Improving Indian Health Care Sector

Indian healthcare sector is one of the most important one which offers immense employment opportunities and impressive revenue for the government. In 2007, the value of healthcare sector was around $34 billion (6% of the GDP) which is expected to reach more than $40 billion in 2012. 80% of Indian healthcare comes under private sector while the remaining 20% is under public sector¹ .

The figures may suggest things against privatization and in support of governmental interference in healthcare sector. However, the present deficit of government (9%) won’t allow it to invest more on healthcare, so if we restrict private healthcare sector, around 80% of the healthcare facilities will simply go orphan and non-working and that will certainly create a havoc as Indian healthcare sector will be completely demolished. So, whatever healthcare facilities we have attained in India are primarily because of the private sector.

Government strictly controls and regulates the private sector through its taxation, subsidies licensing, registration, and inspection practices. So why is it difficult for common Indians to attain proper medical help? Like many other countries, India also enjoys a governmental Universal Health Care program (local/state level). It is also true that only a 1/4^th of Indian population lives in urban area, yet urban areas have less than 4% of government primary health care facilities. Situation in rural area is much more sensitive because private sector often fails to offer enough healthcare services because of lack of incentives.²

Failure of Indian Universal Health Care Program

State interference supporters often suggest that Indian government must restrict the private healthcare sector completely and should stress over providing free or universal healthcare system funded by government at federal and state level. Statists often provide a weird and emotional explanation for the failure of Universal Health Care. Socialists suggest that the current policy of government to support private healthcare sector is in fact a policy of negligence and a gradual withdrawal of the state from the responsibility of people’s health³ . Often socialists ignore the inability of government in providing any proper health care system for all and they feel that the failure of universal healthcare system is just because of the wrong policies of the state and its support for the private sector. According to a report, there are around 11, 25,000 recognized practitioners of different medical systems registered with different medical councils out of which,  125,000 are in government service.  Around a million other medical practitioners in India are working in the private sector. Apart from that, there are tens of thousands of unqualified or unregistered medical practitioners offering medical help. 59% of all medical practitioners are offering their services in cities while the rest 41% practitioners provide medical services in small towns and villages. Same is the case with hospitals and health infrastructure. Around 84% of all hospital beds are situated in urban areas while around 75% of Indian population resides in villages. Overall, villagers (75% of Indians) are still living without any proper medication or they have to cover long distances to attain any significant medical help⁴ .

Socialist argument for the failure of Universal health Care

Indian government offers immense support for medical practitioners in form of subsidies, loans, tax waivers and other similar benefits for initiating private practice, for building up hospitals, diagnostic centers and pharmaceuticals. Socialists often claim the private health sector as unethical and exploitative and offer an emotional yet irrational argument against the freedom of practitioners to choose their work ethics. The socialist claim is that the government provides highly subsidized medical education at the expense of taxpayers and hence, the medical experts do not have a right to choose private sector rather, they should be forced to serve the public sector.

However, this argument holds no ground because only 3 percent of Indian population pay income taxes⁵ . Others either legitimately evade taxes, or they earn so less that they are not required to pay any tax while many evade taxes illegally (as the government say). So, if the medical practitioners should work for those who do pay income taxes because their education was funded by tax payers, then they need to serve just a 3% of Indian population. Furthermore, most of these taxpaying citizens are living in urban areas and often they opt for private medical facilities. Hence, medical practitioners do no wrong if they choose to work in urban areas in private health sector.

Around Rs 10, 00,000 are invested by the government for the medical studies of a doctor while 80% of the doctors produced by the public medical schools either prefers to migrate abroad or to join the private health sector of India which is currently the biggest private health sector of the world. Around 4 to 5 thousand doctors migrate abroad from India every year and at this rate, India looses around Rs4, 000- 5, 000 million every year. Socialists claim that this money could have been invested in improving life and working conditions of the poor Indians. While this is true, the solution suggested by statists is to force medical practitioners to work in Indian rural areas and to allow them work in urban areas only after they provide enough services for the rural people.

This socialist idea is also irrational because it directly violates the right to freedom to move or work in any place of India. Furthermore, these medical practitioners while certainly enjoy the subsidized medical education and various other monetary benefits, they never called for these benefits by their own. Also, they never had any other option because medical education is completely regulated by Indian government through its medical council. There are very few private medical colleges in India because the All India Medical Council often acts reluctant in providing licenses for private medical colleges.

How to Improve Indian Health Sector

So what are the other ways to improve Indian health care sector?

When compared with engineering colleges, medical colleges are very few in India, furthermore, the course design for medical practitioners is quite uninteresting and time consuming because of which, only a few interested students work hard and succeed in attaining a medical degree. While the government has created an overabundance of engineers in India through its control on engineering and technical education board (AICTE), the same regulatory power has caused an immense dearth of medical practitioners while there are ample opportunities. Medical fees are high because of governmental monopoly which is maintained through license provisions. While 84% of doctors work in urban India, there are not enough doctors in urban areas too to reduce the demand of doctors and to provide them enough incentive to go and work in villages.

However, the cause of all this mess is the governmental interference in education and specially the medical education. The lack of supply of qualified medical practitioners is because of the unethical control of government over medical education. If anyone with enough resources and expertise to run a medical college is allowed to initiate their own medical colleges and educational instituted, the competitive market free of any governmental interventions will produce enough medical practitioners to compete in urban areas which will reduce the medical fees and will provide an incentive for medical practitioners to look for areas where they may attain more clients or consumers for their services and hence, they will have a natural incentive to move towards villages to serve the villagers and earn through their services.

Enforcement never helps. Even if government makes it compulsory for every medical practitioner to serve in rural areas for at least 5 years before they may attain a license to work in cities, the government cannot ensure that medical practitioners will actually visit villages to serve poor villagers. Obviously they will create ways to dodge government and show that they worked in villages without actually visiting a village ever. We should not forget that the end can be good only if means are valid. Forcing people to work against their will can certainly not help while we can attain a situation when medical practitioners may willingly opt for visiting villages to serve villagers and this is possible only if we allow free market forces to provide enough incentives for medical practitioners to seek new markets to practice. The only way to make it possible for the poor Indian villagers and poor urban dwellers too to attain quality health care facilities at affordable prices is to completely remove the governmental interference, regulation and license system from medical education and health care sector and privatizing it absolutely. By doing so, the government will reduce the expense of taxpayers on medical education and hence it will reduce the wastage of tax-payers money. This money on the other hand can be used to make the tax payers strong enough to support the public through jobs and opportunity creation by reducing the taxes while the government may also work to improve the basic health care infrastructure.

1. Emerging Health Care Sector of India, Healthcare in India [↩]
2. Smiles on Wheels, Smiles on Wheels [↩]
3. The Private Health Sector in India: Nature, Trends, and a Critique,  The Private Health Sector in India: Nature, Trends, and a Critique [↩]
4. The Private Health Sector in India: Nature, Trends, and a Critique,  The Private Health Sector in India: Nature, Trends, and a Critique [↩]
5. Indian Great Robbery, Tehelka [↩]