It was always measly

It should also not be forgotten that the whole argument in favour of private participation in physical infrastructure (such as power and telecom) was built around the claim that it would free scarce resources for social infrastructure -- such as health and education. Instead, we see a rolling back of the state in these sectors. Any mechanism of cross subsidy requires an arbiter who consciously works in favour of the poor. To believe that the present Indian state is going to play this role is like living in a veritable fool's paradise.
Concessions galore The cuts in public health expenditure have gone hand in hand with increasing concessions to the private sector. It is estimated that the private health care industry -- including drugs, diagnostics, private consultations, and hospitalisation -- has a turnover of approximately Rs100,000 crores. This makes it, by far, the largest unregulated sector of the economy!

The private sector thrives on a host of direct and indirect subsidies from the government. Thus, after providing medical education at a very nominal cost, the government provides concessions and subsidies to private medical professionals and hospitals to set up private practice and hospitals. The government also provides incentives, tax holidays and subsidies to the private pharmaceutical and medical equipment industry. There are also generous exemptions in taxes and duties for importing medical equipment and drugs. Also, the highly profitable private hospital sector is allowed to function as trusts, which are exempt from taxes. Moreover, medical and pharmaceutical research and development is largely carried out in public-funded institutions but the major beneficiary is the private sector.

The nineties have seen another transition in the private health sector. Earlier, the private sector consisted of individual practitioners and private hospitals and nursing homes run by medical professionals. Today the organised corporate sector has entered the area. As the practice of medicine becomes more technology intensive, the role of the medical professional is becoming much narrower. Control of technology has thus become the key factor in determining who or which entity controls private medical care. Corporate entities, given their ability to invest in "state of the art" medical technologies, are fast wresting control of the medical care "industry." Henceforth, the return on investment made by such corporations will determine the kind of care provided. As corporates try to maximise profits, they will attempt to further push up medical costs by introducing high cost technologies and expensive diagnostic aids and medicines. This is not merely an imaginary futuristic scenario. In the us, this approach to medical care has lead to health care costs being the highest in the world.

Besides, there is the government's newfound fascination with health insurance. Wary that a total collapse of the public health infrastructure would also affect the more vocal sections of the people -- the elite and the middle class -- health insurance is viewed as a useful ploy to placate such people. And when the government today talks of health insurance, it means private health insurance. All countries with a developed health care infrastructure provide health insurance, but in most the major share is that of the government. For example, in Japan, France, Canada, England and the Netherlands the whole or majority of the population is covered by government-funded health insurance. The only large country where private health insurance is dominant is the us -- a country with the most inefficient and expensive health care system in the developed world.

It is foolhardy to argue that health services would improve in India if the government sector were replaced by the private sector. Global experience shows that private health care serves to drive up costs, is inefficient, and is prey to corrupt practices.

Amit Sengupta is the co-convenor of the New Delhi-based organisation, Jana Swasthya Abhiyan