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role of private sector in health role of private sector in health Presentation Transcript

  • Healthcare System  The term healthcare system refers to a country’s system of delivering services for the prevention and treatment of diseases and for the promotion of physical and mental well being
  •  The Indian healthcare sector can be viewed as a glass half empty or a glass half full.  The challenges the sector faces are substantial, from the need to improve physical infrastructure to the necessity of providing health insurance and ensuring the availability of trained medical personnel with the opportunities available equally.
  • The healthcare sector comprises: Medical Insurance Pharmaceutical Medical tourism Hospitals Diagnostics Equipment and supplies
  • Private sector in healthcare  It is conventional to define “private sector” as that which falls outside the direct control of government.  Informal Private Sector – 45% (usually small-scale providers including drug shops) * Unlicensed and unregulated  Formal Private Sector – 35% (multinational, national enterprises, private qualified individuals) * Legally registered and recognized by the government
  • Why the Private Sector Matters?  Scaling up the delivery of essential interventions to achieve international health targets is dependent on working with it.  The “private health sector” includes an enormous diversity of actors, including providers, funders, and suppliers of physical and knowledge inputs for the health sector.  The effectiveness of health care delivery can be enhanced with use of innovative and flexible models and performance-based provider remuneration.
  • EVOLUTION
  • Merchants Company started hiring doctors
  • Which required trained health care personal British spread the Medical services all over India But many colleges also admitted private students As early as 1880's these private students were competing with European doctors for private market
  • Our pillars to the Construction of health care sector is Bhore and Sokhey committee In mid 1970’s no. Of private institutions become more Concentrating Before the independence of Independence more on India, the spread of infectious 1947 preventive pgms diseases was very high 1970's We have less info. Regarding this In the mean Time govt. . Many committees were formed by the govt. to review the health care sector
  • 1961's MUDALIAR COMMITEE 1940's BHORE COMMITEE 1967's JUNGALWALLA COMMITEE
  • The primary responsibility for health care in the Indian constitution rests with state Resulting in increasing the no. of private institutions ( private sector growth with the supporting hand of the govt.) NRI INVESTMENT 1974 to 1982 grants from central to the state govt. comprised of 20% Following liberalization (1982-89) fell to 6% In (1992-93) further fell to 3.3% Policies Liberalization in 1990’s & national health policy 2002 BOOST to the private sector Finally it became just like the story of Arab and camel( camel which pushed the Arab out of tent)
  • PRIVATE PRACTICE BY GOVT. DOCTORS NEGLIGENCE AND POOR QUALITY IN GOVT. HEALTH CARE SECTOR FINANCIAL CONCESSIONS GIVEN BY GOVT. STEROTYPES User fees Potential market UNAFFORDABILITY OF GOVT. PRIVATE SECTOR GROWTH IN HEALTH CARE Lack of proper monitoring sytem Disguise hand of private secto REDUCTION IN FUNDINGS BY CENTRAL &STATE GOVT.
  • Hospitals PRIVATE hospitals in different cities of India Source: Business Monitor Report, WHO World Health Statistics 2011, Aranca Research
  • Ref: IJTBM : 2013 VOL no 2, issue no 3: ISSN: 2231-6868
  • FAVOUR AGAINST FACTORS INFLUENCING PRIVATISATION
  • Medical tourism- medical travel value Medical tourism market is expected to expand at a CAGR of 27 per cent to reach USD3.9 billion in 2014 from USD1.9 billion in 2011 • Cost of surgery in India is nearly 1/10 th of the cost in developed countries • Presence of world-class hospitals and skilled medical professionals
  • Factors leading to an increase in the popularity of medical travel include: High Cost Long Wait Time EASE AND AFFORDABILITY IMPROVED TECHNOLOGY AND STANDARDS OF CARE
  •  Market size : USD 600 million, 20 % annual growth Growth Drivers  Steady rise in healthcare spending  Increased consumerism  Dynamic healthcare scenario in the country -Increasing incidence of lifestyle diseases -Greater health related concerns -Growth of Medical Tourism -Increasing penetration of Health Insurance
  • LACK OF REGULATION HIGHLY FRAGMENTED DIAGNOSTICS SECTOR HUGE DISPARITY IN QUALITY OF CARE
  •  Expansion through hub and spoke model. Alternatives- modifications of Hub and Spoke model.  Acquisitions of small labs by large players.  Telemedicine
  • Private health insurance • • • • • An alternative mechanism for financing health care. Liberalization since 1991 paved the way for privatization of insurance sector. Private and foreign entrepreneurs were allowed to enter the market with the enactment of IRDA in 1999. Penetration - 3% to 5% of population. Market share - 1% of the total health spending in the country.
  • Opportunities in India  Total health expenditure in India, Rs 3 00000 crore, the spending on hospitalization accounts for Rs 100000 crore.  The existing level of health insurance premium was worth only Rs 10,000 crore, which means that a majority section of the Indian populace does not have an insurance cover.  According to World Bank Report, 99% of Indians will face financial crunch in case of any critical illness. Hence is the need for Health Insurance.
  • Medical Technology TURN OVER GLOBALLY Indian Market USD$ 273.3 billion (2011) USD 4.8 billion (2011) Regulation body and policy: No specific body or policy( right now it's covering under CDSCO, central drug standard control organization.) Most of the market in India of medical technology covers by the MNC's companies the role of govt. And domestic private sector is minuscule.
  • Why govt. Or domestic private sector failed to grasp the market of medical technology? Competition from MNC's Lack of financial incentives High capital investment challenges Customer relationship management Adverse regulatory policies Trained man power shortage
  • Keep watching……….
  • Foreign Direct Investment
  • SOURCES • India – 2nd most important FDI destination (after China)) • Eight fold increase in its FDI (< $1 B in 1990- to March 2012). UAE 01 France 02 • fast-growing service sectors in India ( 12% per annum ) contributing 6% of GDP 0.78% of the total FDI 04 Germany 06 Japan & U.K 11 Singapore 17 Mauritius 34 0 10 20 30 40
  • DISTRIBUTION other sectors chemicals hotel &tourism Mis.eng. Indust. Misc. mech. power sect. Metallurgical Construction Telecommunications Drugs & pharma., service sect. (financial… 0% 30% 3% 3% 5% 5% 6% 6% 7% 8% 13% 19% 20% 40%
  • REGULATIONS singlebrand , 100% aviation, 4 9% Broadcast sector, 74% multibrand retail , 51% 2012-GOI •Before 2000-through FIPB •2000 onwards ,FDI –- through automatic route •Now also through ADRs and GDRs
  • PREFERENCES Series 1 Rural, 5 Semiurban area , 20 urban area , 75 60 50 40 30 20 10 0 The huge benefits and concessions granted by the government is the major factor for the flow of FDI in healthcare than Steady economic growth of Indian economy and availability of raw materials, like in other sectors. Series 1
  • IMPACT • Hospital- improved Infrastructure, quality of cares (more specialized care), advanced diagnostic & treatment equipments, No.of private players • Medical tourism- has grown from $350Million in 2006 to $3 Billion-2012 • Govt. Started encouraging this by incentives like lower import duties, higher depreciation on medical equipments and expedited visa for patients
  • IMPACT • IT sector -more growth in health & hospital sectors • Tele -medicine has improved & became as a solution for the difficulties in hospital acceptance (time, place &money ). • Tele -radiology has emerged and many foreign hospitals are active in it . • Bio-medical equipment manufacturing sector-has also improved.
  • CHALLENGES EXTERNAL  The number of potential overseas institutions are low.  Entry as an independent overseas institution is very difficult  Problems in partnerships, financial control , expectations , management styles etc.  Political and foreign exchange risks DOMESTIC  Lack of proper infrastructure and set-ups  Corruption, red tape, social and political issues  Govt. - non transparency and uncertainty in policies, lacking clear vision,  lacking investment& business friendly environments
  • P.P.P
  • PRIVATE-PUBLIC PARTNERSHIP fundamental themes Relative sense of equality between the partners; 2. there is mutual commitment to agreed objectives; 3. there is mutual benefit for the stakeholders involved in the partnership 1.
  • COLLABORATING WITH THE PRIVATE SECTOR IN HEALTH (Source: Adopted from World Bank 2004) INFORMAL NOT FOR PROFIT FOR PROFIT PROS CONS Accessible Client-oriented Low cost Poor quality care Difficult to mainstream Poorly educated High quality Targeted to the poor Low cost Involves the community Small coverage Lack of resources Cannot be scaled-up Ad hoc interventions High quality (in select disciplines) Huge outreach / coverage Innovative Efficient High Management Standards Ad hoc interventions High Cost Variable quality Clustered in cities Less concern towards public goal.
  • PPP…  Contracting out and Contracting in, is the predominant model of private partnership.  In almost all partnerships, the principal public partner is the department of health and family welfare, either directly or through health facility level committees.
  •  In terms of monetary value, the least valued contract provided dietary services at a rate of Rs 27 per meal for about 30 meals in a day(Bhagajatin Hospital, Kolkata);  The most expensive engaged a corporate hospital to run a government-built super-speciality hospital in Raichur, Karnataka (over Rs 600 million).  The oldest partnership (since 1996) is the Karuna Trust that adopted and manages primary health centres in Karnataka.
  • Evolving state-NGO relationships Nature of activities and programmes undertaken Formation of NGOs by political parties, retired bureaucrats & BM - supporting - antagonising or empowerment -well connected members -entry of young professionals Autonomy of NGOs through foreign funding Policies emphasizing greater control over NGO sector - control of foreign funds by introducing registration or permission -well-defined role --provision of services & service delivery
  • Donor influences on NGOs Highly formalized and bureaucratic structures Cost effectiveness & efficiency Working env creates inequality & brain drain Short term targets and specific goals neglect overall functioning of the healthcare system Altering ngo- client relationshi ps Dependenc y on donors who seek value for money
  • What should be done to achieve better health? ● Cooperation with the state- long-term plan of a national health care system; making the government the main responsible party ● Nationalised institution for channeling aiddivision without being stuck to short-term direct measurable goals. ● Training and employment of locals- preference over expatriates; providing the same salary as the national health care system does. ● Increasing donor confidence by eradicating corruption- ensure more involvement of such agencies with the state than with the international and local NGOs.
  • Influence of Globalization and Trade WORLD TRADE ORGANISATION (WTO) 1995 GATT * - Goods • Medicines, Vaccines GATS - Services • Health professionals; Patients; health related investments TRIPS - Intellectual Property • Patents; Trademarks; copyrights
  • NATIONAL HEALTH POLICY DECENTRALISATI ON PRIVATE SECTOR NHP 1983 >2002 INFRASTRUCTURAL STRENGTHENING HUMAN RESOURCE
  • MoHFW Central Drugs Standard Control Organization (Medical Equipments) Food And Drug Administration Departments of Health in individual states Indian Medical Association The Indian Medical Council
  • Income tax exemption for a period of five years, for newly established hospitals (Finance Act, 2008). Foreign Direct Investment (FDI) in the hospital sector (100% ) Long term capital and Cheaper loans to PHI ( ITA 1961) Land allocation on subsidized rates, partial or complete wavier on stamp duty, electricity duty etc.
  • Medical Visa (M Visa) and Attendant Visa (MX Visa) mid 2005 Import duty on Medical equipment and technology Reduced the customs duty on Medical devices Insurance companies, Post liberalization (IRDA Regulation, 2001) Rastriya Swasth Bima Yojana, 2008 Relaxed the procedures to attract Non Resident Indian doctors .
  • Regulation  Information Technology Act, 2000  Bio-medical Waste (Management And Handling) Rules      1998 The Companies Act, 1956 The Clinical Establishment (Registrations & Regulations) Act, 2007 Consumer Protection Act, 1986 Pre-natal Diagnostic Techniques (Regulation And Prevention Of Misuse) Amendment Rules, 2003 Medical Termination Of Pregnancy Act, 1971 And (Amendment) Act, 2002
  • FOOD SAFETY AND STANDARDS ACT, 2006 THE TRANSPLANTATION OF HUMAN ORGANS ACT, 1994 (RULES AMENDMENT 2008) BIOMEDICAL WASTE MANAGEMENT AND HANDLING RULES, 1998, AMENDED IN 2000 THE DRUGS (PRICE CONTROL) ORDER, 1987 INCOME TAX ACT, 1961 FINANCE ACT, 2008 SERVICE TAX OF INDIA, 1994 ENVIRONMENT (PROTECTION) ACT, 1987
  • GUIDELINES FOR CORPORATE SECTOR  Companies included- Which are worth 500 crores or above / which have a turnover of 1000 crore/profit of 5 crore.  2% of company’s 3 year average income initially followed by 2% on company’s profit annually. SIGNIFICANCE IN HEALTH SECTOR • CSR funds are being utilised in MDG programmes - Health programmes for Maternal and Child health, Malaria ,HIV etc.
  • Salient features of the Company Bill, 2012  Company should have dedicated CSR division with     experts from fields of social work and public health . Government should play as a facilitator rather than a director. Transparency Companies should present an annual report relating to CSR. There should be an accountable authority to monitor CSR fund utilisation.
  • HETEROGENEITY AND IT’S IMPACT
  • Heterogeneity refers to the diverse nature of healthcare systems and services provided to the society
  • HETEROGENEITY IN HEALTHCARE TYPE OF SETUP NGOs CHARITABLE TRUST CORPORATE SETUP. NURSING HOME AND CLINICS. MEDICAL COLLEGES WITH HOSPITAL. HOME BASED CARE QUACKS SYSTEM ALLOPATHIC HOMEOPATHY AYURVEDIC UNANI SIDDHA YOGA. TRADITIONAL HEALING SYSTEMS
  • EFFECTS OF HETEROGENEITY  Provides ‘Last Mile Connectivity’.  Improves the Health System by increasing competition.  Greater compatibility for all socio-economic strata.  Inclusion of indigenous systems of medicine into the mainstream.  Greater freedom of choice from the beneficiary perspective.
  • Impact
  • WHAT? The differences in the utilization of healthcare services arising out of the contrasts in the quality and accessibility of healthcare service providers.
  • UTILISATION DIFFERENCES Rural Urban
  • WHY ? Determinants  Government Stance  Policy Drawbacks  Economic Reform  Low Insurance Penetration  Regulatory Failure
  • HOW? GOVERNMENT ECONOMIC REFORM STANCE LOW INSURANCE PENETRATION RURAL –URBAN DIVIDE POLICY DRAWBACKS REGULATORY FAILURE. HIGH COST OF QUALITY SERVICE RICH-POOR DIVIDE QUALITY SEGMENTATIO N& MALPRACTICE