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Friday, June 7, 2013

The Utopian “Liberal Health Model”



The Neo-liberal movement has picked up its pace from early 1990 across the globe. Few countries voluntarily embraced the principle and few were forced to adapt to the practices as part of structural adjustment programme (SAP). Neo-liberal advocates for free markets with minimalistic government performing only the functions that enhance or enforces hassle free market environment for better efficiencies. They advocate for freedom of choice without any coercion from the state. The neo liberals strongly believe in property rights and lower tax. The state has to reduce its role in service delivery take budget cuts to tax its citizens less and allow market to take over as markets are considered to be efficient and effective than state. The neo liberals also advocate to state to minimize its subsidy and cut on all welfare programmes which are denting the budget and leading to fiscal deficit. They also believe in creation of social safety nets by market based approach. They argue allowing market in social security  Programme would enhance the choice available for the poor and ultimately poor can chose rather accepting what state offers him. The conditional cash transfer programme or state backed health programmes fall into this category where the individual is empowered to access the market and choose what suits his requirement. Neo liberals argue that by adapting to these policies leakages in the state welfare expenditure can be minimized with an improved service delivery. In the next section I would be analyzing whether markets can replace state to deliver primary good like health?

                  Health status of India is abysmal with less that 4 % GDP is being contributed from health sector.  Until 1980 the health care was primarily serviced by government. Late 1980 and liberalization of economy with reforms in health sector has seen mushrooming of private nursing homes and corporate hospitals. Government is in the process of adequately strengthening the health institutions for basic healthcare, lack of specialist doctors and equipment for treatment of serious diseases has created a wide gap between the disease load and the capacity of the Government hospitals to serve the poor. These facilities though available in corporate sector are catering mainly to the affordable sections of society and are beyond the reach of poor families living in villages. Because of this gap poor patients are constrained to go to private hospitals for treatment and in the process incur huge debts leading to sale of properties and assets or are, sometimes, left eventually to die. This was seen as opportunity and the agricultural surplus was diverted to invest in high end hospital with latest equipment in private sector. While structural adjustment and budget deficits has done little in improving and upgrading the standards of public funded hospitals. In Andhra Pradesh tertiary health care involving super specialty is majorly controlled by private hospitals. Private hospitals usually formed cartels to virtually keep cost of treatment high depriving poor from accessing advanced health care facilities. Those poor who availed these facilities are often pushed into debt traps because of these health financial shocks leaving them no option other than to commit suicides. In Report of the Commission on Farmer’s Welfare, Government of Andhra Pradesh, Hyderabad by Ghosh, Jayati (2006) it was suicide in poor farmer families is linked to the health shocks. To address this issue of financial health shock state has come up with innovative market based health service scheme Rajeev Arogyasri for BPL households.

The key objectives of any publicly-funded health insurance programme are multidimensional. Besides improving health outcomes, it is expected to enhance access and availability of essential healthcare services. But the critical goal of any health financing strategy is to protect households from financial catastrophe and impoverishment. This is expected to substantially reduce the households’ out-of-pocket (OOP) spending on healthcare. Rajeev Arogasri is a first of its kind in India where tertiary care was made available for poor household by government free of cost. The programme is cash less hospitalization where poor can avail services without any expenditure.  Under this scheme 938 procedures are covered.  The amount covered is Rs.2 lakh with additional buffer amount of Rs.50,000. A private insurer is selected through completive bidding and the community health insurance model was created. A network of Private and government hospitals were empanelled under the scheme where health facilities can be availed. This neo liberal market schemes looks glossy from outside. Poor are extremely as for the first time they are able to access corporate health services free of cost. But did the progamme deliver a better health services to poor than state ?

            There is no doubt that opening up of market has increased the access for poor to health services. But the market has exploited the scheme and distorted the schemes vision. Under Arogyasri only tertiary health care is covered. After the progamme came into place the funds from health budget are being diverted to the scheme putting the primary and tertiary care in an abysmal state. Arogyasri also has a targeting issue it identifies 80% of state’s population as poor. The scheme appoints Arogyamitra, scouts to identify the patients and refer them to doctors. Arogyamirtas by and large colluded with private hospital and are directing patients to the private hospitals. The private hospitals are also being choosy about the cases the pick. Data Healthcare Models in the Era of Medical Neo-liberalism [1] say that the private hospital are selecting patients based on various factors. Cases which involve high risk, more post operative care, low returns are re-directed to government hospital. For example cases like spine injury might need long post operative care which can potentially block the bed in private hospital and the maximum amount what one can claim under Arogyasri this is making them to divert these cases to Public hospitals. The procedures are dived into two categories first categories has 352 cases funded by star insurance company and the rest are funded by Arogaysri trust.  The private hospitals are more inclined in taking up cases those are reimbursed by the insurance company as there are no delays. Private hospitals also started encouraging the surgical procedures for treatments even though the ailment can be treated otherwise as non- surgical procedures are not covered under the schemes. After the scheme was introduced there was sudden rise in caesarians as poor people were forced to undergo instead of normal delivery. There are also cases where old women were selected and were done hysterectomy bribing them. Corruption was also rampant extra service fees were collected from patients even though everything is covered under the scheme. This raises the questions of moral ethics and the scheme has tested moral limits of markets again.
                        The government has used ICT technologies to cull the fake claims done by private hospitals but the in a neo liberal approach the scheme has failed. The neo liberal schemes are supposed to give choice of selection to patients where then wish to claim their “quality treatment”. But the private hospitals jeopardized the health of patient. Patient no more has the right to select it’s the market which has power to select what they ought to do. Ultimately the cases are diverted to public hospital whose pockets are already picked by private hospitals due to the scheme.  
            As a policy designer one can encourage market based approaches but one has to also consider the limits of market in service delivery.  When it comes to basic services like health market can distort the goals and give us biased outcomes. At least now government has to open its eyes and start investing in public hospital and use the same insurance schemes to funds them. Diverting these funds from private hospitals to government can create necessary infrastructure which in long term will make medical cost affordable to the society or else we will be reach a point where no one would be able to afford health without an insurance. The million dollar question is what if government withdraws the scheme? Already this insurance market based schemes has pushed up health costs which already started effecting who are not covered under the scheme. Can poor afford this high cost without the schemes the government’s goal should be creation of sustainable institutions which can deliver services at a affordable costs.


[1] Prasad and Raghavendra, “Healthcare Models in the Era of Medical Neo-liberalism.”

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