Universal Health Coverage Part IV: A partnership for change


The gamuof services that shelter under the umbrella of Health and Medical Services are collected neatly into four broad verticals: Preventive, Promotive, Curative and Rehabilitative. Preventive and Promotive health services are in the ambit of Public Health and have come to be the responsibility of the government. They are structured as low incentive sectors whose outcomes also rely on the participation and behaviour of the targeted population. For decades, these two divisions (often clubbed as one), have suffered from lack-lustre funding and interest. Paradoxically, effective action implemented here, is what impacts health metrics and influences the success of health policy. At the other end of the spectrum, Curative and Rehabilitative services are high incentive and lucrative tertiaries where the private sector is the dominant provider. This end is technology intensive. It does not rely on market participation and does not share responsibility for outcomes. In practice, there is a wide grey zone where curative and preventive services are in intimate and interactive contact. Evidently, irrespective of lucid demarcations of purpose and goal, successful policy depends on an active and cooperative participation of both the public and the private sector.

The framework of our health system was developed and commissioned in the initial years after Independence. While it has expanded in scope; very little of the original thought or content has changed and Government continues to serve a dual role of provider and purchaser of services in competition with, but distinct and apart from, a vibrant private sector. This explicit separation cannot continue in any useful way anymore. Health is now complex and gargantuan. The failures of the public health system as also the serious lapses of the private sector on professional responsibility and ethics have forced a rethink. Experience has brought a new acceptance of effective capabilities: ‘Not for profit’ Government excels at stewardship and regulatory; whilst the profit-driven private sector is a more efficient provider of services. This, broad but true, understanding should inform the new collaboration.

At a fundamental level, health is simply a service that subscribes to the same ordinary equations of provider, payer, profit and cost. These four elements are at the centre of a grouping of healthcare models into four types: Bismarck, Beveridge, National Insurance and Out of Pocket. Table 1 details the salient features of each system. National healthcare models, fronted by Germany and the UK, preceded the push for UHC. The first three systems in both their nascent and current versions were developed for the local people with heed to culture, disease burden and economic context. To this day each model is still associated with its country of origin. Local culture and conditions are critical components of policy and make the design of each system unique. Countries that have followed in the wake of the early trendsetters have themselves developed unique systems borrowing elements from all these models. One size does not fit all and there is no one model that can be singled out for emulation; but the fundamental principles of these four models are recognizable in every system.


Some features of an ideal system would include: a single, not for profit payer with comprehensive coverage for all and with tight cost control. Most of the obstacles in the path towards these ideals are laid in stone by the structure of already existing systems that are hard to dismantle. Reform of existing but non-effective systems will need an exercise in understanding before an overhauling is undertaken. Here’s a very brief overview of India’s healthcare delivery and purchase patterns as they stand to date:


Health service providers in India are divvied up  into: A) The public (government) health system owned and operated by the government – extends from tertiary hospitals to an extensive three tier network of secondary and primary healthcare that meanders through urban pockets, satellite townships, districts and interior villages. These facilities are ostensibly free and some charge a nominal amount. In reality; out of pocket expenses, borne by the poor at the public health system, are significant. The public health system is also one of the largest employers in the country. More than 2/3rds of the budget is expended on human resources. B) The private health system owned and operated by private individuals, companies and corporations – offers tertiary and secondary services restricted mostly to cities with a smattering presence at the town and district level. Privatized primary care is serviced through GPs, group practices and OP clinics at hospitals.


The critical details of purchase and spending were enumerated in UHC Part II. To briefly summarize; the bulk of healthcare spending is private; 86% of this is at point of care, direct and out of pocket. Public healthcare delivery and funding is decentralized to the State; which contributes 2/3rd of the outlay. The Union government absorbs the remaining 1/3 but bears primary responsibility of policy, stewardship, regulatory, establishment of standards and protocols and, audit. There are a plethora of, relatively new (2007 on), government sponsored health insurance schemes (GSHIS), distinct and apart from those for formal sector employees and civil servants. In 2009-2010, government sponsored insurance programs accounted for 8% of total health expenditure. The social-health insurance schemes are greatly fragmented, are funded by both the Centre and the State with considerable degree of overlap. government. According to WB 2010 figures; 25 per cent of the population have some sort of coverage; 19% is public insurance and 6% is private. Even if these figures seem low for a huge country; it is still a giant leap from a few years back and owes much to the expanded coverage of RSBY and some good state health plans. The pros and cons of the new GSHIS are detailed in Table 2 belo

GSHIS (Government Sponsored Health Insurance Scheme)
Advantages Disadvantages
Covers 240 million as of 2010 Is not universal
Is restricted to BPL groups BPL is not clearly defined or agreed upon
Packages are explicit. No surprises They are not comprehensive. Cover largely catastrophic Inpatient. Primary care and OP care is largely excluded even though 70% of private spending happens here. Coverage limits vary. Low per capita cost directed at tertiary coverage reflects low utilization frequency. Exceptions are Yashasvini and RSBY
  Use TPA for administrative functions. Guaranteed to spiral costs in the long term. Government must invest in infrastructure and human resources to serve this role. Insurers under contract to these schemes have no incentives to control costs
  Inadequate vigilance measures
Networked to private hospitals and patient choice of provider. Makes public health facilities at the tertiary and secondary level, duplicate and redundant.
                                                                                                             Table 2: GSHIS 

The crisis in public health is not one of funding alone; there are serious operational flaws too. That government fails at delivery of services is well established. The reasons are systemic and entrenched. At every level of governance,  the failure is more one of quality and credibility than of accessibility. Quality standards in government-run institutions are abysmal; these institutions are also underfunded, understaffed and absenteeism of employed staff is rampant. The poor react to this in two ways: 1) Avoid non-emergency care. They mistrust public health facilities and do not also have the money to pay for private service. 2) When delay makes the condition dire and/or in emergency situations, they opt to either pay out of pocket for private services or avail of tertiary public health services in large government hospitals. This utilization pattern is reflected, through the example of free meds, in the table below.

  Year Free  meds OOP spend (out of pocket) Did not take treatment due to non-affordability
IP (in-patient) Mid- 80s 30% 41% 13%
2004 9% 72% 3%
OP (out-patient) Mid-80s 18% 65% 12%
2004 5% 65% 26%
Note: The number gap is filled by partially free drugs; those numbers haven’t showed significant movement to warrant detailing here. Also, OOP spending includes purchase for a fee at either private or government outlets. IP OOP can also reflect a shift to service utilization at private hospitals Source: HLEG
The reduction in free IP meds is matched by a corresponding increase in OOP spending. Despite this; people availed of the treatment as can be seen by the drop in non-treatment from 13%-3%. People availed of hospitalization even if they had to pay out of pocket. OP presents a different picture. Even here supply of free meds went down; from 18% to 5%. But OOP did not rise correspondingly. It stayed at 65%. People just stopped taking OP treatment (first line curative, preventive, protective) treatment. Their numbers climbed to 26%From this, it is possible to infer that the segment of the population that is unable to afford health, forgoes out-patient care and risks hospitalization (a more costly service). When their condition worsens forcing hospitalization; they then pay out of pocket as a desperate measure. Hospitalization is more expensive and consequently many are put through severe financial hardship; even bankruptcy.

Behaviour can be reversed by increasing funding to OP services. IP are services of last resort and people will pay for them irrespective of funding. It is also important to note that, empirically, people in a crisis have more faith in and choose the private sector.

                                                                                 Table 1: Spending and behavior

Coverage or Delivery? The shape and form of change:

Public healthcare in India is unique in that the government serves operates in both the demand side and the supply side as provider and purchaser. It does this in a market that is replete with multiple players on both sides. Coverage is meaningless unless linked to delivery. But, world over the scope of health and medical services has expanded to unwieldy levels and it is a Herculean task for governments to go it alone. When funding is already a problem; can the government realistically fund both and keep both, efficient and effective? Can government choose to fund one over the other and if so, how? Consensus is building on the possibilities of partnership with the private sector to tackle this conundrum. Some suggestions for how and a timeline for implementation are proposed below.

1. The scope and scale of government insurance coverage:

  • The entrenched health system is rooted in delivery and coverage fragmentation. UHC, on the other hand, is a homogenizing concept. Transformation of a disparate system into a homogenized one can only be done incrementally
  • Restrict the size of UHC by first making it available to all people under a pre-defined income bracket.  All existing state and central government insurance programs are merged into this one program now called GHC (government healthcare)
  • Coverage under GHC to be comprehensive. All IP and OP, preventive and curative services will be covered along with a prescription plan.
  • The holders of the GHC card can avail services at all government hospitals and the government health system network. This restriction on choice of provider is strictly time-bound. Upon the expiration of this period it is withdrawn in toto. The rationale behind restriction: Allowing GHC holders unrestrained access will bring with it a new set of problems. The public health delivery network becomes redundant and duplicated, since all holders will use the private hospital network. GSHIS is already providing us with valuable learning lessons on this front. On the other hand, giving people coverage to the existing, but crumbling, services at the public hospital will make GHC redundant and push people back into avoiding care.  Lastly, investment in the public hospital network alongside GHC brings up the bogey of funding both demand and supply side. Provision of service must thus be restricted to the public health network. How we prevent the GHC-covered from exercising a Hobson’s choice, is detailed in the following paragraph on delivery reform
  • Institute a single model of purchase by mandating health insurance for all sections of society. Holders of private insurance use the private health network.
  • Abolish direct payments
  • Impel stringent cost control price control and negotiated package rates instead of fee for service.
  • Introduce ‘GHC plus’ for an intermediary group that has GHC as its primary insurance but that can afford to pay for it. Services in the government hospital network are scaled up to include hospitality for this group. Coverage of medical services is uniform for both but the addition of a separate paid-for category (even if only for additional hospitality) prods entitlement towards aspiration
  • Standardize treatment protocols and quality measures.
  • Ensure complete and full transparency and accountability. Subject UHC to a full third party and community audit

2. Ownership of public health delivery:

  • In order to ensure efficient delivery of services; it is proposed that Government plays the role of purchaser alone; disinvests, scales down and finally exits its role as provider. This also is instituted incrementally with the tertiary and secondary services commissioned first and primary care at a later stage
  • Disinvesting in and divestment from delivery of services will provide a source of funding for GHC and the taxation burden on the middle class, who will subsidize some part of GHC, is reduced or not needed even anymore
  • The entry of the private sector into traditionally owned government territory will guarantee growth, quality standards and equitable services on a scale similar to that in the private system.
  • Privatized services in government hospital networks operate under the regulatory stewardship of government but with decentralized control and autonomy in decision making
  • The scaling down of delivery should be matched by an investment in health monitoring and IT services, complete involvement of government in planning and monitoring of delivery, stringent regulatory, tough price control and government audit
  • Data collection and record maintenance is stringently imposed, monitored and collated by investing in technology
  • Empower community participation in regulatory activities at every level of healthcare delivery. Building a sense of rightful ownership will ensure the active involvement of the community in monitoring delivery and in ensuring responsible and ethical service from the provider

Government now ensures depth of coverage to all under GHC while the private sector guarantees the quality of that coverage under the government’s stewardship. Once the system has taken root, operational difficulties ironed out and services equalized across sectors restrictions on provider choice to GHC holders are removed. At this point, Insurance can transition to a National insurance model.

3. Human resources, education and the community:

At its core, health is a personal affair. Initiatives for health work well when there is active community involvement. The government has built an excellent infrastructure of community workers in health through the SHC and PHC network. Happily too, women form the bulk of the frontline of these health workers: ASHAs  (Accredited Social Health Activist), Anganawadi Worker (AWW), ANMs (Auxiliary Nurse Worker), etc. Despite the excellent infrastructure, actual benefits have not been realized; once again, due to the same operational and funding problems. The centres are understaffed, the Community Health Worker (CHW), a local person from the village who is expected to be the bridge to the PHC, is unable to handle the responsibility without support, is inadequately trained and is not integrated into the health system in a sustainable fashion.

This is an excellent opportunity for education to integrate with health. At long last, degree certification in Rural Medicine has been green-lighted. The private sector should be licensed to set up rural/semi-urban schools to offer different levels of training in translatable social and paramedical community health. The enrolment of these schools must be from the local communities. The institution of rewards along with clearly defined career growth will incentivize community participation. Education, until the roll-out of the first graduates, can locate in district centres. At these primary levels of health much can be accomplished with tele-communication aids. Once the first layer of a qualified professional group takes root from within the non-urban civil structure; a new generation of primary health care will truly take shape.

Summary of the core principles of the proposed delivery model

1. Government coverage for all under a certain economic bracket, patient choice initially restricted but regularised in a defined time period; private insurance mandated for all out of this bracket; tight cost control

2. Stringently regulated government partnership with private organisations in delivery with divestment targets to disentangle government from provider role

3. A new funding arm for UHC

4. Private running of government facilities to be monitored, audited, for quality and service checks by both government and community audit and,

5. Primary care and rural medicine education privatised under strict regulation, standards monitoring and audit by the government.

At the centre of health reform is the goal of providing access to affordable health for all people in a population. The only thing standing in the way of that goal is a true political will. Change is easy to accept and implement if the larger purpose of an achievable goal is in focus. The private sector is not without its own set of serious flaws; but it trumps government in an analysis of service delivery and quality. Public perception, satisfaction and trust with government is at a nadir after a six decade experience with ever-failing competence. In this environment; the role of government as provider needs a re-think. By ridding itself of its debatable provider role and focusing instead on its imperative responsibility of ensuring access to affordable health for all its citizens; a true and outcome driven reform might finally take shape.



One thought on “Universal Health Coverage Part IV: A partnership for change”

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s