Opportunities for Public Private Partnership in healthcare in India

Author Info: 

-->

Mohammed Arif Raza

Manager - Hospital Quality Assurance

Shree Krishna Hospital, Karamsad, Gujarat, India

Email: arifraza@rediffmail.com

-->

INDIAN HEALTHCARE SECTOR

In rapidly growing Indian economy the healthcare sector is facing a great challenge of providing health for all. There is vast unmet and increasing demand for healthcare at all levels. Even after an enormous growth in healthcare over the past few years a wide gap remains between demand and supply. The vast area and a huge population of our country needs equitable amount of resources to provide healthcare.

Our current health infrastructure is grossly inadequate to meet the demand. There is an acute shortage of hospital beds with bed ratio of 0.7 per 1000 population as against average of 1 bed per 1000 amongst low income countries (as defined by WHO). Number of doctors per 1000 population is 1.2 as against average of 2.3 for developing nation. We similarly lack other resources such as nurses, technicians, technology etc. Even with this low ratio, distribution of these resources are highly unequal, with high concentration seen in urban areas. Besides lack of resources , cost is another factor that hinders with provision of healthcare to a majority of population. Cost of healthcare in India, although considerably low as compared to other countries is still not affordable to many. In India, 80% of the expenditure of healthcare comes from out of pocket. In most cases healthcare expenses comes unplanned and leaves high stress on the families financial health. A high percentage of people have to sell their assets to meet healthcare expenses and a lot of them goes below poverty line every year due to unexpected expenditure of healthcare. Poor road connectivity and lack of public transport facilities specially in rural and far off areas adds to the overall cost of taking treatment at a healthcare facility.

CHALLENGES TO GOVERNMENT

It is difficult for Government alone to provide solution to all these issues. India's total expenditure on healthcare is 5% of the GDP which is one of the lowest in the world. Even with this low overall expenditure Government's share is just 30%, which is lower than the average of low income countries. Building healthcare infrastructure is highly capital intensive where building a secondary care and tertiary care hospital could be as high as 25 lacs and 40 lacs respectively. Human resource required in healthcare like doctors and nurses need to be well trained highly skilled, which again require huge capital investment. Given the limited financial resources available in healthcare government is not in a position to invest sufficiently in infrastructure development.

Besides infrastructure there are other issues with government's healthcare provision. There is no managerial expertise available in public run hospital. Lack of proper management results in poor utilization of facilities, low cost and time efficiency and low patient satisfaction. Even the quality of care and safety of patient and staff are questionable. Due to these, overcrowding, low cleanliness, frequent equipment breakdown, absenteeism and similar other managerial issues are commonly observed at any typical public run hospital.

PUBLIC PRIVATE PARTNERSHIP (PPP) - A SOLUTION

In-order to overcome these limitation and to be able to provide quality healthcare to all, Government need to take a different approach to achieve its purpose. Public private partnership can be seen as one way through which most of these problems can be addressed. A public private partnership is a legally-binding contract between government and private party for the provision of assets and the delivery of services that allocates responsibilities and business risks among the various partners. It take a variety of forms, with varying degrees of public and private sector involvement – and varying levels of public and private sector risk

PRIVATE SECTORS IN HEALTHCARE

Private sectors in healthcare have seen tremendous growth in last few years and have demonstrated potential to take healthcare to a higher level. In India, while health is the state's responsibility, healthcare is highly privatized As per World Bank data for 2010, public expenditure of healthcare in India is just 29.2% of the total healthcare spending, as against global average of 62.8% and average for low income countries at 38.8%. At present Health care industry in India is worth $17 billion and is anticipated to grow by 13% every year.

If tapped appropriately, private sector is in position to provide solution to most of of government's problems and weaknesses. Government and private parties can collaborate to overcome each others weaknesses and build upon each others strength in such a manner that the objective of providing quality healthcare to population can be achieved realistically.

Government's weaknesses of limited finances and low managerial capabilities can be overcome by private parties bringing in their capital and operational expertise. In return private parties can gain by collaborating with government such as, opportunity for low risk investment, almost assured business, support in clearing legal formalities, contingent liability for raising funds, etc.

EXAMPLES OF PPP IN HEALTHCARE

There are various models already in use in PPP which has proven to be successful. Healthcare in different countries has been using different PPP models since long and has reaped benefits out of it. In India, PPP has been utilized beneficially in infrastructure development, but healthcare sector is still to utilize its benefits. Most of the PPP in healthcare is in the form of simple and basic form of contracting in and contracting out. However few motivating examples of PPP in healthcare are there and some of them are mentioned below.

Emergency medical response initiative which is a scheme to provide immediate emergency care to the person in need. Its a partnership between state government and private party GVK EMRI, where government provides financial assistance for infrastructure requirement such as ambulances and call centres, while private party manages entire operations of emergency and ambulance services. People can avail emergency ambulance services 24 x 7 through a common toll free number 108. Besides medical, this arrangement also provides for emergency response in case of police and fire emergency While the private party gets paid from government for each trip at some predetermined rate and condition, government has been able to provide efficient and high quality emergency care to its citizens. At present this PPP is functional in 12 states and 2 union territories of India.

Rashtriya Swasthya Bima Yojana an initiative by ministry of labour and employment is a PPP between central and state government, insurance companies and private hospitals. It provides protection to BPL households from financial liabilities arising out of health shocks that involve hospitalization. Beneficiaries under RSBY are entitled to hospitalization coverage up to Rs. 30,000/- for most of the diseases that require hospitalization. Beneficiaries need to pay only Rs. 30/- as registration fee while Central and State Government pays the premium to the insurer selected by the State Government on the basis of a competitive bidding. Under this model all partners has their share of benefits. For insurance companies paid premium for each household enrolled for RSBY. Therefore, the insurer has the motivation to enroll as many households as possible from the BPL list. This will result in better coverage of targeted beneficiaries. A hospital has the incentive to provide treatment to large number of beneficiaries as it is paid per beneficiary treated. For government, by paying only a maximum sum up to Rs. 750/- per family per year, the Government is able to provide access to quality health care to the below poverty line population.

Emergency Ambulance Services scheme in Tamil Nadu: This scheme is initiated by the Government of Tamil Nadu in order to reduce the maternal mortality rate in its rural area. The major cause for the high MMR was identified as the lack of adequate transport facilities to carry pregnant women to health institutions for childbirth, especially in the tribal areas. Seva Nilayam is working as the non governmental partner in the scheme. This scheme is self-supporting through the collection of user charges. The Government supports the scheme only by supplying the vehicles. Seva Nilayam recruits the drivers, train the staff, maintain the vehicles, operate the program and report to the government. It bears the entire operating cost of the project including communications, equipment and medicine, and

publicizing the service in the villages, particularly the telephone number of the ambulance service.

Yashasvini health scheme in Karnataka: This is one of the largest Self Funded Healthcare Scheme in the country, initiated by Narayana Hrudalaya It is operated by a trust formed jointly by government and hospitals. Partnership is between third party administrators, the trust and private network hospitals. The Government provides a quarter (Rs. 2.50) of the monthly premium paid by the members of the Cooperative Societies, which is Rs.10 per month. The incentive of getting treatment in a private hospital with the Government paying half of the premium attracts more members to the scheme. The cardholders could access free treatment in 160 hospitals located in all districts of the state for any
medical procedure costing up-to Rs. 2 lakhs.

Tele-medicine initiative: This scheme is also initiated by Narayana Hrudalaya in Karnataka. The Government of Karnataka, the Narayana Hrudalaya hospital in Bangalore and the Indian Space Research Organization initiated an experimental tele-medicine project called ‘Karnataka Integrated Tele-medicine and Tele-health Project’ (KITTH), which is an on-line health-care initiatives in Karnataka. With connections by satellite, this project functions in the Coronary Care Units of selected district hospitals that are linked with Narayana Hrudalaya hospital. Tele-medicine provides access to areas that are under-served or un-served. It improves access to specialty care and reduces both time and cost for rural and semi-urban patients. Tele- medicine improves the quality of health care through timely diagnosis and treatment of patients .

The Uttaranchal Mobile Hospital and Research Center (UMHRC): It is three-way partnership among the Technology Information, Forecasting and Assessment Council (TIFAC), the Government of Uttaranchal and the Birla Institute of Scientific Research (BISR). UMHRC has been designed to augment the diagnostic medical services of needy people located in far-flung inaccessible terrain of Uttarakhand. Primary objective of the scheme is to Help the health care system to reach the remote areas serving primarily the underprivileged

and economically backward communities, through mobile health clinics.

The PPP initiatives mentioned are few examples that have reaped benefits for both government and for private parties. However, there are tremendous opportunities for many more similar PPP in different states and newer forms of PPP in healthcare.

REFERENCES

1. The Emerging Role of PPP in Indian Healthcare Sector , prepared by CII in collaboration with KPMG
2. Examples of Public Private Partnership in India by KPMG
3. Public Partnership Guide, V 1.0, PPIF, World Bank Institute
4. An Introduction to public private partnership, Updated June 2003, by British Columbia
5. Web reference, http://www.emri.in/, accessed on 29 November, 2012
6. Web reference, http://www.economywatch.com/world-industries/health-care/india.html, accessed on 2 December, 2012
7. Web reference, http://www.rsby.gov.in/ accessed on 4 December, 2012
8. Web reference, http://www.birlainstitute.co.in/pdf/mobile.pdf accessed on 4 December, 2012
9. Web reference, http://www.yeshasvini.kar.nic.in/about.htm accessed on 12 December, 2012