
HEALTH SECTOR
Health as one of the Fundamental Human Right, has been accepted in the Indian Constitution. Although Article 21 of the Constitution requires the State to ensure the health and nutritional well being of all people, the Federal Government has a substantial technical and financial role in the sector. Due to growing importance of healthcare industry, it has been conferred with the Infrastructure status under section 10 (23G) of the Income Tax Act.
GOAL
The goals for health systems, according to the World Health Report 2000 - Health systems: improving performance (WHO, 2000), are good health, responsiveness to the expectations of the population, and fair financial contribution. Duckett (2004) proposed a two dimensional approach to evaluation of health care systems: quality, efficiency and acceptability on one dimension and equity on another.
HEALTHCARE IN INIDA
Healthcare is the largest service industry in India in terms of revenue and the second largest, after education, in terms of jobs, employing more than 4 million people.
The Economist Intelligence Unit estimated the Indian healthcare sector (Including pharmaceuticals) to be around US$44.6 billion in 2006 which amounted to around 4.9 per cent of the GDP. It estimated the sector could grow to US$82.5 billion by 2011 accounting for 4.5 per cent of the GDP. The spending in healthcare is expected to rise by around 10 per cent per year during the year. Private consumption is forecast to increase in real terms by an annual average of 7.4 per cent during the period.
| 2006 | 2007 | 2008 | 2009 | 2010 | 2011 | |
| Healthcare spending(Rs bn) | 2,019 | 2,242 | 2,555 | 2,881 | 3,221 | 3,382 |
| Healthcare spending(% of GDP) | 4.9 | 4.7 | 4.7 | 4.6 | 4.6 | 4.5 |
| Healthcare spending(US$ bn) | 44.6 | 53.6 | 62.3 | 70.3 | 78.5 | 82.5 |
| Healthcare spending(US$ per head) | 41 | 48 | 55 | 62 | 68 | 71 |
| Physicians(per 1,000 population) | 0.6 | 0.6 | 0.6 | 0.6 | 0.6 | 0.6 |
| Pharmaceutical sales (US$ bn) | 9.4 | 10.1 | 10.8 | 11.6 | 12.4 | 13.3 |
| Indicator | Value(year) | |
| Total expenditure on health as percentage of gross domestic product | 5.0 (2004) | |
| General government expenditure on health as percentage of total expenditure on health | 17.3 (2004) | |
| Private expenditure on health as percentage of total expenditure on health | 82.7 (2004) | |
| General government expenditure on health as percentage of total government expenditure | 2.9 (2004) | |
| External resources for health as percentage of total expenditure on health | 0.5 (2004) | |
| Social security expenditure on health as percentage of general government expenditure on health | 5.6 (2004) | |
| Out-of-pocket expenditure as percentage of private expenditure on health | 93.80 (2004) | |
| Private prepaid plans as percentage of private expenditure on healt | 0.8 (2004) |
Source: WHO
INFRASTRUCTURE SHORTFALL
Despite the phenomenal GDP growth seen by India in the last decade and a half making it one of the fastest growing economies in the world, the healthcare infrastructure in India still lags far behind the international standards even by emerging market standards.
Against a world average of 3.96 hospital beds per 1000 population, Russia has 9.7, Brazil has 2.6, China has 2.2, and India languishes at just 0.7.
In terms of availability of trained medical personnel India has 0.6 physicians per 1000 population as against 1.8 in the developed countries and a global average of 1.5. The number of nurses available per 1000 population in India is 0.8 as opposed to 7.5 in the developed countries and a global average of 3.3.
At present India has 242 medical colleges from where around 23,000 doctors qualify each year with an MBBS degree. In addition there are 205 dental colleges from where 14,700 dentists qualify each year.
GROWING DEMAND
Population growth - India’s growing population is expected to surpass China by 2030 and be 1.6 billion by 2050. With greater life expectancy by 2025 alone an estimated 189 million Indians will be at least 60 years of age—triple the number in 2004. The growing elderly population will place an enormous burden on India’s healthcare infrastructure.
Growing middle class - India’s economic growth is driving urbanization and creating an expanding middle class. With rising incomes this has resulted in more disposable income to spend on healthcare. Today at least 50 million Indians can afford to buy Western medicines -a market almost 5/6th the size of the UK market.
Rising lifestyle diseases – Socio-economic and demographic changes within certain segments of the Indian population, particularly in urban areas, have created increased demand for advanced healthcare services. Not only is there a growing awareness and sophistication among healthcare consumers who are demanding more services, there is also an increase in the incidence of so-called “lifestyle” diseases like cancer, diabetes and cardiovascular disease, which are more expensive to treat than communicable and infectious diseases.
Healthcare insurance - Less than ten per cent of India’s population today has some sort of health insurance cover. With the emergence of private sector in the insurance industry, healthcare insurance is rising. Healthcare insurance premium collected in 2005-2006 registered a growth of 35 per cent over year 2004-2005.
MAJOR PLAYERS IN THE SECTOR
Hospital Services - An estimated that 450,000 additional hospital beds will be required by 2010 - an investment estimated at US$25.7 billion. The government is expected to contribute only 15 to 20 per cent of the total, providing an enormous opportunity for private players to fill the gap. There also is strong demand for tertiary care hospitals, which emphasize the treatment of lifestyle diseases, focusing on specialties such as neurology, cardiology, oncology and orthopaedics. Tertiary hospitals are projected to grow faster than the overall healthcare sector, in response to the growing incidence of lifestyle disease and the accelerating growth of medical tourism. The private sector accounts for 62 per cent of hospitalization treatment and 81 per cent of the non hospitalisation treatment in India in the urban areas and 58 per cent and 78 per cent of the hospitalisation and non-hospitalisation treatment in India in the rural areas. Major private sector companies in the hospital services are Apollo Hospitals - 40 hospitals with 6000 beds, Fortis Healthcare - 12 hospitals with 1900 beds, Wockhardt Hospitals – ten hospitals with 1500 beds, Max Healthcare - seven hospitals with 800 beds and Manipal Hospitals – 13 hospitals with 7000 beds. Some of the new companies with plans in this segment are Reliance Healthcare, Artemis Health Sciences and Paras Group. The international companies with plans in this segment are Parkway Group - Singapore, Pacific Healthcare Holding - Singapore, Columbia Asia – Malaysia, EMAAR Group – Dubai and Prexus Healthcare Partners – USA.
Medical Tourism - India offers highly cost-competitive and technologically advanced treatments options. India’s private hospitals excel in fields such as cardiology, joint replacement, orthopaedic surgery, gastroenterology, ophthalmology, transplants and urology. According to a joint study by CII and McKinsey, Indian medical tourism was estimated at US$350 million in 2006 and has the potential to grow into a US$2 billion industry by 2012. An estimated 180,000 medical tourists were treated at Indian facilities in 2004. Patients from approximately 55 countries were treated at Indian hospitals. However, most of the foreign patients are from nearby developing countries such as Afghanistan, Pakistan, Nepal, Bangladesh and Sri Lanka, which lack top-quality hospitals and health professionals; patients from the US and Europe are relatively few. International patients choose India primarily because of the substantial difference in the cost of high-end surgery and critical care and quicker access to medical care in India vis-à-vis some highly developed countries. The cost of such medical care also compares favourably against costs of other more established medical tourism destinations like Thailand. For example, a cardiovascular surgery, which costs approximately US$50,000 in the USA and approximately US$14,250 in Thailand, costs approximately US$6,000 in India, and orthopaedic surgery, which costs approximately US$6,900 in Thailand, costs approximately US$4,500 in India. Apollo Hospitals has successfully treated over 60,000 foreign patients from across the world in last five years.
Tele-medicine - Only 25 per cent of India’s specialist physicians reside in semi-urban areas, and a mere 3 per cent live in rural areas. As a result, rural areas, with a population approaching 700 million, continue to be deprived of proper healthcare facilities. Tele-medicine is a fast-emerging trend in India, supported by exponential growth in the country’s information and communications technology (ICT) sector, and plummeting telecom costs. Several major private hospitals have adopted tele-medicine services, and a number of hospitals have developed public-private partnerships (PPPs), among them Apollo, AIIMS, Narayana Hridayalaya, Aravind Hospitals and Sankara Nethralaya. Today there are approximately 120 tele-medicine centres throughout India. The Asian Heart Institute (AHI) is planning to establish 60 more tele-medicine satellite centres across the interiors of Maharashtra. The Indian Space Research Organization (ISRO) plans to establish 100 tele-medicine centres across the country. ISRO has already connected 25 major hospitals in the mainland and plans to link at least 650 district hospitals by 2008. The government also is reducing import tariffs on infrastructure equipment. With the shortage of radiologists the world over, tele-imaging offers good opportunities for the international market. Teleradiology Solutions is a leading company providing tele-radiology to 50 hospitals in the USA.
Pathology Services – The market for pathological services in India is estimated at US$500m and has been growing at 20 per cent annually. There are around 40,000 pathology labs in India but most of these are small companies and comprise the unorganised sector of the pathology market. The growth in the segment is expected as healthcare insurance market grows and preventive healthcare takes root in the country. Further there is a huge potential for providing outsourced pathology to major healthcare markets abroad as India offers a distinct price advantage. Some of the major players in this segment are Dr Lal’s Pathlabs and Apollo Group.
Medical Equipment - The rebuilding of India’s healthcare infrastructure, combined with the emergence of medical tourism and tele-medicine, will drive strong demand for medical equipment, such as x-ray machines, CT scanners and electrocardiograph (EKG) machines. The demand for hi-tech medical devices in India is growing by 12 -15 per cent annually and 90 per cent of demand is being met by imports from countries like USA, Japan and Germany. Leading international companies market most high value medical equipment, while only consumables and disposable equipment are made locally. Many international companies have expanded their operations in the Indian market in recent years and established manufacturing facilities to assemble equipment for the domestic market and export sales. The market is expected to be around US$1.7 billion by 2010, against US$1.2 billion in 2005. Changing disease profile and clinical needs, and growth of medical tourism are all expected to drive the potential for medical devices. Some foreign companies conduct first 500 surgeries in India after approval of a medical device or surgical treatment by US FDA.
Healthcare BPO Services – The rapid strides that India has made in the IT industry along with the availability of a large English speaking skilled manpower has opened opportunities in the healthcare outsourcing in India. Some of the services offered include managing their patient information data and back office operations like Medical Transcription, Medical Coding (ICD & CPT) and Medical Billing. Outsourcing to India results in cost savings in the range of 20-30 per cent. The opportunity in this segment is estimated to be worth around US$4.5 billion.
Healthcare Insurance - In recent years, there has been a liberalisation of the Indian healthcare sector to allow for a much needed private insurance market to emerge. Due to liberalisation and a growing middle class with increased spending power, there has been an increase in the number of insurance policies issued in the country. In 2001-2002, 7.5 million policies were sold. By 2003-2004, the number of policies issued had increased by 37 per cent, to 10.3 million. The Insurance Regulatory and Development Authority (IRDA) eliminated tariffs on general insurance on 1 January 2007, and this move is expected to drive additional growth of private insurance products. In the wake of liberalisation, health insurance is projected to grow to US$5.75 billion by 2010, according to a study by the New Delhi-based PHD Chamber of Commerce and Industry. Currently there are 25 licensed third party administrators in the Indian health insurance industry. Some of the international majors that have entered the segment are Max New York Life, a joint venture between Max India and New York Life, and ICICI Prudential Life Insurance, a joint venture between the ICICI Group and UK-based Prudential plc.
HEALTH SECTOR PRIVATIZATION, A BOON OR BANE?
Privatization! Do we need it or not? Few other questions can kick start a heated debate as this. What is seen now is that India is slowly engulfed by an enthusiasm to privatize anything and everything. Even while the left parties in India staunchly oppose the “privatize all” move, the proponents present it as a panacea to problems of the poor, incompetent services and loss making performances of public sector units. So is the case in health sector. As per a recent study ("Health transition in Kerala" by P.G.K Panikar), the share of private hospitals in Kerala is about 93%. The irony here is that Kerala supported a leftist Govt for nearly 50% of its life time!
Hospitals or medical care systems run by individuals is not a new phenomenon to us. Before the British rule, all the medical centers (e.g.: vaidyasala) were run by individuals or families who had a legacy knowledge about those system of medicine. Public health care system run by the state was predominantly a western idea (I don’t think that any of the earlier kingdoms that ruled India – or parts of it--- had a public health care system run by the Kingdoms) and naturally it came to India with the British rule.
Present Situation
By any stretch of the imagination it’s hard to believe that the Govt would have been able to provide the same service, quantitatively or qualitatively, with out private sector participation. Moreover private sector has provided unwavering support to the Govt for all of its endeavors towards attaining a national health security. An example is the national immunization programs. Private hospitals have helped the Govt in setting up the infrastructure for such a huge exercise which has parallels only to the General election in India in terms of its scale. Definitely the private healthcare sector is unequivocally a stakeholder in the better healthcare system we are enjoying at present.
But even while considering all contributions of the private sector in health care system in India, it needs to be pointed out that most of the times people are subjected to a disconcerting ruthlessness of profit making. As with any other private industry, the motto of business is making profit. Agreed; a business is not run for charity and it’s the right of the owner to make a return on his investment. But surely there should be a clear difference between robbery and making a justifiable profit.
I have seen that most of the time the proponents of privatization, repudiate the allegations of private hospital exploitations by terming it as problem of paranoid vision. Let me tell you one incident where I witnessed a classic example of looting by a private hospital.
On the morning of 7th October 2006, my friend Mithun took his wife Pavithra (names have been changed as per their request), who was in the initial stages of her pregnancy, to a five star hospital in Bangalore (This hospital is having branches in most of the metros). Pavithra had a severe abdominal pain and giddiness. This was followed by a brief loss of consciousness and convulsion. She had become noticeably pale by the time they reached hospital. When I reached hospital she was inside the Emergency room and Mithun was waiting outside the room. After some time a doctor came outside the room (we later came to know that he was Neurologist) and asked about her pregnancy and told Mithun that they suspect an epileptic fits and need to do more investigations as the symptoms manifested, like convulsions, point to the possibility of seizure disorder. Mithun who was in bewilderment had no other way but to buy the claim of the doctor who (at least in theory) knows a human body more than him. To rule out (or reinforce?) the possibility of an epileptic fits; she was taken for an MRI scanning. But the results ruled out the possibility a seizure disorder.
While standing outside the emergency room I saw one of the most interesting ad, I might have ever seen. Interesting part was not its presentation but its content. The colorful notice on the wall of the Emergency room was to inform the visitors of the hospital about the great discount they can avail if they do an MRI on weekdays than on weekends. There was almost a 30% discount on the MRI done on weekdays. I started wondering whether a hospital is something like an amusement park, where you go to enjoy your vacation and is MRI some kind of high adrenaline thrill ride that makes your visit worth remembering.
As far as I know, MRI (Magnetic resonance imaging) is a noninvasive medical imaging procedure that uses powerful magnets and radio waves to construct clear, detailed pictures of the part of the body under investigation, to assist the diagnosis.
Meanwhile I talked to my father who is a Surgeon in Kannur (A town in Kerala). He immediately told me that he suspects an Ectopic pregnancy rupture as in this case she is in the initial stages of pregnancy and complaining a severe abdominal pain. (Ectopic Pregnancy is an abnormal pregnancy that occurs outside the uterus. The most common site for an Ectopic pregnancy is within a fallopian tube).
As the MRI conducted could not pinpoint the cause of her symptoms and as there were no improvements made with the initial fluid supplements given, she was taken to ICU, where an abdominal ultra sound scanning reveled that it was an Ectopic pregnancy complication with ruptured fallopian tube and massive internal bleeding (Leading to a condition called shock—Due to loss of blood volume and low blood pressure). They performed an emergency surgery to fix the problem. She was pulled back to life from the brim.
Two days she was in hospital, as it was a laparoscopic procedure the stay needed at hospital was minimal. But then it was a shock (Literary this time and not medical) at the time for us, when we saw the bill. According to hospital its “just 80,000 rupees ONLY”. In the bill the cost of MRI was given as 20,000. When inquired we came to know that MRI for inpatients was higher than outpatient MRI and the "lucrative offer" of MRI discount in the advertisement was not applicable to inpatients!.
In the above case, was the incorrect assumption made by the neurologist, that it’s a case of epileptic fits; a non culpable error in judgment happened by overlooking the primary symptoms of the patient (like acute abdominal pain and anemia in early weeks of pregnancy) or was it a clever blissful wrong diagnosis to squeeze the patient?
How could a doctor miss the possibility of an Ectopic pregnancy rupture when the patient was manifesting copy book symptoms of the same? Was it a problem of the doctor’s super specialization? Is super specialization something where you learn more and more about less and less and ultimately know everything about nothing?
When I inquired in some private hospitals in Kerala I came to know that the same treatment would have incurred only a sum of 12000-- 15000 Rupees. Then why was the treatment exorbitantly costly in this five star hospital?
Was it not a daylight robbery? I strongly feel it was. Considering the fact that the hospital was promoting their radiology department with discounts and other offers, this incident of taking a cerebral MRI for pregnancy related complication smells fishy. If the cost of treatment, for a not so uncommon condition like Ectopic pregnancy rupture, was too high even for two upper middle class IT engineers, then its unthinkable what the situation would be for the majority our compatriots.
Complete privatization is not a panacea for our problems of poor service, at least not in service sectors like health care industry. Yes we do need private sector participation to a certain extent and I am not belittling their contributions. But this does not mean that you can get rid of the Govt healthcare system and rely only on private sector for all your needs.
Having the system of public domain may not stop this exploitation, but we will have at least an alternative to depend on. The achievements that we made in public healthcare are results of the accessibility that the common man had to the hospitals. But 5 star hospitals that charge exorbitantly high rates, like the one above may hinder this progress by introducing an economic inaccessibility and will pull down our progress.
As it is very evident that we have already crossed the rubicon of privatizing the health care system, it’s time for us now to think about having a regulatory authority which has the powers to audit the actions of private hospitals. This regulatory body must be composed of medical and legal experts, along with representatives from the Govt. This will definitely bring down private hospital exploitations where the patients are subjected to unnecessary/ unwanted medical investigations in the name of diagnosis.
Ending note: - How about this for an offer you may find in the near future at a pvt hospital; “Combo Offer: - Along with mother’s Hysterectomy, you get daughter’s caesarian Free!”
FOREIGN INVESTMENT
For developing countries with failing health systems, this foreign investment may seem an attractive source of capital and medical technology at a time when other sources are thin on the ground. Yet involvement by the foreign private sector in health care has the potential to marginalise the poor even further. Companies seek markets in which they can be assured sufficient returns, and this typically concentrates investment in more affluent areas. Loans granted to private health care providers by the World Bank's International Finance Corporation, for instance, are predominantly directed towards facilities for the richer communities of the country or for expatriates, not the majority of the population. This practice of "cream skimming" by the private sector is already familiar in the field of private health insurance, where insurance companies and health maintenance organisations (HMOs) typically favour the healthy and wealthy over high-risk customers, excluding the latter by means of prohibitive premiums.
MEDICAL TOURISM
India is quickly becoming a hub for medical tourists seeking quality healthcare at an affordable cost. Nearly 4,50,000 foreigners sought medical treatment in India last year with Singapore not too far behind and Thailand in the lead with over a million medical tourists. As the Indian healthcare delivery system strives to match international standards the Indian healthcare industry will be able to tap into a substantial portion of the medical tourism market. Already 13 Indian hospitals have been accredited by the Joint Commission International (JCI). Accreditation and compliance with quality expectations are important since they provide tourists with confidence that the services are meeting international standards. Reduced costs, access to the latest medical technology, growing compliance to international quality standards and ease of communication all work towards India’s advantage.
It is not uncommon to see citizens of other nations seek high quality medical care in the US over the past several decades; however in recent times the pattern seems to be reversing. As healthcare costs in the US are rising, price sensitivity is soaring and people are looking at medical value travel as a viable alternative option. In the past the growth potential of the medical travel industry in India has been hindered by capacity and infrastructure constraints but that situation is now changing with strong economic progress in India as well as in other developing nations. With more and more hospitals receiving JCI accreditations outside the US, concerns on safety and quality of care are becoming less of an issue for those choosing to travel for medical treatment at an affordable cost. The combined cost of travel and treatment in India is still a fraction of the amount spent on just medical treatment alone in many western countries.
In order to attract foreign patients many Indian hospitals are promoting their international quality of healthcare delivery by turning to international accreditation agencies to standardize their protocols and obtain the required approvals on safety and quality of care.
Another secondary motivation besides accessibility and cost of care is the idea of having your medical treatment combined with a relaxing vacation at an exotic destination. This is an opportunity for India to embrace its Ayurveda and other alternative medicine options by adopting more of a holistic approach to healthcare delivery that includes wellness tourism for rejuvenation of the body and mind.
One of the main concerns that patients face when opting for medical value travel is whether or not they will receive proper follow-up care in their home country post treatment in a foreign country. Another concern is the issue of liability, for example if something were to go wrong during a procedure in a foreign country how easy or difficult would it be for that individual to work through the host country’s legal system.
With a growing medical tourism market the Indian healthcare system will benefit from improved quality, standards and increased investments. Private hospitals argue that medical tourism reverses the brain drain, as health workers seeking more attractive career opportunities abroad will stay in India if given the option of working in the medical tourism sector.
Health Care & Rights of Patients
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