SPMG II MTEF Report 2015-16 - Department of Health & Family Welfare - Final
Hospital Autonomy in Andhra Pradesh
1. FINAL REPORT
STATUS OF HOSPITAL AUTONOMY IN
ANDHRA PRADESH, INDIA
Submitted By:
Purna Chandra Dash
Dr. Ramesh Durvasula
Mr. Venkat Rao
Center For Social Services
Administrative Staff College of India
Bella Vista, Hyderabad
2. CONTENTS
Title Page no.
List of tables………………………………………………………………….
Executive summary…………………………………………………………..
1.0. Introduction……………………………………………………………...
1.1. Health care delivery in AP……………………………………………....
1.1.1. Public health Sector………………………………………………
1.1.2. Private sector……………………………………………………..
1.2. Utilization………………………………………………………………..
1.3. Pattern of health expenditure in AP…………………………….……….
2.0. Current health policy…………………………………………………….
3.0. Evidence on relative performance of public and private sector…………
3.1. Access to poorer groups…………………………………………………
3.2. Quality of care…………………………………………………………...
3.3. Staffing levels……………………………………………………………
4.0. Current status of autonomy in the state………………………………….
5.0. Current regulatory structure APVVP……………………………………
5.1. Extent of utilization of autonomy status………………………………...
5.1.1. An eye at infrastructure development……………………………
5.1.2. A focus on resource mobilization………………………………..
5.1.3. Equipment maintenance………………………………………….
5.1.4. Efficiency………………………………………………………...
5.1.5. Financial-management…………………………………………...
5.1.6. Standardization of hospital services……………………………...
5.1.7. Emergency services………………………………………………
5.1.8. Drugs……………………………………………………………..
5.1.9. Management information system………………………………...
6.0. Readiness to accept higher autonomy…………………………………...
7.0 Factors affecting success………………………………………………...
7.0.1. Leadership………………………………………………………..
7.0.2. Responsibilities…………………………………………………..
7.0.3. Functional authority……………………………………………...
7.0.4. Functional specificity of authority……………………………….
7.0.5. Ambiguous rules…………………………………………………
7.1. Feasibility of increased autonomy……………………………………….
8.0. Number of points to be reviewed by GOI ………………………………
9.0 Conclusion……………………………………………………………….
Appendixes……………………………………………………………………
References …………………………………………………………………...
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3. LIST OF TABLES
Title Page
No.
Table 1: Current status of government health facilities in Andhra Pradesh,
(Allopathic)
Table 2: Current status of autonomy (as per annex-1)
Table 3: Expenditure by APVVP on maintenance of buildings
Table 4: Reasons for equipment in good condition but lying idle
Table 5: Reasons for the equipment lying for a long period without repair
Table 6: Proposed standardization of APVVP hospitals
Table 7: Current status of readiness to accept greater level of autonomy using
audit tool
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4. STATUS OF HOSPITAL AUTONOMY IN ANDHRA
PRADESH, INDIA
Executive Summary
The purpose of present paper was to examine the current status of hospital autonomy in
the state of Andhra Pradesh and explore the possibility of introducing more autonomy to
the hospital sector for the state. This issue has been examined in the context of each level
(primary, secondary and tertiary) of hospitals in general and Andhra Pradesh Vaidya
Vidhana Parishad (APVVP), an autonomous governmental body for managing the
secondary level hospital in AP, in particular.
Andhra Pradesh has better health status indicators in India compared to many other
states. The disease burden, measured in terms of DALYs lost, shows that the major
causes of DALYs lost are due to communicable diseases such as diarrhea and ARI. The
diseases such as cancer and heart diseases also contributes a major proportion to the
DALYs lost due to non-communicable diseases. The health care delivery in AP
constitutes a three-tier system, with the primary health care at the bottom level and
tertiary and specialty health care at the top. There have not been any significant
improvements in the expenditure on health during past 10 years - with the expenditure on
health lying between 5 to 6%.
In 1986, the government of AP established an autonomous body, called APVVP, for
managing the secondary level hospitals with the express objectives of increasing
efficiency, quality and accessibility of secondary level hospitals. Primary and tertiary
hospitals still remain under the direct control of the government, as is the case for other
states. The autonomy used by the government of AP to grant autonomy is based on
creation of a parental organization and giving that organization autonomy, as distinct
from giving autonomy to individual hospitals.
The review shows that the specific objectives of granting autonomy has not been fulfilled
during last 15 years. Though there has been some change in management of financial
structure - a change from budgetary allocation to block grants - the individual hospitals
does not seem to have any power with them. The following are the achievements and
failures:
• There has been improvement in infrastructure management - with better sanitation,
toilet maintenance, water and electricity supply etc.
• A significant improvement is observed in the field of resource mobilization. APVVP
has been able to mobilize the resources from the external agencies. But the revenue
collection through user fees has been extremely low.
• There has been substantial change in equipment maintenance policies. As a result, the
down time for the necessary equipments has been reduced substantially.
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5. • Though APVVP has taken several initiatives to improve the performance of its
hospitals through regular monitoring, the achievement has been very poor.
• There has been some improvement in the provision of emergency services - with the
availability of better equipment, oxygen cylinders etc.
• A significant change in MIS is noted. Presently the reporting of hospital statistics has
been quite regular.
However, it may be pointed out that the level of autonomy has been quite insignificant -
for the government and the governing body keeping more powers. In fact, there has been
no / little powers with the hospital board. As a result, the hospitals depend on the
approval from the board very frequently for simple day-to-day functioning. Various
factors that have affected the success of APVVP are; changes in leadership, overlapping
responsibilities, and unclear rules. In order to benefit from greater autonomy there is a
need for redefining/clarifying the roles and responsibilities of various stakeholders in
APVVP. However, each approach has its drawbacks, and moreover, every stakeholder
would like to enjoy certain amount of authority over the others. Therefore, the approach
towards achieving greater outcome through autonomy should tend towards minimizing
these effects, and thereby moving towards the welfare of the public.
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6. STATUS OF HOSPITAL AUTONOMY IN ANDHRA
PRADESH, INDIA
Introduction:
The state of Andhra Pradesh, located in costal South India, has better health status
compared to all India. As per burden of diseases estimates, measured in terms of
Disability Adjusted Life years (DALYs) lost, the communicable diseases contributed
nearly 54% of the total DALYs lost for the state during 1991. The contribution of non-
communicable diseases and injuries / accidents were 30% and 16% respectively. The
leading causes of DALYs lost due to communicable diseases are diarrhea (12.68%),
tuberculosis (14.28%), and ARI (18.52%); non-communicable diseases, IHD (15.06%)
cancers (11.26%), cerebrovascular (11.77%); injuries / accidents, (31.64%), falls
(13.89%). (ASCI 1995)
1.1. Health care delivery in AP:
1.1.1. Public health Sector:
Andhra Pradesh comprises of three levels of health care delivery. The primary health care
services, which make up the bottom level of health care delivery system, provide
preventive and promotive care for minor health problems, maternal and
child health and family
planning. Directorate of
Health Services (DHS)
manages all primary
health care services with
the exclusion of family
planning services that are
managed by Directorate
of Family Welfare. The
referral hospitals and
secondary level hospitals
constitute the second
level of public health
care. These facilities
provide inpatient and
outpatient care for the
illness that are too
problematic to be treated
at primary level. These
services are primarily
under the control of
Andhra Pradesh Vaidya Vidhana Parishad (APVVP), an independent governmental
agency, which was created in 1986. The third and final level constitutes the tertiary health
care and is managed by Directorate of Medical Education (DME). Apart from these,
there are five smaller directorates that manage AIDS programme, Preventive Medicine,
Employees State Insurance, Indian System of Medicine and Drug Control. These smaller
Table 1: Current status of government health facilities in Andhra
Pradesh (1997-98), (Allopathic)
Authority Responsible for Number
of
facilities
Numb
er of
beds
Number
of
doctors
DME Tertiary hospitals 38 12466 3077
APVVP Secondary level
district, area,
community and few
specialty hospitals
171 9960 1224
DOH Primary health centers,
sub-centers etc.
1677 95211
3068
DIMS Hospitals related to
state insurance
146 1121 583
UHS Teaching hospitals 5 682 181
Total 2037 33050 8133
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Including emergency beds, DME: Under the control of Director of Medical Education,
VVP: Under the control of Andhra Pradesh Vaidya Vidhana Parishad, DOH: Under the
control of Director of Health, DIMS: Under the control of Director, Insurance Medical
Services, UHS: University of Health Sciences, Source: Statistical Abstracts of AP,
(1996,1997, 1998), Directorate of Economics and Statistics, Government of AP.
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7. directorates are comparatively less independent than other and are supervised by
department of health, medical and family welfare. Table 1 depicts the number of public
health care institutions (allopathic) at different levels in AP.
1.1.2. Private sector:
The state has, of late, witnessed a phenomenal growth of health care facilities in the
private sector. These services range from a family Vaidya in the village to multi specialty
corporate hospitals. Since there is no documentation of this information, we present the
estimated numbers only. It is estimated that, at present, there are more than 2100 private
hospitals spread over the state accounting for about 42,000 beds. Appendix Tables 1A
&1B.
1.2. Utilization:
National Sample Survey Organization (NSSO) in their 52nd
round conducted a survey on
morbidity pattern as well as the extent of utilization of private and public health services
for all India as well as for states. Morbidity is estimated on the basis of number of
persons reporting ailment per 1000 population. The survey reveals that, for rural AP,
there are 64 persons per 1000 reporting their illness, which is slightly higher, compared to
all India (55). For Urban AP the self-reporting is 61 per thousand as against 54 for all
India. The implication of this finding is that in AP, the people are little more conscious
about their health status compared to all India. As for utilization, the report reveals that
majority (i.e., more than 70%) of hospitalized and non-hospitalized cases use the private
health care facilities (Appendix Table 1C).
1.3. Pattern of health
expenditure in AP:
Government expenditure on
health and health related
services have grown
considerably in real terms
during 1983-96. However,
the increase in health related
expenditure is much higher
than that on health. There
has been a significant rise in
the quantum of government
expenditure on health but
more on health related
services. As a result, the per
capita expenditure on health
has not increased at an adequate pace (Appendix Table 1D)
Chart 1 shows the distribution of real government expenditure on each component of
health services. The increase was more in case of public health services followed by
hospitals, medical education and alternative systems of medicine in that order (Appendix
Tables 1E & 1F).
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Chart 1: Real government health expenditure (Rs mil) on
different components, 1983-96
0
500
1000
1500
1983
1985
1987
1989
1991
1993
1995
Year
Expenditure
Pub. Hlth. Hosp. Alt. Sys. Edn. Trg.
8. 2.0. Current health policy of the state:
The current health policy aims at improving the quality and accessibility of health
services to people of AP through following:
1. Strengthening and upgradation of health care institutions at primary and
secondary level with an emphasis on community based health services that are
generally monitored and supported by the community.
2. Emphasis on mobile units that are to be attached to referral hospitals in mandal
and taluq headquarters to solve the problem of non-availability of doctors in
remote areas.
3. Public sector tertiary care is intended to be directed towards providing specialist
health care for the poor and vulnerable and the disadvantaged. Investments in
tertiary care by private sector are also intended to be encouraged.
4. Improving the effectiveness of the public health system through institutional
development. This includes a well-developed information system to provide the
information on health and demographic parameters to estimate the health needs;
development of separate and centralized procurement and distribution system for
drugs; development of appropriate referral system; and a systematic programme
to ensure improved performance in public health institutions.
5. Changing the system of administration by allowing the health institutions to
operate autonomously through the institution advisory committees, which will
involve local body and people's representatives and the community. Government
hospitals are also intended to be encouraged to generate internal resources of
revenue through donation.
6. Establishing an effective public-private partnership to improve relationships,
clarify roles, share information, and discuss issues of common concern and
mutual benefit to co-ordinate health activities. Enhancement of effective
participation of non-governmental organizations in the areas where they have a
comparative advantage. (Vision 2020).
It is pertinent to note that above policy measures leaves enough space for increased
autonomy in the future years.
3.0. Evidence on relative performance of public and private sector:
Studies on performance of private sector are difficult to conduct because of
inaccessibility as well as non-availability of published data. In view of this there is almost
no literature on performance of private sector. There are few studies, which have focused
on the performance of public sector hospitals in AP. The first of these studies are by
Mahapatra and Berman (1992, 1994). Study by Dash (1999) deals with the issue of
efficiency more extensively. However, all the studies have focused their attention on
secondary level health services only. In the absence of any other relevant literature, we
summarize the studies quoted above (Appendix 2). The results are not quite encouraging
- for the performance of the secondary level hospitals has not improved over the years.
The results, therefore, suggest the room for achieving better performance of the hospitals.
This could probably be achieved with greater autonomy to the hospitals. However, we
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9. will come to details about this point while discussing the impact of autonomy status on
the performance of hospitals (Appendix Table 2A, 2B & 2C).
3.1. Access to poorer groups:
Most of the poor people either stay in rural areas or remote tribal villages. The physical
access is generally poor for these people. Though the people can easily go to PHCs by
walking, the modes of transport for Community / Area / District hospitals is very poor. A
study by ASCI 1995 reveals that for the people staying in interior villages of Srikakulam
District, the access to PHCs is restricted to summer seasons only. They have to trek
several kilometers to reach the road and catch a bus to reach the PHC. After going
through all this they may not find the medical officer at the PHC. Access to public health
facilities therefore was restricted on social, physical and economic grounds. (ASCI
1995a)
3.2. Quality of care:
Quality of care can be perceived from two angles, demand and supply side. Demand side
factors affecting the quality and ultimately the use of hospital services are generally
judged from the patients’ perception on the various services provided. The supply side
factors that interact with demand are; non-monetary price of access, the quality of
services with respect to the adequacy of drugs and other medical supplies, staffing and
the availability of critical specialties. A study by Dash (1999) reveals that the quality of
services - measured in terms of supply of drugs, food and other materials- has not been
satisfactory in public hospitals. The quality of care, as perceived by the patients, is not
quite satisfactory - for most of the patients expressing their dissatisfaction over the
services provided. (Dash 1999)
3.3. Staffing levels:
The levels of staffing pattern have a
significant impact on the quality of services
and therefore the performance indicators.
There has been no performance study
relating to staffing pattern for primary and
tertiary level hospitals. Dash (1999) used the
technique of multiple regressions for finding
out the relationship between staffing levels
and performance indicators (i.e., ALS, BOR and BTR) for secondary level hospitals in
AP. His results show that the availability of doctors per bed and nurses per bed in a
hospital affected the performance indicators to a large extent.
4.0. Current status of autonomy in the state:
Motivated by the desire to grant more (and eventually complete) autonomy to district
hospitals, APVVP was setup in 1986 as a quasi government organization with freedom to
set its managerial objectives and style of functioning. The APVVP replaced the
Department of Health, Government of AP, in the management of district hospitals. It was
hoped that through greater autonomy the secondary level hospitals in AP could ensure
greater efficiency, quality of care and patient satisfaction, and improvement in financial
sustainability and management. Starting with a total of 140 district and community
Staffing levels
Staff category Primary Secondary
Doctors 1755 1577
Nurses 3090 2917
Paramedical 5307 2817
Others 19195* 3763
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10. hospitals, APVVP soon took the charge of all area hospitals as well and by 2000 it has
208 hospitals with 10980 beds.
The model used by the Government of Andhra Pradesh to grant autonomy is based on
creation of parental organization and giving that organization autonomy, as distinct from
giving autonomy to each and every hospital. However, there is no evidence to indicate
that autonomy has percolated down to the level of the hospital. The delegation of
financial and administrative powers to the hospital superintends does provide them with
some elements of decision making, but as compared to the overall size of hospital
operations this delegation has been quite insignificant. In Appendix 3 we give certain
theoretical background of the concept of autonomy. On the basis of this theory, we
examine the current status of hospital autonomy in AP. (Table 2)
5.0. Current regulatory structure APVVP:
As already mentioned, prior to the formation APVVP, the hospitals that are presently
under the control of APVVP were under the supervision of Director of Health. The
decisions regarding finance, management of manpower etc. was under the control of state
government. APVVP was established through a legislative act in 1986 with a view to
improve secondary level (first referral) health care delivery system in AP.
Legal framework:
APVVP is managed by a Governing Council (GC), which consists of 5 members of the
medical profession and legislative assembly nominated by the government of AP, 6 ex-
officio members that include the secretaries of health and finance department, APVVP
secretary, Commissioner institutional finance, Vice Chancellor University of Health
Sciences, and Director of Health. Majority of the functions of APVVP depends on the
approval of its GC. The GC of APVVP is therefore the principal policy making body and
has powers to:
1. Make regulations to achieve the objectives of the act;
2. Hold, control and administer the properties of the Commissionerate; Administer
funds, accept donations, endowments, bequests, grants, transfer of movable and
immovable property on behalf of the Commissionerate;
3. Raise loans from central or any other government or the public or any other
financial institution;
4. Levy and collect such fees as may be prescribed for various specific services;
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11. Table 2: Current status of autonomy (as per Annex 1):
APVVP Primary health care Tertiary
Overall health
goal
Low autonomy: The political institutions
define health goal of the hospital sector.
Hospitals as well as health care
institutions are intended to achieve it.
Low autonomy: A major component of
primary health care is preventive in
nature and the goals are set as per
national health policy developed by the
political institutions.
Low autonomy: The political institutions
define health goal of the hospital sector.
Hospitals as well as health care
institutions are intended to achieve it.
Hospital goals
(Performance
goals)
Lowest autonomy: The goals of the
hospitals are not specified by the
hospitals themselves, rather decided by
higher authorities.
Lowest autonomy: The higher
authorities determine the goals.
Lowest autonomy: The goals of the
hospitals are determined by the higher
authorities.
Strategic
management
Medium autonomy: The strategic
management involves the setting up of
broad goals and targets for the hospital
sector as a whole as well as the rules and
procedures. The hospitals have full
powers to determine its range of services
and have control over the quality of
services that are provided. The
independent board makes the decisions.
Medium autonomy: Management
according to rules and guidelines of the
government. However, the hospitals do
have control over the range and quality of
services produced.
Medium autonomy: Management
according to rules and guidelines of the
government. Hospitals do have control
over the quality of services produced.
Administration Highest autonomy: The management of
APVVP is under the complete control of
the board.
Lowest autonomy: Management
according to rules and guidelines set by
the government.
Lowest autonomy: Management
according to rules and guidelines set by
the government.
Financial
management
Medium autonomy: Instead of line item
financing, there is the provision of block
grant. Allocation of funds is under the
control of APVVP. Though there is
provision of charging user fees the
decisions are not made at hospital level.
The hospitals do not have the power to
use the revenues raised by them. Though
there is provision of raising the external
Lowest autonomy: Line item budgets -
allocations for the expenditure from the
side of the government. No possibility of
reallocation by the hospitals. No scope for
collecting user fees.
Lowest autonomy: Line item budgets -
allocations for the expenditure from the
side of the government. No possibility of
reallocation by the hospitals. Though
hospitals do collect user charges for some
services, the decision to do so is usually
made by the government.
12. resources, the act of doing so need to be
approved by the government.
Human
resource
management
Medium autonomy: As far as human
resources management is concerned
APVVP does not posses sufficient powers
to set its own staffing levels and skill mix.
The government generally recruits the
staff and terms and conditions as per the
government rules apply to them.
Therefore the hospitals are not
empowered with setting their pay scales
and therefore the question of hiring and
firing the staff by the hospitals does not
arise here. However, the staff
requirements are basically determined by
APVVP and government recruits them.
Lowest autonomy: No powers to hire
and fire the staff. Staff numbers and terms
and conditions of the services are
governed by civil service requirements.
Lowest autonomy: Staff numbers and
terms and conditions of the services are
governed by civil service requirements.
Procurement Medium autonomy: The hospitals are
given full powers to procure drugs and
other supplies within the allocated budget
from the APVVP district warehouse as
per their requirements. The necessary
drugs are generally purchased centrally,
and are distributed to the hospitals as per
their requirement through district
warehouse. The hospital authorities are
given powers to purchase necessary drugs
up to Rs. 100/- per bed per month. As far
as contracting out the services are
concerned, the hospitals do have power to
contract out the services such as laundry,
food etc. Hospitals do not possess
adequate powers to dispose off their
unwanted assets. This is usually done by
the prior permission of higher authorities.
Medium autonomy: The hospitals are
given full powers to procure drugs and
other supplies within the allocated budget
from the APVVP district warehouse as
per their requirements. The necessary
drugs are generally purchased centrally,
and are distributed to the hospitals as per
their requirement through district
warehouse. Hospitals do not possess
adequate powers to dispose off their
unwanted assets. This is usually done by
the prior permission of higher authorities.
Medium autonomy: The hospitals are
given full powers to procure drugs and
other supplies within the allocated budget
from the APVVP district warehouse as
per their requirements. The necessary
drugs are generally purchased centrally,
and are distributed to the hospitals as per
their requirement through district
warehouse. Some amount is allocated for
hospital authorities to purchase necessary
drugs. As far as contracting out the
services are concerned, the hospitals do
have power to contract out the services
such as laundry, food etc. Hospitals do
not possess adequate powers to dispose
off their unwanted assets. This is usually
done by the prior permission of higher
authorities.
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13. 5. Purchase, stock manufacture and dispute drugs, linen and other consumable;
6. Enter into an agreement with the central or state government or with a private
management for assuming management of any dispensary or hospital and for
taking over its properties and liabilities or for any other purposes of the act;
7. Purchase, maintain and allocate quality equipment to various dispensaries and
hospitals; and
8. Constitute committees of professional experts to advise on strategies for
improvement of medical care facilities.
The APVVP is headed by a Commissioner, who is supported by a number of Joint
Commissioners and Deputy Commissioners, and administrative and legal staff. The
APVVP is a government agency reporting government through Secretary, Department of
Health and Family Welfare. However, the use of such corporate status provide a greater
degree of potential for improved efficiency in contracting, disbursement and management
matters as well as in providing non-government participation in the health sector. A large
number of physicians are also on the pay roll of APVVP, and are principally located at
the various hospitals. The functions entrusted to APVVP are given below:
1. Formulate and implement the schemes for the comprehensive development of the
dispensaries and hospitals.
2. Construct and maintain dispensaries and non-teaching hospitals.
3. Purchase, maintain and allocate quality equipment to various dispensaries and
hospitals.
4. Procure, stock and distribute drugs, diet, linen and other consumable among
dispensaries and hospitals.
5. Provide facilities of specialists and super-specialists in various hospitals.
6. Receive donations, funds, and the like form the general public and institutions
both from within and outside India.
7. Receive grants or contributions, which may be made by the government.
8. Provide for construction of houses for employees of the dispensaries and hospitals
and the maintenance thereof.
9. Plan, construct and maintain commercial complexes, and paying wards; provide
diagnostic services and treatment on payment basis and utilize the receipts for the
improvement of hospitals and dispensaries.
10. Manage public utility services and any other activity of commercial nature within
the hospital premises.
Financial powers: In addition to grants in aid (GIA) from the state government and other
grants from the central government, APVVP is empowered by the act to mobilize
resources by taking loans and by charging for the services provided.
Powers of government: APVVP operates under the general supervision and control of
14. the government, who has powers to review, and inspect the affairs and properties of
Commissionerate, if required. In the event of any disrupt between the government and
Commissionerate, as to whether a matter is of concern to state purpose, the decision of
the government overrides.
In addition to APVVP, there are two super specialty hospitals in AP - Nizam's Institute of
Medical Sciences (NIIMS) and Sri Venkatswara Institute of Medical Sciences (SVIMS)
-, which are autonomous in nature. These institutes are given the status of deemed
universities and provide specialty courses to medical graduates - in addition to the regular
inpatient and outpatient care. These institutes enjoy more autonomy - in a sense that there
is no government interference in their day-to-day functioning and they are free to; set,
collect and spend their user fees. A major portion of their expenditure is met through the
user fees. Governments' grant constitutes a small portion of their total expenditure. Since
the user fees are substantially high and are not affordable by poorer class we do not
concentrate more on the organizational structure of these institutions.
As could be seen below that the extent of autonomy has not been fully utilised yet. The
autonomy has been confined to fewer aspects.
5.1. Extent of utilization of autonomy status
5.1.1. An eye at infrastructure development:
At the time when the APVVP took over the hospitals, basic infrastructure such as water
supply, electricity, toilet maintenance, security, building maintenance was inadequate.
These areas were given high priority by APVVP. The water supply has been improved
substantially by installing bore wells, augmenting municipal sources, and adding
overhead storage tanks. Of the 208 hospitals presently being managed by APVVP, water
supply distribution system has been overhauled and made functional in all 208 hospitals,
an improvement of over 40% as compared to situation in 1988.
Before the creation of APVVP most of the old hospitals had damaged and unsafe internal
wiring and insufficient number of fans in working conditions. This was recognized as one
of the major problem areas by APVVP, and a multi-pronged strategy was adopted to
address power shortages. Measures taken by APVVP include installation of stand by
generator sets, electrical re-wiring in old hospitals, and provision of adequate number of
fans.
APVVP has been giving top priority to toilet cleanliness and maintenance. A separate
annual allocation of Rs.2500000 has been made for purchase of sanitary tools and
cleaning agents for maintenance of toilets and improvement of sanitation.
In addition to comprehensive maintenance, APVVP has also taken up construction of
additional wards, outpatient centers, room for diagnostic services, and areas for patient's
attendants. Table 3 gives an account of such activities:
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15. 5.1.2. A focus on
resource mobilization:
In addition to the grants-in-aid from the state government and other grants from
the central government, APVVP is empowered by the act to mobilize resource by taking
loans and by charging for services provided. Under the clause 5(i) of the bill, APVVP can
"plan, construct and maintain commercial complexes, paying wards and provide
diagnostic services and treatment on payment basis and utilize the receipts for the
improvement of hospitals and dispensaries".
APVVP envisaged several ways of raising resources to augment funds it receives from
the government, currently around Rs. 1500 million annually. These include charging user
fees, instituting system of accepting donations, lotteries and donor funding. We discuss
these points in detail:
(a) User fees: Prior to the formation of APVVP, all the health care services were
provided free of cost. Immediately after creation, APVVP introduced the system
of user charges, though it was only in 1989, that a formal system comprising fee
structure was set up. However, the achievements of APVVP in raising resources
through user fees have been negligible i.e., 1.5 to 2% of total recurrent
expenditure. (Appendix 4). This has mainly been due to lack of proper business
plan by the APVVP, coupled with vested interests of the politicians.
(b) External funding: Probably the biggest achievement of APVVP has been the
approval of World Bank loan of US $133 million in 1993 for a special project
that has helped APVVP to finance activities for strengthening institutions for
policy development and implementation capacity, and improve quality, access,
and effectiveness of health services at district, area and community hospitals.
5.1.3. Equipment maintenance:
Table 3: Expenditure by APVVP on maintenance of buildings
Heads of
expenditure
1993-94 1994-95 1995-96
Hospit
als
covere
d
Exp.
in
Rs.'0
00
Hospi
tals
cover
ed
Exp.
in
Rs.
'000
Hospi
tals
cover
ed
Exp.
Rs.
'000
Construction of
walls
2 216 1 110
Improvement of
existing walls
4 125
Comprehensive
maintenance
73 9385 37 2722 26 1537
Operation
theaters
9 3394 5 6456
OP areas 1 500
Service areas 1 55
Space for
attendants
4 1247 1 310
Total 94 14922 42 9178 28 1957
15
16. One of the major areas in the management of public hospitals in Andhra Pradesh has
been maintenance of medical equipment. It has frequently been observed that while most
of the hospitals seem to be supplied with the required equipments, maintenance of these
equipments had been quite unsatisfactory. The equipments happen to break down
frequently for the reasons given in Table 4 and 5. As a result most of the diagnosis
services remains non-functional. The APVVP could realize this and has made concerted
efforts to ensure that the down time on equipments is minimized. In order to solve these
difficulties APVVP classified the equipments as (a) Common ward equipment, (b)
Analytical equipment, (c) Sterilisation equipment, (d) Pneumatic, Hydraulic and
mechanical equipment, (e) Endoscopies equipment, (f) Electro-medical equipment and,
imaging equipment. It was recognized that while some of these equipments were liable to
frequent breakdown, others were not. Furthermore, it was found that, while in-house
technicians could repair some of these equipments, other required more professional
attendance.
Accordingly, APVVP
divided the equipments into
three categories:
Category 1: This include all equipment to be serviced and repaired by the original
manufacturer or their authorized service agents only, and contained some or all
equipments classified as common ward, endoscopy, imaging, and elector-medical
equipment.
Category 2: This included all equipments where no service contact was deemed
necessary. These included some or all equipment classified as common ward, analytical,
sterilisation, and some electro-medical equipments Category 3: This included all the
equipment subject to frequent breakdown and which could not be easily repaired by in-
house personnel, but could be repaired by qualified
Table 4: Reasons for equipment in good condition but lying idle
Primary reason Secondary reason
Equipment
supplied, but not
installed
1. Supplier took 90% payment but did
not return
2. Fixtures not available
3. Equipment received in damaged
condition
Equipment
supplied but of
poor quality
Equipment choice based on price alone
Equipment require
minor repair
1. Lack of interest
2. Don't know correct maintenance
3. Wear and tear
4. Old age
No one trained to
use it
1. Through donation
2. Supplier did not show up for training
3. Person who was trained was
transferred
16
17. technicians, not necessarily
the manufacturers. This
category included all or some
pneumatic, hydraulic, and
mechanical equipment.
Accordingly, the repair and maintenance of Category 1 equipments was entrusted to
original manufacturer, and appropriate maintenance contacts were drawn up. Category 2
equipments became the responsibility of in-house technicians, and maintenance of
Category 3 equipments was done through service contracts with authorized firms. In
addition, emphasis was also placed on preventive maintenance. In order to facilitate this,
workshops on preventive maintenance of various equipments were organized. A study by
Madeline Hirsch land (Harvard University) in 1992 found that the result of these
initiatives has been quite satisfactory.
5.1.4. Efficiency:
We have already addressed the issue of hospital performance and efficiency in the
preceding Section 3.0. It may be pointed out that there have not been any unambiguous
measures of performance. Government of AP may look at performance as a means of
increasing efficiency to allow the state to reduce its subsidies to the hospital sector.
Madhya Pradesh, on the other hand, might see it as a means of improving accountability
and responsiveness to local needs. Whatever the case may be, there is little direct
evidence of improved efficiency.
5.1.5. Financial-management:
APVVP has taken several initiatives to manage and control funds at its disposal. It
has reorganized the classification of expenses to follow a functional classification and a
concurrent audit system has been introduced and an internal audit wing has been created.
In addition, a number of financial powers have been delegated to the hospital
superintendents and district coordinators, especially for minor and routine repairs.
5.1.6. Standardization of hospital services:
In order to secure appropriate and balanced growth and development of hospitals,
APVVP standardized the scale of facilities in different categories of hospitals, and laid
down normative range of services that consisted of a minimum level and maximum level
of each type of service. The basic idea behind standardization was that it would enable
the hospitals to direct their resources towards the provision of prescribed minimum range
and level of services for the respective category, discourage investment in any facility
outside the prescribed maximum range and levels, meet the local needs of the people. On
the basis of this standardization the APVVP reclassified the hospitals according to the
norms of Bureau of Indian Standards (BIS), which uses number of beds as the basis
(Table 6).
Table 5: Reasons for the equipment lying for a long period
without repair
Primary
reasons
Secondary reasons
Minor repair
needed
1. No budget for electrical fittings
2. No spare parts
3. No one knows how to operate
Supplier or
service
contractor does
not attend
1. Monopoly on parts
2. Problem with payment
3. Supplier busy
No one comes Equipment donated
17
18. Table 6: Proposed standardization of APVVP hospitals
Clinical or
hospital
Clinical services Laboratory services
Minimum Maximum Minimum Maximum
Community
hospitals
(30 beds)
General medicine and surgery;
Gynecology and Obstetrics
Family Planning,
Dentistry, Pediatrics
Clinical pathology,
Bleeding facility,
Radio diagnosis
Blood Bank
Area
hospital
(100 beds)
General medicine and surgery;
Gynecology and Obstetrics,
Family planning, Dentistry,
Pediatrics
Orthopedics,
Ophthalmology, ENT,
Skin and VD,
Emergency ward
Clinical pathology
and Biochemistry,
Blood bank, Radio
diagnosis
Bio-chemistry
District
hospital
(250
bedded)
General medicine and surgery;
Gynecology and Obstetrics,
Family planning, Dentistry,
Pediatrics, Orthopedics,
Ophthalmology, ENT, Skin
and VD, Emergency ward
Traumatology,
Cardiology,
Psychiatry, Disease of
chest and TB
Bio-chemistry,
Blood bank,
Microbiology,
Pathology, Radio
diagnosis
Ultrasonography,
Endoscopy, Radio
therapy, Forensic
medicine and
Toxicology
District
hospital
(250
bedded)
General medicine and surgery;
Gynecology and Obstetrics,
Family planning, Dentistry,
Pediatrics, Orthopedics,
Ophthalmology, ENT, Skin
and VD, Emergency ward,
Traumatology, Cardiology,
Psychiatry, Disease of chest.
Clinical pathology,
Gastro-enterology,
Medical oncology,
Cardio-thoracic
surgery, Urology,
Pediatric surgery,
Plastic surgery
Bio-chemistry,
Blood bank,
Microbiology,
Pathology, Radio
diagnosis,
Ultrasonography,
Endoscopy
Hematology,
Forensic medicine
and Toxicology
5.1.7. Emergency services:
APVVP has taken several steps to improve the preparedness of hospitals to meet
emergency situations. These include identification and improving availability of
equipment required for emergency services, like oxygen cylinders, suction apparatus and
refrigerators.
5.1.8. Drugs:
Availability of required medicines has improved substantially since the formation of
APVVP. It has prepared a list of 63 essential drugs and has developed a system to ensure
that the drugs are available in the hospitals. A separate procurement wing has been set up
by APVVP in APHIM & HDC. This procures them centrally and distributes them
through its district warehouses through the system of passbook. In order to ensure the
quality of drugs APVVP decided to deal with only those suppliers who had a long-term
reputation.
In addition to above improvements, several changes in administrative procedures
have also been made since the formation of APVVP. Due to these modifications, not only
the administrative procedures have become easy, but also many day-to-day functions of
hospitals are carried out without many problems.
5.1.9. Management information system:
APVVP has taken strong initiatives to set up a well-organized management
information system since its inception. The idea behind it is to look at the performance of
individual hospitals within its control. Accordingly, the individual hospitals are requested
to supply the information on various hospital statistics such as, number of outpatients and
admissions, discharges, deaths, laboratory examinations etc. on a monthly basis. These
data are computerized at APVVP headquarters and are used for periodical evaluation of
18
19. individual hospitals. APVVP is in the process of developing online MIS. The system
would help access important information from the hospitals to APVVP and vice versa.
However, it is important to note that the collection of basic hospital statistics and
computation of hospital indicators has been a routine function of hospitals and APVVP.
These information, as it seems, have not been used in the policy making process.
Moreover, the information is also not accessible to the public, and therefore, the public
does not have any knowledge about the performance of their hospitals.
6.0. Readiness to accept higher autonomy
As already mentioned, the hospital sector in Andhra Pradesh consists of three tiers;
primary, secondary and tertiary. There is no evidence that primary and tertiary level
hospitals are given autonomy for their functioning. The hospitals function as per norms
and rules set by the government. Therefore the context of analysis here is secondary level
hospitals. The major objectives of granting autonomy to the secondary level health
services in Andhra Pradesh has been to achieve greater efficiency and financial
sustainability in their operation. In addition, the autonomy is also aimed at decentralizing
the management structure so as to meet the health needs of poorer masses. Available
evidence suggests that the level of autonomy has not been utilised fully, as the hospitals
still run below the level of operational efficiency. From the points discussed above, it is
apparent that a significant achievement has been in the area of generating additional
resources from different non-governmental sources. Below we use the audit tool given in
Annex 2 for assessing the current state of readiness to accept a greater level of autonomy:
Table 7: Current status of readiness to accept greater level of autonomy using audit
tool:
Section 1: External environment
Clear strategic framework
There is no clear-cut strategic framework, which is identified by the
state department for assessing health needs. Prior to the implementation
of World Bank project for secondary level hospitals, Administrative
Staff College of India (ASCI) conducted a beneficiary social assessment
study - on behalf of APVVP- for finding out the secondary level health
care needs.
External communications:
Mature network of external
communication
Performance Management Agreement does not exist and the hospitals
are no way involved in the decision making process.
Networks: There exist a well-functioned network of primary, secondary and
tertiary health care. However, the linkages between these networks are
limited due to duplication of various services at various levels. There
are no agreed health care profiles among them.
Section 2: Internal environment
Mission and vision statement: No Mission and Vision Statement.
Culture and team work: The functioning of multi-disciplinary teams at hospital level is
extremely limited. At tertiary and secondary level district hospitals there
do exist some kind of body that discusses day-to-day issues, but those
discussions are at informal level. At hospital level these bodies do not
have any power and, therefore, the question of documentation and
circulation of the minutes of these discussions do not arise.
Strategic plan There is no existence of hospital specific strategic plan. Though some
19
20. kind of strategic plan at the level of SD exist, there is no agreement
between the hospitals and SD.
Annual business plan There is no annual business plan. However, at the level of secondary
level hospitals there do exist some kind of objective setting at APVVP
level - to achieve some level of bed occupancy etc. -. However, there
has not been much interest - incentives or disincentives - at hospital
level to fulfill these objectives.
Mature contracting Process (Internal and External)
Negotiation process between
the SD and individual hospital
No negotiation between the SD and individual hospitals. For tertiary
and primary level hospitals the government of AP usually allocates the
budgets. For secondary level hospitals, which are managed by APVVP,
there is the provision of block grant. There is some kind of agreement
between APVVP and the individual hospitals for meeting certain goals.
But the process is not matured. There is no internal contact
Organizational structure and designated areas of responsibility
Organogram There do exist managerial and professional relationships among the
members of the staff. The employees of the hospitals are usually
accountable to the superintendent - the head of the organization.
However, there is no hard and fast rule about the specific number of
staff being accountable to the authority. The senior manager - usually
the superintendent- has the responsibility for reviewing the organogram
annually and all staff within the hospital have individual job
descriptions.
Objective setting and appraisal No clear-cut objectives are set either by individual staff or by the person
holding the managerial responsibility.
Training and development There do exist the training activities for the clinical and managerial staff
at primary and secondary level hospitals. The emphasis has not been
much at tertiary level. However, there are no personnel development
plan set by the manager.
Personnel appraisal The activity evaluation of the personnel is not done on the basis of their
performance in work. Rather, it is based on the annual confidential
reports, which is usually sent by the managers to the headquarters.
These reports are usually prepared for assessing the character of the
personnel rather than their work performance.
Human Resource Infrastructure
Human resources strategy No human resources strategy exists at hospital level.
Human resources director No human resources director.
Planning for human resources No clear-cut planning for future human resource requirements.
Links with training institutions There do not exist any established link between trainers and
professional staff. The authorities provide training activities to the
institutes based on the need.
Data base of all established
posts and current staff
Database for established posts and current staff does exist and the
information is computerized at APVVP level. Although the same
information is available at other levels, it is not well organized.
Staff Involvement
Communication channels There is no well-defined communication channel at any level.
20
21. Trade unions There are trade unions at hospital level. However, they are not
recognized at hospital level. No regular meetings between the
management team and trade unions take place.
Financial Structure
Procedures for budget There is provision of block grants to APVVP, which in turn reallocates
the resources to individual hospitals. The budgets are set by the APVVP
and the hospitals supply the income expenditure account in every
month. There do exist standard financial instructions on the basis of
which the transactions take place. The income expenditure account is
audited annually and the reports prepared by APVVP. For other
category of hospitals the allocation is usually from the government. The
accounts are audited annually and the reports presented in the budget
book.
Standing financial instructions The APVVP and the Government of AP has standard financial
instructions for expenditure against a budget. At hospital level there is
no financial manager. Usually, the financial responsibilities are given to
an accountant. At the Commissionerate / Directorate level a regular
finance officer is employed for looking after the issues relate to
financing.
Information
Information strategy A well-defined information strategy does exist for the secondary level
hospitals. The hospitals compile the information on expenditure on
various purposes and send the reports monthly to APVVP. The finance
officer of APVVP usually analyzes these reports. In case of other
categories of hospitals, the hospital submits a routine report to State
Director, which is never analyzed.
Information availability 1. Expenditure
against budget:
The information on expenditure is usually
provided to the funding organization (i.e.,
government in case of primary and tertiary level
and APVVP in case of secondary level hospitals).
This information is usually produced in the budget
books or audit reports and are available to public
on request.
2. Income against
target
No targeted income has been set either by
secondary or tertiary or primary level hospitals.
3. Activity
against planned
activity
No activity planning.
4. Quality
achieved against
quality standards
No fixed quality standards.
5. Complaints,
accidents and
untoward
incidents
Though a system of complaining exists, complains
are not usually looked into. Information on
accidents and untoward are usually recorded.
6. Legal claims No information available
Consumer Focus
21
22. Consumer involvement forum Does not exist
Patient and public surveys No regular surveys
User friendly procedures The procedures are usually user friendly
Patient information leaflets The bedside of the patients usually displays the patient information
leaflets.
Extensive parent access for
children
Access is free.
Separate treatment facilities for
children
Available.
Facilities for relatives to see
deceased patients
No specific facility.
Complaints and suggestions
procedures
Exists
Staff wearing name badges Some categories of staff (usually doctors) wear.
Quality Framework
Annual quality targets No targets
Agreed clinical standards No properly defined clinical standards and no regular audit.
Agreed standards for facilities Usually the government or APVVP sets the standards. Therefore no
agreed standards at hospital level.
Quality objectives No quality objectives by the state or hospital.
Total quality management No quality improvement framework.
Risk Management
Occupational health service No occupational health service.
Training in lifting and handling No training
Regular maintenance schedule
of equipments
No regular maintenance schedule for the equipment. But standard rules
exist by APVVP for the down time of the equipment.
Regular fire drills No fire drill
Major accident procedures No major accident procedures.
Major disaster procedures No major disaster procedures.
Security procedures No identified security procedures.
Accident and untoward
incident reporting system
No system
Health and safety committee No committee.
Clinical procedures based on
evidence based medicine
No clinical procedures are based on evidence.
Year 2000 plan Exist.
The above table suggests that there is very little scope for benefiting from greater
autonomy in the absence of many systems. It may, therefore, be necessary to change the
strategic framework by the government in order to keep certain rooms for greater
autonomy. Since there have been little evidence form the developing countries regarding
the effects of autonomy, an experimental approach may be useful to know whether the
autonomy could benefit or not. The costs involved in greater autonomy and the expected
results from it may be of paramount importance here.
7.0. Factors affecting success:
7.0.1. Leadership:
Though there is no published evidence that could help drawing inference on the impact of
leadership on achievement and performance of APVVP, leadership did have a significant
22
23. impact on them over the years. Since the formation of APVVP, it has had 6 regularly
appointed Commissioners during 1987-99. Not during the term of all the commissioners
the missions and goals of APVVP was adequately met. An evaluation of the performance
of commissioners gives us indication that during the period of some commissioners there
was substantial improvement in the style of functioning of APVVP whereas, in case of
others it was very poor. Frequent changes in the top executives of APVVP have, no
doubt, affected the performance of APVVP to a large extent.
Recently (four years back) the government of AP appointed a project director for looking
after the project sanctioned by the World Bank. After the appointment of project director
there has been substantial improvement in management of the hospitals.
7.0.2. Responsibilities:
An important characteristic of any organization is the manner and the extent to which the
roles and functions of the authorities are specialized. The commissioner who has a
number of joint commissioners, deputy commissioners, and other officers under him head
APVVP. There are four joint commissioners who are in charge of equipment
maintenance, training and management information system, procurement, and
paramedical units. Each of these officers is responsible for all activities and decision
including planning, research, finance, marketing, etc. that falls in their domain. Besides
joint commissioners, there is one vigilance officer, one finance officer, and one company
secretary under the commissioner. Each of these officers is assisted by number of other
officers. In spite of this elaborate structure, there are a number of tasks for which no one
has any clear responsibility. The most significant such area is that of co-ordination with
individual hospitals. There are many overlapping and conflicting responsibility also. The
most significant conflict is interaction with finance department of APVVP. Each and
every department has to obtain clearance of finance department before any expenditure
can be approved. Since the linear structure of authority between the finance department
and other departments are not specified, each such case goes to the commissioner. As a
result, an activity that should ideally be disposed off at the level of deputy commissioner
ends up on the table of commissioner.
The division of labor, which is neither functionally oriented not area-wise oriented, thus
produces undesirable effects on efficiency. Thus while the vertical hierarchy is quite well
established, the horizontal flow of information and process is almost non-existent.
Therefore, there is excessive time pressure on commissioner, who is hard to put to justice
to any of the tasks that he undertakes.
7.0.3. Functional authority:
Responsibility without authority is difficult to discharge. For example, the ministry of
health (MOH) has delegated substantial power to the board of APVVP, but has retained
the sanction authority of any expenditure beyond Rs. 2.5 million. The board, in turn, has
delegated substantial authority to the commissioner but has retained authority any
expenditure in excess of Rs. 1 lakh. Similarly the commissioner has delegated many
powers to joint commissioners, but all expenditure beyond Rs. 10,000 has to be approved
by the commissioner. As a result, many day-to-day activities get delayed.
Furthermore, projects are usually not approved within the division responsible for them.
23
24. Hospitals asking for any funds are not involved in the process of project approval and
practically ignorant about what happens in departmental meetings. At the same time, a
large number of projects that are approved at the headquarters are assigned to hospitals,
whether or not they have any need for them. Consequently, the hospital physicians are
not enthusiastic about many of their projects.
7.0.4. Functional specificity of authority:
In contrast to the situation where officers do not have substantial authority, there are
number of incidences in APVVP where some officers in some situations hold more
authority than is necessary. First; the authority of the finance officer overlaps with that of
almost every other officer, second; and more serious, i.e., the confusion of authority of
hospital superintendent and joint commissioner responsible for the paramedical staff.
Many hospital superintendents complain that they have no control over their nurses and
paramedical staff, who very often bypass them and obtain orders directly from joint
commissioner. The joint commissioner in turn maintains that he is simply doing his
duties when he responds to a request made by any nursing staff. As a result, there is very
little discipline in the hospitals and the farther away is the hospital from headquarters the
greater is the power of superintendent. Third, there is great deal of confusion with respect
to the authority of the hospital engineer and joint commissioner maintenance. On the one
hand APVVP was born out of the desire of the government to decentralize. On the other
hand the joint commissioner, maintenance tended to centralize all the activity at
headquarters.
7.0.5. Ambiguous rules:
Brevity and clarity have never been the strong point to any government document and the
experience of APVVP has not been an exception to it. One of the clear-cut example of
this is the rather verbose set of instructions issued by the government regarding the
collection of user charges. The document is so replete with legislative jargon that it
becomes very difficult to interpret in any coherent manner. We present the following
extract pertaining to exemptions of user fees:
"in so far as the patient, or family, or anyone-else vouching on his behalf, has in his
possession a plot of land no less than 100 squire yards in an area as defined under schedule
XVII, Para 8(C), of t1952 as amended subsequently in 1957, such patient shall be deemed to
be above the minimum income line as defined by the government of India rule XI as
published in the official gazette, except herein fore mentioned as specific exclusion as per
category XI of schedule 68 of the state government as revised by the ruling number 486 of
1977"
An interpretation of the above would require reference to numerous sources, most of
which would not be available in any of the APVVP hospitals. As a consequent, there has
been extremely poor collection of user charges in APVVP hospitals (Table 7).
7.1. Feasibility of increased autonomy:
Before entering into the discussion of increased autonomy, it may be necessary to answer
certain fundamental questions such as; Why there is need for autonomy? How it is to be
achieved? How it is really implemented? How has it worked in different countries
including AP?
24
25. As already pointed out, autonomy is usually perceived as delegation of responsibility for
better operational management and therefore acts as a means of achieving better health
outcome. Thus, autonomy may be defined as means but not end. Different countries are
embarked with different health goals and in order to achieve them, they tend to reform
their health sector. As like as other countries, the major goal of AP is to fulfill the
objective of "Health for All" by improving the health status of its people, especially, the
poor and underserved, by reducing mortality, morbidity and disability. Out of various
options available to the state, one is developing a better secondary level health care
delivery system. The means that the state has adopted is granting autonomy to secondary
level health services management. By doing so, the government aims at (a) improving the
allocation and use of health resources through institutional development, (b) improving
system performance of health care through improvements in quality, effectiveness and
coverage of health services at the secondary level to better serve the people. The extent
to which the autonomy has been realized in the state is discussed in the previous section.
No doubt, some degree of autonomy exists in the fields of financing, equipment
maintenance etc. There have been major shortcomings and it is possible to perceive
greater autonomy in the current legislative framework:
(a) Although the act of setting up APVVP was passed in 1986, the staffs of APVVP
hospitals remains government employees on deputation from Department of
Health, Medical and Family Welfare and are subject to all regulations and
restrictions of the government. Examples include reliance on the state recruited
and promotion machineries; restrictions on employing staff outside the state, and
for some cadres, outside the zone; and with some exemption, adherence to
statewide salaries and benefits. The consequence of such restriction has been
multifold. Though, in recent times, APVVP has been revising the various sets of
regulations in order that the government may approve them, the approval of those
requires referral to various departments such as finance and the special chief
secretary, which may possibly take its own time.
(b) Another area of major concern has been the imposition of user charges. Though
APVVP would be permitted to charge user fees for the services provided, it is not
allowed to do so without government clearance. Though, the charges are being
levied for long established services such as certification charges, where there is
no political sensitivity, the charges for medicines and professional services are
not yet been levied. As a result, the situation of APVVP is similar other
independent hospitals in the state such as Osmania and Gandhi, which need
approval from the government for the user fees.
However, it may be pointed out that these are the two key areas where the APVVP need
to have greater autonomy. It may be necessary to change the current legislative
framework, in order to give more powers to the chief executive of APVVP to deal with
the above two important issues more firmly. However, as the evidence shows, the current
approach has been to enable the legislation rather than bringing any change. Following
are the suggestions in this regard:
8.0. Number of points to be reviewed by GOI:
Recommendations for various stakeholders:
25
26. (a) Ministry of Health:
1. The government in the ministry of health should ensure that there is continuity in
and stability the appointment of the senior staff and board members of APVVP.
2. The Government created APVVP to improve the performance of hospitals and
improve efficiency. The government appoints the board members as well as the
senior officers at APVVP. There is, thus, little justification in the government
retaining substantial financial powers over the organization. The ministry of
health, who is already represented in the Board by a senior secretary, should
delegate full powers to the board.
3. Though there have been substantial changes within APVVP, the changes have
been mostly administrative in nature, without more emphasis on final outcome.
The quality of services has not improved much. Therefore, it is recommended that
the Government of India should set up strict standards for accreditation and
quality control. Government should do its own performance evaluation, and
introduce a system of incentives for APVVP as well as hospital staff.
4. The written rules and instructions from the government should be clear and
simple (not as cited above for user charges). It is difficult to expect anyone who
does not understand what is being said to follow what he has not understood.
5. There need to be an overall specification of what and how much APVVP should
be delivering together with an annual objective setting exercise. For the purpose
of annual objective setting, data on previous performance could be used as a
starting point. There is a need for regular evaluation (preferably quarterly) of the
performance of the hospitals by the ministry. Moreover, there is a need for
publishing annual reports on previous performance and future plans for greater
pubic participation in the decision making process.
(b) Commissioner:
1. Commissioner should re-define functional authority for all functions presently
being carried out by APVVP, and ensure that there is no over lapping
responsibility and that the functions are accounted for when allocating
responsibility. He should ensure that every important functionary gets well-
defined authority, particularly the physicians and hospital staff in each of the
hospitals.
2. The commissioner should ensure that in the hierarchy of the organization,
officials at the same level have an open channel of communication and a set of
rules and procedures that govern the flow of information and substance between
them.
3. Hospital employees and professionals at all APVVP hospitals are probably the
most significant constituencies. They are the people that implement the decisions
at the hospital level and it is necessary to make them involved in the process of
planning and development of any decision taken at the APVVP headquarters. It is
therefore suggested that the commissioner should make it a point that the
employees are involved in the process. This will make the implementation of the
policies easier.
26
27. 4. There is a need for the development of performance-evaluation and performance-
management system so that the staff could know about what they are responsible
for and what they have to achieve.
Conclusions:
The present paper was intended to analyze the status of hospital autonomy in the state of
Andhra Pradesh with a view to examine the possibility of achieving higher benefits from
greater autonomy. It was found that the secondary level hospitals enjoy a greater
autonomy compare to primary and tertiary levels. The achievement seems to have been
very negligible - for the very concept/purpose of autonomy has been misunderstood/
misutilized. Thus, there need to have clear understanding of the very purpose of
autonomy and find out the ways and means to achieve it. Since Andhra Pradesh has
already initialed the steps to achieve it, at the first instance, it may be useful to
concentrate more on APVVP rather than primary and tertiary. At the same time, the
tertiary level hospitals, which consume a major chunk of resources allocated for hospitals
need not be ignored. Probably, one major area of experimentation in tertiary level
hospitals could be financing - to give autonomy for generating more resources and use
the revenues so obtained for the improvement of hospital services. There is a need for
redefining/clarifying the roles and responsibilities of various stakeholders in APVVP in
order to have more autonomy at the hospital level. However, each approach has its
drawbacks, and moreover, every stakeholder would like to enjoy certain amount of
authority over the others. Therefore, the approach towards achieving greater outcome
through autonomy should tend towards minimizing these effects, and thereby moving
towards the welfare of the public.
27
28. APPENDIX:
Appendix Table 1A: Number of private and voluntary hospitals and beds
Year Hospitals Beds
1973 113 9213
1983 266 11103
1993 NA 26791
Source: Health information of India, Central Bureau of Health Intelligence (Government of India, various
years)
Appendix Table 1B: Number of hospital beds by type of ownership
Year Public beds Private beds
1973 19356 9213
1983 22722 11103
1993 22776 26761
Source: Health information of India, Central Bureau of Health Intelligence (Government of India, various
years)
Appendix Table 1C: Distribution (per 1000) by sources of treatment (Non-hospitalized and
hospitalized cases)
Non-hospitalized cases
Utilization by source (Overall figures)
Government Non government
Free Partly
paid
Paid Free Partly
paid
Paid Total
AP 173 11 49 28 3 735 1000
India 60 26 96 17 6 796 1000
Utilization by services (ECG, X-ray, Scan etc.)
AP 41 - 35 14 - 910 1000
India 48 9 128 39 6 770 1000
Utilization by services (Other diagnostic tests)
AP 30 1 21 69 14 866 1000
India 129 7 66 56 38 708 1000
Utilization by services (Surgery)
AP 17 - - 32 - 951 1000
India 75 1 72 77 3 772 1000
Utilization by services (Medical services)
AP 482 - 37 33 3 445 1000
India 168 - 9 102 64 635 1000
Hospitalized cases
Government Others
Free Paying
General
Paying
special
Free Paying
general
Paying
special
Total
AP 204 17 - 15 622 126 1000
India 388 41 8 28 411 91 1000
Source: NSSO, 52nd
round.
28
30. (57.3) (30.3) (3.6) (8.8) (5.8) (24.0)
* At 1983-84 prices
1
Health related services include general education (primary and secondary), water
supply and sanitation.
2
Figures in parenthesis are percentage to total health expenditure.
Appendix Table 1F: Distribution of real expenditure (Rs. mil) on public health and hospitals*
Year Public health services1
Hospitals2
PHC
institutions
PHC services Disease Control Family
Planning
Secondary
Hospitals
Tertiary
Hospitals
1983 140.3
(32.7)
54.0
(12.6)
125.4
(29.3)
108.9
(25.4)
178.0
(50.8)
172.5
(49.2)
1984 156.9
(33.8)
61.1
(13.2)
122.4
(26.3)
124.4
(26.8)
186.0
(51.6)
174.7
(48.4)
1985 145.3
(20.0)
287.6
(39.6)
130.9
(18.0)
162.4
(22.4)
186.2
(52.1)
171.3
(47.9)
1986 251.8
(27.6)
314.1
(34.4)
154.1
(16.9)
193.9
(21.2)
196.1
(51.3)
185.9
(48.7)
1987 221.4
(28.4)
207.9
(26.6)
169.7
(21.7)
181.6
(23.3)
200.6
(49.4)
205.2
(50.6)
1988 232.1
(30.4)
118.7
(15.6)
193.8
(25.4)
218.5
(28.6)
200.5
(47.1)
225.0
(52.9)
1989 220.2
(31.8)
112.4
(16.3)
182.6
(26.4)
176.5
(25.5)
200.3
(50.0)
200.0
(50.0)
1990 242.7
(31.8)
93.6
(12.2)
226.4
(29.6)
201.6
(26.4)
251.6
(50.2)
249.4
(49.8)
1991 275.9
(31.1)
139.7
(15.7)
261.6
(29.5)
210.5
(23.7)
275.7
(51.4)
260.7
(48.6)
1992 282.2
(31.8)
142.1
(16.0)
246.4
(27.8)
216.9
(24.4)
283.9
(53.1)
251.3
(47.0)
1993 303.2
(32.9)
145.6
(15.8)
255.8
(27.7)
218.6
(23.7)
270.9
(50.2)
268.9
(49.8)
1994 327.7
(30.3)
242.0
(22.4)
262.2
(24.3)
248.6
(23.0)
291.3
(51.5)
274.6
(48.5)
1995 412.5
(37.6)
203.7
(18.6)
325.4
(29.6)
156.2
(14.2)
285.5
(49.8)
287.6
(50.2)
1996 438.3
(37.4)
237.7
(20.3)
337.1
(28.8)
157.7
(13.5)
290.8
(47.0)
328.4
(53.1)
* At 1983-84 prices
1
Figures in parenthesis are percentage to total expenditure on public health.
2
Figures in parenthesis are percentage to total expenditure on hospital
Appendix 2:
Dash (1999) has focused on measuring the performance of secondary level hospitals for the state of AP by
using combined utilization and productivity (CUP) analysis as well as statistical estimation of cost
functions. In view of the simplistic nature of CUP analysis, we summarize the results below. By using three
interrelated indicators: bed occupancy rate (BOR), bed turnover rate (BTR) and average length of stay
(ALS) for measuring the performance1
of community, area as well as district hospitals for the period 1991-
96, and using the bench marks that are defined by APVVP for the cut-off point for the better performing
hospitals, author found that the performance of secondary level hospitals has not been satisfactory. This
could clearly be observed from Table 7 to 9. The number of high performing district hospitals (i.e.,
hospitals with high BOR and BTR) has remained almost constant with slight fluctuations in between (Table
1
The hospitals showing low BOR and BTR are classified as low performing hospitals and with high BOR
and BTR are better performing hospitals. The hospitals showing high BOR and low BTR, and low BOR
and high BTR are the hospitals whose performance can perhaps be improved through policy decisions.
30
31. 7). Similar trend is also observed for area as well as community hospitals (Table 8 and 9). The results from
the cost function study by the same author indicates that there ahs been a greater degree of allocative
inefficiency2
in the secondary level hospitals
Appendix Table 2A: Performance of district level hospitals during 1991-96*
Description 1991 1992 1993 1994 1995 1996 1991-
96*
Low BOR and low
BTR
5
(29.4)
3
(17.7)
5
(29.4)
6
(35.3)
7
(41.2)
6
(35.3)
6
(35.2)
High BTR and low
BOR
1
(5.9)
0
(0.0)
1
(5.9)
2
(11.8)
3
(17.6)
3
(17.6)
2
(11.8)
High BTR and high
BOR
7
(41.2)
8 (47.1) 7
(41.2)
7
(41.2)
5
(29.4)
5
(29.4)
7
(41.2)
High BOR and low
BTR
4
(23.5)
6 (35.3) 4
(23.5)
2
(11.8)
2
(11.8)
3
(17.6)
2
(11.8)
Total 17
(100)
17
(100)
17
(100)
17
(100)
17
(100)
17
(100)
17
(100)
*Figures within the parenthesis show the percentage values to the total.
Appendix Table 2B: Performance of area level hospitals during 1991-96.
Description 1991 1992 1993 1994 1995 1996 1991-96*
Low BOR and
low BTR
4
(50.0)
3
(37.5)
3
37.5)
4
(57.1)
6
(75.0)
6
(75.0)
4
(50.0)
High BTR and
low BOR
0
(0.0)
0
(0.00)
0
(0.00)
0
(0.00)
0
(0.00)
0
(0.00)
0
(0.00)
High BTR and
high BOR
3
(37.5)
3
(37.5)
3
(37.5)
2
(28.6)
2
(25.0)
2
(25.0)
2
(37.5)
High BOR and
low BTR
1
(12.5)
2
(25.0)
2
(25.0)
1
(14.3)
0
(0.00)
0
(0.00)
2
(12.5)
Total 8
(100)
8
(100)
8
(100)
7
(100)
8
(100)
8
(100)
8
(100)
*Figures within parenthesis show the percentage values to the total.
Appendix Table 2C: Performance of community level hospitals during 1991-96.
Description 1991 1992 1993 1994 1995 1996 1991-96*
Low BOR and
low BTR
23
(26.7)
26
(27.4)
29
(29.9)
31
(31.9)
47
(48.0)
46
(46.5)
36
(33.3)
High BTR and
low BOR
2
(2.3)
1
(1.0)
3
(3.1)
2
(2.1)
0
(0.0)
1
(1.0)
1
(0.9)
High BTR and
high BOR
37
(43.1)
38
(40.0)
39
(40.2)
46
(47.4)
41 (41.8) 43
(43.4)
45
(41.7)
High BOR and
low BTR
24
(27.9)
30
(31.6)
26
(26.8)
18
(18.6)
10 (10.2) 9
(9.1)
26
(24.1)
Total 86
(100)
95
(100)
97
(100)
97
(100)
98
(100)
99
(100)
108
(100)
2
Allocative inefficiency means inefficient input mixes. The allocation towards manpower input seems to be
higher compared to other recurrent inputs. As a result most of the hospitals operate below the cost
minimizing level.
31
32. *Figures within the parenthesis are percentage values to the total.
However, it may be pointed out that the hospitals that are taken for the above studies are managed by
APVVP, which is an autonomous governmental body. As could be seen later that APVVP was created as
an autonomous body with the noble objectives of increasing efficiency, and financial sustainability. In spite
of repeated attempts of the organization to achieve its goals the performance of hospitals has not improved
over the years. Keeping view of the performance of the secondary level hospitals, which operate with much
flexibility, one can imagine the performance of other category of hospitals as well. The results obtained by
Dash (1999) are in the similar lines of Mahapatra and Berman (1991, 1994).
Appendix 3:
Autonomy: A theoretical prospective
Autonomy is generally defined as a state of being self-governed. This can be Global or Dimensional. An
organization is said to have Global Autonomy if it has power concerning its environment in government
organization defined in terms of territorial boundaries. It is commonly referred to as horizontal division of
powers and decision making between national, state and local levels of government. Territorial division of
power may take different forms; de-concentration, devolution and delegation. De-concentration is
frequently known as reorganization of authority, redistribution of some amount of administrative authority
to lower levels in the hierarchy. Devolution shifts the responsibility from ministry of health MOH) to
separate administrative structure still with the public administration (provinces, municipalities, states etc.).
Delegation or Re-organization involves the transfer of decision making management authority for
particular function to organizations, which are not directly controlled by the central government. An
organization is said to have Dimensional Autonomy if it has power with respect to type of decisions such
as supervisory establishment, hiring and firing, determination of new programs, making purchases,
allocation of work among available personnel, financial budgets etc. This division of power is sometimes
referred to as vertical division of power over specific functions. There can be varying degrees of
dimensional autonomy (Chawla and Berman, 1995).
Thus the concept of autonomy can be conceptualized according to two level nested structure representing
global autonomy "degree" and dimensional autonomy "type". The first level of nesting in this conceptual
framework reflects combinations of territorial control and authority. Territorial autonomy refers to the
transfer or control, either in part or in full, from the national government to local government. On the one
side of territorial autonomy spectrum is the system where all decisions are made at the farthest of the
organization, such as the decision by Ministry of Health (MOH); on the other end is the system where all
decisions are taken at the institutional level such as, individual hospitals.
Power, or authority to govern and manage, refers to the act of direction, control and regulation which
influences or determines the goals and objectives of the organizations and its operational policies. There is
variety of ways in which governance of hospitals can be organized and power and responsibility for
direction and control vested. On the one end of the spectrum is the hospital that is governed and directed by
Ministry of Health. On the other hand is the independently managed hospital. In between is an array of
forms that organization of governance can take, and the extent and the nature of autonomy varies with
position on the authority spectrum.
The second level of nesting refers to the key variable 'function'. Functional autonomy refers to the manner
in which the hospital management makes day-to-day decisions about the operations of the various
functional areas of the hospital. The chief functional areas include general administration, finance, and
control over inputs including hospital staff.
1. Administration refers to the methods by which the hospital decides its goals and objectives,
interacts with its environment, and establishes rules and procedures for intra-organizational
interaction. Administrative autonomy therefore refers to the freedom and discretion the hospital
enjoys in setting its goals and objectives, and administrative practices of interaction with the state
and community, as well as within the organization with its own staff and patients.
2. Finance refers to the methods by which the hospitals' revenues generated and funds disbursed. It
includes the establishment and management of financial resources through recurrent and capital
budgets, procurement of capital, financial controls, financial procedures, and the process of
32
33. financial auditing. Financial independence therefore refers to the freedom to raise revenue and
allocate expenditure, and to monitor and control one's finances.
3. Management of inputs refers to the method by which the hospital administers its personnel,
equipment, drugs, and medical and non-medical supplies. Personnel include administrators,
physicians, nurses, paramedical staff and non-medical staff. Operational involving personnel
include selection of recruitment, training, determination of wages and salaries, personal records,
discipline and discharge, post-retirement payments, and other staff related issues. The extend and
nature of autonomy will depend on the hospital's freedom to choose its own policies with respect
to all or some matters relating to personnel.
There are a variety of ways in which the functional autonomy can be organized. First, there may
be centrally directed and financed public hospitals, with no administrative flexibility, and no power over
finance, personnel and procurement of supplies. Second, there may be full autonomy where the
management has complete discretion over administration, finance, personnel matters, and procurement of
supplies. In between there is a vast array of forms that management can take, and the extent and nature of
autonomy will depend on the type and degree of functional independence the management enjoys.
33
35. References:
ASCI (1995): "Andhra Pradesh Burden of disease and cost effectiveness analysis",
Project Report prepared by Social Services Area, Administrative Staff College of India,
Hyderabad.
ASCI (1995a): "Beneficiary Social Assessment for AP Secondary Health Systems
Expansion", Project Report prepared by Social Services Area, Administrative Staff
College of India, Hyderabad.
Dash, P. C (1999), "Efficiency and financing of health sector: Study of secondary level
health services in Andhra Pradesh", Unpublished Ph.D. thesis submitted to Department of
Economics, University of Hyderabad, Hyderabad - 500 046.
Barnum, H. and J. Kutzin (199 3), Public hospitals in developing countries: Resource use
cost and financing, Published for the World Bank, John Hopkins Press, London.
Lasso, H. P. (1986), "Evaluating hospital performance through simultaneous application
of several indicators", PAHO Bulletin, 20: 341-57.
Mahapatra, P. and P. Berman (1994), "Using hospital activity indicators to evaluate
performance in the Andhra Pradesh, India", International Journal of Health Planning and
Management, 9: 199-211.
Mahapatra, P. and P. Berman (1991), "Evaluating public hospital performance: Service
mix ratio of secondary level hospitals in Andhra Pradesh, India". Unpublished
manuscript.
