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Budget 2013-14: provisioning for universal healthcare or moving away from agenda?

Author(s): Sona Mitra
Date:Feb 20, 2013

The world trend is to move towards public health systems, but developments in India seem to be in the opposite direction

The government of India is yet to recognise and institutionalise the right to health as a universal right of every citizen. India’s public spending on health, at about one per cent of the country’s GDP, has been among the lowest in the world. On the other hand, with a high burden of out-of-pocket spending on health, millions of people are reportedly being pushed below the poverty line every year. As a result, provisioning for healthcare has emerged as the most critical public policy challenge confronting India at the present juncture.  In this context, the present article focuses on the 12th Five Year Plan’s proposals for the health sector for the next five years, which are expected to influence the allocations for health in the forthcoming Union Budget 2013-14.

The 12th Five Year Plan document promises a lot of deliverables in the health sector over the next five years. It envisages a National Health Mission, moving the National Rural Health Mission (NRHM) into the urban sphere, and launching of an all-inclusive health mission that would work towards achieving universal healthcare in the country. In a welcome initiative, the plan document proposes to increase India’s overall public spending on health (combined spending on health by the Centre and all states) to 2.5 per cent of GDP (including budgetary allocations made towards Water and Sanitation, Integrated Child Development Services and Mid-Day Meal scheme) by the end of the 12th Plan period. The 12th Plan proposes an allocation of Rs 2,68,551 crore for the next five years, which is a significant increase from the total Plan expenditure on health over the 11th Plan period. It rightly recognises the need to reduce out-of-pocket expenditure of households on health and step up the share of public spending on health to almost 70 per cent of total health spending (government spending and out-of-pocket spending) from a current share of roughly 30 per cent.

The Plan document also highlights the importance of enhancing availability of drugs within the public healthcare sector, for which the Plan proposes to set up 3,000 more Jan Aushadhi Stores  in rural areas across the country, during the five-year period, where medicines would be provided free of cost. With regard to this specific proposal, there exists a growing expectation from the Union Budget 2013-14 that it would make a separate allocation of up to Rs 30,000 crore for financing the provisioning of 348 major generic drugs free of cost within the country as a step towards universalising access to medicines in rural areas.

Enter PPP

However, the roadmap for financing of the proposed allocations for health over the next five years is where the dichotomy of the Plan surfaces. While suggesting certain initiatives like introducing “sin tax” on harmful items like alcohol and tobacco for financing the health sector, the Plan proposes general tax revenues as the principal source of finance for public health, to be supplemented by partnerships with the private sector and contribution of corporate sector as part of corporate social responsibility. The Plan proposes to increase public expenditure on health by 34 per cent annually for the next five years and also proposes to keep the share of Centre-state expenditure at the existing 30:70 ratio.

We may note here that in 2004-05, the United Progressive Alliance government at the Centre had acknowledged in its charter of governance, the National Common Minimum Programme (NCMP), that it needed to increase the country’s total public spending on health to the level of 2-3 per cent of GDP by the end of its tenure—financial  year 2008-09. Now, a similar target (or rather, a more diluted version) has been set for stepping up the country’s public spending on health for financial year 2016-17. This only implies that the government is not very keen to acknowledge the implications of the acute shortage of financial resources for health sector, which have persisted over the last decade.

As regards the proposed division of financing responsibility between the Centre and the states, given the growing dominance of the Centre in the domain of public resource mobilisation in the country (in collection of tax revenue), the inability of several backward states to step up their own mobilisation of revenue, and the shrinking share of untied transfers to states within the total transfers from the Centre, it was necessary for the Planning Commission to ask the Centre to shoulder a bigger share of the financing responsibility in the next Plan period instead of continuing with the same 30  per cent share in overall public spending on health. In fact, unless the 14th Finance Commission suggests some radical changes in the domain of Centre-state sharing of resources (which seem unlikely from the terms of reference given to this Finance Commission), the 12th Plan period might not witness significant increase in states’ spending on health, which in turn would imply that the country’s overall public spending on health would continue to be much lower than the required levels.

Instead of ensuring adequacy of financial resources for provisioning essential health care to all, there seems to be a wishful thinking on part of the Planning Commission to expect large contribution from the private sector for creating universal access to health care. This, in fact, comes across as the growing unwillingness of the government to provide for a healthy existence for the poor and vulnerable sections of the population. It also reflects the willingness of the Planning Commission to usher in private operators as partners within the public sector health care system.

No roadmap for achieving development goals 

This is where the dichotomy of the Plan document gets reflected. While the Planning Commission on the one hand recognises the increased burden on the households due to an increase in the share of private service providers within the health sector and highlights the demerits of such services, it moves ahead with a roadmap of providing the private operators with a public infrastructure without any robust system of regulations and monitoring mechanisms. Experts have correctly pointed out that with such an approach the government ends up subsidising the private sector instead of the people.

Taking into account the international experience, in countries with universal access to health care like those in Europe or Latin America, the systems have been achieved through government. In Asia, universal healthcare in Sri Lanka and Thailand has also been achieved by active participation of the government.  While the world trend is to move towards public health systems, the developments in India seem to be in the opposite direction.

Despite accepting or acknowledging that the country faces an acute shortage of skilled human resources (to the extent of at least 6.4 million skilled people), the country is still far from fulfilling the Millennium Development Goals (MDGs) in health (in terms of reducing infant and maternal mortality rates and improving child sex ratio, TFR and malnutrition among children). Studies have shown increased poverty levels among rural population due to high expenditure on health, and an acute need to increase per capita public spending on health. But the Plan document fails to provide a solid roadmap for generating adequate financial resources and depends on the private sector for additional resources. The approach of the plan document, if analysed closely, therefore, raises doubts on whether we are moving towards universalisation of healthcare or moving away from it.

The author works with Centre for Budget and Governance Accountability (CBGA) and can be reached at sona@cbgaindia.org



Health sector reforms which India needs
- hopes of a Public health professional from
As now are the budgetary days in India, lots
of talks are there on the issues of
strengthening public health and education
system. Some media reports are there about
the possible Health System Reforms and
Universal heath cover in India but we will
only know how our worthy planners and
ministers have planned to take care of our
health in the next year on the Budget day, I
am writing with a perspective to review the
direction of government in health sector in
recent past, to bring in notice some recent
developments in the world in terms of
economical public health delivery system,
recent trends in development of policies in
health sector, priority problems and some
possible suggestions for practical
implementation of those up to grass root
level of healthcare provision in India.
Multiple issues and aspects have been
touched in the article fulfilling the need of
the subject, however, each aspect requires
further detailed elaboration.
There is urgent need to address following
lacking areas in health care provision and
improvement in general health of Indians -
1) Because of global economic slowdown it
will be difficult for India to continuously
raise the health budget to meet the growing
demands of Health care provision for
chronic illnesses. Even country like U.S. is
thinking of strategies and methods to
provide best possible Health services at
minimum possible resources. On 28th June
2012, the U.S. Supreme Court uphold the
Affordable Care Act, which is the most
important legislation since the Civil Rights
Act. Under this health care law, many
insurers are required to cover certain
preventive services at no cost to public1.
Today, human suffering and the cost to U.S.
society is measured by national trends in
population health. The U.S. expends over
17% of the gross domestic product on health
services; yet, ranks approximately 30th in
health outcomes compared to other
countries. This 17 % of U.S. GDP will amount
to 30 times the India’s Health budget. But
still they are looking for innovations to
improve health and health care at reduced
cost. They are studying what is driving the
rise in costs, what is waste, and how billions
of dollars can be saved. The most exciting
opportunity provided is for every public
health professional to participate in positive
change. India however, still struggling to
provide universal basic healthcare has its
own problems of wasteful expenditure e.g.
wilful postings of doctors at lucrative sites
on long deputations, non availability of
simple and easily available instruments
halting work all due to lack of accountability,
mismatched staff there are cases where
surgeons are working as program officers at
District level while hospitals lack surgeons. Is
it not more important to curb wasteful
expenditure for us when we are not able to
provide basic health care? Possible solution
will be target based focused attention on
different levels of health care provision in
every state in collaboration with a central
advisory committee using NRHM funds.
Better will be going higher to lower levels,
first strengthening of tertiary level hospitals
for country like India.
2) The second major problem in health care
provision as per Govt. is lack of health care
providers, out of which serious concern is
shortage of doctors in public health system
in rural areas and has been a major concern
for the last two Union Health ministers
which has led them to create a brand new
medical study course for rural medical
science B.Sc.(community health), the final
shape of which we are unaware of till now.
But here rises a big question, that do we
really so badly require thousands of new
health care providers when we are not using
the existing manpower to its full potential?
This should be our first priority. As a part of
the health care delivery system we have
observed that although we talk about
overburden on Govt. hospitals but it is only
at the level of large tertiary care hospitals
and few District level hospitals while
majority of the block level community health
centres (CHC) and primary health centres
(PHC) where doctors are available remain
non functional due to lack of interest of
doctor itself, lack of monitoring/ false
reporting and if doctor is willing to do
justice to his work gets limited by lack of
supporting staff, laboratory facilities,
medicines or pathetic atmosphere of
workplace thanks to ego clashes among
doctors. The Patient which can be easily
managed at these centres now move to
higher centre leading on to overburden
there and again limiting the quality of health
care. Is it not more important to first focus
on these issues and making these units
functional up to their maximum potential?
Possible solution which can be applied is to
identify the manpower lying vacant or
underutilised and utilising them in more
productive way. In management terms it is
called Resource levelling, but it requires
management and planning with authorative
powers at district levels and even lower. It is
worth to mention that in India , civil
surgeons/ CMOs who are responsible for
such work are not able to perform as par
with the other district authorities e.g. IAS .
Reasons might be various, but worth
mentioning is that lack of support from
ministers and beurocrats if someone tries to
do so.
Country has infrastructure and capacity in
approximately 335 medical colleges (about
half are government medical colleges and
rest are private), which produce around
40,000 medical graduates annually. After
getting education, very few of them join
health services due to uncertain career
prospects and lack of proper facilities and
emoluments. It is a matter of great concern
that young doctors are reluctant to join
government job and prefer to work in urban
settings that too in private setup. It is
difficult to say whether our teaching
standards are successfully addressing
societal needs and expectations by
preparing students with knowledge and skills
in disease prevention and health
The problem which is more severe is lack of
specialists, but still there are various places
where specialists are serving as District
program officers rather than providing
treatment care of the concerned speciality, is
it not mismanagement of human resource?
3) No system exists for purposeful
community focused public information or
seasonal alerts or advisories or community
health information to be circulated among
doctors in both private practice and in
public sector. PHCs were meant to be local
epidemiological information centers which
could develop simple community. Civil
Surgeons and panels have no active role in
pre planning and preventive advisory until
the epidemic has already occurred. Majority
of Medical Officers can’t even count the
various national health programs running in
their own districts. No estimates are being
provided to them regarding disease burden
in their area of PHC. To tackle this issue the
Indian Public Health Standards(IPHS) report
suggest recruitment of Public Health
Program Manager at every CHC level2 which
has not been implemented. It carries a lot of
advantage of carrying planning activities
from district level to block level.?
How can a newly recruited Medical officer
will perform until he be made aware of local
situations and modalities of work in his
area ? but who will do so is unclear because
District Program officers are given charge of
some specific programs and no one is there
to provide holistic situation. Induction
training at many states is being provided
after 6 months !! The need is to enhance
micro planning, setting responsibilities and
liabilities, proper monitoring , sorting out
local issues, charting realistic targets,
empowering district administrators for
manpower management.
4) The separation of public health, research
and education, and medical health services
when done was basically intended to spur
advancement in health science and practice;
but it has cause stagnation of information
due to lack of inter-linkage between state
health departments and medical colleges.
The challenges we face today in the 21st
century are to strengthen the
interconnection, not the separation, of our
institutions that link evidence with practice,
practice with public health, and the training
of health scientists with health professionals.
It is duty of health scientists and
professionals to bring better health and
better health care to society. But all these
measures need continuous support by policy
makers. There is a need to communicate
more among persons in a health related
leadership role, whether a scientist,
practitioner, legislator, academic, or health
industry businessman. All have a
responsibility to seek accurate information
about why we need health care reforms. If
we are in a health related profession, then
we are responsible for the health of our
children and adults.
There are many fields in medical profession:
as mentioned, researchers, public health
physicians, general physicians, surgeons,
medical practitioners, geneticist, pathologist,
teacher for basic medical sciences. However
who are confronted with patients directly
need to be addressed properly by
formulating laws. Possible solution which
can be suggested for this problem is to
regenerate a link between medical colleges
and research centres and state health
services via Department of community
medicine, it will also solve the problem of
students lacking in hand on experience of
health services jobs. Presently it is limited to
some of the programs which varies state to
6) Defunct Public health care delivery system
- as every body knows the enjoyment of
highest standard of health is a fundamental
right of every human being. The Indian
healthcare industry is witnessing growth at a
rapid pace and it is expected that the sector
will touch US$238.76 billion by 2020 with
annual growth of 14% 4. But this growth
basically represents growth in private
healthcare sector and Pharma industry. All of
80 per cent of healthcare is now privatised
and caters to a minuscule, privileged section.
The metros are better off: they have at least
a few excellent public health facilities,
crowded though they might be. Tier II and
III towns mostly have no public healthcare to
speak of. Millions of Indians living in small
towns go through the same agony--not
knowing where to turn to in the absence of a
good health system. Because of that,
thousands travel to Delhi’s overburdened
AIIMS and Safdarjung Hospital, which are
staffed with excellent doctors. The rest just
pay for a private system designed to extract
the maximum from each patient. “Public
health is a big question in small cities. They
have government hospitals, which are not
well-equipped—in terms of infrastructure or
adequate numbers of doctors and other
staff. Why can’t Public Health care provision
sector can not join and grow along with this
growing sector?
“A healthy nation needs healthy people. We
all agree that our citizens must be literate.
Perhaps it's time to ensure that all of those
literate remain healthy and functional as
well. We can do better.”
The possible reason easy to understand
which is of utmost importance is that it is
not possible to accomplish the motive of
health for all by funding Healthcare as
subsidy. How long the health care delivery
system will run as a subsidy? Indian
economy will not be able to bear expenses
of quality healthcare to all citizens. Should
we not make the larger public sector
hospitals self reliant by allowing their
management to run parallel health facilities
comparable to private sector ones at some
decent charges along with the already
existing hospitals ? When people are able to
pay and have belief in larger institutes like
AIIMS but only go to private sector because
of difficulties due to overload and rush.
Provision of such a system will create a
situation of competition which will check the
highly exaggerated cost in corporate
In the health sector, the buzz these days is
all about Universal Health Care (UHC). While
health activists see in it potential to ensure
access to quality health care for common
citizens, commercial bodies seem to be
eyeing the huge scope for profit from
sickness, in a field already characterised by
large scale commercialisation and imbalance
of information between providers and
users.5 Indian Govt. is planning for the
Universal Health Coverage with a central and
state expenditure of 85:15 respectively, but
it will be hurried step to jump into this
before judging the benefits of similar
schemes like RSBY(Rashtriya Suraksha Bima
Yojna). There will be much bigger problem
of money leak and corruption without hawk
eye supervision mechanism for public
private partnership. We should learn from
countries like USA where this system is well
developed, but they still believe that it
cannot be made possible until you have a
well developed mechanism of preventive
health care services, disease surveillance
system and health promotive programs.
Otherwise it might be a disaster for a
nations economy.
Let’s think carefully about what we actually
do as physicians, and as we do this consider
the words we are using. Most “health care”
providers are not dealing in “health”– they
are in the business of “rescue and
repair”medicine. On the whole, results are
good (sometimes spectacular) – but the
benefits are not available fairly across
society. We should take first step in the
process of organizing a true system with
equitable access to quality, affordable
“rescue and repair” services( insurance
cover).“The end of the beginning, not (even)
the beginning of the end …”
But even then the deeper problems will
remain. The development of new and better
treatments and medical technologies is
never-ending – and of course this should be
encouraged and welcomed – but “rescue
and repair” services will always struggle to
keep up and costs will continue to climb. We
will never get ahead of this curve unless we
start to reduce the incidence of the major
chronic diseases and conditions, by
embracing health promotion and disease
prevention. We haven’t even scratched the
surface yet – but if we don’t start doing so
soon, the country is going to be bankrupted
by “health care” costs. The cost of prevention
per person is far less than the cost of the
variety of cures, from surgical to
pharmacological. The health of the
population has gone beyond the health
sector and involves the development sector
in the recent past, reiterating the principle of
multisectoral approach in PHC. The
physiological risk factors can be delayed if
the behavioural risk factors are given due
emphasis at an early stage.6
Should we not encourage involvement of
Health professionals and management
people in policy making rather only
depending upon Administrative people
learning from our failures in various
Although these issues require more debate
and separate discussion.
Some of the solutions emerging are as
1. The States must appoint Public Health
Manager at CHC level as per IPHS 2007
preferably MD community medicine/ Social
and Preventive Medicine decreasing the
workload on the part of civil surgeons/CMOs.
2. State Health Departments should
collaborate and involve Medical colleges in
development of local strategies and
concerned speciality of medical college
should be associated in local action plan of
any national program, rather than both
planning separately. This plan should be
then further be micro-planned by Public
health managers at block level along with
District Program Officers. Should be
monitored with appropriate tools like
realistic target achievements, setting up
3. These Public Health Program Managers
should provide purposeful community
focused public information / seasonal alerts/
advisories/ community health information
which should be circulated among doctors
in both private practice and in public sector.
Importance should be understood as now
we are facing Swine flu.
4. Necessary focus on adding practical
education to medical students on prevention
of non communicable diseases. Initiation of
Preventive Medicine clinics at medical
colleges by Dept. of Social and Preventive
Medicine to identify and timely manage
chronic diseases in families of diagnosed
patients, providing Primary, secondary and
tertiary level of Preventive care and various
other roles without much new investment.
5. There is a need for flexibility in fixing
compensation for health personnel in order
to make the government services more
attractive. Further promotions should be
linked to training and attainment of higher
knowledge and skills relevant to service
delivery. Why only a single rank of MO for
around 16-20 years before promotion to
6. The state health directorate should have a
full fledged HR department with specialized
staff and dedicated budget. The states
should develop short and long term human
resource strategies and plan by adopting the
standard process of manpower planning.
7. The existing recruitment rules should be
reviewed and modified in the light of
changing job requirements and improvement
in overall education level. Recruitment of
programme staff should be undertaken with
a view at long term utilization. District level
recruitment in NRHM is presently having a
lacuna to retain trained staff.
8. The state governments should devise
policy for providing better housing and
education facility for children of Doctors to
make rural posting more attractive. Financial
incentives only will not work. Why not their
children can be provided education in Army
schools? Terms and Conditions like non–
allotment of home district should be waved
9. The state government should consider
time bound promotion and transfer and
deputation policy for all categories of staff.
Why not make it more transparent by setting
detailed guidelines rather than lending
decisions in hands of few officials? Better
working environment will attract honest and
hard working doctors.
10. The state should undertake proper
training of supervisory staff and effective
monitoring of supervisory activities in order
to strengthen supervision.
11. The states need to adopt a
comprehensive training policy based on the
actual needs as per the job requirement.
12. Make the larger public sector hospitals
self reliant by allowing their management to
run parallel health facilities comparable to
private sector ones at some decent charges
along with the already existing hospitals.
Large Public sector hospitals should be
allowed to initiate separate hospitals for
Health tourism, NRIs and Upper middle class
nationals , funds generated from these will
help research activities at those centres and
can also make some hospitals self reliant.
13. These hospitals will be a tough
competitor for corporate hospitals and will
bring down the highly exaggerated cost.
14. District Hospitals and tertiary hospitals
need more of the managerial posts , having
fresh minds and newer ideas under the
supervision of Senior doctors/ SMO.
If we truly wish to avoid bankrupting the
country with healthcare costs we must
emphasize prevention, specifically teaching
It requires a major shift in the way
healthcare practitioners and other providers
approach the need to better educate our
population about maintaining individual
health. Over the past century the disease
model has become predominant and the
wellness model has come to be perceived as
a fringe approach, poorly understood and
There are many reasons why the current
model emerged and holds such a strong
position. It has been easy to comment on
the difficulties in educating the population
but we have the methodology, educational
and psychological research, teaching
resources, and technology needed to do the
job if we would "wake up and smell the
coffee". It will require healthcare providers
to assess the knowledge and comprehension
of each client. The topic areas will need to
be prioritized to ensure that the greatest
threats to each individual's ability to remain
well are addressed. Initially it may seem as if
the cost of an office visit would increase. The
long term result would be savings for the
individual who would spend less as chronic
illnesses were avoided or significantly
reduced in severity. A gradual but significant
improvement in the quality of life is the
expected as an outcome if chronic illnesses
can be reduced and limited in severity.

22 February 2013
Posted by
Dr. Sumeet Singh , MD, MBBS

Dr Singh's comment is extremely important , enlightened and deserves consideration.

4 November 2014
Posted by
Dr K N Jehangir

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