Universalizing access to quality primary healthcare
Team SURAJ from Indian Institute of Management(IIM) Kozhikode
Contextual Background for primary Healthcare Status
Primary healthcare Issues from Primary Data Collected
Medicines and Vaccines
1998 2000 2002 2004 2006 2008 2010 2012 2014
Infant Mortality Rate(deaths/1,000 live
Source: World bank Data
Hospital beds-to-People ratio: 9:10000 where as WHO benchmark is 35:10000;
World average: 26:10000
Difference between CAGR of total health expenditure and CAGR of GDP for
India: -1.7% where as for Low-and-Medium income countries(LMIC) average is
1/5th of the 2,87,000 maternal deaths worldwide in 2010 occurred in India
Shortage of at least 6.4 million skilled health personnel
Government spending on primary healthcare is only 1.04% of GDP.
Nearly 70% of the healthcare expenditure is from patient’s own pocket due to
low quality healthcare provision by the govt.
Issues and Challenges
Lack of regulation in
Lack of accessibility
to medicines and
Infectious diseases dominate the morbidity
Absenteeism Rate for medical personnel is as
high as 40%
Only 3% specialist physicians serve the
whole rural India.
39% PHCs do not have lab
18% PHCs do not have a
70.2% shortfall of medical
specialists in CHCs
68% of the
66% of rural
NOT have the
access to the
31% of the
than 30 kms
More than 1 million babies born every year
in urban slums having NO or minimal
31.5% of private hospital
visiting population goes to
doctors having limited or
live in urban
70% of urban
Only 25% of
live in semi-
live in urban
Proposal 1: National Medicine Policy
Easy Access to medicines: Proposed Medicinal products distribution System
Central Health Department
Bidding must incorporate
pricing based strategy and
stringent quality check
Procurement of medicine through Medical Store
DRUG DISTRIBUTION SYSTEM
Central Govt. Health Centre
State Owned Health Centre
Public Sector Units
National Depot13 national Depot
Assume: Each national depot will
cater 30-35 districts and sub-depot
will cater 20-25
To district hospitals catered by different depots
Block medical Centre 1 Block medical Centre nBlock medical Centre 2
PHCs CHCs PHCs CHCs
Distribution from block medical centers to PHCs and CHCs will be done through the
recommendation from the doctors servicing these PHCs and CHCs.
Communication to the rural mass for the assurance of the drug standard will be done by
“Swathya Sahayaks”, present in CHCs and PHCs
Proposal 1: National Medicine Policy
Easy Access to medicines: Proposed Medicinal products distribution System (Contd…)
National drug depot to increase from current count 7 to 13 with 6 new sub-depot to increase the
accessibility, timely replenishment and thereby catering to the demand of generic and specialized drug.
The Overall Value chain(up to district level) be implemented using Enterprise Resource Planning(ERP)
through the Ministry of Health and Family welfare in collaboration with the Ministry of
Communication and Information technology to monitor the distribution system effectiveness
Through bidding process ERP vendor should be selected: SAP, Oracle Applications R12.1.3 g,
Microsoft Dynamics AX are few options
Significant amount of cost savings by eliminating intermediaries(middle-men, agents etc.)
To restrict the involvement of drug mafia, ensuring the supply of quality drugs to the people
Material Resource Planning(MRP) to be implemented using ERP to avoid any leaking, man handling
and Business-to-Business(B2B) level corruption based on demand and supply mismatch. (Monitoring
MRP will also contribute significantly towards the demand forecasting and fulfillment
Capturing the demand of specialized and chronic disease drugs to avoid local procurement by
the state government.
Inventory Management System to be implemented in depot level to cater zone specific demand.
Nationally Standardised Regulation of medicines should be managed through rational and
transparent criteria and processes
Regulations to ensure appropriate practices are followed in the development, production, supply and
disposal of medicines, and that any problems are met with a quick, effective and appropriate response
The level of regulation should be consistent with the potential benefits and risks for the community
and based on appropriate risk-assessment processes
There should be an effective post-market monitoring system (for example, for adverse drug
reactions), to ensure ongoing assessment of safety
Patent protection law must be strictly monitored to avoid duplication and unnecessary restrictions
and to facilitate early availability of therapeutic advances
CASH AND MEDICINE IN THE PIPELINE MONTHS
Purchase pipeline: About 35% of the medicinal products
used in the Indian pharmaceutical market must be sourced
by the GoI. An average of 2 months will elapse between
the provision of letter of credit and the receipt of the
pharmaceuticals at the central supply agency.
Safety Stock: A 3 month safety stock will be maintained at
the central supply agency.
Working Stock: The central agency will tender once a year
but will receive deliveries every 4 months. This strategy
implies a maximum working stock of 4 months and an
average working stock of 2 months.
District Hospital Safety Stock: The district medicals will
maintain a SS of 2 month.
PHCs and CHCs Safety Stock: These must have safety stock
of 1 month.
District to Centre Cash Transfer: Money received by the
district medical stores will be deposited within the week at
the local branch of the national bank. On an average, this
money will take 1 month to be credited to the account of
the supply agency.
Cash on hand: In general purchases made by the supply
agency will represent 1/3 of its annual turnover. As a
result, money will sit In the agency's central account up to
4 months, or on an average 2 months, before being used to
effect a purchase.
Cost Structure Model for the proposed alternatives
Medicinal products distribution System
Assumption: The system will be implemented within a span of 9 months.
All calculations are done based on the 13 proposed national and sub-depots.
Only incremental calculations are shown to evaluate the extra monetary burden
that the GoI has to carry from its GDP expenditure towards its healthcare.
Software implementation calculation is based on Oracle Fusion ERP software
and Sun Microsystem (Oracle Systems) Exadata Server.
Labor hour taken: 6 hours per day for project design and 7 hours per day for
Project Development and no. of working days = 22 per month
Source of Project Cost(IT and ITes)
PROJECT TASKS LABOR HOURS LABOR COST ($) MATERIAL COST ($) TRAVEL COST ($) OTHER COST ($) TOTAL PER TASK
Develop Functional Specifications 396.0 ₹ 7,92,000.00 ₹ 1,00,000.00 ₹ 5,00,000.00 ₹ 50,000.00 ₹ 14,42,000.00
Develop System Architecture 396.0 ₹ 7,92,000.00 ₹ 1,00,000.00 ₹ 5,00,000.00 ₹ 50,000.00 ₹ 14,42,000.00
Develop Preliminary Design Specification 396.0 ₹ 7,92,000.00 ₹ 1,00,000.00 ₹ 5,00,000.00 ₹ 50,000.00 ₹ 14,42,000.00
Develop Detailed Design Specifications 396.0 ₹ 7,92,000.00 ₹ 1,00,000.00 ₹ 5,00,000.00 ₹ 50,000.00 ₹ 14,42,000.00
Develop Acceptance Test Plan 396.0 ₹ 7,92,000.00 ₹ 1,00,000.00 ₹ 5,00,000.00 ₹ 50,000.00 ₹ 14,42,000.00
Subtotal 1,980.0 ₹ 39,60,000.00 ₹ 5,00,000.00 ₹ 25,00,000.00 ₹ 2,50,000.00 ₹ 72,10,000.00
Develop Components 924.0 ₹ 18,48,000.00 NA ₹ 5,00,000.00 ₹ 50,000.00 ₹ 23,98,000.00
Procure Software 924.0 ₹ 4,80,00,000.00 NA ₹ 5,00,000.00 ₹ 50,000.00 ₹ 4,85,50,000.00
Procure Hardware 924.0 ₹ 12,00,00,000.00 NA ₹ 5,00,000.00 ₹ 50,000.00 ₹ 12,05,50,000.00
Development Acceptance Test Package 924.0 Included in above NA ₹ 5,00,000.00 ₹ 50,000.00 ₹ 5,50,000.00
Perform Unit/Integration Test 924.0 Included in above NA ₹ 5,00,000.00 ₹ 50,000.00 ₹ 5,50,000.00
Subtotal 4,620.0 ₹ 16,98,48,000.00 ₹ - ₹ 25,00,000.00 ₹ 2,50,000.00 ₹ 17,25,98,000.00
Subtotals 6600.0 ₹ 17,38,08,000.00 ₹ 5,00,000.00 ₹ 50,00,000.00 ₹ 5,00,000.00 ₹ 17,98,08,000.00
Risk (Contingency) 0.0 ₹ 3,47,61,600.00 ₹ 1,00,000.00 ₹ 10,00,000.00 ₹ 1,00,000.00 ₹ 3,59,61,600.00
Total (Scheduled) 6600.0 ₹ 20,85,69,600.00 ₹ 6,00,000.00 ₹ 60,00,000.00 ₹ 6,00,000.00 ₹ 21,57,69,600.00
Cost Category Total Cost
Average Inventory Carrying Cost (At depot level) 1,95,00,000.00₹
Operating Cost (Storage and Stock Management) 2,60,00,000.00₹
Transport Cost (To Operating Units) 65,00,000.00₹
Sub-Total (Incremental) 24,70,00,000.00₹
Pharmaceutical Land Acquisition Cost (Including the
registration charges and duties)
Warehousing Incremental Cost Analysis
Proposal 2: Quick Response Service (QRS)
Total Slum enumeration blocks(SEBs) is about 108000 in India
Slums Category: Notified: 37072 in numbers Recognized: 30846 in numbers Identified: 40309 in numbers
Total slum households: 13.749 million
Largest number of slums in Maharashtra: 21359
Most health issues with urban slums are associated with women and children
Primary data Collected from Chennai, Bhubaneswar, Kanpur(150+ respondent): 42% of women had post delivery complications
An severe anemia is a cause of high maternal mortality rate and Infant mortality rate(IMR)
Since currently there are no primary healthcare centers in urban slums, there is a high need of providing easy and fast service.
63.5% households in slums are having mobiles (as per 2011)
We are proposing for a weekly Mobile Hospital Plan which are capable of providing primary healthcare namely generic drugs, Vaccines etc.
More frequent visits for Women and Child Care based on the information provided over telecommunication network.
Dedicated 24 x 7 helpline number should be provided for ease of access of the service.
To communicate the existence of the facility, We will be conducting rallies, camps and through media campaigns
Special preventive actions should be taken for diseases like Malaria, HIV, Flus etc. as these are the major cause of death tolls in slums
P-P-P Model should be aggressively implemented for Telemedicine : Apollo, AIIMS, Narayana Hridayalaya, Aravind Hospitals etc. few options.
Reaching through Mobile Hospitals
The proposal will be launched in a test case basis in 4 states
namely: Odisha, Maharashtra, Uttar Pradesh and Tamil Nadu
The States are chosen to represent 4 parts of the country and
relatively larger slums and rural population percentage as per
census data than other states.
Analysis of QRS System
Financial estimation of the pilot launch of the program
Larger and effective reach to remote places and places deprived
of basic medical facilities in terms of primary healthcare
Easier and faster way to spread awareness
Saves expenditure and time of people who can not afford
Medicare facilities, even the basic ones
Diseases that are treated traditionally due to its complexity can be
brought into notice so that proper treatment can happen
Effective distribution of vaccination can be done. e.g. Polio
No. of Panchayat Samiti (PS) 314
Each Mobile hospital will cater to 3 to 4 PSs (Assumption)
Catering to 226 PSs (4:1 Ratio) 56
Catering to 90 PSs (3:1 Ratio) 30
Total installation Cost 8,60,00,000.00₹
Calculation for State of Odisha
No. of mobile hospitals Required
Fixed Cost Calculation for infrastructure
Variable Cost Calculation
Petrol and Salaries (Per annum): Salary@5000
INR per driver per month and petrol@1000
per visit assuming 100 visits per annum
Local recruitment and training of para-medical personnel
through public-private partnership with organizations like Arvind
hospitals, Apollo Group, AIIMS etc.
Outsourcing the transportation/mobility of the vehicles to
transport agencies for better co-ordination and effectiveness
Partnership with medical equipment suppliers like General
Electric Medical Sciences or Philips for supply and maintenance
Special department to be established for the proposed system
How to achieve?
Proposal 3: Securing Human Lives
National Health Insurance Policy
PROPOSED CHANGES IN THE RSBY SCHEME
Total BPL population 22% 279.5 million
Registration Fee Rs. 0 per household
Expected no of people per household 5
Total no of households in BPL category 55.9 million
Plan coverage Rs. 50000 per household per annum
New Scheme for the people
above BPL but Poor
National Health Insurance
This scheme will help to cater the
rest of the poor section of the
population, who cannot avail the
facility through BPL schemes but
also don not have sufficient
money to avail good medical
Total Population 120.5 million
Total No of households 24.1
Proposed premium amt. Rs. 100 per person
For a family of 5 Rs. 500 per household
Mode of payment In 2 installments of Rs.250
The new insurance scheme
should be launched in the UP,
Maharashtra, MP and Odisha
with highest no of poor public
First instalment (DOP*) 1st- 5th April
Valid Up to 31st September
Second Instalment (DOP*) 1st- 5th October Launch the scheme phase wise in
various districts with the help of
NGO’s, locally active committees
like Rotary club etc. to increase
awareness about the scheme
Valid Up to 31st March
*DOP: Date of Payment
Coverage Package Rs. 1,00,000
Permium earned Rs. 6025 6025 12.05 billion
If all the people file medical claim Total Cost (Rs.) 2410 billion
Facts and Issues
Only 11% of the population has any form of health insurance coverage.
It is estimated that 20 million people in India fall below the poverty line each
year because of indebtedness due to healthcare needs.
The first ever general medical insurance policy by GoI in 1996-97was a major
FAILURE due to:
The insurance was on a reimbursement basis
The claim of the insurance was lingered most of the time even up-to 1 year
from date the application.
All BPL and above BPL but poor will avail the policy having 5 members/family.
Rs. 100,000 as coverage for the poor section other than BPL.
Cost is given for 100% claims, though this is highly unlikely that all the insured
people will file claim
AMENDMENTS IN RSBY:
Since the cost of treatment has gone up, So coverage plan should be revised
from Rs.30000 to Rs.50,000
The registration cost should not be collected from the BPL people
The selection of insurer & empanelled hospitals should be made for a bigger
ADVANTAGES OF THE NHIP:
Medical insurance for every poor in the country
Improve the HDI by providing timely and effective medical care which earlier
was not possible because of money
Reduce the no of people falling into poverty because of taking loans for
FACTORS MEDICINE DISTRIBUTION SYSTEM QUICK RESPONSE SERVICE NATIONAL HEALTH INSURANCE POLICY
Huge pressure on pricing of the drugs
Issue of more harmonization of healthcare systems across
Acceptability of initial capital outflow and its
approval in the political level
Huge political stand-point regarding PPP model in
Indian healthcare insurance scheme
The spend on healthcare per capital continues to grow in
Low cost of innovation, manufacturing and operations
Cost benefit analysis of the infrastructure
spending and challenge on the break-even
Huge negative impact in health insurance models
particularly where part payment is required.
Opening of the health insurance sector
Huge increase in domestic demand of generic drugs
Increasing aging population and health concerns
Problem of the increasing obesity amongst the population and
its associated health risks.
Awareness about the mobile hospital concept
among the poor and the rural people
Dealing with the beliefs of the people about the
effectiveness of the system
High level of social dis-belief regarding paying
insurance premium without availing the benefits for
years if not needed.
Outsourcing of clinical data management may trigger threat to
the effectiveness of the system.
Opportunities in terms of:
a. New info and Communications technologies.
b. Social Media for Healthcare.
c. Customized Treatments.
d. Direct to Patient Advertising.
e. Direct to patient communications.
Challenge of in-house procurement of the medical
equipment and outsourcing of the same to
Proper trained staff/para-medical personnel for
handling and operating the equipment giving
quality treatment to the people.
Huge challenge in managing database for all the
genuine candidates for the scheme
Data integration and security issue in terms of
claimant amount and quick and effective transfer of
service to the needy
Presence of more unorganised players versus the organised
Growing environmental agenda and community awareness
An opportunity to incorporate it within their
Corporate Social Responsibility programmes
Huge scope of business for both public sector and
private sector companies due to a wide market
Import duty on foreign trade in pharmaceutical products.
Huge export may pose challenges on domestic demand-supply
Trade Related aspects of Intellectual Property Rights (TRIPS)
have an adverse impact on pricing of pharmaceutical products.
An ever growing culture of litigation across Indian
Proper validation of applicants during registration to
Stake of private sector companies in case of PPP
model implementation in insurance domain.
Low public expenditure and high government
involvement in investment policies
Challenges, Risks and Factor Analysis
India being one of the most populated subcontinents in the world with very high population density we would have to ensure
proper distribution system in terms of medicine and other medical facility.
For ensuring availability of medicine as per requirement, the proposed National Medicine Policy would not only bring in efficiency
but also will lead to a transparent and sustainable medicine distribution system.
Reducing IMR and MMR will help India in improving its HDI ranking
Considering India to be an emerging economy with increased technological adaptation, a proposed paradigm like QRS would lead
to better access to emergency medical facility which is the need of the hour.
As the per capita income is also growing, the applicability of health insurance scheme can't be ignored any more. Hence, with the
wide adaptation of health insurance schemes it would be easier on the part of both the general public and government to bear the
cost of health care facilities. For this, government has to increase its spending on healthcare sector by 2% of the GDP to
accommodate the increase in cost structure.
By cutting on the cost incurred by people on the medical care, they can now invest more on other things like food, education etc.
After all, government should not consider these options as a source of income; rather a good investment for a better future.
Lastly we would propose increased focus on preventive measures in order to ensure a healthier breed in coming future. For this we
should spread awareness related to yoga and Ayurveda which is not only cost effective but has been proven effective in many
instances. Institutionalizing yoga would not only ensure health but also would lead to lower healthcare liabilities on Governments'
part to bear for.
Sound mind lives in a healthy body. Thus by implementing all these, we can put a step closer for making India a better place to live,
because after all Sound mind is a necessity for a country to grow.
Towards a better India
• SWOT analysis of Indian pharmaceutical industry by Kapil kumar, research scholar, Bhagwant university, Ajmer and Dr. M. K. Kulshreshtha, director, s. d.
college of management, Panipat
• Ministry of Health and Family Welfare Government of India. "Financing and Delivery of Health Care Services in India." 2005. Web. 30 Apr. 2012
• "Rashtriya Swasthya Bima Yojana." Rashtriya Swasthya Bima Yojana. Web. 30 Apr. 2012. http://www.rsby.gov.in/.
• World Health Organization. "National Health Accounts in India." 2005. Web. 30 Apr. 2012
• Priya Shetty, “Health care for urban poor falls through the gap”, The Lancet, Volume 377, issue 9766, page 627-628.
• Indian Health Industry, DINODIA Capital advisors, November 2012.
• Health of the Urban Poor in India, UHRC, March 29, 2007.
• Analyzing and Controlling pharmaceutical expenditures, Chapter 40, Planning and Administration, Management Control System.
• Infant and Child mortality in India, National Institute of Medical Statistics, Indian Council of Medical Research
• Emerging Market Report: Health in India 2007, PricewaterhouseCoopers
• Jan Swasthya Abhiyan, Universalising Health Care for All, November 2012, Published by Amit Sengupta, on behalf of Jan Swasthya Abhiyan, and Printed at
Progressive Printers, 21 Jhilmil Colony, Shahdara, Delhi.
• Coverage plan for BPL population, Government of India Publication
Appendix and Sources