Public Private Partnership for Non-Communicable Diseases (NCDs) in District Hospitals

This post critically analyses the NITI Aayog's recent proposal for partial privatisation of district level hospitals for treatment of NCDs .

Main takeaways of proposal

• offering space to private players through competitive and transparent PPP framework.
• facility only for BPL and insurance covered

Argument in Favor :

• Issues plaguing public health system(HR, inadequate infrastructure, finance)
• rampant absenteeism of doctor
• vacancy rate of specialists - govt unable to attract & retain talent
• overloaded tertiary facility
• paltry budget allocation ~1.1% of GDP
• Positives of Private sector
• efficiency, accountability, sustainability
• continues to grow @15% pa
• five fold higher doctor density
• NCD accounts for 60% of premature death
• Cost apprehension is ill-founded as majority of patient already going to pvt facilities
• Benefits :
• Better Access - geographical disbursal of skills required for NCD care
• Quality & Affordability - provide quality care closer home at lower cost.
• help decongest tertiary level health facilities
• The proposal in alignment with new National Health Policy which seeks constructive role of private sector for promoting health.

Arguments against :

• concern regarding cost, equity, quality and health rights 
• pvt hospitals known to overcharge e.g. stents
• service only for BPL and insurance covered threatens UHC, a key for SDG
• continuous monitoring of PPP based services @ local level is weak
• experiment at RGSSH @Karnataka shows huge discrepancies
• US experience of switching to pvt health shows higher administration and transaction costs.

WF : 

• experiment in select district hospitals
• strong regulatory oversight required
• in the long run - 
• medical education - restructure MCI + NEET implementation
• implement RSBY
• greater budgetary support - 2.5%
• focus on outcomes with rankings to measure incremental improvement
• incentivise better performing states

Rising Inequality a deep concern

Some recent stats revealed :

• Oxfam International report titled "An economy for 1%" - the richest 1 % owned as much wealth as the remaining 99 % combined did, with the gap in wealth widening even faster than anticipated.
• In India Richest 1% owns 58% wealth(much greater than global average of 50%)
• WEF's Global Risk Report 2017 also highlights danger of inequality as rising populism. 
• Similarly, Thomas Picketty's work "Capital in the 21st century" highlights steep inequality in India.

Causes of such rising inequality : 

• Globalization - has benefited some(those ready to deal global competition) and weakened some(MSME etc)
• Changing supply & demand for skills
• More unequal access to skills
• Gender pay gap : A/t ILO's Global Wage Report India has huge gender pay gap - exceeding 30% for same job.
• Increasing dependency on regressive indirect tax which hurts poor more. (~50%)
• Poor reach and overall efficiency of anti-poverty schemes.
• Rate of wealth creation(r) >>> rate of growth(g). Resulting in 
• wealth inequality >>> income inequality

Consequences of such unchecked inequality : 

• social - rising protest across the globe - Occupy wall street, Arab spring
• political - rise of authoritarian leaders with divisive agenda fueled by sectarianism, xenophobia
• threatens stability of democracies
• economic - not suitable for free-market economy because it depends on purchasing power of masses
• Naxalite issues has roots in economic deprivation & inequalities in access to resources.

Steps required : 

• Financial transparency in government resource distribution
• Global coordination on wealth taxation
• Progressive wealth tax rates
• Increase direct tax collection capabilities
• Provide life long re-skilling opportunity
• "Technology is greatest leveler"(Sam Pitroda). e-Kranti, BharatNet etc should be fast implemented.  
• Women empowerment - Rashtriya Mahila Kosh , Maternity Benefit Act etc. 
• Rethink trickle down model of growth 
• equity in development
• investment in human capital and public goods
• A conceptual framework has been given by A.Sen - human capability approach
• Other (undesired) ways to redistribute wealth :
• inflation - shifts money value from creditors to debtors
• war
• expropriation

Time has come to move development discourse beyond current discourse of outcomes and opportunity.