0
Healthcare System
 The term healthcare system refers to a country’s

system of delivering services for the prevention and...
 The Indian healthcare sector can be

viewed as a glass half empty or a glass half
full.
 The challenges the sector face...
The healthcare sector comprises:
Medical
Insurance

Pharmaceutical

Medical tourism

Hospitals

Diagnostics

Equipment and...
Private sector in healthcare
 It is conventional to define “private sector” as that

which falls outside the direct contr...
Why the Private Sector Matters?
 Scaling up the delivery of essential interventions to achieve

international health targ...
EVOLUTION
Merchants

Company started
hiring doctors
Which required trained
health care personal

British spread the
Medical services
all over India

But many colleges also
ad...
Our pillars to the
Construction of health
care sector is Bhore and
Sokhey committee

In mid 1970’s no. Of
private institut...
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 PRACTICE
BY
GOVT. DOCTORS

NEGLIGENCE
AND
POOR QUALITY IN
GOVT. HEALTH CARE
SECTOR

FINANCIAL CONCESSIONS
GIVEN BY...
Hospitals
PRIVATE hospitals in different cities of India

Source: Business Monitor Report,
WHO World Health Statistics 201...
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....
Factors leading to an increase in the
popularity of medical travel include:
High Cost
Long Wait Time

EASE AND AFFORDABILI...
 Market size : USD 600 million, 20 % annual growth

Growth Drivers
 Steady rise in healthcare spending
 Increased consu...
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...
Private health insurance
•

•
•

•
•

An alternative mechanism for financing health
care.
Liberalization since 1991 paved ...
Opportunities in India
 Total health expenditure in India, Rs 3 00000

crore, the spending on hospitalization accounts fo...
Medical Technology

TURN
OVER
GLOBALLY

Indian Market

USD$ 273.3 billion
(2011)

USD 4.8 billion
(2011)

Regulation body ...
Why govt. Or domestic private sector failed to grasp
the market of medical technology?

Competition from
MNC's
Lack of fin...
Keep watching……….
Foreign Direct Investment
SOURCES

• India – 2nd most important FDI

destination (after China))
• Eight fold increase in its FDI (<

$1 B in 1990- t...
DISTRIBUTION

other sectors
chemicals
hotel &tourism
Mis.eng. Indust.
Misc. mech.
power sect.
Metallurgical
Construction
T...
REGULATIONS
singlebrand
, 100%

aviation, 4
9%

Broadcast
sector, 74%
multibrand
retail , 51%

2012-GOI

•Before 2000-thro...
PREFERENCES
Series 1

Rural, 5
Semiurban
area , 20
urban
area , 75

60
50
40
30
20
10
0

The huge benefits and concessions...
IMPACT
• Hospital- improved Infrastructure, quality of cares

(more specialized care), advanced diagnostic &
treatment equ...
IMPACT
• IT sector -more growth in health & hospital sectors
• Tele -medicine has improved & became as a solution

for the...
CHALLENGES
EXTERNAL
 The number of potential
overseas institutions are low.
 Entry as an independent
overseas institutio...
P.P.P
PRIVATE-PUBLIC PARTNERSHIP
fundamental themes
Relative sense of equality between the partners;
2. there is mutual commitme...
COLLABORATING WITH THE PRIVATE SECTOR IN HEALTH
(Source: Adopted
from World Bank
2004)
INFORMAL

NOT FOR PROFIT

FOR PROFI...
PPP…
 Contracting out and Contracting in, is the

predominant model of private partnership.
 In almost all partnerships,...
 In terms of monetary value, the least valued

contract provided dietary services at a rate of Rs 27
per meal for about 3...
Evolving state-NGO relationships
Nature of activities and
programmes undertaken

Formation of NGOs by
political parties, r...
Donor influences on NGOs
Highly
formalized
and
bureaucratic
structures

Cost
effectiveness
& efficiency

Working
env creat...
What should be done to achieve
better health?
● Cooperation with the state- long-term plan of a national health
care syste...
Influence of Globalization and
Trade
WORLD TRADE ORGANISATION (WTO) 1995

GATT * - Goods
• Medicines, Vaccines

GATS - Ser...
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 Heal...
Income tax exemption for a period of five years, for newly
established hospitals (Finance Act, 2008).
Foreign Direct Inves...
Medical Visa (M Visa) and Attendant Visa (MX Visa) mid
2005
Import duty on Medical equipment and technology
Reduced the cu...
Regulation
 Information Technology Act, 2000
 Bio-medical Waste (Management And Handling) Rules







1998
The Com...
FOOD SAFETY AND STANDARDS ACT, 2006
THE TRANSPLANTATION OF HUMAN ORGANS ACT, 1994 (RULES
AMENDMENT 2008)
BIOMEDICAL WASTE ...
GUIDELINES FOR CORPORATE SECTOR
 Companies included- Which are worth 500 crores or

above / which have a turnover of 1000...
Salient features of the Company
Bill, 2012
 Company should have dedicated CSR division with






experts from fields...
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 COLLE...
EFFECTS OF HETEROGENEITY
 Provides ‘Last Mile Connectivity’.
 Improves the Health System by increasing

competition.
 G...
Impact
WHAT?
The differences in the utilization of healthcare services
arising out of the contrasts in the quality and
accessibil...
UTILISATION DIFFERENCES

Rural

Urban
WHY ?
Determinants
 Government Stance
 Policy Drawbacks

 Economic Reform
 Low Insurance Penetration
 Regulatory Fail...
HOW?
GOVERNMENT

ECONOMIC
REFORM

STANCE

LOW INSURANCE
PENETRATION

RURAL –URBAN
DIVIDE

POLICY DRAWBACKS

REGULATORY
FAI...
role of private sector in health
role of private sector in health
role of private sector in health
role of private sector in health
role of private sector in health
role of private sector in health
role of private sector in health
role of private sector in health
role of private sector in health
role of private sector in health
role of private sector in health
role of private sector in health
role of private sector in health
role of private sector in health
Upcoming SlideShare
Loading in...5
×

role of private sector in health

856

Published on

0 Comments
1 Like
Statistics
Notes
  • Be the first to comment

No Downloads
Views
Total Views
856
On Slideshare
0
From Embeds
0
Number of Embeds
0
Actions
Shares
0
Downloads
53
Comments
0
Likes
1
Embeds 0
No embeds

No notes for slide

Transcript of "role of private sector in health"

  1. 1. 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
  2. 2.  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.
  3. 3. The healthcare sector comprises: Medical Insurance Pharmaceutical Medical tourism Hospitals Diagnostics Equipment and supplies
  4. 4. 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
  5. 5. 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.
  6. 6. EVOLUTION
  7. 7. Merchants Company started hiring doctors
  8. 8. 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
  9. 9. 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
  10. 10. 1961's MUDALIAR COMMITEE 1940's BHORE COMMITEE 1967's JUNGALWALLA COMMITEE
  11. 11. 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)
  12. 12. 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.
  13. 13. Hospitals PRIVATE hospitals in different cities of India Source: Business Monitor Report, WHO World Health Statistics 2011, Aranca Research
  14. 14. Ref: IJTBM : 2013 VOL no 2, issue no 3: ISSN: 2231-6868
  15. 15. FAVOUR AGAINST FACTORS INFLUENCING PRIVATISATION
  16. 16. 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
  17. 17. 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
  18. 18.  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
  19. 19. LACK OF REGULATION HIGHLY FRAGMENTED DIAGNOSTICS SECTOR HUGE DISPARITY IN QUALITY OF CARE
  20. 20.  Expansion through hub and spoke model. Alternatives- modifications of Hub and Spoke model.  Acquisitions of small labs by large players.  Telemedicine
  21. 21. 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.
  22. 22. 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.
  23. 23. 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.
  24. 24. 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
  25. 25. Keep watching……….
  26. 26. Foreign Direct Investment
  27. 27. 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
  28. 28. 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%
  29. 29. 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
  30. 30. 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
  31. 31. 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
  32. 32. 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.
  33. 33. 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
  34. 34. P.P.P
  35. 35. 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.
  36. 36. 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.
  37. 37. 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.
  38. 38.  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.
  39. 39. 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
  40. 40. 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
  41. 41. 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.
  42. 42. 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
  43. 43. NATIONAL HEALTH POLICY DECENTRALISATI ON PRIVATE SECTOR NHP 1983 >2002 INFRASTRUCTURAL STRENGTHENING HUMAN RESOURCE
  44. 44. 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
  45. 45. 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.
  46. 46. 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 .
  47. 47. 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
  48. 48. 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
  49. 49. 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.
  50. 50. 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.
  51. 51. HETEROGENEITY AND IT’S IMPACT
  52. 52. Heterogeneity refers to the diverse nature of healthcare systems and services provided to the society
  53. 53. 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
  54. 54. 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.
  55. 55. Impact
  56. 56. WHAT? The differences in the utilization of healthcare services arising out of the contrasts in the quality and accessibility of healthcare service providers.
  57. 57. UTILISATION DIFFERENCES Rural Urban
  58. 58. WHY ? Determinants  Government Stance  Policy Drawbacks  Economic Reform  Low Insurance Penetration  Regulatory Failure
  59. 59. 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
  1. A particular slide catching your eye?

    Clipping is a handy way to collect important slides you want to go back to later.

×