Is the Public-Private Partnership Model the right path for Indian Healthcare?
By: Sagar Suresh Kumar
Tags: Healthcare, Privatization, Niti Aayog, India, Medical Education

The new year began with the infant death toll in JK Lon Hospital, Kota, Rajasthan rising to 110, exposing the pitiful state of healthcare in India.

The healthcare situation in India is rather complicated and quite contradicting in many ways, as I had mentioned in my previous article. On one hand, you have a nation that provides efficient care to middle and upper-class Indians and a booming center of medical tourism, and on the other, you have one where people can’t afford to get even basic medical care.

As you may have already inferred, the former situation is observed in private hospitals, while the latter in government ones. There is a far greater shortage of doctors in government hospitals, and rural areas, which are highly dependent on them, are severely affected.

A comparison of public and private healthcare. The picture was taken from Al Jazeera.

Thus, there is a large disparity between public and private healthcare. The public healthcare spending is quite low compared to other nations, at around 1 to 2 % of the GDP. This is why, private hospitals and medical colleges, which are known to run for a profit, generally have better infrastructure and equipment.

Public-Private Partnership (PPP) and its Indian context

In the backdrop of the aforementioned problems, Niti Aayog is planning to modify several district government hospitals into private medical colleges, though what is known as Public-Private Partnerships (PPP).

Public-Private Partnerships can be described as long term partnerships between public and private sector agencies, targeted towards financing, designing, and implementing infrastructure facilities to provide services that were traditionally provided by the public sector.

Private players will be responsible for building and running the medical colleges, with a minimum annual intake of 150 MBBS students, and also operate the district hospital. As per the 250-page document released for feedback from the stakeholders, the district hospital must have a minimum of 750 beds, where 300 and 20% of the remaining beds will be reserved for patients, called regulated beds, where treatment will be free of cost. The private player can charge for the remaining beds, as a means of remuneration. NITI Aayog has mentioned in its statement, that PPPs will:-

Reduce the reliance on public funding by using money from private investors. Increase the number of doctors, especially in rural districts.

Now, India is no stranger to PPPs. It has used them in for infrastructure, power, and water in the 2000s. The results weren’t perfect, with complaints of corruption, that the private players weren’t abiding by their agreements, the user was charged too much and so on. However, in healthcare, the experience is quite limited, with states like West Bengal having PPPs for diagnostic services and equipment like MRI and CT. Service-based PPPs have been given out to local firms and even MNCs like GE Healthcare, Siemens.

Factors for the success of a PPP. The picture was taken from oliverwyman.com

Moving from the service-oriented domain to a public one would entail problems of its own.

1. The track record of PPPs in Public Health

One of the few states where a public health PPP was implemented was Karnataka, and unfortunately, the results were poor. A PPP for primary healthcare called the Aarogya Bandhu scheme was prematurely terminated by the state government in 2016, following complaints of noncompliance with rules, misuse of funds and so on.

The PPP for tertiary healthcare too met the same fate, with the scheme between the Rajiv Gandhi Super Speciality Hospital, Raichur and Apollo Hospitals being terminated due to poor governance, grievance redressal mechanism and accountability.

In other lower and middle-income countries, studies have shown that private players in PPPs were hesitant to publish data, which would make an appraisal harder, had poor accountability, and the worst of all, tended to serve higher socio-economic groups.

Even for a high-income country like the US, PPPs showed deficits in transparency and a lack of care for vulnerable groups. When you consider a country like India, where there has been no dearth of reports of medical malpractice from private hospitals, or their exorbitant fee charges, it is an understatement to say that such partnerships would need to be stringently monitored.

2. The dangers of privatization of medical education

The current government has already gotten a lot of flack its activities in the educational sector, like giving autonomy to 60 universities over their fee structure, a reduction in the budget allocated to public education, which many see as a push for privatizing education. These proposed PPPs seem to be in favor of that argument.

India’s medical education is one that has been rocked by a series of scandals and other charges of corruption, propagated by a criminal nexus that included politicians, real estate agents, and even private medical colleges.

In last year’s medical seat scam in Karnataka, three private medical colleges blocked around 60% of the seats allocated under management quota and then sold them to students who secured low ranks.

They did this by paying bright students to crack the NEET exam, with some of them being in their third or fourth years in their MBBS course. After these students opted for seats in the respective colleges, they would later give them up, thus allowing the colleges to sell these seats for inflated prices, as they are ‘unoccupied’. Experts say that this could be just the tip of the iceberg and such scams could have a nationwide presence.

The three medical colleges belong to trusts under G Parameshwara, a Congress party leader and an Ex-deputy CM of Karnataka. He was alleged to have been involved in the scam.

Also when the National Eligibility cum Entrance Test (NEET) became an obstacle to charging capitation fees, they resorted to increasing their fees, by substantially high amounts. For example, Shri Guru Ram Rai Institute of Medical and Health Sciences in Dehradun increased its fees to around 13 lakhs per annum from 4 lakhs, for seats under the national quota category. The private medical and dental colleges association in Telengana has also asked for an increase in fees, citing institutional expenses and inflation.

Although one can appreciate the government’s efforts in limiting the fees of private medical colleges, is the handing over of district government hospitals to private players really the best way to encourage medical education, especially amidst all the scams and when the private players themselves are longing for fee hikes? Have they completely ruled out increasing the budget for public medical education?

So, such questions on the PPPs need answers from the government, lest we lose faith in their health policies.

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