already done some work in this area.

More needs to be done. One of the creative ways is to harness college students to spend at least 100 hours as part of their curriculum to create awareness of health in rural and remote areas.

Presently doctors conduct camps in rural areas for testing, administering antibiotics etc. By creating awareness, you can lower the cost of dealing with chronic conditions later on in life and enhance the quality of life.

The private sector can create incentives for students who undertake such activities by explicitly including such community service as a factor in their recruitment decisions.

The private sector must also fulfil its social responsibility by committing some resources to non-governmental organisations and holding them accountable for results.

India does not have a functional western model to follow in healthcare. The non-price rationing by queuing in Canada/ Britain and the price-based rationing in the US are not functioning effectively. India has its own system with private healthcare practitioners, who are largely unregulated, playing a significant role in meeting the healthcare needs of people.

More disclosure on the part of the private clinics and hospitals must be made mandatory so that the public can assess the quality of medical care and get some understanding of the track record of practitioners and hospitals.

Research has shown substantial medical expenditure occurs during the last two years of a person's life. A broad based hospitalisation catastrophic insurance must be offered to protect individuals in their old age.

The benefits clearly defined and properly enforced can minimise fraud and delays in these programmes. Last but not the least, more collaboration is needed between doctors and economists to jointly pursue research and make health economics a robust discipline for specialisation. A healthy India is certainly a precondition for a wealthy India.

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