Profiting from misery

The fever is back. After wreaking havoc in 2006 when it killed a record number of people, deadly dengue is haunting the country again this year. The story hit headlines when the parents of a seven-year-old boy, who died of the disease on September 8, jumped to their deaths from a building after they failed to get him admitted to a hospital in time.

The tragedy of their plight follows from cold, impersonal policies. Despite years of strong economic growth, government spending on healthcare in India is only 1.04 per cent of GDP which is about 4 per cent of  total government expenditure. Consequently, basic healthcare needs are seldom met from government expenditure. The gap has given rise to the private sector that provides nearly 80 per cent of outpatient care and 60 per cent of inpatient care.

The private healthcare enterprises — 72 per cent of which are own-account-enterprises (OAEs) — are very different in their needs, sensitivities and services. These are basically household run businesses providing health services. The absence of proper control mechanisms by the government has helped the industry to flourish with scant regard to standards. While the health ministry is yet to come out with a regulatory policy, the Medical Council of India (MCI) which has the power to take action against the erring doctors, is rarely seen in action.

“The healthcare sector has become a business these days. Since these hospitals are not run by doctors but by corporates their main aim is to get business and make profits,’ says Dr Randeep Guleria, head of department of pulmonology and sleep disorders at the All India Institute of Medical Sciences (AIIMS). Dr Guleria, a recipient of Padma Shri, is one of the few doctors in the premier institute who has rejected lucrative offers from greener pastures time and again.

Experts say that the private healthcare industry is “complex”. It includes insurance and equipment, which accounts for about 15 per cent, pharmaceuticals which accounts for over 25 per cent, about 10 per cent on diagnostics and about 50 per cent is hospitals and clinical care. In return, some say that “unnecessary tests” and even surgeries are conducted. “My father died in a private hospital last month. The doctors conducted the surgery even when they knew that he would not be able to withstand the complex surgery. The result: he died on the operation table. However, we had to pay the huge amount before taking his body,’ said 45-year-old Delhi resident Rajni Manchanda.

Not everyone can afford the expenses. According to the government’s draft health policy 2015, over 63 million persons are faced with poverty every year due to healthcare costs alone. People have no financial protection for the vast majority of healthcare needs. An increasing number of households are facing catastrophic expenditures due to health costs. The numbers rose to 18 per cent of all households in 2011-12 from 15 per cent in 2004-05.

India’s private healthcare industry is the second most popular destination for global investments in health. As per market sources, in one year alone (2012-13), the private healthcare industry attracted over 2 billion dollars of FDI, much of it as venture capital. “These hospitals run like any other business models. Like any other business, here also the aim is to make profits. But doctors are not given any targets. No one can push you for doing anything unethical. People have a right to pursue what they want. Even the government takes tax for providing services.

Here better services are provided with state-of-the-art equipment for which money is charged,” said Dr Sandeep Vaishya, director of neurosurgery, Fortis Hospital. Dr Vaishya worked in AIIMS before moving to Max Hospital and then Fortis. He said that his decision to leave AIIMS was not dictated by mere money. “There is a lot of red-tapism and incompetence in AIIMS. Things do not move. In the private sector though they take money, you receive better quality healthcare,” added Dr Vaishya.

For Dr Sandeep Guleria, who joined Indraprastha Apollo Hospital in 2011 as senior consultant, surgery from AIIMS where his father was also the dean, the decision to move to the private sector was not easy, but today, he says, corporate healthcare is far better. “Most doctors do not prescribe surgery unless required. Private hospitals work on different models. There is a lot more independence and they are far better in providing quality care,” he said.

Even as the industry is bringing revenue through medical tourism and providing employment, public health experts say that there is a necessity and a rationale for the health ministry to intervene and to actively shape the growth of this sector for ensuring that it is aligned to its overall health policy goals, especially with regards to access and financial protection.

The tragedy of preventable child deaths due to dengue in the capital of India should be a wake-up call for bringing about systemic reforms in the design and delivery of public health services, feels Dr K. Srinath Reddy, president, Public Health Foundation of India (PHFI). “While there is a need for regulation of hospitals to ensure competent and compassionate care, there is also a need for building well-coordinated and adequately resourced public health systems that not only respond to a crisis, but also function well in a steady state to prevent a crisis. That also includes setting and enforcing standards in ethics, cost and quality across all health care facilities, as well as efficient civic services for vector control and public education.”

Government officials say that they are working on a new regulatory framework to ensure that better services are provided to the people. “We want to intervene and regulate, but not strangulate the private health sector,” said a senior official. Interestingly, the private health care industry is valued at $40 billion and is projected to grow to $ 280 billion by 2020 as per market sources. The current growth rate of this perennially and rapidly growing area of the economy, the healthcare industry, at 14 per cent is projected to be 21 per cent in the next decade. Even during the global recession of 2008, this sector remained relatively recession-proof.

“The ministry is aware of these concerns and in the new health policy we are hopeful that we would be able to address these concerns comprehensively. We have already received various suggestions on this and we are deliberating on it,” said J.P. Nadda, Union health minister.