IASbaba’s Daily Current Affairs 25th July, 2017

  • July 26, 2017
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IASbaba’s Daily Current Affairs – 25th July 2017



TOPIC: General Studies 2

  • Issues relating to development and management of Social Sector/Services relating to Health
  • Development processes and the development industry the role of NGOs, SHGs, various groups and associations, donors, charities, institutional and other stakeholders

Transforming India’s healthcare sector

In news:

Two recent developments related to public health in India hold the prospect of changing the nature of service provision for the people. Both lean heavily on the private sector in an effort to improve the deplorable state of healthcare services for India’s 1.3 billion people.

Delhi government policy:

  • A new policy by the Delhi government was announced recently. As per the policy the government would pay for surgeries of private citizens conducted at private hospitals. These surgeries would be ones that the government would not be able to conduct expeditiously at its own facilities.
  • The Delhi government’s new scheme is a novelty for the common man but has a precedent in several government schemes for employees which use public funds to provide private healthcare. For example, the Central Government Health Scheme (CGHS) has existed for decades and has been emulated by several states, which have floated similar schemes that discriminate between those who are employed by the state and those who are not. This is a violation of the principles of justice, and has not been noticed by policymakers as they are the first among equals to benefit from such policies. In this context, the Delhi government’s effort is a giant leap in establishing distributive justice.
  • The Delhi government had earlier tied up with private laboratories for tests that require expensive equipment, such as the magnetic resonance imaging (MRI) test, computed tomography (CT) scan, and positron emission tomography–computed tomography (PET-CT ) scan. There are usually long queues for these tests at government hospitals as the equipment may not be easily available or accessible.

While it will take time for these plans to materialize, and the government has done well to rope in private entities.
Implementation holds the key to universalization of such schemes.

Niti Aayog’s report on PPP model in healthcare:

  • The PPP model, it is stated, will work alongside the public health system and will be chargeable.
  • The proposal calls for roping in private healthcare providers to diagnose and treat certain non-communicable diseases in district government hospitals.
  • Niti Aayog’s proposal pushes for PPPs focused on cancers, heart conditions and respiratory tract diseases in non-metros. It would see private healthcare service providers bid for a 30-year contract to upgrade and operate these facilities within district hospitals.
  • However, only those patients who are not covered by any government scheme will be covered by this model.
  • The proposal does not further the idea of justice. It goes against the spirit of India’s national health policy, which seeks to provide “free, comprehensive primary healthcare services for all aspects of reproductive, maternal, child and adolescent health and for the most prevalent communicable, non-communicable and occupational diseases in the population”.
  • The policy recommends “strategic purchase of secondary and tertiary care services as a short-term measure”, but not services people would pay for.
  • While most private hospitals see the plan as a comprehensive attempt at constructing a successful public-private partnership (PPP) model in healthcare, some are wary of engaging in the project because they feel the pricing structure lacks clarity. Some provisions in the proposal need to be clarified. This includes the rates that can be charged to patients who aren’t covered by National Health Protection Schemes (NHPS), Rashtriya Swasthya Bima Yojana (RSBY), Central Government Health Scheme (CGHS) or state insurance schemes. The draft suggests that where NHPS, RSBY and state insurance schemes aren’t applicable, patients cannot be charged over CGHS rates.
  • This lack of clarity also leaves uninsured patients paying out of their own pockets vulnerable to profiteering.
  • The earlier concept of PPP has remained a non-starter due to lack of trust and understanding of the financial aspirations of the providers.
  • Private players may be hesitant in associating in such projects due to the low CGHS rates and higher operational costs and stent price capping.
  • The ‘payor mix’, or the level of payments received from different types of patients, is an important factor to determine whether investment in such a project is viable.
  • The proposed PPP model appears to be an immediate measure for ‘gap filling’ but is likely to become a permanent feature with continued dependency on the private sector, which can set and revise terms according to its wishes.
  • The proposal needs to ensure that there is no extra billing to the patient on grounds of “additional care” provided.

Issues with health sector in India:

  • Private healthcare in India usually offers quality service but is often expensive and largely unregulated. The national health policy notes “growing incidences of catastrophic expenditure due to healthcare costs, which are presently estimated to be one of the major contributors to poverty”.
  • Low health spending
    India spends slightly more than 1% of its gross domestic product (GDP) on healthcare. Countries that have robust public health systems spend much more—Canada and the UK spend 8% of their GDP on healthcare. India has set itself an unambitious target of 2.5% of GDP for distant 2025.
  • A grave impact of the CGHS and similar plans on public health is that India’s ruling elite do not have an incentive to improve the system as they would never use it.


A common point between the NITI Aayog proposal and the national health policy is that both support government schemes which provide preferential care to government employees in the present and future. It is imperative, nevertheless, to ensure that the association with the private sector is rooted in principles of justice rather than merely financial expedience.

Connecting the dots:

The PPP model for healthcare sector recently proposed by NITI Aayog holds potential to transform the sector. Discuss. Also analyze how the model will help solve the issue of poor healthcare spending in India.


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