Issues in Health Care Financing and Provision in India Peter Berman The World Bank New Delhi
Financing and Provision of Health Care: Some Introductory Concepts Consider whole system Government and non-government, not only health department Curative, preventive, and promotive Qualified and unqualified, allopathic and AYUSH Financing: Resource mobilization, Resource allocation and pooling, Payment and purchasing Provision: Who does what for whom?. Must consider the individual provider and the organization in which they work
Diagnosis and Reform There are many problems how can we decide what is most important? Focus on outcomes Health Financial protection Consumer satisfaction And their distribution -- EQUITY
Financing and Provision: Government and Non-government Roles Provision Financing Govt Non-G Govt Core public sector? Non-G? Core private sector
Four Key Functions in Health Systems Stewardship Input Generation, e.g. human resources, drugs, equipment, facilities Financing Service Provision Health systems differ greatly across countries in how these functions are done What countries say they do and what they actually do is often VERY different Typically in lower income countries governments try (unsuccessfully) to do everything themselves
India Total health expenditure about Rs. 1,09,000 crores (NCMH), Rs. 1000 per capita, or 4.8% of GDP Government share 30% or less Government delivery system widespread, along lines of national health service model. Actual share of services delivered is modest
Source NCMH 2005
Source NCMH 2005
Public and Private Sector Shares in Service Delivery across India, 1995 96 Immunizations Prenatal care Institutional deliveries Hospitalization Outpatient care 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Shares of public and private sectors Public Private Source: NSSO, 52 nd Round
Do poor people rely on the public sector? Primary Health Care 100 80 60 40 20 0 Share of the private sector in number of visits for primary care services - rural areas Karnataka Kerala Rajasthan West Bengal All India poorest 2 3 4 richest Doesn t seem to matter how poor you are. But national average masks some interesting state variations. Hospitals Share of the private sector in hospital in-patient days - rural areas 70 60 50 40 30 20 10 0 Karnataka Kerala Rajasthan West Bengal All India poorest 2 3 4 richest Source: Calculations based on Mahal et al (2001) referred to in MTA Para 2.2.68
Public Subsidies for Primary Care and Hospitals NB: 95-96 data 35 30 25 20 15 10 Hospitals Primary Health Centers 5 0 Poorest II III IV Richest Source: calculations based on Mahal et. al. 2001 referred to in MTA para. 2.2.68
Complex Structure of Government Financing for Health Center 25%, States 75% Significant center support to state budget Attention to H& FW Role of other departments and organizations Health benefits for civil servants? Center H&FW: H = 19% FW = 81 % States H&FW: H = 85 % FW = 15 % States H: M = 83%, PH = 17 % States H&FW: Salaries=70-80%, Drugs=10 % Does this raise questions about who is responsible/accountable and for what? Based on demand for grants, 15 major states, 1999-2000
PHC s: What do people find when they get there? 80 Absenteeism 70 amongst doctors by state & reasons for absence 60 50 40 Official Duty Leave No reason 30 20 10 0 Bihar Jharkhand Orissa Uttaranchal Uttar Pradesh 70 Assam Rajasthan Madhya Pradesh Chhatisgarh West Bengal Andhra Pradesh Karnataka Tamil Nadu Maharashtra Gujarat Haryana Absenteeism amongst staff by state & reasons for absence Punjab 60 50 40 30 Official Duty Leave No reason 20 10 0 Bihar Jharkhand Orissa Uttaranchal Uttar Pradesh Assam Rajasthan Madhya Pradesh Chhatisgarh West Bengal Andhra Pradesh Karnataka Tamil Nadu Maharashtra Gujarat Haryana Punjab
Other issues in service delivery Nominal priorities and technical package largely sound, key issues are access and quality Real access is often lacking, especially in most needy areas Vacancies Absenteeism Lack of essential inputs All these lead to higher financial burden and use of nongovt services Technical competence? limited evidence suggests quality problems in both government and non-government sectors, need to learn more about this
Health Financing and Delivery: What can be done? More Better Resource Mobilization Resource Pooling and Allocation Paying for and purchasing services quality, efficiency, and equity/effectiveness Service delivery improvement strategies in government and non-government sectors including PPP, decentralized approaches, capacity building, etc.
MORE What is the justification for more government spending? Unmet health need and poor service delivery caused by insufficient funds? Is the case adequately made? NCMH arguments about economic growth, poverty effects, health transition? GoI has called for public spending to increase to 2-3% of GDP over next 5 years
MORE (2) How to achieve increased government spending? General tax revenue Earmarked taxes Sale of public assets Expanding social insurance Cost recovery, linked to private insurance? Increased external aid Others? Role of center, states, others? Mix of financing sources? Effects on total health spending and economy?
BETTER Allocations to the right problems and places? Sufficient financing for adequacy of inputs and right mix of inputs? Can government spend money in timely and effective manner? Performance measurement and accountability?
Extent of Budget Utilization in Health Sector: 1991-92 to 2002-03 (%) 110 105 % of Budget Utilised 100 95 Karnataka Orissa Kerala Haryana Punjab Bihar Assam Rajasthan West Bengal Madhya Pradesh Gujarat Tamil Nadu Andhra Pradesh Maharashtra Uttar Pradesh Goa 90 85 Source: V. Selvaraju, 2005
BETTER (2) Broad Strategies for Govt Action to Improve Service Delivery New service delivery strategies, e.g. ASHA Improve management of government service delivery Better incentives in public sector PPP: buy rather than make Demand-side and Accountability strategies: empowering communities and consumers through decentralized approaches All three included in NRHM No single formula likely Need MIX of strategies for different regions and problems Not only WHAT, but HOW? Skills and capacities needed for more innovative approaches e.g. financial management, performance measurement etc. States, districts, blocks, and communities are the key actors
Some Conclusions Issues well known and documented in official publications NRHM provides a broad umbrella for change with room for significant innovation Main problems are not what to do, but how to do it Both more and better financing and provision needed both strategies must advance in tandem To achieve priority outcomes must states, local bodies, and communities play a much greater role?