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Minhaz Merchant

Minhaz Merchant is the biographer of Rajiv Gandhi and Aditya Birla and author of The New Clash of Civilizations (Rupa, 2014). He is founder of Sterling Newspapers Pvt. Ltd. which was acquired by the Indian Express group

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Reforming India’s Healthcare System

The problems in government hospitals are of a different dimension entirely... sanitary conditions and infrastructure

Photo Credit : Shutterstock


Healthcare is India’s most distressed sector. In cities, private hospitals over-charge patients at will. In villages, healthcare facilities are rudimentary. In towns, government hospitals provide appalling patient care: unsanitary operating theatres (OTs), poorly trained staff and crumbling infrastructure.  
Corruption is rife. The deaths of dozens of children from encephalitis in Gorakhpur and other towns in Uttar Pradesh is just one indication of the urgent need for healthcare reform in India. There are several others, cutting across the urban-rural divide.

The government has started tackling one end of the problem: exorbitant prices of medical equipment and essential drugs. The total value of medical devices used in Indian hospitals is $4.9 billion (Rs 31,600 crore). Most are manufactured by multinational companies. The margins are huge. Take the example of cardiac stents. The cost of drug-eluting and bio-degradable stents has now been capped at Rs 29,600. Till the National Pharmaceutical Pricing Authority (NPPA) stepped in, patients were charged up to Rs 1,50,000 per stent. Mark-ups occur at every stage: wholesale distributors, retail stockists and (steepest of all) hospitals.

Despite the caps, private hospitals will always find a way to protect their profits. Specialist doctors make the rounds of patients in hospital rooms every morning. Two minutes of a cursory examination (and often not even that) leads to a bill of several thousand rupees in some upscale private Mumbai and Delhi hospitals. Doctors and hospitals have a pre-set sharing formula for the “visiting” fee. To counter price caps on medical equipment and essential branded drugs, private hospitals are also charging more for laboratory tests (many wholly unnecessary), operating theatre fees and surgery. There’s little a patient, vulnerable as he or she is, can do about it.

The problems in government hospitals are of a different dimension entirely. Treatment is inexpensive and essential drugs are subsidised but sanitary conditions and infrastructure remain appalling. To prevent more tragedies like those that are endemic in Gorakhpur, the government must increase investment in public healthcare. India’s total annual budget on healthcare is barely 2.5 per cent of GDP.

In contrast in Britain, for example, the budget of the National Health Service (NHS) is ringfenced from cuts. At £150 billion (Rs 13 lakh crore) it is eight per cent of Britain’s GDP. In the United States though, the Affordable Care Act (popularly known as Obamacare), despite its large budgetary allocation, is falling apart at the seams, placing millions of poor Americans (mostly blacks and Hispanics) in dire straits without access to affordable medical insurance.

A new pharmaceutical policy is meanwhile under planning in India. The idea is to make essential drugs affordable in a country where purchasing power is low. A draft of the policy reads thus: “The issue of unreasonable trade margins and bonus offers by various stockists, distributors and retailers has been adversely affecting both the industry as well as consumer interest. After detailed stakeholder consultations, the level of trade margins will be prescribed to create a level playing field for the industry and to bring down the prices.”

The National Pharmaceutical Pricing Authority (NPPA) is in the process of deciding trade margins for not only essential drugs but medical devices like orthopaedic knee implants. The powerful pharmaceutical lobby, comprising mainly MNCs, argues that price controls go against the spirit of free markets, limit innovation, reduce investment in R&D, and militate against the ease of doing business.

And yet indigenous companies like Cipla have developed inexpensive vaccines that are used globally. Its AIDS vaccine for Africans that was sold at just $1 a shot won it plaudits worldwide. US companies were selling similar AIDS vaccines for several times that price.

According to Dr Devi Shetty of Narayana Health, “There are three main problems with Indian public health, and none of them have to do with lack of money. The problems are: (i) acute shortage of medical specialists; (ii) lack of career progression for nurses; and (iii) accountability. Shortage of medical specialists is evident even in a state like Karnataka which has the largest number of medical colleges. Yet there are over 1,200 vacancies for specialists in government hospitals.  Unlike in the past, an MBBS doctor with adequate training but without a postgraduate degree is legally barred today from performing a caesarean section, an anaesthetic procedure, an ultrasound or interpreting a chest X-ray.

“The top 10 causes of death in India cannot be treated by an MBBS doctor. In simple terms, even a brilliant MBBS doctor cannot do anything more legally than what a housewife is permitted to do. These rigid regulations were created by the Medical Council and upheld by the Supreme Court for patient safety. Unfortunately, we also have an acute shortage of postgraduate seats needed to convert the existing two lakh MBBS doctors into specialists. Because of the shortage of specialists, Indian maternal and infant mortality rates are worse than some sub-Saharan African countries.

“Ten years ago, maternal mortality rate (MMR) of Maharashtra was as bad as in the rest of the (otherwise) prosperous south Indian states. In 2009, Maharashtra’s health ministry recognised diplomas from the then 96-year-old College of Physicians and Surgeons (CPS) to convert MBBS doctors into specialists. Today, nearly a thousand specialist medical officers working for the Maharashtra health service are not MD or MS but diploma holders from CPS. By 2013, these diploma holders had produced a Maharashtra miracle: they dramatically reduced its MMR from 144 to 68, half of Karnataka’s MMR. Very soon, Maharashtra will be challenging Kerala for the number one spot. Fortunately, the Union health ministry is considering recognising CPS diplomas across India. The National Board of Examinations is also converting large government hospitals as teaching institutes to train medical specialists. With trained and certified gynaecologists, paediatricians, anaesthetists and radiologists, community health centres and taluka and district hospitals will become the most vibrant hospitals.”

India clearly has many advantages in terms of innovation, generic formulations and talented doctors. But unless healthcare receives a greater allocation of resources from the government and investment from the private sector, Indian patients, rich and poor, urban and rural, will remain at the mercy of a broken system.