Heal the divide: Two sides of India’s healthcare industry
India has the biggest healthcare sector in the world, but the divide between public and private hospitals here has only widened in recent years, resulting in a fractured system that needs fixing.
The healthcare sector is one of the largest sectors in India— both in terms of employment opportunities and revenue generation. As per a report by FICCI-KPMG, the sector has grown steadily, at a compound annual growth rate of 16.5%, and is expected to be worth $280 billion by 2020. IBEF, a trust established by the Department of Commerce, Ministry of Commerce and Industry, recently put out a report that states the following reasons for this probable growth: “rising income level, greater health awareness, increased precedence of lifestyle diseases and improved access to insurance.” The expansion of the sector at this robust pace has been evident just by the sheer number of private players that are entering and creating a niche for themselves in the sector. While the government has done a remarkable job by introducing new schemes—most notably Ayushman Bharat (a national health protection mission that provides a benefit cover of Rs 5 lakh per family per year)— their execution remains questionable factoring state-wise implementation challenges, financial considerations, and empanelment of hospitals among other factors.
The underlying aspects associated with private and public healthcare can enable us to understand the complex differences between them. The FICCI-KPMG report, titled “Healthcare: The Neglected GDP Driver”, said that the Indian healthcare workforce is expected to double to 7.4 million in 2022 from 3.6 million in 2013. The largest contributor to this growth seems to be the private players, who are known to attract the best talent. They hardly face any staffing challenges, which in turn ensures that the required care and treatment is provided with a sense of urgency. They are often extremely qualified and are remunerated well.
The public healthcare system usually has a tougher time hiring and retaining talent. The system is often criticised for overworking their staff while underpaying them. The public systems need to look into incentivising doctors appropriately so that their recruitment and retention improves dramatically. This is evident from the fact that the doctor-patient ratio of India at 0.62:1000 is below the WHO-prescribed limit of 1:1000. The private players are usually perceived as efficient and quality-oriented. They are known to provide a better set of clinical conditions, be it the design of the rooms, comfort level or technology. They are also able to provide better care as they also have a manageable number of patients to deal with on a weekly basis.
The public healthcare system has numerous challenges to overcome, especially in the rural areas. According to research by some professors associated with the MIT Poverty Action Lab, on average, 36% of medical staff were absent from larger primary health centres and 56% of sub- centres were closed during regular opening hours at unpredictable times. The lack of availability of healthcare providers adversely affects the quality of healthcare. In the past, too, public healthcare institutions have been criticised for complacence and negligence as illustrated by the 2017 Gorakhpur Hospital Case. It is safe to say that the private players have historically focused primarily on tier-1 cities (eg. Mumbai, Chennai, Hyderabad, Bengaluru, New Delhi), as these cities have a significant middle-class population with high disposable incomes. It is a known fact that people from smaller cities travel to these tier-1 cities seeking better quality treatment. The private players have a targeted clientele, and therefore tier-2 and tier3 cities are usually not their first choice when setting up hospitals.
According to the Union Minister of Health and Family Welfare, there are about 35,000 public hospitals in the country. The rural scenario looks even bleaker considering the limited access and lack of incentive for personnel to operate in rural areas. However, panchayat- level clinics and screening camps have evolved to serve as effective alternatives in rural areas. They deal with both preventative and curative healthcare. Private hospitals are more expensive than public health- care and already provide 60%70% of both inpatient and outpatient treatment. Therefore, this sector is responsible for the largest portion of out-ofpocket medical expenses that stand at a whopping 62% of India’s total healthcare expenditure. According to experts, 80% of India’s healthcare expenditure is in the private sector. There are no standardised rates of surgeries across the private sector.
While procedures and treatments offered by government hospitals are usually cost-effective, they are perceived to be slow in offering treatment due to long waiting lists. People choose private healthcare to be able to skip the lines that are commonly found in government hospitals. With Ayushman Bharat providing an insurance cover of upto Rs 5 lakhs, there still lingers a lot of doubt concerning its implementation. The public is still unclear about how the empanelment of hospitals is going to happen considering the huge difference between the actual healthcare costs charged by private hospitals today versus the low Ayushman Bharat rates for various surgeries.
To conclude, private players are still perceived to be expensive but effective, thereby reinstating the Indian population’s faith in the system. While public players are perceived as lacking infrastructure and personnel, they are definitely cost-effective, thereby leaving a lot of scope for improvement by offering higher quality treatment and services with the latest technology.
The public healthcare system usually has a tougher time hiring and retaining talent. The system is often criticised for overworking their staff while underpaying them. The public systems need to look into incentivising doctors appropriately so that their recruitment and retention improves dramatically.
The author is CEO and cofounder of ImpactGuru.com, a crowdfunding platform for medical expenses, personal causes and non-profits