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Neo-liberalisation and health care in India

THE essence of the New Economic Policy (NEP) announced by the Government of India in 1991 is to accept the view that private profit is the only effective engine for rapid progress of the country. This engine is to be fuelled by integrating India into the global market where this principle now holds sway. A convenient term for the diverse, ill-defined and frequently changing initiatives under the NEP is 'neo-liberalisation' (NL); while being benignly vague and inclusive, it acknowledges the prior inclination in this direction. One important area of life which NL is likely to affect is health care, which the public usually considers beyond its own purview. This article attempts to analyse how NL may impact on health care in India. This can be helpful in anticipating the likely developments and modulating them for common good, not only in India but also in other countries following the same course.

We will first consider the different components of health care and their relative importance in health and disease in society. Each component can be assessed as to how far it is, or can be, driven by market forces like profit and demand. Against this background, we could look at the present health status of India and the role of market forces in it. This can set the stage for projecting the likely effect of NL on health care in India. Finally, some course of actions are suggested for concerned citizens.

Constituents of health care and their marketability One function of health care relevant to all people in a community is to prevent them from falling ill and to promote their health as much as possible. These preventive and health promotive activities constitute Basic Health Care; this is the foundation on which the health status of a community is built. The majority of those who fall ill suffer from a limited number of common illnesses, which respond to readily available, relatively affordable treatment with a high cost-benefit ratio. They require what can be called Essential Clinical Care. The remaining less common and often more serious diseases call for Advanced Clinical Care. It is instructive to consider these three segments of health care in detail, especially with respect to their need, cost, profitability and marketability.

Basic health care

Since the object of this care is not to relieve disease, there is no biological compulsion or felt need to obtain this care. A significant part of these measures involve behavioural changes, the need for which is not self-evident, but has to be demonstrated and cultivated through education. Many of these measures relate to the state of development of a community, such as levels of income, nutrition, education and environmental sanitation. Such of these measures as can be marketised have to be distributed widely into the homes and the profit margin is necessarily low. These measures do not call for much technology or specialised expertise and so are not very attractive to the health professionals. Thus basic health care, while of crucial importance and not very expensive, is not readily animated by profit and demand.

Essential clinical care

In the Indian context, this mostly relates to communicable diseases, childhood diseases and clinical conditions associated with pregnancy, motherhood and sexuality. Some of the interventions are curative and others preventive or health promotive. Together, these conditions account for the major load of sickness and for most untimely deaths in developing communities. These services are recognised to be necessary, but may not receive high priority since they concern the more vulnerable sections of society i.e. women and children. They have to be provided widely and sometimes over relatively long periods of time. Effectiveness is high but often depends on the compliance and participation of the patients. Compared to the effort required, their profits to the provider are modest. The level of technology and specialisation is intermediate. In summary, essential clinical care has a large-volume, low-profit market, and is a vital ingredient of health care.

Advanced clinical care

These services have a ready market because they address diseases which are considered serious. These diseases affect a relatively smaller number of people, often in their later years. They often require expert interventions and extensive investigations. The facilities for these are concentrated in hospitals to which patients have to, and will, come. Thus, from the providers' point of view, they are easier to deliver. They are much more expensive and can generate relatively higher income per intervention. There is a more challenging level of expertise and technology. On the whole they are more easily marketed. But they benefit a limited number of people and their contribution to the overall health of a community is relatively small. Often the outcome is relief or temporary remission rather than cure.

Thus health care covers a broad spectrum of activities. At one end is the widely needed basic health care which is not readily commoditised and has low market value. At the other end, advanced medical care deals with selectively needed, highly visible interventions which are popular and are lucrative to the providers. Market forces favour the latter and can adversely affect the others.

Education in the health professions

The education and training of health professionals, particularly doctors, is also an important factor in health care. The attitude and priorities of the professionals are influenced considerably by the contents of the curriculum and the learning environment. These in turn are determined by who owns and directs the educational institutions. Where the control rests with the state, there is always the possibility of directing the education towards the health needs of the community. Where the education itself is a marketable commodity, its products are bound to be more sensitive to market forces.

Pre-liberalisation health care in India

The accompanying Table below gives selected indicators of health and health care in India in 1990, along with some other relevant parameters. It also provides the same data for China which is the Asian country closest to India in population, GNP and industrialisation. Japan represents the successful Asian countries with globalised market economy. The mortality and ill-health indicators are distressingly high for India. The greatly superior health indices of China demonstrate what can be achieved on an equally low income. In fact, on most counts, the Chinese data are closer to Japan with over 70 times as much per capita income. A major part of the Chinese achievement may be attributable to societal factors such as education (especially female literacy) and effective access to nutrition (particularly for children and women). In India, the total expenditure on health ($21) is almost twice as much as in China ($11). But most of it (perhaps 90%) goes for advanced clinical care, mainly through the private sector (which absorbs 70% of the total spending); the state-funded Indian hospitals also give high priority to additional clinical care. But all this bears little fruit, even in regard to that segment of ill-health on which such care is targeted. On the other hand, the success of China in all parameters of mortality and morbidity, but especially those influenced by basic and essential care, is all too obvious. The explanation has to be the relatively higher (7:4) spending in China on the basic and essential services through the public sector, which perhaps is also more efficient and effectively targeted. In fact, according to WHO statistics, India spent the lowest proportion (22%) of its total health care expenditure through the public sector, among all the countries of the world.

Thus, even before the advent of NL, the health care system in India was heavily marketised, and the public allocation for health inadequate, resulting in an avoidable but heavy load of human misery through disease and death. The system was already lopsided and its critics were making little headway.

What about the medical education in India? The content of medical education was always disease-oriented, with a special focus on additional clinical care. But till the 1970s, most of the medical colleges were state-owned. Thus it could be hoped that medical education could be reoriented if and when the state itself became health-oriented. But by 1990, medical education had become increasingly privatised and market- driven. The possibility of reorienting medical education by state action had already receded.

The advent of neo-liberalisation

From the discussion so far, it is clear that the overwhelmingly privatised and commercialised health care system in India was failing to provide an effective health care net, before NL came to be initiated in 1991. There was little 'socialistic' health care to be dismantled by NL. So no radical change in direction is likely to flow from the new dispensation. It follows that the general effect of NL in India can only be to aggravate the adverse consequences of the existing situation, with its poorly funded, ill-directed and inefficient state apparatus for health care. The badly needed improvements will fail to materialise. Within this basic trend, the following specific developments may be envisaged.

(a) At the bottom of the social pyramid, living conditions and access to nutrition greatly influence vulnerability to disease. So much will depend on whether the meagre income of the poor will undergo any change due to NL. Even marginal increases in real income can make them less vulnerable to disease. On the other hand, even a small fall in income can have disproportionately adverse effects. It remains to be seen whether, as a result of NL, the poor will become less poor or more poor, in absolute terms.

(b) A second trend which seems in no doubt is that public expenditure cannot increase. We have noted the present low levels of public expenditure on health and the resultant high levels of preventable mortality and morbidity. Under the new dispensation, no additional funds will become available to rectify this anomaly. And perhaps the situation might well deteriorate further. In this climate hostile to the public sector, the commitment of public servants to the state health machinery might weaken, leading to even greater inefficiency and lack of direction in the feeble public sector.

(c) Two interesting developments are likely to occur in basic health care. The lack of funds for the public sector will abbreviate the concept of comprehensive primary care to selective primary care. The former is a broad- based, horizontal approach to participatory promotion of health. But as that becomes abandoned due to lack of public funds, a few cost-effective technical measures will be identified for vertical implementation. And in the name of market forces these will be delivered through private vendors. The pattern can be observed in the history of the promotion of oral rehydration solution. The basic concept of ORS is that diarrhoea can be effectively tided over by the administration of plenty of drinks rich in carbohydrates and salt; the sugar facilitates the intestinal absorption of salt, and water accompanies both into the dehydrated body. This concept is a striking example of an appropriate technological solution to a major cause of infant mortality. In the horizontal primary care approach this would have been promoted by persuading mothers to make babies drink thin gruel with a little more common salt than usual. Every mother however poor can do this, every time the baby develops diarrhoea. But in the vertical approach, salt and sugar packets were manufactured by a number of private companies. Naturally they produced a variety of packets. The mothers who could not read the instructions on the packets were unsure how much water to use with each type of packet. Thus the babies got either too weak or too strong solutions. Since the packets had to be obtained from elsewhere, they were not readily available when the need arose. Initially the government paid the cost of the packets to the private producers. But as funds became scarce, the mothers had to buy the packets, which today costs about one third of the daily wage of a manual labourer. Naturally, the diversion of the meagre daily wage for this purchase, in the end makes the family even more malnourished and vulnerable to ill-health. This is a classic example of how the cycle of commoditisation and privatisation of even very cost-effective basic health measures can eventually defeat their own purpose.

(d) The squeeze on public health expenses will lead to schemes for user-financing and cost sharing of publicly funded, health utilities. Since some of the problems with the present government hospitals are due to inadequate funding, the additional income from those schemes may improve their efficiency. But the fact is that it is only the poor who use the government facilities and their use of these facilities is bound to diminish as they too become costly. Thus the net effect of the user-financing schemes will be to reduce access for those who are dependent on these services.

(e) A part of the liberalisation policy is the recent revision of the Drug Price Control Order. About half of the controlled drugs have been decontrolled. And the effect of this on the prices of some drugs is already being felt. The shift from the pattern of process patents to product patents will have serious repercussions. Till now, drug prices in India have been lower than in the international market. With product patenting and globalisation, many new drugs will become prohibitively expensive for Indians of limited means. Sixty percent of medical expenses is the cost of drugs. With these new policies, inflation in the cost of drugs will exceed the general inflation, making medical care relatively more expensive for everyone.

(f) The general effect of these will be that the man at the wide base of the social pyramid will be called upon to fend for himself more than in the past. But this response will become more expensive. In the result, any benefit of the reduced vulnerability to disease derived from a possible trickle down effect on societal factors, will be reversed by the added load he has to carry without help.

(g) Another obvious development is the mushrooming of corporate or commercial hospitals. Recently three such ambitious projects have been announced. The capital costs in these projects vary from Rs 2.9 million to as much as Rs 7.5 million per inpatient bed. Even at the lowest estimate, these projects cannot be financially viable unless the hospitals make a net profit of at least Rs 1,500 per bed per day. Thus the daily cost of in-patient care cannot be less than Rs 5,000 which is equal to the per capita GNP for six months. As these highly visible institutions advertise their new equipment and procedures, they will set the pace for what has been called 'catastrophic health care costs'.

(h) One manifest effect of this inflation in medical costs is a hyperinflation in the salaries or remuneration of doctors. Five-figure monthly salaries (in rupees) have become the norm and six-figure salaries are being mentioned. These salaries are being offered to increase the profitability of the investment in the commercial hospitals. In a sense the doctors are being made parties to milking the medical market for profit. Such an environment is conducive to dubious practices like kick-backs, fee splitting, unnecessary procedures, over-prescription and so on.

(i) A very visible aspect of recent trends in medical advances is the greater role of expensive diagnostic procedures. These are mainly dependent on costly machines, purchased as investments through borrowed capital or hire purchase arrangements. This is a segment of medical care singularly prone to market forces. Over-investigation, or investigations inappropriate to the total situation of the patient, is a likely consequence. Also, there is an increasing dependence on gadgetry both on the part of the patient and the doctors. The result can be missed diagnosis or wrong diagnosis, leading to still more expensive investigations or worse.

(j) All these cannot be without adverse effects on the perceptions of the patients. One real effect is that the patient also starts evaluating drugs and procedures in terms of cost, appearance and novelty. For instance, patients are not satisfied with economically produced drugs, distributed in inexpensive packages in the cost- conscious voluntary hospitals. Secondly, the usual tendency of patients to depend on technical solutions without taking personal responsibility for their own health will be affirmed. Thirdly, as the patients notice the commercialisation of medicine, they too will be tempted to resort increasingly to malpractise litigation. The recent spurt in such cases is not only the effect of the Consumer Protection Act, but also due to the patient feeling justified in paying the doctor back in his own coin.

(k) The medical education scene is also bound to become further commercialised. A distinct fall in the standards of training not only of doctors but also of nurses and paramedical workers is already evident. Once education becomes a commodity, there need be no correlation between manpower needs and educational opportunities. And the stage is set for excessive production of inadequately trained and profit-driven health professionals from the proliferating health education market.

(l) Finally, who is likely to experience these unpleasant effects most? The middle class with rising expectations of improved quality and quantity of life, will find that their new- found affluence is not sufficient to ensure their access to the five-star medical culture. The poor will cope, as they always have, silently and miserably.

A responsible response

In the face of these forbidding possibilities, what can the conscientious citizens do?

1. Citizens should push for a health-oriented, cost-effective, basic health care system funded by the state.

2. Patients should seek more information on the likely benefits and costs of medical interventions that are advised, so that they too can knowledgeably participate in the decision making with an eye to cost effectiveness.

3. Since drugs constitute such a large proportion of medical costs and since the discount to the medical shops is considerable, every community could try to set up a non-profit co-operative pharmacy, which also stocks medicines produced by reputed non-profit manufacturers. Well-informed patients could indicate to the doctors a preference for Rational Drug Therapy.

4. Socially sensitive and professionally competent health care institutions in the voluntary sector will have an increasing role to play in the coming years. They should not withdraw from their medical ministry in the face of the rising commercial tide. Rather they should manage their institutions with greater efficiency, setting an example of how financial viability can be combined with social responsibility and professional dependability.

5. A significant proportion of ailments (some say 85% of all ailments) need only symptomatic relief while the clinical episode runs its course and the body, mind and spirit effect their own healing processes. Judicious use of home remedies, folk medicines, alternative therapies and holistic responses should be favoured in these situations.

6. A long-term but very effective strategy is for the educational system at the school level to offer the best possible health education. This can enable everyone to take his legitimate responsibility for every aspect of his health needs with informed understanding and confidence.

7. The lay public should demand and undertake an increasing involvement in health issues, drug policies and medical matters. Medicine is too important to be left to medical people!

Dr P Zachariah is a medical doctor and the Co-ordinator of Faith and Healing Cell in Vellor


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