DEVELOPMENTAL PLANNING
Unhealthy Planning
Ravi Duggal Senior Trainer and Analyst, International Budget Partnership 1/20/2011 4:14:03 AM
Planned development in India has had its pros and cons. If it was not for planning, India’s agricultural and industrial economy would not have been what it is today. Planning was a necessity of the era in which it began. India’s economy and wealth had been drained substantially under colonial rule and the Indian bourgeoisie was quite weak and did not have the confidence and wherewithal for India’s development. Then there was the socialist influence under Nehru and Mahalanobis which are very evident in the first two 5-Year Plans.
While the Indian bourgeoisie was financially weak it was not so intellectually and the real driver of the planning model in India was the Bombay Plan also known as the Tata-Birla Plan (titled A Brief Memorandum Outlining a Plan of Economic Development for India, the signatories of the Plan were JRD Tata, GD Birla, Ardeshir Dalal, Sri Ram, Kasturbhai Lalbhai, AD Shroff and John Mathai, under the editorship of Purushottamdas Thakurdas). A key principle of the Bombay Plan was that the economy required concerted government intervention and regulation because the Indian Capitalist class was unable to compete in a free-market economy, and that the government protects indigenous industries against foreign competition in local markets. They even recommended a strong public sector in arenas where the Capitalists did not have the financial strength to invest, like capital goods, infrastructure etc. While the political class may deny its influence and give larger credit to the Nehru authored National Planning Committee of the Congress Party, history tells us a different story.
So planned development indeed helped build India’s basic economic infrastructure and provided the crutches for accumulation of private capital through protectionist policies and various subsidies, it failed miserably with social sector development, primarily health and education. For example in the health sector the pharmaceutical industry and medical education benefited from the planned development. The pharma industry had protection through the patents policy with India rejecting product patents as well as massive subsidies through cheap basic chemicals being sold by public sector giants like Hindustan Antibiotics, Bengal Chemicals, IDPL etc. who perpetually were in the red not because of their inefficiency but because of the subsidies via pricing of bulk drugs for formulation units which were predominantly private sector. And medical education received huge subsidies through almost free education and the outturns mainly went to the private sector or worse still migrated abroad. The consequence of this was that the public health sector became the victim and private healthcare grew from strength to strength using the crutches provided by planned development. Today the public sector pharma industry has virtually disappeared and India’s private pharma capitalists have become multi-nationals and global players. Similarly Indian doctors rule the roost globally and within the country too are predominantly serving private capital, and worse still medical education is also increasingly becoming privatised and for the future this means even less human resources for the public sector. So this was not the failure of India’s planned development of the health sector but it was planning for failure of the public health sector!
Review of Health Planning in India
India’s tryst with planning seriously for health began with the Bhore Committee Report. Prior to that under colonial rule the planning and provisioning was largely restricted for the civil lines of the British India territories and military enclaves. The four-volume Bhore Committee Report was submitted to the Government of India in 1946. It defined the following objectives for its plan for a National Health Service:
1. The services should make adequate provision for the medical care of the individual in the curative and preventive fields and for the active promotion of positive health;
2. These services should be placed as close to the people as possible, in order to ensure their maximum use by the community, which they are meant to serve;
3. The health organization should provide for the widest possible basis of cooperation between the health personnel and the people;
4. In order to promote the development of the health programme on sound lines the support of the medical and auxiliary professions, such as those of dentists, pharmacists and nurses, is essential; provisions should, therefore, be made for enabling the representatives of these professions to influence the health policy of the country;
5. In view of the complexity of modern medical practice, from the standpoint of diagnosis and treatment, consultant, laboratory and institutional facilities of a varied character, which together constitute “group” practice, should be made available;
6. Special provision will be required for certain sections of the population, e.g. mothers, children, the mentally deficient etc.,
7. No individual should fail to secure adequate medical care, curative and preventive, because of inability to pay for it and
8. The creation and maintenance of as healthy an environment as possible in the homes of the people as well as in all places where they congregate for work, amusement recreation, are essential.1
It further emphasized a need for a comprehensive and universal health care system, and it made recommendations concerning the district health scheme and health organization to provide integrated health services — curative, preventive and promotive — to the entire population. If implemented, these measures would have been India’s first steps to realize universal access.
The health care facilities that existed in India at the time of the Bhore Committee were embarrassingly inadequate. In fact, most of these were in urban areas and largely in enclaves of the British Civil administration and Cantonments.2
The Committee categorically states, "we are satisfied that our requirements can only be met satisfactorily by the development and maintenance of a state Health Service."3 It recommended that all services provided by the health organization should be free to the population without distinction and it should be financed through tax revenues.4 It further recommended that the health service should be a salaried service with whole-time doctors who should be prohibited from private practice.5
The Bhore Committee ends its report on a clear note of urgency for implementation of the plan in its full form:
The existing state of public health in the country is so unsatisfactory that any attempt to improve the present position must necessarily involve administrative measures of such magnitude as may well seem to be out of all proportion to what has been conceived and accomplished in the past. This seems to us inevitable, especially because health administration has so far received from governments but a fraction of the attention that it deserves in comparison with other branches of governmental activity. We believe that we have only been fulfilling the duty imposed on us by the Government of India in putting forward this health programme, which can in no way be considered as extravagant either in relation to the standards of health administration already reached in many other countries or in relation to the minimum requirements of any scheme which is intended to demonstrate an appreciable improvement in the health of the community. For reasons already set out, we also believe that the execution of the scheme should not be beyond the financial capacity of governments.
We desire to stress the organic unity of the component parts of the programme we have put forward. Large-scale provision for the training of health personnel forms an essential part of the scheme, because the organization of a trained army of fighters is the first requisite for the successful prosecution of the campaign against diseases. Side by side with such training of personnel, we have provided for the establishment of a health organization which will bring remedial and preventive services within the reach of the people, particularly of that vast sections of the community which lies scattered over the rural areas and which has, in the past, been largely neglected from the point of view of health protection on modern lines. Considerations based on inadequacy of funds and insufficiency of trained workers have naturally necessitated the suggestion that the new organization should first be established over a limited area in each district and later extended as and when funds and trained personnel become increasingly available. Even with such limitations the proposed health service is intended to fulfill, from the beginning and in an increasing measure as it expands, certain requirements, which are now generally accepted as essential characteristics of modern health administration. These are that curative and preventive work should dovetail into each other and that, in the provision of such a combined service to the people, institutional and domiciliary treatment facilities should be so integrated as to provide the maximum benefit to the community. There should also be provision in the health organization for such consultant and laboratory services as are necessary to facilitate correct diagnosis and treatment. Our proposals incorporate these requirements of a satisfactory health service.
We have drawn attention to these aspects of the health programme because we feel that it is highly desirable that the plan should be accepted and executed in its entirety. We would strongly deprecate any attempt, on the plea of lack of funds, to isolate specific parts of the scheme and to give effect to them without taking into consideration the interrelationships of the component parts of the programme. Our conception of the process of the development of the national health services is that it will be a cooperative effort in which the Centre, acting with imagination and sympathy, will assist and guide a coordinated advance in the provinces. We therefore look forward to a pooling of resources and personnel, as far as circumstances permit, in the joint task that lies before the governments.6
The above was a good head start in planning India’s health care system which our first Independent government inherited but the tragedy is that the warning in the preceding paragraph was ignored as the 5-Year Plans only picked up small pieces from the Bhore Committee Report, diluted its recommendations and implemented a plan which was doomed to fail from the start. Each 5-Year Plan had its own priority schemes — disease specific programs, family planning, MCH, training paramedics, setting up PHCs and subcentres in rural areas, universal immunization, community health volunteers, RCH and the latest being NRHM. The schemes not only segmented the public healthcare system and developed parallel structures which could not work in unison but actually led to scheming towards continued failure of the public health system. This is not to deny limited successes of the public health system — small pox eradication, malaria control in the sixties, PHC network, leprosy control, immunization, fertility control, medical education – but in retrospect these small successes appear like sops when we look at what happened to the larger health system. Infact it is this planned failure which gave ascendancy to the private health sector in India to emerge and conquer and exploit.
Apart from the 5-Year Plans there were also various committees over the years like the Mudaliar Committee, Jain Committee, Mukherjee Committee, Shrivastava Committee, Kartar Singh Committee, Chadha Committee, Chopra Committee, Shah Committee, Simon Committee, Hathi Committee etc and each made its own specific and narrow recommendations which only added to the problem of segmentation and moving further away from the comprehensive approach of the Bhore Committee. And then we had the two National Health Policies of 1982 and 2003 which should have been an opportunity to put a check on the planned failure processes but they too failed. The 1982 policy did talk about a comprehensive approach and universal access but it failed to spell out how structural changes would be made and how increased resources would be garnered to provide the budgetary support to achieve that. The 2003 health policy in contrast did not even talk about comprehensive healthcare. It called for strengthening the private health sector and ended up being a document to abdicate state responsibility in healthcare. The NRHM has attempted to salvage that to some extent by investing efforts at strengthening atleast the rural public health system and building some responsibility within the system but so far it has failed to deliver the architectural corrections it talks about.
So this is the story of health planning in India; it is not that what they planned failed. There were small successes and perhaps the planning initiatives could take the credit for that but when we look at the larger developments of the health sector in India we clearly see that we were planning for failure because health and healthcare were never considered in the same class for instance as rural development and agricultural subsidies. The latter was about politics, specifically electoral politics, and health did not measure up to that. For example NRHM does not have the same political clout today that NREGA has. Thus, NREGA is relatively a far better success story than NRHM.
Epilogue
Now we are on the eve of the 12th 5-Year Plan and there is a call for helping to define the 12th Plan Approach Paper by the Planning Commission. So looks like planned development would continue. And for the health sector then what can we do to assure that planning for failure stops. The Plan must be about achieving universal access to healthcare with equity and for that the plan must work out the strategy to make the structural changes, including reining in the private health sector, as well as work out the complete budgetary requirements and not just the plan budget.
Universal access to healthcare implies that everyone gets equitable access to healthcare and there is no discrimination whatsoever, especially discrimination based on the capacity to pay. Worldwide countries which have established universal or near universal access have clearly demonstrated that public financing of healthcare is critical to realize this. However delivery of health services need not be only in public domain.
For instance Canada, which has the best and most equitable healthcare system in the world assures full access to everyone without the need to make any payment at the point of care. Health Canada, a public Corporation pools all resources and is a single payer for all healthcare services. While most hospitals are run by governments in Canada, private hospitals are also given access to these resources when citizens access them. And for out-patient care most providers in Canada are private providers who are contracted in by Health Canada on pre-agreed fee for services. The NHS in UK is very similar and Brazil, Venezuela, Mexico close to emulating these models. On the other hand there are examples like Sweden, Sri Lanka and Cuba which are completely state run systems which provide universal access to healthcare. Thailand is the most recent entrant into this club and I think we have a lot to learn from the Thai experience because the structure of the healthcare system in India and Thailand historically has been very similar.
In India the NRHM affords us a great opportunity to change the way the healthcare system works in India. NRHM talks about architectural corrections, public-private partnerships and the UPA backs this with a (theoretical) political commitment of providing upto three percent of GDP to realize universal access to healthcare. But so far the UPA and NRHM have failed because the required political backing to make radical changes and shake up the healthcare system has not been forthcoming. So what needs to be done to realize universal access to healthcare and end the planning of failures? To begin with:
• equating directive principles with fundamental rights through a constitutional amendment
• incorporating a National Health Act (similar to Canada Health Act) which will organize the present healthcare system under a common umbrella organization as a public-private mix governed by an autonomous national health authority which will also be responsible for bringing together all resources under a single-payer mechanism
• generating a political commitment through consensus building on right to healthcare in civil society
• development of a strategy for pooling all financial resources deployed in the health sector
• redistribution of existing health resources, public and private, on the basis of standard norms (these would have to be specified) to assure physical (location) equity
As an immediate step, within its own domain, the State should undertake to accomplish the following:
• Allocation of health budgets as block funding, that is on a per capita basis for each population unit of entitlement as per existing norms. This will create redistribution of current expenditures and reduce substantially inequities based on residence. Local governments should be given the autonomy to use these resources as per local needs but within a broadly defined policy framework of public health goals
• Strictly implementing the policy of compulsory public service by medical graduates from public medical schools, as also make public service of a limited duration mandatory before seeking admission for post-graduate education. This will increase human resources with the public health system substantially and will have a dramatic impact on the improvement of the credibility of public health services
• Essential drugs as per the WHO list should be brought back under price control (90% of them are off-patent) and/or volumes needed for domestic consumption must be compulsorily produced so that availability of such drugs is assured at affordable prices and within the public health system
• Local governments must adopt location policies for setting up of hospitals and clinics as per standard acceptable ratios, for instance one hospital bed per 500 population and one
general practitioner per 1000 persons. To restrict unnecessary concentration of such resources in areas fiscal measures to discourage such concentration should be instituted.
• The medical councils must be made accountable to assure that only licensed doctors are practicing what they are trained for. Such monitoring is the core responsibility of the council by law which they are not fulfilling, and as a consequence failing to protect the patients who seek care from unqualified and untrained doctors. Further continuing medical education must be implemented strictly by the various medical councils and licenses should not be renewed (as per existing law) if the required hours and certification is not accomplished
• Integrate ESIS, CGHS and other such employee based health schemes with the general public health system so that discrimination based on employment status is removed and such integration will help more efficient use of resources. For instance, ESIS is a cash rich organization sitting on funds collected from employees (which are parked in debentures and shares of companies!), and their hospitals and dispensaries are grossly under-utilised. The latter could be made open to the general public
• Strictly regulate the private health sector as per existing laws, but also an effort to make changes in these laws to make them more effective. This will contribute towards improvement of quality of care in the private sector as well as create some accountability
• Strengthen the health information system and database to facilitate better planning as well as audit and accountability.
Infact the NRHM clearly articulates the need for architectural correction. Such restructuring will be possible only if:
• The healthcare system, both public and private, is organized under a common umbrella/framework as discussed above
• The financing mechanism of healthcare is pooled and coordinated by a single-payer system
• Access to healthcare is organized under a common system which all persons are able to access without any barriers
• Public finance of healthcare is the predominant source of financing
• The providers of healthcare services have reasonable autonomy in managing the provision of services
• The decision-making and planning of health services is decentralized within a local governance framework
• The healthcare system is subject to continuous public/community monitoring and social audit under a regulated mechanism which leads to accountability across all stakeholders involved
The NRHM Framework one way or another tries to address the above issues but has failed to come up with a strategy which could accomplish such an architectural correction. The framework only facilitates a smoother flow of resources to the lower levels and calls for involvement of local governance structures like panchayat raj institutions in planning and decision making. But the modalities of this interface have not been worked out and hence the local government involvement is only peripheral. In order to accomplish the restructuring that we are talking about the following modalities among others need to be in place:
• All resources, financial and human, should be transferred to the local authority of the Health District (say Block panchayats)
• The health district will work out a detailed plan which is based on local needs and aspirations and is evidence based within the framework already worked out under NRHM with appropriate modifications
• The private health sector of the district will have to be brought on board as they will form an integral part of restructuring of the healthcare system
• An appropriate regulatory and accreditation mechanism which will facilitate the inclusion of the private health sector under the universal access healthcare mechanism will have to be worked out
• Private health services, wherever needed, both ambulatory (FMP) and hospital, will have to be contracted in and appropriate norms and modalities, including payment mechanisms and protocols for practice, will have to be worked out
• Undertaking detailed bottom-up planning and budgeting and allocating resources appropriately to different institutions/providers (current budget levels being inadequate new resources will also have to be raised)
• Training of all stakeholders to understand and become part of the restructuring process
• Developing a monitoring and audit mechanism and training key players to do it
Further the most important challenge would be reining in the completely as yet unregulated private health sector. Where the private health sector is concerned it functions completely on supply-induced demand which fuels unnecessary procedures, prescriptions, surgeries, referrals etc.. leading to its characterization as an unethical and mal-practice oriented provisioning of healthcare. This has huge financial implications on households, inflating costs of healthcare, spiraling indebtedness and pauperization and being responsible for the largest OOPS anywhere in the world.
The challenges across the country differ due to different levels of development of the public and private health sectors in the states. For instance a state like Mizoram, a small and hilly state, already has an excellent primary healthcare system functioning with one PHC per 7000 population and one CHC per 50000 population and since it has virtually no private health sector the demand side pressures are huge and hence the public health system delivers. Each PHC has two to three doctors on campus available round the clock with 15 – 20 beds which are more or less fully occupied and 95% of deliveries happen in public institutions. So Mizoram has indeed realized the Bhore dream. The problem in Mizoram is that there are very few specialists available and hence higher levels of care become problematic – the CHCs are however run by MBBS doctors who have received some additional trainings. Mizoram does not have a medical college but it does have reservations in other state medical colleges. While the state cannot provide tertiary care it has a budget to send people elsewhere to seek such care. And Mizoram does this with 2.7% of its NSDP and has the best health outcomes in India. In some sense Mizoram is like Sri Lanka — a statist model. There are few other states in India which can do a Mizoram because they too do not have a significant private health sector but to do that they have to demonstrate the political will of Mizoram.
Even though extremely successful Mizoram cannot be the national model because the reality across most other states is very different, the reality of an entrenched private health sector which is unethical and unregulated. The private health sector has to be reined in and this can only happen with a strong political will which declares healthcare to be a public good and which takes on the private sector to get organized under public mandate. Under NRHM sporadic efforts towards this end are being undertaken in the name of public-private-partnerships like Chiranjeevi in Gujarat, Yeshasvani in Karnataka, Arogya Rakshak in AP, Rajiv Gandhi Hospital in Raichur (Karnataka Government and Apollo Hospitals) etc. They may have achieved limited success but then healthcare systems cannot be built by segmenting it into programs and one-off initiatives like PPPs. There have to be serious efforts at building a comprehensive healthcare system and it goes without saying that given India’s political economy of healthcare the private sector will have to be a significant partner in this process. So states have to think beyond the Chiranjeevis and Yeshasvanis and learn from the recent experiences of Thailand, Mexico and Brazil to invest in an organized healthcare system and with a booming economy resources will not be a constraint.
So the challenge is enormous demanding huge restructuring of the healthcare system in the country through strong regulatory mechanisms both for the public and private sectors, education of professionals in ethics of practice, pushing the politicians for creating a strong political will to make healthcare a public good as well as generate and commit adequate resources to realize universal access. The restructuring of the healthcare system and its financing strategy, given the price advantage of India and economies of scale it offers, will actually reduce nearly by half the healthcare spending in the country and reduce substantially the household burden to access healthcare. Calculations I have done show that for universal access to healthcare across India we need less than three of GDP provided we show the political will to shift healthcare from the domain of the market to the category of a public good. This will indeed do a lot of public good. But we have to plan for all this as a comprehensive strategy and not pick out specific issues and create schemes. We have to stop scheming and get back to comprehensive strategizing as was done by the Bhore Committee in order to put an end to planning for failures.
Endnotes and Additional Thinking
1 Report of the Health Survey and Development Committee, Vol. I to IV, Sir. Joseph Bhore (Chairman), Delhi: Government of India, 1946 (“Bhore Committee Report”), vol. II, p. 17.
2 Roger Jeffery, The Politics of Health in India, Berkeley: University of California Press, 1988, p. 98.
3 Bhore Committee Report, vol. II, p.13.
4 Ibid., vol. II, p.14.
5 Ibid., vol. II, p.15.
6 Ibid., vol. II, pp. 516-517.
(The views expressed in the write-up are personal and do not re?ect the official policy or position of the organization.)
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