PPP Remedy for Boosting Healthcare
The successful partnership model can bring healthcare to the ailing millions
VIVEK DESAI

Healthcare is a fundamental right of every citizen of any country and needs to be ensured by the sovereign government. Unfortunately, most third world and developing countries are not able to ensure that — and India is no exception. In fact, India fares worst than most countries wherein we have 20% of the world’s disease burden, but fall below the minimum acceptable standards when benchmarked for beds, doctors, nurses, health workers, laboratory technicians, etc.

We need 1.75 million beds to reach two beds per 1,000 population by 2025, whereas countries like Japan have 20 beds per 1,000 population. Similarly, we need 7,00,000 doctors to reach one doctor per 1,000 population and 16,00,000 nurses to reach the ratio of 2.2 nurses per doctor by 2025. This will require an investment of $78 billion. The growth in bed capacity in the past decade has been grossly inadequate in catering to the growth in demand. We not only have inadequate infrastructure, we also have problem of inequitable distribution of infrastructure across states and even within them, across rural and urban geographies. Apart from this fact, we have problem of underutilisation of the existing infrastructure due to non-availability of doctors, specialists, technicians and nursing staff across the country.

The government is not only facing problem of increased demand but also of rising costs. Public spending in healthcare has not grown significantly and the rising fiscal deficit has constrained this spending further. Public expenditure tends to focus more on capital costs as compared to recurring costs.

Asset creation as compared to asset operation and maintenance appears to be the government’s focus. About 93% hospitals, 64% beds, 85% doctors, 80% outpatient clinic footfalls and 57% patients are admitted in the private sector, says a World Bank report published in 2001. The situation still remains more or less same. Considering the above facts, I strongly feel that public-private partnerships (PPP) can mobilise private finance, increase access, introduce efficiencies in delivery of public health services and improve outcomes to a significant extent. “PPP is a cooperative venture between the public and private sector, built on expertise of each other that best meets clearly-defined public needs through appropriate allocation of resources, risks and rewards,” as per a Canadian definition.

The areas in which PPP can work in healthcare would include private management in public health service delivery, adoption of primary healthcare centres, non-clinical areas such as catering, laundry, housekeeping, mobile clinics, tele medicine, clinical services such as imaging centres, laboratories, pharmacies, ambulance services, dialysis, etc.

Apart from these, there could be broader areas like health insurance programmes as are being run in Andhra Pradesh as the Arogyasri Scheme or the Yashaswini Scheme in Karnataka. Infrastructure PPP like the PFI projects in the UK where in the private sector builds the asset as capital cost and addition of running the clinical services can be other variants in the model. The key to success of a PPP is in the way the contract is designed and the project is structured. It has to be a win-win situation for both partners whereas, in India, it more tilted towards the public sector partner. The tendering process should also be transparent and well documented to avoid future disputes between the partners. If planned and executed in a structured manner, PPP in healthcare is the best way to provide healthcare to the country’s poor, especially in the hinterland.

Even in the urban area, consumers will find it affordable to avail healthcare only if they have medical insurance cover and hence there is dire need to popularize these schemes even in the urban geography. More tax sops for investing in health insurance policies will help the common man to cover himself better for medical emergencies and tertiary care treatment. The current limit of five lacs falls short many a times in metro cities for tertiary care. Cashless services will need to be streamlined further to make it more hassle-free for the end user.  

Government is doing its bit by investing in the healthcare infrastructure of organizations like the Employee State Insurance Corporation (ESIC) and that will surely pave way for the organized sector to get their employees covered by medical insurance. Currently the scheme becomes mandatory if an organization have certain number of staff (20 is what I know off) below Rs 10,000 as salary per month. The infrastructure and administrative aspects in these hospitals surely need to be improved much more than what is available, but a start has been already made. The Armed Forces and Indian Railways are also getting into the act and modernizing their hospitals to come par with the private sector. I think that part capacity of these and more public sector hospitals should also be opened for insured healthcare especially in remote areas. Payment for healthcare by insurance mechanism is the ONLY way to ensure that citizens can afford treatment whenever illness strikes.

Similarly the heights for diagnostic (CT, MRI, X-Ray, Nuclear medicine, laboratories) and therapeutic floors (operation theatres, cath lab, intensive care units, etc) should be a minimum of 4 mtr and that of inpatient floors should be 3.3 mtrs. These heights will give comfort to run services above the false ceilings. A service floor is generally desirable above the operation theatres to house air handling units and divert any services coming down from the inpatient rooms. This is generally a MUST and should not be compromised. I have noticed that these crietria are generally not followed in smaller towns and that leads to problems once the construction gets over and services are found to be difficult to be accomodated. I have had innmuerable examples of this folly in past 15 years of consulting practice.