Dr.N.Krishna Reddy, MD DM (Card)
ACCESS Health International India Country Director
At the time of India’s independence, people’s health needs were mostly met by public facilities and few non-profit faith-based and philanthropic facilities. As successive governments neglected healthcare, under resourced and poorly managed public facilities were insufficient to meet needs of growing population and increasing disease burden. Private healthcare started filling in to the vacuum being created due to perpetual neglect. It started with general practioners (GPs), growing into small to medium sized nursing homes. Advent of corporate hospitals started in late 1980s, beginning with Apollo Hospitals. Growth extended into private diagnostics and pharmacies. Recent years are witnessing growth of online and at home services.
While growth of private sector provided an alternate access to people, successive governments again failed in providing effective stewardship over private sector, leading to emergence of highly fragmented and unregulated private sector. As costs started climbing up in private sector, catastrophic health expenses became the leading cause of pushing people into poverty. With increasing investments from private investors, corporate culture overtook the very purpose of medicine. To maximize returns on short-term investments, managements started resorting aggressive marketing and medical practices leading to unethical practices driving up the costs further. Fee per service payment systems resulted in overuse of many diagnostic and treatment plans, both by hospitals and medical professionals. The net result is that growing number of people are fast losing trust in private healthcare system as well. Ongoing Covid pandemic exposed these gaps in both public and private healthcare systems for vivid public view. It is in this context that there is an urgent need and a golden opportunity to restore trust in public healthcare system.
Recently enacted National Health Policy (NHP-17) commits to increase in public health spending to 2.5% of GDP from the measly spending of 1.2% of GDP at present. Resources can be mobilized on priority to fast track the commitment. It is estimated that 20 to 40% of budgeted expenditure remains unspent across States due to inefficient public health finance management. Bringing in professional approaches to finance management can unlock these unspent funds for better use.
India is persisting with line-item budgeting since independence. Budgeted financial resources are not in alignment with healthcare needs of a given population. In addition, there are many vertical central and state-level programs with their own separate budgets. Hence, there is a scope to improve financial management by shifting towards population health risk based global budgets along with integrated delivery networks.
With a mission to achieve universal health coverage (UHC) by 2030, India has launched its most ambitious Ayushman Bharat program, which consists of repurposing existing sub-centers (SC) and primary health centers (PHC) into 150,000 health & wellness clinics to strengthen primary healthcare services across the country and Pradhan Mantri Jan Arogya Yojana (PMJAY) to offer financial protection to nearly 100 million poor families for hospital-based care. In essence, the program is bringing in a major reform in health by bifurcation of public healthcare into separate Payer and Provider systems. Nearly 50% of empaneled hospitals under PMJAY are public hospitals. These hospitals will get reimbursed as per defined benefit package rates for the services they provide. This brings in a major shift in financing of public hospitals from a purely supply-side financing to a mixed supply and demand-side financing.
Hospital management has evolved into a specialization of its own to drive clinical quality, operational efficiency, and financial sustainability. Majority of public hospitals are managed by senior clinicians who may not have requisite professional skills in hospital management. In addition, hospital managers do not have enough authority and resources to be accountable for the performance of these hospitals. There are examples of large public hospitals (AIIMS, PGIMER, JIPMER, NIMS etc.,) that perform far better due to the autonomy that they have and sufficient resources they generate or they are provided.
Every district hospital, along with other hospitals and PHCs in that district can be organized into an autonomous healthcare corporation/ cluster. A governance structure, headed by a CEO or equivalent leadership, with equal emphasis on clinical and corporate governance should be put in place to manage these corporations efficiently. Individual and institutional capacity in professional management can be built through leadership development programs aimed at in-service candidates or through lateral induction of people with requisite qualification and experience. A gradual shift from dominantly supply-side financing to dominantly demand-side financing through population-specific global budgets linked to performance will drive quality, efficiency, and financial sustainability of these autonomous corporations. Sufficient autonomy, level-playing field Quality regulation, honest patient feedbacks, independent performance rankings, and performance-based incentives will motivate these organizations to restore trust in public healthcare systems. In addition, they offer sufficient competition on quality and pricing to private healthcare system, thereby benefiting the consumers.
In summary, a combination of strategies (increasing public health expenditure, shift from supply-side financing to demand-side financing, creation of district-level autonomous corporations to integrate and manage public healthcare facilities as a cluster, efficient and effective professional governance structures, and managed competition with private sector etc.,) can strengthen public healthcare system and bring back the trust that people have lost over last decades. This is the right time!
Dr.N.Krishna Reddy, MD DM (Card)
Country Director, ACCESS Health International (India)