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Health System Innovation in India Part I: India’s health system challenges

Adam Wagstaff's picture

India’s health system faces some major challenges. In some respects, the hill India’s health system has to climb is steeper than that facing other developing countries. The good news is that the innovation that India is famous for in other sectors, as well as in health technology, is now starting to make itself felt in the health system. Not only may these ideas benefit India’s poor; they may also provide food for thought for other countries.

In this post, we sketch out the challenges facing India’s health system. In the next two, we outline two innovative approaches—one government, one private—in the state of Andhra Pradesh. 

1) Getting sick, getting poor

Twenty one percent of Indian households record out-of-pocket health spending in excess of 15 percent of nonfood expenditure; China records a similar ‘catastrophic’ spending figure, but elsewhere in Asia—apart from Bangladesh and Vietnam—the figure is lower.

Illness is a common reason for falling into poverty in India. The poverty headcount in India would have been 3.7 percentage points lower in the absence of out-of-pocket health payments; only Bangladesh records a higher figure. These figures may be overestimates insofar as households find ways to avoid cutting back current consumption by borrowing, drawing down savings, etc. But sooner or later, the resources have to be found, and many households experience bouts of illness period after period.

The high figures for India reflect its heavy reliance on out-of-pocket payments to finance health care: at 76 percent, India’s out-of-pocket share is second only to Pakistan’s in Asia. The relatively small amount (relative to GDP) that India’s government spends on health (currently about one percent) disproportionately benefits the better off, more so than in most other Asian countries.

2) Getting sick, but not getting any better

Random spot checks of government clinics have found upwards of 40 percent of health workers absent. Unsurprisingly, Indians often turn to the private sector for their ambulatory care, including unqualified practitioners. This explains in part India’s high out-of-pocket spending.

Sadly, the quality of ambulatory care in both sectors is rather poor. When presented with vignettes about hypothetical patients, qualified practitioners in both the public and private sectors demonstrate substantial knowledge gaps, asking well below half the questions they ought to ask. Worse, under observation both sets of doctors do much less than they know; so in addition to an absolute knowledge gap, there’s a “know-do” gap too. Both gaps are larger among public sector doctors. Among unqualified providers, the absolute knowledge gap is largest of all, but the “know-do” gap is zero, and under observation unqualified providers outperform qualified public sector doctors! Indians—especially poor ones—will have multiple visits per illness episode, either to the same or different providers; even after all the visits, they are often no better.

A health needs assessment was completed in Prakasam district in Andhra Pradesh a few months back. It was found that 98 percent of the households, all living below the poverty line, had someone who fell sick last year. More than 99 percent of these went to unqualified providers as a first point of care. The government has developed specific programs to improve the management of specific disease such as TB with free diagnostics and drugs. People are aware of these programs but nine of ten people with TB had been treated in the private sector. People say that they do not trust the drugs provided in the public facilities and the doctors are rarely there.

Hospital care in India, until recently at least, entailed large out-of-pocket payments. As result, India’s poor record much lower rates of hospitalization, and likely experience higher rates of premature mortality as a result. Many of the causes of death uncovered by a detailed study of deaths in rural Andhra Pradesh are—at least in principle—amenable to medical care, such as ischemic heart disease (14 percent), cerebrovascular disease (13 percent), tuberculosis (4 percent), intestinal infections (4 percent), and lower respiratory disease (3 percent). Yet barely 50 percent of those who died had been to a hospital in the period leading up to their death (those who did mostly went to a private one), and only 20 percent died in a hospital. This picture is only partial, of course; but it does suggest that raising the quality of hospital care in India, and helping Indians get hospital care when they are at risk of dying might lower rates of premature mortality.
3) Addressing these challenges

In our next posts, we look at a couple of innovative programs that are trying to address some of these challenges.

For part II of this post, visit this blog next week.


Interesting post and I look forward to parts 2 and 3. However, the question I would ask the authors is why have they focused only on India's challenge in treating the ill appropriately in hospital. India's bigger challenge is prevention of communicable, infectious diseases through public education, sanitation and public health campaigns. I speak from recent personal experience where my entire family in the state of Jharkhand in India fell ill with what was diagnosed as Chikungunya fever. Anecdotally, local doctors reported that it was an epidemic and all local hospitals had run out of beds. Yet the Integrated Disease Surveillance unit of the Ministry of Health seemed to to have no knowledge of this outbreak. More importantly, none of the locals I spoke to were aware that the illness is spread by mosquitoes - a vital piece of information that had not been communicated to the public by authorities and no guidance given on prevention. Such mass communication is easily done by SMS on mobile phones and was a missed opportunity. Surely the best way to reduce premature morbidity and mortality is prevention and not admission to hospital, as the authors opine. I am surprised that economists at the World Bank have missed such a vital challenge for India's healthcare system. Dr Suparna Das Director - e3 Intelligence Ltd

Dr Das, My colleague, Monica Das Gupta, wrote a nice piece in Economic and Political Weekly with several Indian public health specialists on ways to strengthen India's public health system I completely agree with you on the scope for reducing hospitalizations through good public health programs and a strong primary care system. But even in countries with a well-functioning public health system and a good primary care system, hospitalizations occur. And where hospital charges are high, there will be some people whose condition indicates hospitalization but are not hospitalized, and others who are hospitalized but whose families face financial hardship as a result of the hospitalization. Granted - these problems would be reduced with a good public health and primary care systems. But I don't think they'd be eliminated. AW.

Thanks for the link to your colleague's work - the abstract touches on relevant points about preventive medicine and improving public health systems in India. I appreciate that your blog post is trying to highlight the problems, especially financial hardship, that Indians face when they need hospitalisation. This is commendable and, indeed, needs to be highlighted. However, the title of your blog post is then misleading - 'India’s health system challenges' - because appropriate and equitable hospitalisation isn't India's only health system challenge. Perhaps it should be titled 'Challenges to receiving good hospital care in India'. I'm sure you'll agree that a health system is a much broader concept than a hospital system. Suparna

The post is really very interesting and quite impressive. Asian countries are doing well enough in the field of health and hospitality. I think, India is not so poor as we read and see in magazines and documentaries. As far as I am concerned, India has the ability to fight against infectious diseases. Its the only country which has great manpower and is also famous as a democratic nation all over the world. I am sure, India has the ability to fight with any kind of problems whether its health, corruption, poverty or society. I would like to get some more information related to health in India. Thanks for sharing the post.