ROLE OF PRIVATE SECTOR IN

INDIAN HEALTHCARE
SECTOR
A Project

Submitted to the Department of ECONOMICS for the Partial fulfilment

of the Degree of BA

SUPERVISOR SUBMITTED BY

Ms. Deepa Parik Kratika Gaur

BA(P) Sem 6

THE IIS UNIVERSITY

Jaipur
 (2018– 19)

INDEX

CHAPTER NO TOPIC

1 INTRODUCTION TO
HEALTHCARE SECTOR IN INDIA

2 PRIVATE HEALTHCARE SECTOR

- SHARE IN ECONOMY AND
EMPLOYMENT

3 HOW AND WHT PRIVATE

HEALTHCARE SECTOR BOOMS

4 COMPARISON OF PUBLIC AND

PRIVATE HEALTHCARE SECTOR

5 PPP (PUBLIC PRIVATE

PARTNERSHIP )
 INTODUCTION
 REASON OF MERGING
 OPPORTUNITIES
 CHALLENGES

6 CONCLUSION

7 BIBLIOGRAPHY
INTRODUCTION TO HEALTHCARE
SYSTEM
Healthcare has become one of India’s largest sectors - both in terms of revenue and
employment. Healthcare comprises hospitals, medical devices, clinical trials,
outsourcing, telemedicine, medical tourism, health insurance and medical
equipment. The Indian healthcare sector is growing at a brisk pace due to its
strengthening coverage, services and increasing expenditure by public as well
private players.
Indian healthcare delivery system is categorised into two major components -
public and private. The Government, i.e. public healthcare system comprises
limited secondary and tertiary care institutions in key cities and focuses on
providing basic healthcare facilities in the form of primary healthcare centres
(PHCs) in rural areas.
The private sector provides majority of secondary, tertiary and quaternary care
institutions with a major concentration in metros, tier I and tier II cities.
India's competitive advantage lies in its large pool of well-trained medical
professionals. India is also cost competitive compared to its peers in Asia and
Western countries. The cost of surgery in India is about one-tenth of that in the US
or Western Europe.

SHARE OF PRIVATE HEALTHCARE SECTOR

The private health care system in India has grown vastly over the years and is well
established and flourishing. At the time of Independence, the private health sector
accounted for only 5 to 10 per cent of total patient care.
In 2004, the share of private sector in total hospitalized treatment was estimated at
58.3 per cent in rural areas and 61.8 per cent in urban areas. In the case of
nonhospitalized treatment, government sources account for only 22 per cent in
rural areas and 19 per cent in urban areas (Planning Commission, 2008: 68– 69).
Data from the National Family Health Survey (NFHS) III also confirms that the
private medical sector remains the primary source of health care for the majority of
households in urban (70 per cent) as well as rural areas (63 per cent). Private
doctors or clinics are the main source of care in the private sector, catering to 46
per cent of the urban and 36 per cent of the rural households (IIPS and Macro
International, 2007: 436).
With government expenditure on health as a percentage of GDP falling over the
years and the rise of private health care sector, the poor are left with fewer options
than before to access health care services. Private insurance is available in India, as
are various through government-sponsored health insurance schemes.
According to the World Bank, about 25% of India's population had some form of
health insurance in 2010. A 2014 Indian government study found this to be an
over-estimate, and claimed that only about 17% of India's population was
insured.] Public healthcare is free for those below the poverty line.
Spending on health care in India was an estimated five percent of gross domestic
product (GDP) in 2013 and is expected to remain at that level through 2016. Total
health care spending in local-currency terms is projected to rise at an annual rate of
over 12 percent, from an estimated $96.3 billion in 2013 to $195.7 billion in
2018.3 While this rapid growth rate will reflect high inflation, it will also be driven
by increasing public and private expenditures on health. The statistics for India’s
health infrastructure are below that of other large countries. The U.S. has one bed
for every 350 patients while the ratio for Japan is 1 for 85. In contrast, India has
one bed for every 1,050 patients. To match bed availability to the standards of
more developed nations, India needs to add 100,000 beds this decade, at an
investment of $50 billion.
Also, India’s expenditure on health care information technology (HIT) is
considerably low. Hospitals in India will need to increase their IT spend
considerably to provide improved and patient-centric service. The shortage of
qualified medical professionals is one of the key challenges facing the Indian
health care industry. India’s ratio of 0.7 doctors and 1.5 nurses per 1,000 people is
dramatically lower than the WHO average of 2.5 doctors and nurses per 1,000
people. Furthermore, there is an acute shortage of paramedical and administrative
professionals. The situation is aggravated by the concentration of medical
professionals in urban areas, which have only 30 percent of India’s population.
Many patients, especially those living in rural and semi urban areas, are still
 receiving services from unqualified practitioners. The industry needs an additional
1.54 million doctors and 2.4 million nurses to match the global average.13 India’s
health care professional and infrastructure shortage is one of the major reasons for
the country’s high mortality rate. Although there has been a consistent decline in
the Infant Mortality Rate (IMR) and the Under-Five Mortality Rate (U5MR), based
on robust projections, at the current rate of decline, India is unlikely to meet the
targets for Millennium Development Goal (MDG)-4, which aims to reduce by two-
thirds, between 1990 and 2015, the underfive mortality rate.
private sector players are likely to contribute significantly to the development of
India’s hospital industry, which comprises around 80 per cent of the total market In
India, private healthcare accounts for almost 74 per cent of the country’s total
healthcare expenditure Private sector’s share in hospitals and hospital beds is
estimated at 74 per cent and 40 per cent, respectively The main factor contributing
to rising medical tourism in India is presence of a well-educated, English-speaking
medical staff in state-of-the art private hospitals and diagnostic facilities

Strong growth in healthcare expenditure

 Healthcare industry is growing at a tremendous pace owing to its strengthening
coverage, services and increasing expenditure by public as well private players.
 During 2008-20, the market is expected to record a CAGR of 16.5 per cent.
 The total industry size is expected to touch US$ 160 billion by 2017 and US$ 280
billion by 2020.
 As per the Ministry of Health, development of 50 technologies has been targeted in
the FY16, for the treatment of disease like Cancer and TB.
PRIVATE HEALTHCARE SECTOR AND HIKE IN ECONOMY

The Indian healthcare sector is expected to register a compound annual growth rate
(CAGR) of 22.9 per cent during 2015-20 to US$ 280 billion. Rising income level,
greater health awareness, increased precedence of lifestyle diseases and improved
access to insurance would be the key contributors to growth.
The private sector has emerged as a vibrant force in India's healthcare industry,
lending it both national and international repute. It accounts for almost 74 per cent
of the country’s total healthcare expenditure. Telemedicine is a fast-emerging trend
in India; major hospitals (Apollo, AIIMS, Narayana Hrudayalaya) have adopted
telemedicine services and entered into a number of public-private partnerships
(PPP).The telemedicine market in India is valued at US$ 7.5 million currently and
is expected to grow at a CAGR of 20 per cent to reach US$ 18.7 million by 2017.
Further, presence of world-class hospitals and skilled medical professionals has
strengthened India’s position as a preferred destination for medical tourism. During
January-November 2016, a total of 82 health technology companies have raised
about US$ 80 million.
The Government of India aims to develop India as a global healthcare hub. It has
created the National Health Mission (NHM) for providing effective healthcare to
both the urban and rural population. The Government is also providing policy
support in the form of reduced excise and customs duty, and exemption in service
tax, to support growth in healthcare.
Investment in healthcare infrastructure is set to rise, benefiting both 'hard'
(hospitals) and 'soft' (R&D, education) infrastructure.
Foreigners in increasing numbers are now coming to India for private health care.
They come from the Middle East, Africa, Pakistan, and Bangladesh, for complex
paediatric cardiac surgery or liver transplants—procedures that are not done in
their home countries. They also come from the United Kingdom, Europe, and
North America for quick, efficient, and cheap coronary bypasses or orthopaedic
procedures. A shoulder operation in the UK would cost £10 000 ($17 460; €14
560) done privately or entail several months' wait under the NHS. In India, the
same operation can be done for £1700
The recent remarkable growth of the private health sector in India has come at a
time when public spending on health care at 0.9% of gross domestic product
(GDP) is among the lowest in the world and ahead of only five countries—
Burundi, Myanmar, Pakistan, Sudan, and Cambodia. This proportion has fallen
from an already low 1.3% of GDP in 1991 when the neoliberal economic reforms
began.2
Yet India ranks among the top 20 of the world's countries in its private spending, at
4.2% of GDP. Employers pay for 9% of spending on private care, health insurance
5-10%, and 82% is from personal funds. As a result, more than 40% of all patients
admitted to hospital have to borrow money or sell assets,3 including inherited
property and farmland, to cover expenses, and 25% of farmers are driven below the
poverty line by the costs of their medical care.
Despite the suspicions of the people who use the service that many private
providers of health care perform unnecessary diagnostic tests and surgical
procedures, Indians are choosing the private sector in overwhelming numbers. This
is because the public alternative is so much worse, with interminable waits in dirty
surroundings with hordes of other patients. Many medicines and tests are not
available in the public sector, so patients have to go to private shops and
laboratories
. Each harassed doctor may have to see more than 100 patients in a single
outpatient session. Some of these doctors advise patients, legally or illegally, to
“meet them privately” if they want more personalised care. In a recent survey
carried out by Transparency International, 30% of patients in government hospitals
claimed that they had had to pay bribes or use influence to jump queues for
treatment and for outpatient appointments with senior doctors, and to get clean bed
sheets and better food in hospital.4
This was not always so. When India became independent of British rule in 1947
the private health sector provided only 5-10% of total patient care. Today it
accounts for 82% of outpatient visits, 58% of inpatient expenditure, and 40% of
births in institutions.5Spending on health has not been a priority for successive
governments, and they have encouraged the growth of the private sector. They
have subsidised the private sector by releasing prime building land at low rates (as
long as a quarter of patients are treated free—a condition that is rarely met), by
exemptions from taxes and duties for importing drugs and high tech medical
equipment, and through concessions to doctors setting up private practices and
nursing homes. Moreover, when medical staff trained in public institutions for fees
of about 500 rupees ($11; £6; €9) a month move to work in private health care this
represents indirect support for the private sector of some 4000m-5000m rupees per
year. They leave not only for better salaries but also for better working
conditions—the same reasons why they leave India to work abroad.
Until about 20 years ago the private sector comprised solo practitioners and small
hospitals and nursing homes. Many of the services provided were of exemplary
quality, especially those hospitals run by charitable trusts and religious
foundations. As the practice of medicine has become more driven by technology,
however, smaller organisations have become less able to compete in the private
healthcare business.
Large corporations, such as drug and information technology companies, and
wealthy individuals—often from the Indian diaspora (commonly called non-
resident Indians)—have started providing health care to make money. They now
dominate the upper end of the market, with five star hospitals manned by foreign
trained doctors who provide services at prices that only foreigners and the richest
Indians can afford. These hospitals are largely unregulated, with no standardisation
of quality or costs.6 Their success may be gauged by their large profits and ability
to raise funds through foreign investments.
The private health sector in India has made some impressive strides but has done
so at the cost of the public sector. To regulate it may be, however, just another
opportunity for bureaucratic delays and corruption. A better solution might be to
impose greater social accountability on private providers, making a certain
proportion of private services available to the poor.
The first priority must be to increase public expenditure on health care. The
government's common minimum programme promises an increase in the spending
on health care from 0.9% to 2-3% of GDP in five years with a health insurance
scheme for poor families.8 In the past two years, although expenditure on health
has increased in absolute terms, the proportion of GDP it represents has declined.
In India, each year tuberculosis kills half a million people9 and diarrhoeal diseases
more than 600 000. It is time for the government to pay more attention to
improving the health of Indians rather than to enticing foreigners from affluent
countries with offers of low cost operations and convalescent visits to the Taj
Mahal.

Public and private healthcare

According to National Family Health Survey-3, the private medical sector remains
the primary source of health care for 70% of households in urban areas and 63% of
households in rural areas. Reliance on public and private health care sector varies
significantly between states. Several reasons are cited for relying on private rather
than public sector; the main reason at the national level is poor quality of care in
the public sector, with more than 57% of households pointing to this as the reason
for a preference for private health care. Most of the public healthcare caters to the
rural areas; and the poor quality arises from the reluctance of experienced health
care providers to visit the rural areas. Consequently, the majority of the public
healthcare system catering to the rural and remote areas relies on inexperienced
and unmotivated interns who are mandated to spend time in public healthcare
clinics as part of their curricular requirement. Other major reasons are distance of
the public sector facility, long wait times, and inconvenient hours of operation. The
study conducted by IMS Institute for Healthcare Informatics in 2013, across 12
states in over 14,000 households indicated a steady increase in the usage of private
healthcare facilities over the last 25 years for both Out Patient and In Patient
services, across rural and urban areas.
Following the 2014 election which brought Prime Minister Narendra Modi to
office, Modi's government unveiled plans for a nationwide universal health
care system known as the National Health Assurance Mission, which would
provide all citizens with free drugs, diagnostic treatments, and insurance for
serious ailments. In 2015, implementation of a universal health care system was
delayed due to budgetary concerns.
With the help of numerous government subsidies in the 1980s, private health
providers entered the market. Opening up of the market in the 90s gave further
impetus to the development of the private health sector in India. Most of the
healthcare capacity added after 2005 has been in the private sector, or in
partnership with the private sector.
Private healthcare providers in India typically offer high quality treatment at highly
unreasonable costs as there is no regulatory authority or statutory neutral body to
check for medical malpractices.
WHY AND HOW PRIVATE HEALTHCARE SECTOR
BLOOMED
A weak government health care delivery system, coupled with the poor quality of
care (QoC) offered by it, is a major contributing factor to the growth of the private
health care system. Other important factors are discussed below.

Government Policies The National Health Policy, 2002, seeks to increase the
availability and coverage of health services by encouraging private investments so
as establish an integrated network of evenly spread specialty and super-specialty
services (MoHFW, 2002). The National Population Policy, 2001, advocates a
partnership between non-government voluntary organizations and private sector
organizations, including corporate houses (Planning Commission, 2001) to achieve
the goals envisaged.

The National Rural Health Mission (NRHM) envisages the participation of the
private sector to ensure that the states make full use of the health care providers
available in remote regions, and to also encourage better utilization of publicly
owned health facilities (MoHFW, 2005: 79).

Indirect Government Support The Government of India (GoI) offers a

number of financial concessions to corporate hospitals in the form of subsidized
sale of land, reduced import duties and tax concessions for medical research (Baru,
2000).

Other benefits received by the private sector include reduced utility charges,
discounted or free land, and low-interest loans . Gradually, health care has emerged
as a blue-chip industry, attracting individual as well as institutional investment.
Domestic and foreign companies have also come forward to set up tertiary
care/super-specialty hospitals. In Andhra Pradesh, the private sector has outgrown
the public sector through the direct and indirect patronage of the state government.
Private corporate hospitals receive huge amounts of public funds in the form of
reimbursements from public sector undertakings and the state and central
governments (e.g., the Central Government Health Scheme CGHS) for treating
their employees.

Private hospitals are replacing rather than complementing public hospitals by

weaning away resources from government hospitals.

Under the Rajiv Gandhi Arogyasri scheme implemented by the Andhra Pradesh
government, about Rs. 800 crore (89 per cent of the premium) went to private
hospitals; and each of the 768 private obstetricians; 16 ASCI Journal of
Management 41 (2) March 2012 who participated in the Chiranjivi scheme of the
Gujarat government earned on an average Rs. 10 lakh (CII and HOSMAC, 2011:
36–39).

Given the huge presence and significant share of the private health care delivery
system (PHCDS) in the total health care scenario of the country, the quality of care
(QoC) provided by this sector is an important factor in achieving the nation’s
health goals.

Hospitals in India comprise: (a) for-profit hospitals and nursing homes, (b)
corporate hospitals and (c) not-for-profit NGO and missionary hospitals. During
the last two decades, the number of private hospitals has significantly increased,
especially corporate chains like Apollo, Fortis, Max among other.

The primary reason, the study goes on to prove, is the absence of doctors and
a dissatisfaction with quality standards at state-run, or public hospitals.
However, it did add that between 85 per cent and 90 per cent of the patients
are willing to shift from the private sector if the situation improved in the
public health care facilities. The study was conducted by IMS Institute for
Healthcare Informatics, in over 14,000 households across 12 states (including
urban and rural areas).
There has been a steady increase in the usage of private healthcare facilities over
the last 25 years for both Out Patient and In Patient services, across rural and urban
areas. In 1986 – 1987, the choice for patients in both rural and urban centres was
tilted in favour of public hospitals over private hospitals (60 to 40). In 2012, 61 per
cent in urban areas had chosen the private sector over the public, and in rural areas,
nearly 69 per cent had put their faith in the private sector.
Why? Especially if one considers that costs in the public health care set up are way
cheaper than in the private centres. But the patients had their own reasons: the key
among them being long waiting periods and non-availability of medicines, apart
from non-availability of doctors and infrastructure.

Nearly 44 per cent of patients groused about the waiting period; while 52 per cent
said there were no diagnostic facilities in government hospitals. Comparatively,
they said, it was easier to meet a doctor in the private sector.

The other serious question that the study covered was the one on accessIt
has assumed that for a person to have access to healthcare in India, a
facility must be reachable within a 5 km and must offer available doctors,
drugs and treatment options that satisfy both acceptable cost and quality-
of-care standards.
“Even if only one of the components is missing, a patient is unlikely to
receive the right treatment in the most appropriate and efficient manner,”
the authors stateThey found that in rural areas, only 37 per cent of people
were able to access in-patient facilities (within the criteria stated above),
and only 68 per cent were able to access out-patient department
facilities.The implication of travelling long distances is the potential loss
of a day’s earnings and deferment of treatment in the early stages of the
disease. This would only lead to increasing the cost burden over time.
PUBLIC- PRIVATE PARTENERSHIP
INTRODUCTION
Deficiencies in the public sector health system in providing health services to the
population are well documented. The inability of the public health sector has
forced poor and deprived sections of the population to seek health services from
the private sector. Evidence indicates that, in many parts of India, the private sector
provides a large volume of health services but with little or no regulation. The
private sector is not only India s most unregulated sector but also its most potent
and untapped sector. To address the inefficiency and inequity in the health system,
many state governments have undertaken health sector reforms.

One of these reforms has been to collaborate with the private sector through
Public/Private Partnership (PPP). State governments in India are experimenting
with partnerships with the private sector to reach the poor and underserved sections
of the population. Collaborating with the private sector and fostering a partnership
for providing health services to the underserved sections of the population are
particularly critical in the Indian context.

Due to the deficiencies in the public sector health systems, the poor in India are
forced to seek services from the private sector, often borrowing to pay for them.
India has one of the world s highest levels of private out-of-pocket financing (87
percent estimated in World Bank 2001). Out-of-pocket expense at the point of
service use is about 85 percent . Such a mode of financing imposes debilitating
effects on the poor. Hospitalisation or chronic illnesses often lead to liquidation of
assets or indebtedness. It is estimated that more than 40% of hospitalised people
borrow money or sell assets to cover expenses, and 35% of hospitalised Indians
fall below the poverty line because of hospital expenses.

Out-of-pocket medical costs alone may push 2.2% of the population below poverty
line in one year (Selvaraju and Annigeri 2001; Mahal et al. 2002). Approximately
29 percent of the Indian population (almost 300 million people) live below the
poverty line and depend on free health services from the public sector. The
inequities in the health system are further aggravated by the fact that public
spending on health has remained stagnant at around one percent of GDP (0.9%)
compared to the global average of 5.5%. Yet even the public subsidy on health
does not automatically benefit the poor. The poorest quintile of the population uses
only one-tenth of the public (state) subsidies on health care while the richest
quintile accesses 34 percent of the subsidies (Mahal et al. 2002).

Private Sector in India Over the years the private health sector in India has grown
remarkably . At independence the private sector in India had only eight percent of
health care facilities but recent estimates indicate that 93% of all hospitals, 64% of
beds, 85% of doctors, 80% of outpatients and 57% of inpatients are in the private
sector (World Bank 2001). Contrary to commonly held views, private hospitals are
relatively less urban-biased than the public hospitals. Given the overwhelming
presence of the private sector in health, various state governments in India have
been exploring the option of involving the private sector and creating partnerships
with it in order to meet the growing health care needs of the populationThe private
sector is not only India s most unregulated sector but also its most potent untapped
sector.

Although inequitable, expensive, over-indulgent in clinical procedures and

without quality standards or public disclosure of practices, the private sector is
perceived to be easily accessible, better managed and more efficient than its public
counterpart. It is assumed that collaboration with the private sector in the form of
Public/Private Partnership would improve equity, efficiency, accountability,
quality and accessibility of the entire health system.

Challenges in Partnership

While the health system as a whole has common objectives of equity, efficiency,
quality and accessibility, public and private providers interpret the contents of
these objectives differently. Generally, the motive of the government is to provide
health services to all at minimum cost or free;
it develops policies and programmes to provide equity of access to such services.
From the public sector point of view,

there are merits and demerits in collaborating with the private sector.

Not-for-profit organizations have special concern for reaching the poor and the
disadvantaged but, in many states, they account for less than one percent of all
health facilities (World Bank 2004). Their sustenance depends on philanthropic
donations or external funding. As a result their interventions remain ad hoc, and
their up-scalability remains doubtful. But they provide good quality care, need
little regulation or oversight from government, are able to attract dedicated staff,
and cater to the needs of those otherwise excluded from mainstream health care

. Moreover, they are also willing to undertake health care challenges that the for-
profit sector is unwilling or unable to take on. Given their non-profit motives and
grass-root level presence, NGOs can play useful oversight roles in the system.
Their size and flexibility allows them to achieve notable successes where
governments have failed. Opinion is divided on the motives of the (for-profit)
private sector, ranging from outright distrust to strong support for close co-
operation with it.

One extreme view is that the private sector is primarily motivated by money and
has no concern for equity or access. five main problems associated with private-
for-profit provision of health services. They are related to the use of illegitimate or
unethical means to maximise profit, less concern towards public health goals, lack
of interest in sharing clinical information, creating brain drain among public sector
health staff, and lack of regulatory control over their practices Management
standards are generally higher in the private (for-profit) sector. The private sector
can play an important role in transferring management skills and best practices to
the public sector. In India, the formal for-profit sector has the most diverse group
of facilities and practitioners. Since it accounts for the largest proportion of
services and resources in the health sector, it is argued that future strategies to
improve public health should take into account of the strengths of the private sector
(World Bank 2004). There are also a large number of non-qualified rural medical
practitioners in the informal private sector in India. A conservative estimate puts
the number of these practitioners at 1.25 million.
Table 1 : Pros and Cons of collaborating with the Private Sector in Health

Sub section PROS CONS

INFORMAL Accessible Client- Poor quality care

oriented Low cost Difficult to
mainstream Poorly
educated

NOT FOR PROFIT High quality Small coverage Lack

Targeted to the of resources Cannot
poor Low cost be scaled-up Ad hoc
Involves the interventions
community

The positive scenario:

1) Increase accessibility and availability of services to rural India
Most of the major private hospitals are located in the metro centres and PPPs
could really help improve services in rural India. Major health centres driven
by PPP could bring the necessary resources – human and others – to rural
India. Incidentally, the private sector owns most of the resources. It currently
has 80% of all doctors, 26% of nurses, 49% of beds and 78% of ambulatory
services and 60% of in-patient care. It seems outrageous not to exploit those
resources. Ahluwalia noted that till now all PPP initiatives had so far been
targeted at metros and he urged the healthcare industry to look at PPP models
for the rural sector.
2) Increase the quality and quantity of manpower available
While there are some premier private and public medical institutions in this
country, there are no superlative medical institution brands like the IITs and
IIMs. Due to various reasons, many of the private medical institutions in this
country are extremely poor and PPP in the medical education sector could
really address this deficit. Incidentally, the health minister also feels the same
way.
3) It would improve primary care services which in turn would
improve quality of life
Most private players are in the secondary and tertiary sector leaving a gulf in
the primary care facilities. This is obviously because of the supply and
demand principle because people only seek healthcare services when they are
seriously ill. Now only if quality primary care was readily available and
accessible, a lot of diseases could be prevented which in turn would bring
down total healthcare costs.
The negative scenario:
1) It would corporatize healthcare
Health activists were left aghast by the PPP suggestion because they felt it
would corporatize healthcare and there’s always that possibility. Following a
PPP model could make the healthcare industry a simple profit and loss one
which could leave out the most vulnerable sections of society – those that
can’t afford it.
2) It could lead to widespread corruption
Corruption is one of the biggest problems and an argument can be made that if
there wasn’t any corruption then Universal Health Coverage would’ve been
achieved a long time ago. Now while there have been cases of corruption
against health initiatives like the NRHM in UP, none of them can compare in
sheer magnitude to the Commonwealth Games’ scam where an astounding Rs
8000 cr was siphoned off. Now imagine if the healthcare industry functioned
like this and government handed out contracts to their ‘companies’ it would
surely lead to non-existent healthcare services and even greater inequity in
healthcare resources.
3) The Government could completely get out of the healthcare sector
One of the other worries healthcare activists had was that a PPP model would
see the government stop providing healthcare services to the people. ‘This
would mean that the government would over time confine itself to providing
small package services and would be primarily just a purchaser of virtually
all clinical services from the corporatized private sector. The government
would, thus, finance (with public money), strengthen and bolster an already
resurgent corporate sector providing medical services,’ Jashodhara Dasgupta
of Sahyog and member of HLEG said adding that it would also decisively halt
and eventually reverse the moderate achievements of the National Rural
Health Mission in expanding public health infrastructure and services.
Incidentally, PPP models have worked remarkably in the international
healthcare scenario. More or less all international healthcare providers or
regulators work on the PPP model the most notable example being the World
Health Organisation .
CONCLUSION

The private health care system in India has grown vastly over the years
and is well established and flourishing. At the time of Independence, the
private health sector accounted for only 5 to 10 per cent of total patient
care With government expenditure on health as a percentage of GDP
falling over the years and the rise of private health care sector, the poor are
left with fewer options than before to access health care services
Introduction
There has been considerable academic interest in the growth of the private
sector in the delivery and financing of health care in developing countries.
“major role in financing and provision” that the private sector plays in low- and
middle-income countries, and went on to state that “private health sector
research has moved beyond classifying and counting providers and users, to the
assessment of mechanisms for harnessing the private sector and identifying
conditions for their successful application”.
In the developing world in particular, research on health care is often hampered
by a lack of standard definitions. For example, only clinicians with medical
degrees are categorized as physicians in some studies, but traditional healers are
also considered physicians in other investigations. Despite such problems with
definitions, a growing body of literature now links private health-care financing
and delivery in low- and middle-income countries with quality of care, drug
availability, patient access and equity, provider training and provider
knowledge, and changes in public-sector health care delivery in the same
settings. Various interventions may further improve private health care
provision in low- and middle-income countries.
The private sector is making a growing contribution to health care in much of
the developing world.Most (nearly 87%) of India’s health care is now privately
funded and out-of-pocket payments from patients have been found to represent
40–70% of the gross domestic product spent on medical care in 20 developing
countries. Various factors, including the traditional counterbalance between
supply and demand, heavily influence the growth of private health care in the
developing world and whether physicians choose to practise in the private
sector, the public sector or both sectors and to stay in their home country or to
emigrate.
BIBLIOGRAPHY
https://www.ibef.org/industry/healthcare-india.aspx

amya Kannan (30 July 2013). "More people opting for private
healthcare". Chennai, India: The Hindu. Retrieved 31 July 2013.

Britnell, Mark (2015). In Search of the Perfect Health System.

London: Palgrave. p. 58. ISBN 978-1-137-49661-4.

Jump up^ Umesh Kapil and Panna Choudhury National Rural

Health Mission (NRHM): Will it Make a Difference?Indian Pediatrics
Vol. 42 (2005): 783