role of private sector in health
TRANSCRIPT
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ROLE OF PRIVATE SECTORIN
HEALTH CARE
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Healthcare SystemThe term healthcare system refers to a
country’s system of delivering services for the prevention and treatment of diseases and for the promotion of physical and mental well being
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The Indian healthcare sector can be viewed as a glass half empty or a glass half full.
The challenges the sector faces are substantial, from the need to improve physical infrastructure to the necessity of providing health insurance and ensuring the availability of trained medical personnel with the opportunities available equally.
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The healthcare sector comprises:
Hospitals
Diagnostics
Equipment and supplies
Medical tourism
Pharmaceutical
Medical Insurance
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Private sector in healthcareIt is conventional to define “private sector” as
that which falls outside the direct control of government.
Informal Private Sector – 45% (usually small-scale providers including drug shops)
* Unlicensed and unregulated
Formal Private Sector – 35% (multinational, national enterprises, private qualified individuals)
* Legally registered and recognized by the government
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Why the Private Sector Matters?
Scaling up the delivery of essential interventions to achieve international health targets is dependent on working with it.
The “private health sector” includes an enormous diversity
of actors, including providers, funders, and suppliers of physical and knowledge inputs for the health sector.
The effectiveness of health care delivery can be enhanced with use of innovative and flexible models and performance-based provider remuneration.
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EVOLUTION
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Merchants Company started hiring doctors
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As early as 1880's these private students were competing with European doctors
for private market
British spread the Medical services
all over India
But many colleges also admitted
private students
Which required trained health care personal
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Before the independence of India, the spread of infectious
diseases was very high
Independence 1947
Concentrating more on
preventive pgms1970's
.
Many committees were formed by the govt. to review the health care
sector
In mid 1970’s no. Ofprivate institutions
become more
Our pillars to the Construction of health
care sector is Bhore and Sokhey committee
In the mean Time govt.
We have less info.Regarding this
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1940's BHORE COMMITEE
1961'sMUDALIARCOMMITEE
1967'sJUNGALWALLA
COMMITEE
Private practice doctors were more compared to theGovt. practice doctors
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The primary responsibilityfor health care in the Indian constitution
rests with state
1974 to 1982 grants from central to the state govt. comprised of 20%
Following liberalization (1982-89) fell to 6%
In (1992-93) further fell to 3.3%
Finally it became just like the story of Arab
and camel( camel which pushed the Arab
out of tent)
Policies Liberalization in 1990’s
&national health policy
2002
Resulting in increasing theno. of private institutions( private sector growth
with the supporting handof the govt.)
BOOST to the private sector
NRI INVESTMENT
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PRIVATE SECTORGROWTH
IN HEALTH CARE
PRIVATE PRACTICEBY
GOVT. DOCTORS
UNAFFORDABILITY OF
GOVT.
STEROTYPESFINANCIAL CONCESSIONS
GIVEN BY GOVT.
NEGLIGENCE AND
POOR QUALITY IN GOVT. HEALTH CARE
SECTOR
REDUCTION IN
FUNDINGS BY
CENTRAL &STATEGOVT.
Lack of proper monitoring sytem
Potential market
User fees
STEROTYPES
Disguise hand of private sector
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SECTORS IN HEALTH
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PRIVATE hospitals in different cities of India
Source: Business Monitor Report,WHO World Health Statistics 2011,Aranca Research
Hospitals
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Long waiting time
Distance factor
Inadequate facilities
Unclean premises(hygiene)
Harsh behavior of staff
Suspected quality of drugs
Lack of privacyWhy private
hospitals not
the govt.
ones???
Ref: IJTBM : 2013 VOL no 2, issue no 3: ISSN: 2231-6868
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AGAINST
FAVOUR
Dismal government performance in providing healthcare infrastructure
Growing demand for quality care and increasing ability to pay
Mounting instances of lifestyle diseases requiring hospitalization
Rapid growth of India as a destination
High start-up cost and capital expenditure
Shortage of medical professionals
FACTORS INFLUENCING PRIVATISATION
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Medical tourism- medical travel valueMedical tourism market is expected to expand at a CAGR of 27 per cent to reach USD3.9 billion in 2014 from USD1.9 billion in 2011
• Cost of surgery in India is nearly 1/10 th of the cost in developed countries
• Presence of world-class hospitals and skilled medical professionals
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Factors leading to an increase in the popularity of medical travel include:
High Cost
Long Wait Time
EASE AND AFFORDABILITY
IMPROVED TECHNOLOGY AND
STANDARDS OF CARE
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Diagnostic and PathologyMarket size : USD 600 million, 20 % annual growth
Growth Drivers
Steady rise in healthcare spendingIncreased consumerismDynamic healthcare scenario in the country
-Increasing incidence of lifestyle diseases
-Greater health related concerns
-Growth of Medical Tourism
-Increasing penetration of Health Insurance
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ISSUES
LACK OF REGULATION
HIGHLY FRAGMENTED DIAGNOSTICS SECTOR
HUGE DISPARITY IN QUALITY OF CARE
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POSSIBLE SOLUTIONS Expansion through hub and spoke model.
Alternatives- modifications of Hub and Spoke model.
Acquisitions of small labs by large players. Telemedicine
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Private health insurance
• An alternative mechanism for financing health care.
• Liberalization since 1991 paved the way for privatization of insurance sector.
• Private and foreign entrepreneurs were allowed to enter the market with the enactment of IRDA in 1999.
• Penetration - 3% to 5% of population.• Market share - 1% of the total health
spending in the country.
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Opportunities in IndiaTotal health expenditure in India, Rs 3
00000 crore, the spending on hospitalization accounts for Rs 100000 crore.
The existing level of health insurance premium was worth only Rs 10,000 crore, which means that a majority section of the Indian populace does not have an insurance cover.
According to World Bank Report, 99% of Indians will face financial crunch in case of any critical illness. Hence is the need for Health Insurance.
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TURN OVER
GLOBALLY
USD$ 273.3 billion (2011)
Indian Market
USD 4.8 billion (2011)
Regulation body and policy: No specific body or policy( right now it's coveringunder CDSCO, central drug standard control organization.)
Most of the market in India of medical technology covers by the MNC's companies the role of govt. And domestic private sector is minuscule.
Medical Technology
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Competition from MNC's
Lack of financialincentives
High capital investment
Customer relationshipmanagement
Trainedman powershortage
Adverse regulatorypolicies
challenges
Why govt. Or domestic private sector failed to grasp the market of medical technology?
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Keep watching……….
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Foreign Direct Investment
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iNDIA & HEALTH SECTOR
• India – 2nd most important FDI destination (after China))
• Eight fold increase in its FDI
(< $1 B in 1990- to March 2012).
• fast-growing service sectors in India ( 12% per annum ) - contributing 6% of GDP - 0.78% of the total FDI
Mauritius
Singapore
Japan & U.K
Germany
Netherlands, Cyprus & USA
France
UAE
0 10 20 30 4034
17
11
06
04
02
01
SOURCES
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service sect. (financial & non financial)
Telecommunications
Metallurgical
Misc. mech.
hotel &tourism
other sectors
0% 10% 20% 30% 40%19%
13%8%
7%6%6%
5%5%
3%3%
30%
DISTRIBUTION
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•Before 2000-through FIPB•2000 onwards ,FDI –- through automatic route•Now also through ADRs and GDRs
aviation; 49%
Broadcast sector; 74%
multi-brand retail ; 51%
single-brand ; 100%
2012-GOI
REGULATIONS
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PREFERENCES
urban area ;
75
Semi-urban area ;
20
Rural, 5
0
20
40
60Series 1
Series 1
The huge benefits and concessions granted by the government is the major factor for the flow of FDI in healthcare than Steady economic growth of Indian economy and availability of raw materials, like in other sectors.
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• Hospital- improved Infrastructure, quality of cares (more specialized care), advanced diagnostic & treatment equipments, No.of private players
• Medical tourism- has grown from $350Million in 2006 to $3 Billion-2012
• Govt. Started encouraging this by incentives like lower import duties, higher depreciation on medical equipments and expedited visa for patients
IMPACT
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• IT sector -more growth in health & hospital sectors• Tele -medicine has improved & became as a solution
for the difficulties in hospital acceptance (time, place &money ).
• Tele -radiology has emerged and many foreign hospitals are active in it .
• Bio-medical equipment manufacturing sector-has also improved.
IMPACT
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CHALLENGES
EXTERNAL DOMESTICThe number of potential
overseas institutions are low.Entry as an independent
overseas institution is very difficult
Problems in partnerships, financial control , expectations , management styles etc.
Political and foreign exchange risks
Lack of proper infrastructure and set-ups
Corruption, red tape, social and political issues
Govt. - non transparency and uncertainty in policies, lacking clear vision,
lacking investment& business friendly environments
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P.P.P
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PRIVATE-PUBLIC PARTNERSHIPfundamental themes
1. Relative sense of equality between the partners;
2. there is mutual commitment to agreed objectives;
3. there is mutual benefit for the stakeholders involved in the partnership
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PROS CONS
INFORMAL AccessibleClient-orientedLow cost
Poor quality careDifficult to mainstreamPoorly educated
NOT FOR PROFIT High qualityTargeted to the poorLow costInvolves the community
Small coverageLack of resourcesCannot be scaled-upAd hoc interventions
FOR PROFIT High quality (in selectdisciplines)Huge outreach / coverageInnovativeEfficientHigh Management Standards
Ad hoc interventionsHigh CostVariable qualityClustered in citiesLess concern towards public goal.
COLLABORATING WITH THE PRIVATE SECTOR IN HEALTH
(Source: Adopted from World Bank 2004)
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PPP…Contracting out and Contracting in, is the
predominant model of private partnership.In almost all partnerships, the principal
public partner is the department of health and family welfare, either directly or through health facility level committees.
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In terms of monetary value, the least valued contract provided dietary services at a rate of Rs 27 per meal for about 30 meals in a day(Bhagajatin Hospital, Kolkata);
The most expensive engaged a corporate hospital to run a government-built super-speciality hospital in Raichur, Karnataka (over Rs 600 million).
The oldest partnership (since 1996) is the Karuna Trust that adopted and manages primary health centres in Karnataka.
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Role of NGOs in health sector
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Evolving state-NGO relationships
Nature of activities and programmes undertaken
- supporting- antagonising or empowerment
Autonomy of NGOs through foreign funding
- control of foreign funds by introducing registration or permission
Formation of NGOs by political parties, retired bureaucrats & BM
-well connected members-entry of young professionals
Policies emphasizing greater control over NGO sector
-well-defined role--provision of services & service delivery
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Donor influences on NGOs
Dependency on donors who seek value for money
Highly formalized and bureaucratic structures
Working env creates inequality & brain drain
Cost effectivene
ss & efficiency
Short term targets and specific goals neglect overall functioning of the healthcare system
Altering ngo- client relationships
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What should be done to achieve better health?● Cooperation with the state- long-term plan of a
national health care system; making the government the main responsible party
● Nationalised institution for channeling aid- division without being stuck to short-term direct measurable goals.
● Training and employment of locals- preference over expatriates; providing the same salary as the national health care system does.
● Increasing donor confidence by eradicating corruption- ensure more involvement of such agencies with the state than with the international and local NGOs.
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Influence of Globalization and Trade
WORLD TRADE ORGANISATION (WTO) 1995
GATT * - Goods • Medicines, Vaccines
GATS - Services• Health professionals; Patients; health
related investments
TRIPS - Intellectual Property • Patents; Trademarks; copyrights
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NATIONAL HEALTH POLICY
NHP 1983
>2002
DECENTRALISATION
HUMAN RESOURCE
INFRASTRUCTURAL
STRENGTHENING
PRIVATE SECTOR
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MoHFW
Food And Drug
Administration
Departments of Health in individual
states
The Indian Medical Council
Indian Medical
Association
Central Drugs Standard Control
Organization (Medical
Equipments)
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Income tax exemption for a period of five years, for newly established hospitals (Finance Act, 2008).
Long term capital and Cheaper loans to PHI ( ITA 1961)
Foreign Direct Investment (FDI) in the hospital sector (100% )
Land allocation on subsidized rates, partial or complete wavier on stamp duty, electricity duty etc.
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Medical Visa (M Visa) and Attendant Visa (MX Visa) mid 2005
Import duty on Medical equipment and technology
Reduced the customs duty on Medical devices
Insurance companies, Post liberalization (IRDA Regulation, 2001) Rastriya Swasth Bima Yojana, 2008
Relaxed the procedures to attract Non Resident Indian doctors .
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Regulation Information Technology Act, 2000Bio-medical Waste (Management And Handling)
Rules 1998The Companies Act, 1956The Clinical Establishment (Registrations &
Regulations) Act, 2007Consumer Protection Act, 1986Pre-natal Diagnostic Techniques (Regulation And
Prevention Of Misuse) Amendment Rules, 2003Medical Termination Of Pregnancy Act, 1971 And
(Amendment) Act, 2002
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FOOD SAFETY AND STANDARDS ACT, 2006
THE TRANSPLANTATION OF HUMAN ORGANS ACT, 1994 (RULES
AMENDMENT 2008)
BIOMEDICAL WASTE MANAGEMENT AND HANDLING RULES,
1998, AMENDED IN 2000
THE DRUGS (PRICE CONTROL) ORDER, 1987
INCOME TAX ACT, 1961
FINANCE ACT, 2008
SERVICE TAX OF INDIA, 1994
ENVIRONMENT (PROTECTION) ACT, 1987
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Corporate Social Resposibility
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GUIDELINES FOR CORPORATE SECTORCompanies included- Which are worth 500
crores or above / which have a turnover of 1000 crore/profit of 5 crore.
2% of company’s 3 year average income initially followed by 2% on company’s profit annually. SIGNIFICANCE IN HEALTH
SECTOR• CSR funds are being utilised in MDG
programmes - Health programmes for Maternal and Child health, Malaria ,HIV etc.
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Salient features of the Company Bill, 2012Company should have dedicated CSR division
with experts from fields of social work and public health .
Government should play as a facilitator rather than a director.
TransparencyCompanies should present an annual report
relating to CSR.There should be an accountable authority to
monitor CSR fund utilisation.
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HETEROGENEITY AND IT’S IMPACT
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Definition
Heterogeneity refers to the diverse nature of healthcare systems and services provided to the society
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HETEROGENEITY IN HEALTHCARETYPE OF
SETUPNGOs
CHARITABLE TRUSTCORPORATE
SETUP.
NURSING
HOME
AND CLINIC
S.
MEDICAL COLLEGES WITH
HOSPITAL.
HOME BASED CARE QUACK
S
SYSTEM
ALLOPATHICHOMEOPATHYAYUR
VEDIC
UNANI
SIDDHA
YOGA.TRADITIONAL HEALI
NG SYSTE
MS
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EFFECTS OF HETEROGENEITYProvides ‘Last Mile Connectivity’.Improves the Health System by increasing
competition.Greater compatibility for all socio-economic
strata.Inclusion of indigenous systems of medicine
into the mainstream.Greater freedom of choice from the
beneficiary perspective.
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Impact
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WHAT?
The differences in the utilization of healthcare services arising out of the contrasts in the quality and accessibility of healthcare service providers.
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UTILISATION DIFFERENCES
Rural Urban
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WHY ?Determinants
Government Stance
Policy Drawbacks
Economic Reform
Low Insurance Penetration
Regulatory Failure
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HOW?
RURAL –URBAN DIVIDE
POLICY DRAWBACKS
GOVERNMENT STANC
E
ECONOMIC
REFORM
RICH-POOR DIVIDE
LOW INSURA
NCE PENETRATION
HIGH COST
OF QUALITY SERVICE
REGULATORY
FAILURE.
QUALITY SEGMENTATI
ON &MALPRACTIC
E