Radical Journal of Health 1988 Vol. 5, No. 1, June: Fifth Anniversary Special
Item
- Title
- Radical Journal of Health 1988 Vol. 5, No. 1, June: Fifth Anniversary Special
- Date
- June 1988
- Description
-
Heath care beyond apartheid
Health care, health policy and under-development in India
Health on political agenda in Pakistan - extracted text
-
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?Zari<- .-loud
Health Care beyond Apartheid
Health Care, Health Policy and
Under-development in India
Health on Political Agenda in Pakistan
Volume V
June 1988
No. 1
FIFTH ANNIVERSARY SPECIAL
V
Working Editors :
Amar Jesani. Manisha Gupte,
Padma Prakash, Ravi Duggal
1
Editorial Perspective
ONE SMALL STEP
Padma Prakash
Editorial Collective
Ramana Dhara, Vimal Balasubrahmanyan (AP),
Imrana Quadeer, Sathyamala C (Delhi), Dhruv
Mankad (Karnataka), Binayak Sen, Mira Sadgopal
(M P), Anant Padke, Anjum Rajabali, Bharat
Patankar, Jean D'Cunha, Srilatha Batliwala
(Maharashtra) Amar Singh Azad (Punjab),
Smarajit Jana and Sujit Das (West Bengal)
Editorial Correspondence :
Radical Journal of Health
C/o 19 June Blossom Society,
60 A, Pali Road, Bandra (West)
Bombay - 400 050 India
Printed and Published by :
Dr. Amar Jesani for
Socialist Health Review Trust from C-6 Balaka
Swastik Park, Chembur Bombay 400 071
r'.nied at
Omega Printers, 316, Dr. S.F Mukherjee Road,
Belgaum 590 001 Karnataka
3
HEALTH CARE BEYOND APARTHEID
Max Price
16
HEALTH CARE, HEALTH POLICY AND
UNDER-DEVELOPMENT IN INDIA
Ravi Duggal
25
HEALTH ON POLITICAL AGENDA IN PAKISTAN
Sar
28
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30
Dialogue
PROBLEMS IN DOCUMENTING EP DRUGS
CAMPAIGN
Anant R.S
CUT SYSTEM DILEMMA
V. Muralidhar
The views expressed «n the signed articles do not
necessarily reflect the views of the editors.
Editorial Perspective
One Small Step
WITH this issue wc complete four years of crowded life. As relations and the broader social order based on it.” At the
we begin a new volume wc would like to share with you same time we also acknowledged that there did not exist
some of our experiences, some positive and some not so, “one single marxist analysis — an all correct perfect line
in producing this journal. Also, wc would like to collectively so to say of health and medicine.” What the periodical
recollect how we began and why wc launched a health hoped to do was to facilitate a continous interaction at the
level of praxis amongst the different trends within the marxist
quarterly at all in the first place.
As in any such venture, wc loo had some broad objectives movement.
However, wc also agreed that there were other ap
in mind when wc began. These objectives were evolved in
response to a need many of us fell for such a platform in the proaches or strands of analysis which had contributed to
context of the time. In the course of four years these a radical understanding of health and health care. One such
objectives have themselves been re-examined — which wc was the 11 ichian which locates problems not so much in the
believe is a positive development. No journal can hope to socio-economic formation as in the bureaucracy and in
survive without being conscious of changes in its milieu. the centralising tendency of capitalist development, faulting
At the same time it cannot afford to adapt itself too rapidly rather the trends towards industrialisation and urbanisation
to every movement in its reference fabric. This creates a rather than the socio-economic system that engenders it.
certain tension, the nature of which may be different for Similarly, the women’s health movement in the west had
mainstream publishing and for the alternative media. RJ1I pioneered the critique of the ideological structure of health
has generally been able to cope with this tension and work care and the medical establishment and in doing so had
within it. Often some of the changes wc make arc mooted by rewritten in many ways the history of medicine. These we
pragmatism, and may not appear to further our goals. And felt, would contribute to the development of marxist analysis
this is why wc arc very much aware of the need to reflect on of health.
But why did wc need a separate journal for fulfilling these
whatever has happened to us. This is notso much an exercise
in self-criticism as a process of sharing our problems — objectives? Couldn’t existing left — journals or health pe
which wc arc sure many other similar journals have experi riodicals serve the purpose? This was indeed an important
issucsinccwcdidnotwanttomcrclyadd to the large number
enced — and learning to deal with them.
In 1983 many of us independently began to feel the need of periodicals unnecessarily, and secondly, many of us
fora forum for discussion and analysis of health issues from though not all, had our introduction to health issues in forums
a left, marxisl perspective. For one thing, since the 70s such as the medico friend circle which published some kind
diverse groups with differing political and ideological of periodicals. As the first editorial made clear, while other
perspectives had began to work in health as part of health periodicals would always remain useful in introduc
‘dcvclopmcnt’activitics. Individuals in these groups through ing individuals to a critical perspective on health, it may not
their work and exposure to ground realities had become be possible for them, or even appropriate, to initiate and
sensitised and come to feel the need for a substantial radical continue a debate with a coherent political perspective, such
critique of health. Also, political activists through their as a marxist one. While the richness of the interaction
involvement in or exposure to health issues of working between ideological perspective could not be undcrcmphapeople had been forced to realise the importance of health in sised, the development of a marxist approach to health
all its. aspects to the practice of politics. Yet another factor through these journals may not be feasible. As for other left
was thccmcrgcncc oflhc people’s science movement, which oriented journals like the Economic and Political Weekly,
although it had not at that time taken health as a major focus it was felt that since they covered all aspects of the analysis
of its activities, had generated a sharp awareness oflhc need of society, it would not be possible for them, nor may they
to critique establishment science including medicine.
be so inclined as yet, to devote space to discussions and
What did wc understand by a marxist approach to health debates on health issues.
Thus was launched with great trepidation, the first issue of
and medicine ? As the editorial perspective in the first issue
of the periodical pointed out, wc meant an “analytical the Socialist Health Review in June 1984. In that one year
approach which takes a historical materialist and dialectical not only had a collective of health and political activists
view of the health of people and the medical care system in from various parts of the country been formed, but we had
a given social order.” From this standpoint health was also collected a small fund to cover costs through individual
considered a part and consequence of economic, political donations and pro-publication subscriptions. The response
and socio-cultural development of society. That is, “the certainly surprised us and after the first few issues wc were
problems of health and health care system reflect the quite overwhelmed — wc now have very few, a dozen per
problems of the dialectic of production forces and production haps, of the first issue on ‘Politics and Health’ and a few more
'June ]988
£ .
of the other issues except the second one, on Women and because we receive our share of criticism on this count from
Health, and that was because it was reprinted with the help both groups.)
of a donation from a friend and well-wisher.
Together with other problems, wc discovered that for
But even then, in spite of our euphoria, we recognised some reason wc could not register the journal under its
that if this response indicated any tiling at all, it was the need name. Of all the near -SHR names wc proposed, wc were
for such a periodical. And also that our survival was in equal allowed to use the Radical Journal of Health. In January
parts due to the support of our readers many of whom
1986, at a meeting of the collective, it was decided to set up
encouraged us in several ways by recommending SHR to a trust, which happily wc could name the Socialist Health
others, collecting subscriptions, sending donations and most Review Trust to undertake the publication of RJH as one of
importantly, writing enthusiastic letters to us and other its activities. We also decided to collect a corpus fund,
factors, not the least of which was our‘discovery’of our introduce a life subscription and raise our subscription rate
first printers, Omega, who shared our burden in producing marginally. So far wc had been subsidising the journal
the journal, not only because they were such professionals, through donations collected in the first year or so but wc
but because of their philosophical and ideological could no longer do so. Moreover, this was also the time when
orientation.
Omega ran into a variety of problems and could no longer
For the first two years, SHR had a comparatively smooth print RJH, which meant that our cost of production would
run— there were of course financial problems,‘administra also go up. Fortunately wcfound friendsagain, in the shape
tive’ as well, because there were so few of us wanting to do of Bharat Printers, Bombay and the Economic and Politi
so much (!) and other day-to-day troubles. (On one occasion, cal Weekly who undertook to print the periodical and
the production ofour issue was held up because of a transport typeset the matter and produce layouts respectively
strike, and for the moment whatever the nature of the painstakingly, at reasonable cost, bearing with all our now
demands of the strikers, we certainly did not feel very haphazard lime schedules. With this issue the journal is now
sympathetic!) Then came the problems in our third year.
back with Omega and may this be the last word on the
We can’t help wondering al this point if this isn’t quite subject!
typical of this kind of publishing. And is there a lesson in
The journal has touched upon a variety of issues some of
all this? That unless the skeleton structures for functioning these have become die focusof debate. But others which had
are formalised in the first few years, the natural decline of been consciously raised with a view to generate discussion,
enthusiasm in the later years will affect the activity such as the issue of the socio-economic roots of the prevail
drastically. We did try to do this with ihcS///C. For instance, ing practice of witch hunting in tribal region of Maharashtra,
it was decided that the topic for each of the four issues would failed to elicit much response. Wc have come to realise that
be decided well in advance. The editorial perspective, the ‘objective conditions’ have to be right even for initialing
whether written by one of the collective or a ‘guest’, had to debates — they need to be live and day-to-day concerns.
be circulated nine months in advance of the issue date. This While theoretical issues do get a response the debate docs
would give enough time to organise a good collection of not continue for very long. This may also be due to the fact
articles on a particular theme. This is how we have been that academic interest in health issues may be of recent origin
functioning more or less, until recently and we hope to revive in India.
it very soon.
To any retrospective reader it may appear that the RJH,
There were of course, many critical comments, perhaps has glossed over three health issues which have been very
the most important one, after the first issue, that SHR read much the focus of public attention in the years of our
too much like a ‘high brow’ journal. That is, the articles existencepharmaceuticals, the Bhopal disaster and the
assumed a degree of familiarity with marxist analysis which campaign against amniocentesis and sex determination
may not exist among most readers. This led to the use of techniques. Although wc did carry a couple of articles on
marxistterminology withoutcxplanation which sounded like Bhopal, wc have not had a sustained focus on it. Similarly,
jargon. This was a serious problem—either we could decide while the RJH has published reports and discussion pieces
that those who did not have a grounding in marxist analysis on pharmaceuticals, it is only in our last volume that wc have
were not our target readership and so we could not cater to carried substantive articles on the drug policy or for that
their needs, or, we could attempt to ‘dejargonify’ the articles matter an entire issue on pharmaceuticals. Wc have done a
and in fact introduce the marxist approach to social analysis little better on the amniocentesis campaign our very second
through the discussions on health issues. Almost unani issue carried an article on the topic and a recent number did
mously we opted for the latter. We have attempted various as well; but nevertheless, wc did not in a major way,
ways of getting over this problem by trying to use a contribute to the ongoing struggle to obtain a ban on the
minimum of marxist terminology without damaging the technique. Perhaps this needs an explanation of sorts.
analysis, and by presenting a mix of articles, some of which
Early
on, it was felt that wc did not need to
were more rigorously marxist than others. (Sometimes of publis'somcthing' on every issue, unless wc had something
(Continued on page 15)
course, we wonder if we have fallen between two stools to say (
2
Radical Journal of Health
Health Care Beyond Apartheid
Economic Issues in Reorganisation of South Africa’s Health Services
max price
The consequences of apartheid for health policy in South Africa are profound. Racial differences in health
status and the allocation of health care reflect the inequalities of power and wealth produced by the political
economy of apartheid. Furthermore, health policy is itself instrumental in furthering apartheid goals. It might
be tempting then, to rely on the demise of apartheid and subsequent democratic redistribution of power and
wealth to redress the fundamental inequalities in the provision of health care. Yet, as has been seen in
Zimbabwe for example, radical political change is not sufficient in itselffully to transform the health services.
Likewise in South Africa, it will require more than the mere removal of apartheid policies to attain health for
all. This article analyses the economic organisation of health services in SA, so as to identify various
structural obstacles to the provision of health care for all, which could well survive the demise of apartheid.
The article analyses the proposed options for reorganising the economic structure of the health services to
decide whether they make economic sense and to indicate the likely consequences ofparticular choices. It does
not assess the political possibility of their implementation.
The article is abstractedfrom the author's Master's dissertation to the London School ofllygine andTropical
Medicine, published in full in Critical Health, March 1987.
IN 1944, in South Africa (SA) the Gluckman commission
proposed the establishment of a comprehensive national
health service. Few of the commission’s recommenda
tions were implemented. However, while not committed to
the principle of a national health service, the Nationalist
government steadily increased its control over die health
services during the 1960s and 1970s. Since the late 1970s
the trend has turned towards greater privatisation. Th is
has recently been accelerated by the state’s current fiscal
crisis, combined with escalating health care costs. There arc
also strategic political and ideological reasons for the
change in the state’s policy towards increasing the number
of people who use private sector providers. This trend has
been supported by various private sector organisations,
think-tanks, companies and professionals. On the other
hand, there is also a growing concern about the inadequacy
of the present health services amongst some professionals
and political organisations, many of whom have called for
the establishment of a national health service. Thus the
debate on the choices to be made regarding how the health
services should be financed, has again flourished.
Not surprisingly, it is often emotive, and positions arc
taken primarily because they arc in line with the broader
ideologies of the authors. But more importantly, when eco
nomic arguments arc marshalled, they are frequently con
fused. Choices arc crudely defined, since the options of
‘privatisation’ and ‘nationalisation’ arc presented as if
they were each a single uniform phenomenon. On closer
examination however, it will be seen that the nature of
each is more complex, and defined by a range of possible
combinations rather than one essential feature. The choices
in the economic reorganisation of the health services, there
fore, comprise a scries of options which should be exam
ined discretely.
■June 1988
The effects of the system of apartheid on health and
health care have been extensively researched and debated.
These studies have focussed largely on those aspects of
the health services that fall under direct government
control — viz. the public health sector. There has been very
little research or debate on the health service as a whole and
in particular, its economic structure. Recently, however,
this debate has flourished.
Although for most of the 1970s the government
seemed to view the provision of health services primarily
as an obligation of the state, and seemed to tolerate the
private sector with some suspicion and a good measure of
control, the recession and fiscal crises of the late 1970s and
1980s have resulted in a dramatic shift of attitude:
Curtailed by the lack of resources, especially financial,
.... a more active process of privatisation of health
services is indicated. Dr. Francois Retief, Director Gen
eral of the Department of Health and Welfare, 1985.2
We will have to guard against being compelled to move
away from the free market system. (The Minister of
Health and Welfare in parliament, March 1984.)3
Health authorities must not be seen as an infinite
source of health facilities and medical care. More people
should be able to make use of private health facilities as
their economic circumstances improve. (Dr. M.H. Ross,
Department of Health and Welfare, 1982.)4
The government appointed the Browne Commission of
Enquiry into the Health Services in the Republic of South
Africa in the early 1980s. Although it has recently submit
ted its report, this is not yet published at the time of writing.
Since 1980, SYNCOM (PTY) Ltd, a private sector
‘think-tank’ organisation, has received several commis
sions to research the future of health care services in SA
from the Pharmaceutical Society of SA (PSSA) and the
Health Strategy Group (HSG). The HSG is composed of
the Medical Association of SA, the Dental Association of
3.
Health Care Beyond Apartheid
Economic Issues in Reorganisation of South Africa's Health Services
max price
The consequences of apartheid for health policy in South Africa are profound. Racial differences in health
status and the allocation of health care reflect the inequalities ofpower and wealth produced by the political
economy of apartheid. Furthermore, health policy is itself instrumental in furthering apartheid goals. It might
be tempting then, to rely on the demise of apartheid and subsequent democratic redistribution of power and
wealth to redress the fundamental inequalities in the provision of health care. Yet, as has been seen in
Zimbabwe for example, radical political change is not sufficient in itselffully to transform the health services.
Likewise in South Africa, it will require more than the mere removal of apartheid policies to attain health for
all. This article analyses the economic organisation of health services in SA, so as to identify various
structural obstacles to the provision of health care for all, which could well survive the demise of apartheid.
The article analyses the proposed options for reorganising the economic structure of the health services to
decide whether they make economic sense and to indicate the likely consequences ofparticular choices. It does
not assess the political possibility of their implementation.
The article is abstractedfrom the author's Master's dissertation to the London School ofllygine andTropical
Medicine, published in full in Critical Health, March 1987.
IN 1944, in South Africa (SA) the Gluckman commission
proposed the establishment of a comprehensive national
health service. Few of the commission’s recommenda
tions were implemented. However, while not committed to
the principle of a national health service, the Nationalist
government steadily increased its control over the health
services during the 1960s and 1970s. Since the late 1970s
the trend has turned towards greater privatisation. This
has recently been accelerated by the state’s current fiscal
crisis, combined with escalating health care costs. There are
also strategic political and ideological reasons for the
change in the state’s policy towards increasing the number
of people who use private sector providers. This trend has
been supported by various private sector organisations,
think-tanks, companies and professionals. On the other
hand, there is also a growing concern about the inadequacy
of the present health services amongst some professionals
and political organisations, many of whom have called for
the establishment of a national health service. Thus the
debate on the choices to be made regarding how the health
services should be financed, has again flourished.
Not surprisingly, it is often emotive, and positions arc
taken primarily because they arc in line with the broader
ideologies of the authors. But more importantly, when eco
nomic arguments arc marshalled, they arc frequently con
fused. Choices arc crudely defined, since the options of
‘privatisation’ and ‘nationalisation’ arc presented as if
they were each a single uniform phenomenon. On closer
examination however, it will be seen that the nature of
each is more complex, and defined by a range of possible
combinations rather than one essential feature. The choices
in the economic reorganisation of the health services, there
fore, comprise a series of options which should be exam
ined discretely.
■June 1988
The effects of the system of apartheid on health and
health care have been extensively researched and debated.
These studies have focussed largely on those aspects of
the health services that fall under direct government
control — viz. the public health sector. There has been very
little research or debate on the health service as a whole and
in particular, its economic structure. Recently, however,
this debate has flourished.
Although for most of the 1970s the government
seemed to view the provision of health services primarily
as an obligation of the state, and seemed to tolerate the
private sector with some suspicion and a good measure of
control, the recession and fiscal crises of the late 1970s and
1980s have resulted in a dramatic shift of attitude:
Curtailed by the lack of resources, especially financial,.... a more active process of privatisation of health
services is indicated. Dr. Francois Retief, Director Gen
eral of the Department of Health and Welfare, 1985.2
We will have to guard against being compelled to move
away from the free market system. (The Minister of
Health and Welfare in parliament, March 1984.)3
Health authorities must not be seen as an infinite
source of health facilities and medical care. More people
should be able to make use of private health facilities as
their economic circumstances improve. (Dr. M.H. Ross,
Department of Health and Welfare, 1982.)4
The government appointed the Browne Commission of
Enquiry into the Health Services in the Republic of South
Africa in the early 1980s. Although it has recently submit
ted its report, this is not yet published at the time of writing.
Since 1980, SYNCOM (PTY) Ltd, a private sector
‘think-tank’ organisation, has received several commis
sions to research the future of health care services in SA
from the Pharmaceutical Society of SA (PSSA) and the
Health Strategy Group (HSG). The HSG is composed of
the Medical Association of SA, the Dental Association of
3.
. -
SA, the Chemical Manufacturers Association of SA PSSA,
the Propriety Association of SA, the Representative Asso
ciation of Private Hospitals, and the SA Nursing Associa
tion. In August 1985, the department of health convened
a meeting at which representatives of the HSG, industry,
academia and the public sector deliberated on the options
for privatisation of health care. Out of this, four working
groups were established which presented their consoli
dated report in February 1986.5
Between August 1985 and June 1986, the South African
Medical Journal (SAMJ) carried 14 letters, an editorial and
an opinion column on the subject of whether or not a
National Health Service (NHS) would be appropriate for
SA. So the future economic organisation of health services
in South Africa is very much on the agenda.
The ’Ideological’ Arguments
Much of the debate simply reflects participants’ vested
interests and ideological tendencies, with little attempt to
explore the consequences of proposals honestly and ration
ally. For example, one opponent of NHS, in a letter to the
South African Medical Journal (SAMJ), claimed, “They
(the advocates of NHS) are simply advocating socialism”,
as if that were sufficient reason for his opposition. Far
more disturbing though, is the following allegation by
SYNCOM about a report it prepared for the HSG in 1982
(known as the SYNCOM III report): “The draft to the final
report contained chapters on the future role of the Associ
ated Health Service Professions, on the changing scientific
paradigm, and on the need to shift the incentive in health
care from the curative aspects to primary health care with
emphasis on life styles and prevention... It was unfortu
nate that most of these chapters and observations had to be
deleted, since they were perceived to clash with vested
interests."7 And, on the other side of the debate: “In our
view, the right to health implies provision of health serv
ices which are free, ...."8 There may be good reasons why
some or all people should not have to pay for health care at
the point of service, but this has to be argued and the
consequences examined, and certainly does not derive auto
matically from the premise that health is a right.
The examples of these arguments which follow arc
given in order to illustrate my contention that they arc
confused because of the analytic approach they adopt. The
substance of the arguments will only be assessed later,
since the point here is only to justify the presentation of
an alternative analytic framework.
Although presented with many minor variations, most of
the arguments for privatisation are covered in the report
of the four working groups on privatisation and deregula
tion, and may be summarised as follows:
(a) Privatisation shifts this burden from the public sector
to private individuals. The implication is that because
private health care is not.providcd free, patients have to
pay for it and therefore they carry the costs, not the
government.
(b) If people have to pay for health care, the tendency to
overuse health services can be reduced considerably.
(c) Since all parties are agreed that a minimum level of
health care must be provided for the indigent, the aged, the
chronically ill etc, where necessary the government
should subsidise the individual, not the institution. This
is claimed to be cheaper for the government because
private providers in a competitive market arc more
efficient than bureaucratically controlled, non-compctilive public providers.
2. Privatisation permits a range of levels of health care to be
offered by providers. This not only increases consumers’
choice of provider, it also permits discrimination, or ration
ing of health care along non-racial lines, thus depoliticising
the issue.
3. People attach more value to services for which they have
to pay.
Argument 1(a) is concerned with the possibility of rais
ing funds by making private individuals pay to use health
services, thus casing the burden on the stale. Yet, hospitals
do not have to be privately owned, nor do doctors have to be
in private practice for this to occur, since such charges
could quite conceivably be made for publicly owned serv
ices. Thus this argument relates to methods of paying for
health services (public versus private sources of funds), not
the pattern of ownership of services (the provision of
services by private, independent health workers and facili
ties).
Arguments 1(b) and 3 are concerned with reducing the
demand on the health services, using fees as a disincentive
to patients so that they do not use the services ‘unnecessar
ily’. These incentive effects on demand for health care
depend on the use of user charges, third party systems of
payment and other factors all related to the methods of
financing health care, not the pattern of ownership of health
services. For example, if patients have 100 per cent health
insurance, then there is much evidence that their demand
for health care increases, regardless of whether they are
being treated in the private or public health sectors.
Just as public facilities can charge for their services,
public funding can be used to pay private providers, as is
suggested in argument 1(c). This argument is obviously
concerned with a different sense of privatisation, viz,
multiple private owners of health services rather than
private sources of funds.
Argument 2 is about rationing scarce resources and the
1. As the demand for health care, and health care costs
escalate, the government and taxpayer will not be able to consequences for equity. Privatisation here refers to a
afford the health care bill. Privatisation reduces the costs to particular pattern of ownership, viz., multiple providers; a
particular method of financing, viz., private payment via
the state of health care because:
4
Radical Journal of Health
‘user charges’ or voluntary health insurance; and a particu
lar form of remuneration of providers, viz., on a fee-forscrvicc basis. Only with such a combination can the
quantity and quality of service be varied according to how
much a patient is willing to pay.
Much of the confusion in the debate on privatisation
results from the failure to separate out three distinct
aspects of privatisation: (1) private sources of funds; (2)
payment of providers on a fce-for-servicc basis; and (3)
private ownership of services. More generally, it is
necessary analytically to recognise three distinct compo
nents in the economic organisation of any particular
health service. These components arc: (1) Methods of
financing health services, i.c. how funds arc raised to pay
for health services; (2) Methods of remuneration of pro
viders; and (3) Patterns of ownership of the health services.
When we turn to the international literature to throw
some light on the debate about the economic organisa
tion of health services, we find similar confusions
arising from the same analytic failure to disaggregate the
components of the economic organisation of health care as
was found in the South African debate. Two examples arc
examined here to illustrate this.
private practice).
2. Unequal access to health care due to inability to afford
fees is mainly a problem for poor people who do not
participate in any risk sharing scheme. In Western Europe,
where 90 per cent to 100 per cent of the population arc
covered by social security, the inability of the poor to afford
the fees of private health care is largely solved. (This is not
to say, of course, that non-fee costs, utilisation, quality of
care or distribution of burden of financing is equitable.)
Again, the point here is that the criterion in this discus
sion, equity, relates specifically to the method of financing,
rather than to the institution of ‘private practice’.
3. The maldistribution of doctors in favour of the urban
rich again depends primarily on the method of financing.
For example, if private, self-employed doctors were paid
an adequate fcc-for-servicc by the government on behalf of
the poor (i.c. by subsidising the individual), they might
move to areas where they could maximise the number of
patients per doctor. This could produce a reasonable
distribution of doctors. The maldistribution of private prac
titioners is more accurately attributable to whether private
or public sources of finance arc used, than to how they arc
reimbursed, or the pattern of ownership.
Thus we can only make sense of Roemer’s criticisms,
Debate About Private Practice
given
a strict definition of ‘private practice’ as entailing
In an article entitled ‘Private Medical Practice: Ob
self-employed
providers, dependent on fee-for-service for
stacle to Health For All’Roemer identifies the following
problems associated with private practice: (1) perverse their income, where the fees arc paid by patients with no
incentives leading to unnecessary investigation and treat risk sharing arrangements or third party payment systems.
ment, and escalating health Service costs; (2) inequity re Roemer probably intended this definition. However, as the
sulting from the inability of lower income patients to responses to his article exemplify9, others may not accept
afford fees to cover treatment costs; and (3) maldistribu such a strict definition and the different meanings of
tion of medical manpower caused by doctors’ attempting ‘private practice’ (c.g. direct payment by private individu
to maximise their income by moving to areas where als, competing privately owned practitioners, etc.) arc one
demand is high, i.c. where there arc large numbers of people source of confusion in the debate. Yet this could be readily
overcome by making one’s definition explicit.
who can afford private medical fees.9
The more serious criticism though, is that the discus
But are these problems endemic to private practice or do
they apply to a particular form of private practice? If the sion fails to recognise that the economic organisation of
latter, how can we identify what it is precisely about that health care (in this case, private practice) has three
form so that it can be selectively altered? I will take the analytically distinct components viz. financing, remu
neration and patterns of ownership^ The failure to
problems Roemer identifies in turn.
1. The problem of perverse incentives and escalating disaggregate the institution into its component parts masks
costs arises because, in the health care market, the supplier the fact that judgements made about the institution as a
is an important determinant of demand and therefore whole, are in fact the result of judgements about one or
perfect competition fails. This problem may be aggra other component of the institution. It is this failure to
vated when the provider is reimbursed on a fcc-for-servicc apply evaluative criteria to the separate components
basis, such that the more expensive the investigations and individually that results in much of the confusion that
treatment, the more the provider benefits. As I will show surrounds debates about the pros and cons of different ways
later if private practitioners were paid on a capitation basis, of organising health services.
One way in which authors frequently deal with the
whether by the patient directly or by the government or
other third parly, the perverse incentives would disappear conceptual difficulties that arise, is by apparently restrict
although ownership of the services would remain private. In ing their discussion to the first component — the financ
other words, the problem needs to be analysed by fo ing of health services. However, their failure to identify
cussing on the method of remuneration of the provider the other two components often results in the de facto
since this is not inherent in the pattern of ownership (i.e. inclusion of the latter under a discussion of ‘financing*,
June 1988
5
and the same confusion recurs. Zschock, for example,
categorised the possible ways of financing health services
as follows:
(a) Public and quasi-public sources — general tax reve
nues; deficit financing (including foreign loans); sales tax
revenues; social insurance; lotteries and betting.
(b) Private sources direct financing of health care by
employers; private health insurance; charitable contribu
tions (including foreign grants in aid); direct household ex
penditures for health; communal self-help.10
Although these categories appear to relate only to
financing, the discussion that follows this classification
suggests otherwise. For example, with respect to general
tax revenues, Zschock argues that “to increase signifi
cantly the proportion of general tax revenues allocated ,lo
health care ... would imply a movement towards increased
socialisation of the health sector by providing free or low
cost health care services for most or all members of
society.”11 Yet there is no neccsary connection between
the extent of government funding (a financing issue) and
the socialisation of the health sector (which concerns pat
terns of ownership, if socialisation means the extent to
which health workers are employed by the state). Public
funding very frequently goes to the private sector directly
as fees (e.g. Medicare in the US), or as subsidies to social
security, or as capitation fees to GPs. The methods of re
muneration, the patterns of ownership of the health serv
ices and the various combinations of financing methods arc
all separate questions.
Social insurance or social security is another example of
confused debate. Some authors do attempt to distinguish
different forms which social security systems might take,
e.g. direct (employing health workers and owning facili
ties) and indirect (paying independent private practitioners
and facilities), multiple or single providers. 12-13-14 AbelSmith makes the point that the many problems attributed
to health insurance are not intrinsic to health insurance as
a system of financing services, but to other associated
features — e.g. in Europe, the fec-for-scrvice remuneration
system, and in Latin America, the separation from the
ministry of health and the competition among the many
social security schemes for scarce personnel.15 Thus
analysing social security as a method or source of
financing is confusing unless the point is to show that very
little can be said that is true of social security systems in
general. Once again, the analysis would be facilitated by
disaggregating the three components.
An Alternative Framework
The left hand column of table 1 sets out an alternative
framework for the analysis of the economic organisation of
health services. This has firstly been divided into its three
component parts. Secondly, within each component a
number of possible methods are identified. The methods
within any component are not mutually exclusive, and
6
frequently occur together in the same organisational form.
For example, private health insurance may require co-pay.
ment and thus the method of financing includes user
charges. For the sake of continuity with the conventional
taxonomies, the table attempts to indicate the links
between the categories used in this analysis and conven
tional categories (in the right hand column). Also in the
right hand column arc the institutional forms which usually
manifest the particular method of financing, or rcmumcration, or pattern of ownership.
Increasing Finances For Health Care
In the debate on health care financing in SA, privatisation
has most frequently been supported on the basis of the
claim that it will result in more funds being made available
for health care. The argument, typical of that common in
the international literature, usually runs something like
this: The level of resources that a government can raise
and devote to health services will always be less than is
required to meet the health needs of the whole population.
(Indeed, even if the whole GNP were allocated to health,
this would not meet the total needs). If, however, there arc
individuals or groups of individuals who arc willing to pay
more for better health services than can be provided through
the public health sector, this should be encouraged because
it can release the public funds spent on these individuals.
Thus total resources allocated to health services can be
increased, and public health expenditure can be concen
trated on the poorer members of society.
This type of argument in favour of privatisation de
pends on a number of assumptions which arc only valid
under certain conditions. The following discussion identi
fies the conditions under which each assumption would
hold, and shows that these do not obtain in SA at present. Il
suggests how these conditions would have to change in
order for privatisation to make economic sense as a means
of increasing the total financial resources devoted to health
care.
First Assumption: Public and Private Methods of
Financing are Independent
The first assumption is that the increased expenditure
by other sectors (private individuals, medical schemes,
employer- provided services) releases public expenditure
that would have been spent on the beneficiaries of those
sectors. Thus, for example,
(The private sector) is self-perpetuating and inde
pendent of government finance. ... (it) is therefore
not to be considered a drain on public funds. (Sub
mission from Hoffman Hospital Group to the Browne
Commission Enquiry.
(P) rivatisation of health services ... would lead to
considerable savings in terms of demands made on’
Radical Journal of Health j
Table 1 : Three Components in Economic Organisation of Health
Components of health service
organisation and options within each component
A.
Services and Available Options
Conventional categories and
Institutional form usually taken
Methods of Financing:
Public Methods of Financing:
Taxes
- General
- Sales tax, import/export duties
- Charging out costs to those who generate them
Deficit financing
Foreign Aid grants (bilateral/muhilatcral)
. Lotteries and betting
Income, company, property taxes
Sales tax, tariffs and duties
Motor vehicle licences and compulsory' third party insurance
Taxes on tobacco, alcohol
Workmen's compensation contributions from employers
Deficit financing and foreign loans
Foreign Aid grants (bilatcral/multilateral)
Lotteries and betting
Public, Quasi-public or Private Financing Methods:
Employer & employee contributions (other than general taxes)
Direct provision of, or payment for health services by employer
Payroll taxes
-National health insurance
-Social security, compulsory health insurance
-Private health insurance
Charges related to generation of costs
eg. workmen's compensation
Private Methods of Financing:
Charitable contributions
Private health insurance
User charges
B.
Frequently from wealthy families, firms, religious groups
Private health insurance
Direct household expenditure
Direct household expenditures— for treatment and drugs etc.
Co-payments — proportion of total costs, deductibles,
excess above ceilings, for excluded benefits
Reinmbursement of Providers
Fcc-for-service
Capitation /pre-payment fees
Salaricd/budgct allocation
Private practice
"Indirect " social security (eg as found commonly in Western Europe)
Private health insurance
Direct household expenditures
Health maintenance organisations
National Health Service “contract
arrangements" with GPs (eg Britain)
Community bascd/cooperative financing
(eg Brigade level health care, China)
Government provided health services
"Direct" social security systems
(eg as found commonly in Latin America)
Employer provided health services
Others eg. bonus systems, merit award
C. Patterns of Ownership
Predominantly public owned health
service (other sectors very small)
Multiple sectors, Many private providers
as well as public and quasi-public sectors
Community owned health services
eg National Health Service (UK), small private
sector, small or no quasi-public sector.
Public sector as well as one or more social
security schemes and/or employer
providers and/or self employed practitioners
Community financing 16
7
June 1988
the central coffers (Report on Privatisation and De
regulation of Health Care in S. A., 1986 — hereafter
referred to as the Report on Privatisation.)
tions so that its own employees will have medical aid
coverage, and be able to use the private sector providers.
Many other forms of subsidy would be too complicated to
measure — e.g. the costs of training nurses and other
health workers, the cost of research, drug testing and
control, and other parts of the health
service
infrastructure which benefit private sector, and public
sector patients alike.
Thus it is not at all clear that the private sector does
indeed release public resources for use on services for
those who cannot afford private health care.
It is likely that the individual who uses the private.
sector providers costs the government more in subsidies
than is spent by the government on individuals who depend
on the publicly funded services. 21 The subsidy to the
private sector therefore, distorts public sector resource allo
cation in favour of those who arc already the most privi
leged. However, there is no theoretical reason why
subsidisation of the private sector cannot be reduced.
The state could quite conceivably withdraw tax
concesions; it could charge private patients die full cost for
the use of public facilities; doctors who leave the public
sector could be obliged to pay an additional tax on their
earnings, etc. Withdrawing all subsidies may raise lhe
costs of private health care so high that demand is
transferred to the public sector. The costs of meeting this
demand may therefore reduce the net savings to the state.
Nevertheless, the assumption that other sectors release
public resources which can be directed to higher priority
services, often ignores the many ways in which the public
sector subsidises other sectors, and the distortive effects
this has on public sector resource allocation.
However, the private sector is not, at present, “self perpetuating and independent of government finance.”
For, the public sector subsidises the private sector in numer
ous ways.
Tax concessions: Under corporate tax law, the contri
butions paid by employers are tax deductible, and the
contributions paid by individuals are abatements under in
dividual tax provisions. In 1982, medical schemes’
income from contributions was approximately 54 per cent
of total private health expenditure (26 per cent of total
health expenditure) of which at least one-third is subsi
dised by the state, i.e. the real cost is 50 per cent more
than what employers and employees pay.17 This loss of tax
r
ue (at least R337 million in 1982), was equivalent to
1
>cr cent of total public sector health expenditure, and
moic than twice the total amount spent on preventive
se~ ices.
Subsidies For Medical Education: The major share of
the costs of medical education is borne by the public
sector. This is a form of ‘human capital’ investment by the
state. When the doctor is employed in the public sector, it
may be assumed that his/her salary undervalues his/her
output by an amount equivalent to the return to the state
on its investment. When a doctor is cither self-employed
or employed by another sector, the additional value
accrues to him/her and to his/her patients. This value is an
effective subsidy to those sectors from the public sector.
Estimates of the cost to the state of the undergraduate
training of a doctor vary from R36, 000 18 to R100, 000.19
937 doctors qualified in 1985, half of whom will eventu Second Assumption: Only Private Sector Services
ally work in private practice. This is equivalent to a state Can Raise Funds from Private Sources.
subsidy of R47 million (2.4 per cent of public expenditure)
The second assumption in the argument that privatisa
to the private sector, excluding the costs of post-graduates'
tion
increases total funding for health services, is that
training.
publicly
owned services are financed from public sources
Subsidised Use of Public Facilities.•Publicly financed
of
funds,
and privately owned services, from private
facilities are usually available to private sector patients (es
sources
which
would not otherwise come into the health
pecially for sophisticated tertiary care), but also frequently
sector.
As
the
Report
on Privatisation expressed it, “Priva
for routine care under private doctors. Most patients re
tisation
seems
to
imply
a shift towards health as a personal
quiring emergency admission are admitted to public
responsibility
and
feel
and
unlimited access to health care
hospitals regardless of their income and whether or not they
as a privilege.”
are covered by medical aid. These patients are charged at
Yet this assumption fails to separate, and distinguish
less than the running costs of maintaining the beds (i.e.
between,
private ownership of services and private
ward costs), let alone the full costs of investigation and
sources
of
finance.
Privatisation of ownership is only one
treatment. In 1984/5, in the Cape, the average daily cost for
an in-patient at a teaching hospital was R130.14, for which way of getting private individuals to finance their own
the maximum fee of R45.00 was charged. (In provincial health care. For, user charges can be a method of financing
non-teaching hospitals the costs and maximum fees were public sector providers just as it is for the fcc-for-scrvice
providers. Publicly owned services need not Be financed
R55.45 and R36.00 respectively.)20 Thus the government
entirely from taxation, but can draw on other methods of
is subsidising the non-public sectors.
Other Forms of State Subsidisation: The government, financing as well, e.g. social security, health insurance and
user charges.22
as one of the largest employers' pays employer’s contribu
8
Radical Journal of Health
efficient, financially, than ‘B’.
With respect to methods of financing, financial effi
ciency refers to the difference between the gross and net
The third assumption is that the existence of a private yields of a particular method of financing. This relates
sector would not inhibit or depress the amount raised by primarily to the cost of administering the collection and
public methods of financing and allocated to health care. allocation of funds. Other measures sometimes considered
Yet, in the presence of other methods of financing from arc the difference between actual and hypothetical gross
private sources, and alternative private providers, it is yields and reliability or stability of a source.
likely that the people with political influence (usually the
The protagonists df privatisation claim that public meth
relatively wealthy, urban dwellers with regular employ ods of financing arc financially inefficient. For example, in
ment), will not be dependent on the publicly financed its conclusion, the Report on Privatisation and Deregula
services. There is a strong chance, therefore, that they tion in SA claims that, with privatisation, “more funds
would not lobby either for increasing the tax effort or for would bo available for the direct delivery function
allocatings greater proportion of public expenditure to the through a reduction in regulations, interventions and cen
health services.
tral decision-making”.
, Thus privatisation has been seen as a way of offering
Yet there seems to be little evidence to support this.
urban, middle-class blacks access to racially integrated The government spends 0.34 percent of tax revenues on tax
medical care of better quality than is available in the public collection, and 0.9 per cent of public health expenditures
sector. This has been motivated precisely by the belief that administering financial allocations to the health serv
it defuses the political pressure from this articulate group to ices.24 Most medical schemes, on the other hand, spend'be
improve public health services for blacks in general, tween 6 per cent and 10 percent of their income from
which would be extremely expensive. And as the Report contributions on administration, i.e. calculating and
on Privatisation concludes, “There is likely to be an overall collecting contributions and processing claims.25 There
saving to the taxpayer.” Yet this may be one of the greatest arc also numerous examples of overcharging by private
dangers of privatisation, and may result in little increase in hospitals, since it is difficult for medical schemes to check
the total resources allocated to health care, and a decline in the bills and there is little incentive for patients to check
public sources of finance for the health services.
them, even if they arc informed enough to do so. This
It is possible, though, that if a future democratic reduces the efficiency of this method of financing, since it
government were committed to providing the best public results in more being spent with no increase in output.
service the country could afford, that the existence of the
This evidence is compatible with the findings of two
private sector would not reduce the political pressure for recent international health care expenditure surveys. Com
raising public finances, and therefore total finances could menting on them, Navarro concluded that western industri
be increased by permitting other sectors to operate and alised countries with the greatest government funding and
raise funds. Roemer’s research in Latin America, for administration of health services have the greatest popula
example, suggested that there was no decrease in the tion coverage and the lowest administrative costs.26
allocation of public funds to health services with the
There arc no estimates of the costs of collecting user
growth of the social security systems there. The overall charges cither in the public or private sectors. However the
level of resources available was indeed increased, and he relative costs will largely depend on whether the user
argues that money that would otherwise have been spent charges arc fiat rates, or arc related to the costs of
on the cosily and inefficient private health sector (if it had providers (as with fcc-for-scrvicc providers). This will
been spent on health at all) was channelled into the more therefore be covered in the next section (on the efficiency
efficient social security sector. At the same lime, govern of different methods of remuneration).
(a) Private fcc-for-scrvicc hospitals: Many of the argu
ments were able to devote larger proportions of their
ments presented in the South African literature in favour of
expenditure to deprived rural areas.23
The economic organisation of the health services should privatisation, are based on the belief that competitive
ensure that, for any given loud expenditure, the health providers motivated by profit and dependent on fee-foroutcome is maximised. The concept of ‘efficiency’ encom scrvicc for their income, arc financially more efficient
passes both (1) financial efficiency and (2) economic effi than non-profit, government-owned services where facili
ties have fixed budgets. These arguments also reflect a
ciency.
faith in the power of the free market to prevent higher
Financial Efficiency
costs and excessive profits being passed on to the consumer
Financial efficiency is a measure of the proportion of in higher prices.
A criticism frequently made about the financial manage
total expenditure that is spent in the direct‘production’of
health care. If system ‘A’ produces the same output of ment of public sector hospitals is that “public hospitals in
health care as system ‘B’ but at lower cost, then ‘ A’is more South Africa do not operate on a true costing system and
Third Assumption: Political Pressure for Public
Funding Will Not Decrease.
June 1988
9
nobody actually knows what it costs ... to keep a patient."
This criticism is valid. However, it does not follow from
this that these hospitals are managed inefficiently, and the
lack of cost data means that no accurate comparisons have
been made. There is therefore no good evidence to suggest
that private hospitals are more cost effective than public
hospitals.
Indeed, one might expect the reverse. For, firstly, there
can be little doubt that the flat rate fees charged by public
sector facilities, even when applied on some sort of means
tested basis, are cheaper to administer than the user
charges in the fee-for-service sector. For, in the latter, the
need to calculate charges for each item (drug, investiga
tion, use of equipment etc.) for each patient individually,
makes billing complicated and costly.27
Secondly, most of the hospitals which operate on a feefor-service basis are profit making enterprises. As the direc
tor of one of the Rembrandt group of hospitals said, “We
came onto the scene in 1983 purely for business reason —
we didn’t do it for charity. We sec the medical services
industry as an area of growth.” 28 The profit obviously
accounts for some of the difference between the gross
expenditure on health in the private sector, and the net
amount actually spent on activities which improve health.
At a fairly crude level of analysis, there is consider
able evidence suggesting that fee-for-service hospital^ are
more expensive for less output. Comparisons arc hazard
ous because one is not comparing like with like. For
example, the costs per patient-day in public hospitals
may include the costs of training personnel, of treatment,
drugs, etc, but generally exclude capital expenditure, while
for fcc-fer-scrvicc hospitals, ward costs exclude medicines
and treatment, but include amortisation of capital expen
diture. There is usually no training of. medical staff in
private hospitals. The quality of care and of the ‘hotel’
function^ may differ. Furthermore, many of the most ex
pensive treatments are available only or mainly in public
hospitals (e.g. cardiac surgery, neonatal intensive care)
because these are not covered by most medical schemes, or
they are not profitable. The following comparisons must
therefore be treated with due caution, though the order of
difference seems so large that it is doubtful that the
direction would be altered by the net effect of these biases.
In the Cape, the Groote Schuur teaching hospitals had an
estimated daily average cost per unit of R 108.37, and an
average for all Cape provincial and aided hospitals of
R63.43. In the Transvaal, in 1983/4, the median cost per
patient day of 69 provincial and provincial-aided hospitals
was R63.27. 29 Compared with this, fee-for-service hospi
tals are estimated to cost R100 per patient per day for
ward costs alone (hotel and nursing services), before the
costs of any doctors fees, theatre costs, investigations,
drugs etc. are added.30 On the other hand, in some private
sector industrial hospitals, which are non-profit, with
10
Table 2 : Comparative Costs of Specific Curative Health
Services in Public and Private Sectors 1984.
Cost to Cape
Provincial
Administration
GP Visit
Obstetric Confinement
Hcmiorraphy (5 day slay)
Pneumonia (5 day stay)
R 10.00(a)
R 567.00(c)
R420.00(c)
R 420.00(e)
Cost to private
patient at
medical aid
rates
R 39.50(b)
R 850.00(d)
R 990.00(d)
R 700.00(d)
Notes:
a. Cost per patient seen at Cape Peninsula Day Hospital
includes investigation, minor procedures, day theatre cases,
district nursing and medicines.
b. GP visit and average medical aid pharmaceutical cost of
R30 per patient.
c Cost per confincmcrft at Peninsula Maternity Hospital,
including complicated obstcrlrical cases and neonatal ICU
facilities.
d. Uncomplicated normal medical aid patient.
e. Cost to the Cape Provincial Administration of a 5 day slay
in Victoria hospital (a non-teaching hospital).
(Source-. Frankish J, Thomson E, Budlcndcr D, Zwarcnslcin M,
Dorrington R, Bradshaw D. Privatisation of Health Services—
Who Benefits? Unpublished. 1986.)
salaried health workers, and which do not have to
compete with other providers (as employees are obliged
to use the services provided), the average cost per patient
day in 1984 was R30.61, inclusive of all drugs and
treatment.31
A more comparable and accurate analysis of costs in the
public and fee-for-service sectors has been made by Frank
ish et al (Table 2).
In the light of the above, it is interesting to note the
findings of a recent study in the United States, which
compared the differences in the economic performance of
matched pairs of ‘for-profit’ and ‘not-for-profit’ hospitals.
While there were no significant differences in patient
care costs, the total charges and net revenues per case were
both significantly higher in the ‘for-profit’ hospitals due to
higher administrative overhead costs. The author con
cluded that for-profit’ hospitals generated higher profits
through more aggressive pricing practices rather than
higher operating efficiencies.32
The imperfections of the market, in the case of health
care, have been frequently discussed in the literature33 and
cannot be reviewed here. It may be concluded, however,
that the evidence available suggests that the profit motive,
and the competition of multiple fee-for-service private
hospitals are no guarantee of greater financial efficiency.
Indeed, such an economic structure is probably less effi
cient.
Radical Journal of Health
(b) Effects of Methods of Remuneration on Efficient
Use of Personnel Resources: Doctors in SA have jealously
guarded their monopoly over the right to diagnose and
treat, and ‘primary health care nurses’ have only been
allowed to perform a limited range of tasks in certain
prescribed circumstances. There is adequate evidence from
all over the world that, in both developing and developed
countries, other health workers can perform many of these
functions at lower training and salary costs. Yet South
Africa’s present inefficient system will not change as long as
doctors earn more for seeing patients themselves, as occurs
in a fee-for-service system. If, for example, doctors were
paid a capitation fee, then it would be in their economic
interests to employ cheaper health workers to perform the
tasks for which they are competent, so that their own more
expensive skills could be used more efficiently, while cover
ing a much larger population.
Effect on Financial Efficiency of a Multi-sector Pattern
of Ownership.
(a) Wage inflation: The competition between sectors for
fixed resources forces up wages in both the public and
private sectors. Comparing salaries of professionals in the
public sector in 1984, the median salary (before tax) of male
doctors was 26 per cent higher than engineers, 39 per cent
higher than lawyers, but only 4.5 per cent less than doctors
in the private sector.34 As one private hospital managing
director said, “We just take a lead from the government
hospitals. When they increase their rates we simply add a
bit more on to get the staff.”35 This is unrelated to productiv
ity, and hence is purely inflationary and is financially
inefficient.
(b) Duplication and Economies of Scale: In 1974, the de
Villiers Commission found that there was a lack of planning,
especially between provincial and private hospitals — an
excess of beds had been provided in certain urban areas,
resulting in too low a rate of occupancy in provincial hospi
tals as well as private hospitals.36 But this is not merely the
result of poor coordination. It is the inevitable consequence
of access to different providers being restricted to different
groups in the population (the rich and the poor) when these
groups overlap geographically. Thus there will be many
areas where both public and private facilities overlap merely
because they are not open to all the people who live near
them. If this results in the failure to achieve economics of
scale, then average costs are high, and the arrangement is
financially inefficient.
Economic Efficiency
Economic efficiency, as opposed to financial efficiency,
is concerned with the allocation of resources in socially
optimal ways. The reality of finite resources means that
more of health care entails less of something else, and within
the health sector, more of one type of health care means less
of another. Optimal economic efficiency occurs when the
June 1988
marginal rand produces equal benefit, no matter where in
tl economy it is spent. In a free market, the price
m. lanism may equilibrate supply and demand in a way
tha fleets individuals’relative evaluation of alternative
con nations of resource allocation. However, in the
healu care market, the price mechanism fails to achieve
economic efficiency for several reasons: the presence of
monopolistic providers (e.g. doctors); consumers arc not
well-informed and have difficulty choosing between
alternatives; providers influence consumption more than
consumers; there arc significant externalities such that the
social benefits exceed the sum of the individual benefits
(and therefore willingness to pay); and unequal income
distribution results in monetary prices reflecting different
marginal utilities at different income levels.37
Consequently, other mechanisms are needed (some of
which may also use prices as signals to providers and
consumers) to promote efficient resource allocation.
Broadly speaking, these mechanisms act cither on the pro
viders to influence the supply of health services, or on
the consumers, to influence the demand for health care.
The efficient allocation of resources therefore, depends
inter alia on: (1) The ability to control allocation on the
supply side — determined largely by the pattern of owner
ship of the services. (2) The ability to control demand for
health services, i.c. to limit demand for each kind of
service to levels that are socially optimal — dependent on
the methods of financing and remuneration.
There can be little doubt about the economic ineffi
ciency of resource allocation in a country where heart
transplants arc being performed while the vast majority
of the population suffers from vaccine preventable dis
eases. This failure to allocate resources to where they will
achieve the greatest health improvements for the maxi
mum number of people, occurs because the economic
agent, the decision maker, is split into parts with inde
pendent allocation systems. The result is that the
benefits and opportunity costs of a given allocation arc
borne by different parts of the system. Pul another way,
even when the marginal rand spent by different parts of
the system produces highly unequal benefits, no transfer
of resources occurs between the separate parts of the
system, in favour of those sectors where they could
produce a greater marginal benefit.
The present system prevents the optimal allocation of
resources in two ways. The first is the racial and
geographic fragmentation of the public health service and
the division of control over total health care spending
between many sectors (government, medical schemes,
employers, private individuals). The other is, of course,
the control of public health services, by an undemocratic
minority government. For such a government, the present
policy may be‘rational’in the sense that it serves the
interests of that government Thus even if there was a
single authority controlling
health resource allocation,
11
in the absence of a democratic government, health policy
would be unlikely to benefit the maximum number of
people.
Yet, assuming that in the future there is adequate demo
cratic control over public health expenditure, if private
expenditure is significant, it will continue to produce inef
ficiencies since private individuals do not suffer the oppor
tunity costs of withdrawing trained personnel and technol
ogy' from the public sector. The effects on the public sector
could be minimised, though, by removing any subsidy to
the private sector. Then, if private individuals were
willing to carry the full cost of, say, haemodialysis, public
sector resources would not be diverted and the optimal
allocation of public expenditure need not be reduced (al
though the economic efficiency of total expenditure would
still be suboplimal).
The determinants of demand for health services arc
multiple and complex. Financial incentives arc clearly
only one group of determinants. Furthermore, it is
difficult to say what the appropriate level of provision for
any particular service is. However, in terms of economic
efficiency, the quantity provided is optimal when it costs
what society is willing to spend on it, i.c. the value society
places on it relative to other possible uses of those re
sources.
When the economic organisation of the health services
docs not have adequate mechanisms for limiting demand
to the level for which resources have been allocated,
demand will exceed its optimal level, drawing in more
resources and resulting in economically inefficient re
source allocation. This also means dial cost escalation
cannot be controlled.
(a) Economic Efficiency and Methods of Financing:
Third party methods of payment frequently result in
economic inefficiencies and cost escalation. If individuals
had to pay the true marginal costs of medical care, they
would allocate their resources according to how they
valued each, which would ideally reflect the relative costbcncfit of each. A collection of individuals, in the form
say, of the state (ministry' of health), or an insurance
group, should allocate their collective resources the same
way. However, having paid their insurance contributions,
individuals who no longer have to sacrifice more in the
short term for demanding more expensive curative care,
will demand more than the value of that care to them (the
problem of ‘moral hazard’). Assuming, for this example,
that the provider faced no financial incentives either to
provide or withold treatment,(s)hc will attempt to do what
is best for the patient personally. To serve the patient’s
interests well,(s) he will administer additional care as long
as there is some net benefit to the patient.
Yet this may be excessive from society’s point of view
since the same resources could have achieved greater
overall welfare had they been used for some other
purpose. In the long term, costs will escalate, with
12
aggravated distortions and growing economic inefficiency.
(b) Economic Efficiency and Methods of Remuneration
__ Problem of Perverse Incentives: In the example above,
it was assumed that the provider was interested only in
what was best for the patient. However, given firstly, that
the provider is the main determinant of demand for investi
gation and treatment, and for secondary and tertiary care,
and secondly, that the patient can afford almost any fees
either personally or through risk sharing arrangements,
the fee-for-scrvice system offers financial incentives to
the provider to perform more investigations and treatment
than arc necessary or justifiable. This is the problem of
“perverse incentives.”38 In Brazil, for example, doctors and
hospitals receive the highest fees from private patients,
slightly lower fees for patients on social security, and the
lowest for indigent patients (paid by the government).
The rales of caesarian section in primiparous women in
1981 were 75 per cent in private patients, 40 per cent in
insured patients and less than 25 per cent in indigent
patients.39
Usually the interests of the income maximising practitio
ner will not be in conflict with those of the patient — the
marginal investigation may indeed increase the certainty
of diagnosis. Furthermore, other non-financial incentives
such as status, career advancement, medical ethical prin
ciples and regard by peers may protect the patient’s
interests. However, all these incentives work in the same
direction as the financial incentives, encouraging the
doctor to ‘do more’ rather than less, with little regard to the
economic costs to society. Thus the system of fcc-forscrvicc remuneration aggravates the problem of efficient
resource allocation and results in the dramatic cost escala
tion.
By contrast, the incentive effects of remuneration by
salaries and capitation fees do not have the ‘perverse’
cl feels that occur with fcc-for-scrvicc, with its conse
quences lor cost escalation and economic efficiency. In
prepaid (capitation) group practices the providers undertake
to cover part or all the costs of treatment that a patient may
require during the next year (or other period of time). This
creates financial incentives not only to keep patients
healthy in the first place, but also to limit unnecessary or
excessively expensive tests, drugs, referrals etc. Saward
and Fleming, for example, have shown that prepaid group
practices can be more cost-effective than fee-for-service
systems, largely because of lower hospitalisation rates.40
In S.A, as in most other countries, per capita expenditure
on health care has escalated in real terms. One source (in
the Report on Privatisation) estimates that real per capita
expenditure by the state increased by 13.5 percent from
1975/6 to 1984/5 (i.c. 1.4 per cent annually, compounded).
On the other hand, average Medical Aid premiums (which
approximate per capita expenditure by medical schemes)
have increased 500 per cent from 1975 to 1986 compared
with an inflation rate of 387 per cent over the same period
Radical Journal of Health
(a real annual increase of 2.3 per cent compounded), i.c.
more than 1.6 limes the per capita rate of increase of public
expenditure.4'Another source puts the increase in total (public and
private) real expenditure on health (not per capita) at 26.5
percent trom 1978 to 1982 (or about 6 per cent annually
compounded). Over the same period medical schemes’
total real expenditure increased by 31.3 per cent (or 7 per
cent annually compounded). Some of the factors that have
contributed to cost escalation over the decade have been
demographic changes c.g. aging white population, urbani
sation of blacks, increasing income and sophistication of
patients, increased coverage by medical aids (member
ship has been increasing by about 20 pcr cent in five
years), increased provision of services, increasing costs of
high technology equipment combined with a falling ex
change rate, recession and poverty. All these trends arc
likely to continue. The economic organisation of health
services ought to be able to contain costs at appropriate
levels. Yet, there is evidence that in both the private sector
and public sectors, the structure aggravates cost escala
tion and does not provide mechanisms for its control.
An increase in expenditure on health carc is not in itself
a bad thing, especially since the proportion of the GNP
devoted to health care is relatively low (4.9 pcr cent),
compared with most industrialised countries. Yet the fol
lowing quotes indicate that, in the private sectoral least, the
cost escalation is due to the inability to limit demand to
socially optimal levels i.c. to growing economic ineffi
ciency.
In 1985, John Emlzcn, chairman of the Representative
Association of Medical Aid Schemes of S.A. (RAMS), said
that as a result of increased claims: medical aid schemes
throughout the country arc on the brink of collapse ...
(T)hcrc is evidence that doctors arc offering more services,
often unnecessary-, to make a living. ... RAMS has also
found that doctors charge more and offer less services at any
given consultation.... (T)hc man-in-thc-strcci also insisted
on a lot of treatment because he felt he was entitled to it
because of his medical aid membership.42
He also claimed that, while medical tariffs in 1984 were
an average of 4.4 percent higher than in 1983: (y)clwc have
found that our claims costs for 1984 rose much higher than
this: up 19 pcr cent on 1983 for general practitioners and 25
pcr cent for specialists. This can only suggest that more
services arc being performed (pcr beneficiary). Those doc
tors who rely on medical schemes for their income sec our
members on average 25 per cent more than those doctors
contracted out.” (Tony Lcvcton, executive chairman of
Affiliated Medical Administrators43And, in the Report to the Department of Health on Priva
tisation and Deregulation in SA, it is claimed that the "dis
proportionate increase (in private medical expenditure) can
most likely be ascribed to an overuse of health carc facili
June 1988
ties in the private sector due to the present structure of
Medical Aid Schemes".
These arc exactly the obstacles to economic efficiency
that arc created by the inability to contain excess demand
due to the moral hazard problem of third party methods of
payment, and the perverse incentives effect when suppliers
who influence demand arc reimbursed on a fcc-for-scrvicc
basis.
This report to the department of health recognised that
"the present triangular arrangement (consumcr-providcrfundcr) is highly inflationary" and that, in such a system,
"with state subsidy to individuals, the results could be
disastrous." Yet its answer was that, " to overcome this,
prepaid cover for health carc should be market-oriented," so
that people could attain the kind ofcovcr they require. But
this is a non sequitur. For, no amount of market orientation
will alter the inflationary triangular arrangement. The re
port goes on to say that the members of the four working
groups that produced the report could reach no agreement
because of strong vested intrccsls", and that this "requires
much further detailed study once the principle has been
accepted." (One might have thought that such a study
should precede acceptance!)
Thus, on the one hand, they arc unable to accept the logic
of their own arguments because the conclusions would
conflict with "strong vested interests". On the other hand,
since they refuse to question their assumptions about the
efficiency of private sector health carc, any observed ineffi
ciencies in the present system arc regarded as the indica
tions that further privatisation is required. As we have seen,
lhe real problems arc the fcc-for-scrvicc method of remu
neration and the dependency on health insurance as a
method of finance.
These arc not the only obstacles io limiting demand to
socially optimal levels. Any mechanism that lowers fees
below their marginal cost may result in 'excess' demand.
And, as was suggested above, even when there arc no
perverse incentives (such as with salaried doctors), supplier
induced demand, and hence costs, arc difficult to control.
These latter problems occur in the present structure of the
public sector, since the doctor does not have to carry the
costs of the quantity of carc (s)hc provides, and the oppor
tunity costs of such carc frequently exceed the marginal
benefits. However, in the public sector, where total expen
diture is constrained by a predetermined budget, suitable
management mechanisms could be developed to control the
supply of services and thus control costs.
Any changes in lhe economic organisation of health
services designed to meet the objective of greater economic
efficiency, must clearly move away from these methods of
financing and remuneration by introducing selective user
charges; by rcinbursing providers on a capitation fee or
salary basis; and by making providers bear some of the cost
of the demand they induce. In the public sector, managc-
13
other factors that may be important for the success of project,;
such as community participation. Although it has recently become
the focus of much attention as a means of tapping resources m poor
communities for health and health related services the particular
strategics considered can be fitted into one of the methods in the left
hand column of the table and can be similarly analysed. Some forms
of community financing may be considered to be unique in their
pattern of ownership — viz. where services are owned by the
community, as opposed to private or public (state) ownershlp.
ment systems will be required to ensure that resources arc
directed towards those communities and types of health
care that produce the highest marginal benefit.
REFERENCES’
1. Report of the National Health Services Commission (Gluckman Com
mission), UG30/I944.
2. Retief F. The Strategy. Hospital and Nursing Year Book for Southern
Africa 1985.; Cape Town: H. Engelhardt & Co., 1985,p50
3. Minister of Health and Welfare introducing the second reading of the
Medical Schemes Amendment Bill. Hansard 28 March 1984; 9; col
3928.
4. Ross MH. Future provision of health services in the R.S.A. RSA 200
1982; 4(1), p32.
5. Privatisation and Deregulation of Health Care in South Africa. Con
solidated report of the four working groups on privatisation and de
regulation. Mimeograph: February 1986, pl.
6. de Kock MJ. "A National Health Service for S.A. correspondence. "
SAfr. Med. J. 1986; 69: p537.
7. Spier A. Submission on an Health Maintenance Organization Model
for S. Africa. Mimeograph: SYNCOM (PTY) Ltd; 19-05-1984; p2.
8. Coovadia H M, Seedat Y K, Philpott R H, el al. "A National Health
Service for South Africa" 5 AFr. Med J. 1986; 69 p280.
9.
Roemer M I. Private medical practice : obstacle to health for all. World
Health Forum 1984, 5, pl95-198. He also makes many other points
but these will suffice to illustrate my point about the confusion that
occurs
10.
Reo’-cr M I, Abbott P, Bygrcn L O, Djukanovic V, Abdul Khalid bin
Saiian, Segall M, Vysohlid J. Private medical practice: obstacle to
health for all. Round Table Discussion. World Health Forum 1984,5,
pl 95-210.
11.
Zschock D T. Health Care Financing in Developing Countries,
APHA international Health Programs Monograph Series No. 1, 1979
pp 19-33. Although both Zschock and WHO call these ‘sources’, it is
recognised that “for different purposes it may be useful to define
sources in different ways”. (World Health Organisation. Financ
ing Health Services. Report, of WHO study group. Technical Report
Series No. 625, Geneva: WHO, 1978,
p 36.) For example, the
above taxonomy considers lax revenue paid by
individuals and
companies a public source. If we were concerned more, say, with
examining equity implications, we might identify the sources as
those who paid the taxes. This taxonomy is useful because most of
the concern has been about how to increase the resources available
for health services, and is therefore about the mosi appropriate
institutional arrangements for channelling finances.
For every R1 contributed, 50c is paid by employers, most of whom
arc companies. The company tax rate is 50 per cent,’ thus the ‘
company effectively pays only 25c and the government pays the
other 25c (through loss of tax revenue). The employee pays the other
50c. The lowest rale of individual taxation is 16 per cent (the highest
rate on the marginal Rand is 50 per cent). Even if all employees arc
assumed to be on the lowest rate, the effective government subsidy is:
16pcrcent X 50c = 8c. Therefore the total minimum subsidy is: 25 +
8 = 33c in the rand.
18. Calculated from figures given in reply to a question in the House of
Assembly. Hansard February 27, 1986, column 256. “The estimates
arc based on the subsidy formula used for calculating the 1986subsidies” i.e. they arc not based on calculations of cost.
17.
19.
‘‘Health care costs. Building Bills.” Financial Mail August 17, 1984.
20.
Louw, N.S. (Director of hospital services in the Cape). Fee for service
and the right of practice of private practitioners in provincial
hospitals. In Hospital and Nursing Yearbook for Southern Africa,
1985. Cape Town: H. Engelhardt and Co., 1985, p41. Note: Since
1984, fees at provincial hospitals have increased enormously, and in
some provinces, patients covered by medical aid are now charged at
the standard rates that medical aids arc prepared to pay.
21.
The total value of these government subsidies, divided by the number
of people who benefit from them (approximately 20 per cent of
the population who use the private sector providers), is likely to be
more than per capita public sector health expenditure. The tax con
cessions alone, which equal at least 17 per cent of the public health
budget, benefit only about 16 per cent of the population (the
proportion covered by medical schemes). If the whole public sector
health budget were distributed evenly over the whole population,
the per capita expenditure would be less than the amount of the tax
subsidy to private sector users.
22.
The Chinese system comes fairly close to this arrangement. At secon
dary and tertiary levels of care, there is only one sector providing
care and this is charged for. The methods of financing used to pay
these charges depend on whether the patient is a government
employee, a
commune or brigade worker, a factory worker, a de
pendant of a worker, or not covered by any risk sharing arrangement
in which case (s)he must carry the full cost privately. Prescott N &
Jamison D T. Health Sector Finance in China. World Health Statis
tics Quarterly, 1984, 37(4): pp387 - 402.
Mills A. Economic Aspects of Health Insurance. In Lee K & Mills
A (eds). The Economics ofHealth in Developing Countries. Oxford,
New York, Toronto: Oxford University Press, 1983, pp 68-9.
13. Roemer M I. Social Security for Medical Care: Is it justified in
developing countries? 1nt JTilth Serv. 1971; 1(4): pp 354-61.
14. Zschock D T. General Review of Problems ofMedical Care Delivery
Under Social Security in Developing Countries. ISSR Year XXXV,
1982.
.12.
15.
Abel-Smith B. ‘Funding Health For All — Is Insurance the Answer?’
World Health Forum 1986; 7: pp8-9.
16.
Community financing and self-help docs notfit easily into any system
of classification because it encompasses so diverse a range of options
of health service organisation, e.g. contributions in kind, such as
labour, materials, agricultural produce; user charges for drugs and
services; household or communal contributions to pay the wages of
a health worker as part of a risk sharing arrangement (Stinson W.
Community financing ofprimary health care. Washington DC:
Primary Health Care Issues. Series 1 no.4. American Public Health As
sociation. 1982.) The main virtue of considering community financ
ing as an entity is that it draws attention to the use of non-monetary
resources, local sources of finance that are often overlooked, and
14
On the use of user charges for publicly owned services: De Ferranti
D. Paying for Health Services in Developing Countries. World Bank
Staff Working Papers no.721, Washington: The World Bank, 1985.
Musgrove P. What should Consumers in Poor Countries Pay for
Publicly Provided Health Services? Soc.Sci Med 1986 22(3):
pp329-333.
■’
’
23.
Roemer MI & Maeda N. Docs social security support for medical care
weaken public health programmes? Int. J. Hlth Serv., 1976, 6 : pp6978. Also. Roemer MI. Contribution to "Round Table" discussion on
health insurance, in Abel Smith B. (1986), op.cit. (reference 22): p2628. Roemer and others have, however, drawn attention to the cost
inflation that has occured as a result of the multiple sectors and
although total output has increased it might also have inctreased
wnhout competition from the social security sectors and al much
lower cosLFurthcnnore, the association Roemer found between the
presence of large social security sectors and large public sectors may
be a result of confounding factors, viz. economic growth and GNP
since these are found to be associated with both larger social security
sectors and larger public expenditure on health.
Radical Journal of Health
24.
Simkins C, Abedian 1. Hendrie D, le Roux P. Justice, Develop.
men! and the National Budget. Second Carnegie Inquiry into
ovcny and Development in Southern Africa. Post-confcrcncc
senes no. 6. Cape town: SALDRU University of Cape Town.
25. Opinion and correspondence in "Watchdog" column in Cape
Times March 20, 1985; March 26, 1985; April 2, 1985; April 9,
1985. The law permits new schemes to spend a maximum of 14
percent on administration, and established schemes, a maxi
mum of 10 percent.
26.
Navarro V. Commentary : The public/private mix in the fund
ing and delivery of health services : An international survey.
Am. J.Public Health, 1985; 75: ppi318-1320.
27.
Barney Hurwitz, past chairman of the Representative Associa
tion of Private Hospitals, commented that there was probably as
much overcharging as undercharging given the complicated
billing system. "Killing off the paymaster." Financial Mail
November 29, 1985, p 37.
28.
’Take them off the drip.’ Financial Mail June 7, 1985, p 31.
29.
1985 Hospital and Nursing Yearbook for Sourthern Africa.
Cape Town: H. Engelhardt and Co., 1985, pl55.
30.
Barney Hurwitz, managing director of Clinic Holdings, quoted
in 'Take them off the drip'. Financial Mail June 7, 1985,p 32.
31.
Rand Mines Corporation Health Department. Annual Medical
Report for 1984 p 15.
32.
Watt J M, Dcrzon R A, Renn S C, Schramm C J, Hahn J S,
Pillari G D. the comparative economic performance of inves
tor-owned chain and not-for-profit hospitals. N.Engl. J Med.
1986; 314 pp 89-96.:
33.
See e.g. essays in McLachlan G & Maynard A. The Public I
Private Mix For Health: The relevance and effects of change.
London : Nuffield Provincial Hospitals Trust, 1982.
34.
’Doctors win when it comes to fees'. Cape Times February 26, 1986.
35.
'Taking them off the drip *! Financial Mail June 7, 1985, p31.
36.
De Villiers Commission of Inquiry into private hospitals and unat
tached operating theatre units in the Republic of South Africa, 1974.
Cited in Thomson E. The private hospital industry in the greater Cape
Town area. S. Afr. MedJ. 1984; 66 : pl 9.
37.
Sec e.g. Culyer A J. Need and the National Health Services Econom
ics and Social Choice. London : Martin Robertson; 1976, pp 81-94.
Maynard A. The regulation of public and private health care markets,
in McLachlan G. & Maynard A. (cds) 1982, op.cil. (reference 69): pp
478-4822.
38.
Evans R G. Supplier-induced demand : some empirical evidence and
implications. In Perlman M. (ed.) The economics of health and medi
cal care. London : Macmillan, 1974.
39.
Janowitz B, Nakamura M S, Lins F E, Brown M L, Clopton D.
Caesarean Section in Brazil. Soc. Sci.Med.1982,16 : pp 19-25; Barros
F C, Vaughan J P, Victoria C G. Why so many Caesarean sections?
The need for a further policy change in Brazil. Health Policy and
Planning, 1986, 1 : (1) ppi9-29.
40.
Saward E W and Fleming SD. Health Maintenance Organisations.
Scient. Am., 1980 243; pp37-43. Cited in Mills A. Econmomic As
pects of health insurance. In lee K and Mills A. (cds) The economics of
health in developing countries. Oxford : Oxford University Press,
1983, p79.
41.
'Killing of the paymaster' Financial Mail November 29, 1985 , pp 36.
42.
'Medical aid near collapse'. Cape Times July 7, 1985.
43.
Financial Mail November 29, 1985, op.cit. pp 37
Continued from page no. 2)
other than what was already being written about. We
were in no competition with fraternal journals which
were focussing on these issues. And most of the
ongoing debate on the three issues, whether in the
mainstream or in the alternative press were them
selves major contributions to the radical critique of
health. There was another perhaps more important
reason. For all of us on the collective the RJH was the
second or third area of activity. That is all of us at
different levels with diffcrentgroups were already very
much involved with these issues. The other forums,
such as the medico friend circle, the All India Drug
Action Network, The Health Services Association
and the West Bengal Drug Action Forum, Kishore
Bharati, women’s groups and others, were putting in a
tremendous effort to generate a public debate on critical
problems in these areas. By tacit consent we decided
to put our energies into these for a rather than in brin
out substantial material in the RJH.
What now? Do we still feel that the journal can
fulfill a need? Have we contributed to the develop
ment of a marxist debate on health care? Certainly
things have changed much since we began. For one
June 1988
thing the last four years have seen an upswing in the interest
in and awareness of health issues. Interestingly the three
issues we mentioned above have been both a cause and
consequence of the changing situation. During this period we
have also seen a large number of health periodicals, some
occasional, some regular, emerge. Also, publications
encompassing a broader canvass of social analyses have
begun to devote more space to heal th issues.
We do not attempt here to answer these questions. Be
cause we really have no means of evaluating the RJH*
qualitatively. We invite you, our readers new and old, to give
us your feedback. Because after all the-whole point in
starting this journal was so that it could provide a forum
for participating in the evolution of a radical, marxist
critique of health. In the meanwhile we will continue to do
our bit as best as we can.
So here comes a fifth year of RJH!
Padma Prakash
15
Health Care, Health Policy and Underdevelopment in India
ravi duggal
SINCE independence health policy making and the design ofhealth programmes (like all other development
programmes) have been guided by programmes of imperialism, Av a result the Indian periphera popu anon
has been denied state-sponsored health care services (that exist theoretically) and have instead had to depend
on the vagaries of the market forces in which operates the overwhelming private health sector that has virtual
monopoly of curative health services, being supported to the hill by the multinational pharmaceutical
industry. Privatisation, high technology, population control, low-cost models, aid and the consequent
dependency are the means imperialism uses to shape our health policy and programmes.
THE underdevelopment of health is not an original stale,
but an active process generated by imperialist exploitation.
Thus the nature of the third world health problems and the
obstacles to their solution are to be found primarily in the
structure of the economic relations historically created
between the capitalist powers and their satellites. This is
reinforced by the economic and social relationships created
by imperialism within particular underdeveloped countries.
[L Doyal and I Pcnnel. EPW August 1977]
The links of underdevelopment with imperialism arc
today well established. The world systems approach
[Baran, 1975: Frank, 1967, Amin, 1974: Wallerstcin,
1976] that critiques the devclopmcntalist paradigm of
liberal political economy has also looked at the health
sector, then it moves on to discuss the underdevelopment
of the health sector in India establishing the linkages with
imperialism based on an analysis of health and population
control policy.
Modem medicine got established in the developed
world only in the last quarter of the nineteenth century.
And now for over a century it has prospered under capital
ism and has spread globally under imperialism expropriat
ing the health of the people. In developed countries
sanitary reforms and other public health measures had
provided the foundation on which modern clinical medi
cine could grow and flourish. This did not happen in what
arc today’s underdeveloped countries because the latter
were colonics of imperial powers. In underdeveloped
(colonial) countries modern medicine developed as an
enclave sector and thcrforc, though early in introduction,
modem medicine catered to a very small proportion of the
population.
The phenomenal growth of modem medicine under capi
talism in the last one hundred years and its expansion under
imperialism had no doubt revolutionised medicine. But in
its rushed growth to find a pill for every ill the medical
industrial complex, under the auspices of monopoly
capital and imperialism has not only become an expropria
tor of health but also global expropriator of surplus through
a network of large multinational corporations. Good
health is not only a question of availability and
accessibility of modern medical care but is also related to
the basic question of the right and access to a comfortable,
16
human standard of life.
Today the difference we sec between the developed
countries of the west and the undeveloped countries of
Asia, Africa and Latin America is the gap that imperialism
has created. The question is not one of lack of resources in
the peripheral (underdeveloped) countries but that of ex
propriation of their resources by the centre (developed)
countries. The world product today (far below level as
which human beings can produce with the present level of
productive forces) works out to over US S 3500 per capita
per annum. If equitably distributed this is sufficient to
support a comfortable life-style for the entire global popu
lation. However in the present world the underdeveloped
countries, which have over 3/4lhs of the world’s popula
tion, gel only l/5lh of the share of the world’s product
[World Bank, 1984]. The situation in 1800, for instance was
a little different. The same population of underdeveloped
countries had 44 percent of the share of world output .
Since 1800 the gap has widened because of the expropria
tion of surplus of the underdeveloped countries by
developed ones, earlier through colonisation and now
through imperialism. And this gap today is widening
further because of the stepped up process of privatisation
all over the world. Thus under capitalism and imperialism
development alone is not possible-development is neces
sarily constructed on the foundation of underdevelopment.
The growing of such a development (increasingly for
lewer people) also means a growth of underdevelop
ment (increasingly for more people), [see Navarro, 1976]
health sector.
A father point to be noted with regard to the health
sector is that it has historically belonged to the category
referred to in western economics as the welfare or social
sector. The argument is that a healthy population is
essential for higher productivity. But under capitalism
the production sector is unwilling to bear the burden of
maintaining the health of the population, therefore this
function is transferred to the state. The stale collects taxes
and makes provision for health care services either
through its own delivery system or through subsidies or
support ol the private health sector. But with the strength
ening ol monopoly capital, contradictions of capitalism
become completely bare and it seeks the support of the
Radical Journal of Health
stiite, the latter tripping into a Fiscal crisis. The direct
consequence is a demand by capitalism for a cut in social
expenditures (health, education, welfare etc). However, at
the same time monopoly capital is well prepared to take
on social expenditures because new tcchonological devel
opments have rendered this sector profitable. It is not
that there were no profits in the health sector carlicr-lhe
pharmaceutical industry, private pracilioncrs, medical
equipment manufacturers etc were grossing large
surpluses. Only now, because of the new medical technol
ogy, large scale corporatisation of health services has be
come possible.
This development in the health sector is not restricted to
the developed world. It has diffused very rapidly in
the underdeveloped world further advancing (sic) the un
derdevelopment of health in these countries. The devel
oped and the peripheral mass has less and less of basic
health care. On the contrary, imperialism pushes ‘new’
low-cost, self-care models for the periphery. “In the
health sector, we find substantial cuts in government
health expenditures with privatisation and commodifi
cation of medical services, accompanied by the ever present ideology of self-sufficiency and self-care brought
to those peripheral countries by transmission belts of domi
nant core ideologies, such as the international agencies of
aid”. [Navarro, 1984].
Underdevelopment of Health in India
In India the growth of the health sector has followed the
enclave pattern of development. Public health in India was
completely ignored. Unlike Europe, India and most of the
third world missed the opportunity of implementing
sanitary reforms because they were colonised [for details
see Ramasubban, 1985]. Even until today, because of the
nature of capitalist medicine and imperialism, this
simple and basic change has not been possible in underde
veloped countries—the entire focus of modern medicine is
centred around the clinic and the only beneficiaries of this
arc the providers and monopoly capital. The recent cholera
andgaslro deaths in Delhi and other pans of India shows
how underdeveloped public health in India is and it also
proves the enclave sector pattern of development.
The genesis of an institutionalised health care delivery
system in India began with the consolidation of British
colonial rule. The motive of the imperial government for
providing such modern and sophisticated medical care was
not to improve health care of the general Indian commu
nity but as a concern for the health of its own armed forces
and civilian administration. This very enclave sector intro
duction of modern medicine in India became the basis of
its growth in the country. This pattern continues even
today. Upto the end of the war modern medicine in India
was not introduced to the periphery at all. It was only
available to the rich Indians and civil servants, besides the
June 1988
Britishers and the Indian Army. With the advent of provin
cial government after the Government of India Act 1919,
some semblance of a medical care network evolved. By
1941 India had 7441 hospitals and dispensaries (2150
hospitals). For rural areas there was one unit (hospital and /
or dispensary) per 45,966 population and for the urban
areas one unit per 16,913 population, (only 7.6 per cent of
all these units were in the private sector) [Government of
India, 1946]. Anyway, these facilities were loo meagre to
be of any significance, especially considering the fact that
they largely catered to .a select population.
Compared to any significant health care delivery system
in the developed world the facilities and investment in
India were miniscule and of little consequence for the
health of its population. For instance, before the start of
the second world war India had a bcd/population ratio of
0.24 beds for 1000 population with a state expenditure of
about 16 annas per capital only (5 per cent of Government
expenditure), compared to Britain and USA which had
bed/populaiion ratios of 7.14 and 10.48 beds per 1000
population and a state health expenditure of Rs.54-8 annas
12 pics and Rs.51 -6-0 per capita (20.4 per cent and 13.8 of
government expenditure), respectively [Government of
India, 1946]. The fact is that Britain’s and USA’s state
health expenditure was equivalent to India’s national in
come and their health care even worse today. In 1984
health expenditure in the USA was $ 15.80 per capita out
of which state expenditure accounted for 41 percent
(Lcvitctal,1985). By comparison in the same year health
expenditure in India was only Rs.50 per capita. Stale
private expenditure in 1984 is estimated at Rs.47 per capita
by the CSO [GOI, 1988] but is more likely around Rs. 190
per capita [Duggal, 1986]. Even taking the latter
estimate of private health expenditure in India, the USA
spends 66 limes more on health than India. Futhcr, the
US health expenditure alone in 1984 was eight times that
of India’s national income (state health expenditure alone
of the USA was 3 */2 times India’s GNP).
In India the Bhorc Committee Report had provided
the first insight into dimensions needed for a comprehen
sive health care system in India. It was a plan that was
almost equivalent to Britains own national health service
but having features closer to the Russian model because
of Dr. Sigcrist’s and Prol.Ogcnov’s influence [GOI, 1946].
The committee stressed that suitable housing, sanitation
and safe drinking water were primary conditions for good
health was not to be equaled with health services or illness
care. The beneficiary was identified clearly as the tiller of
the soil and the committee drew pointed attention to his
plight. Specific groups such as women and children
and industrial workers, were also paid special attention."
[Giridhar ct.al.,1985].
However, after independence the Bhore Committee
Report remained unimplcmcnted. The main reason for
this, as also for the poor performance of other social
17
sectors, was the role of the Bombay plan (also known as
Tata-Birla Plan) in shaping India’s economic policy.
Briefly, the Bombay Plan directed the nation’s economic
policy io serve the needs of private capital by making the
state invest in heavy economic infrastructure, under the
cover that such participation by the state in economic
production would evolve a socialist society. That was as far
as Nehru’s socialism went and the private sector got state
subsidised capital goods and services sector (steel,
minerals, transportation, communmication, finance capi
tal etc.) from which to reap benefits. Il is clear that stale
investment has historically dominated in areas which helps
the growth of private capital.
In the health sector the government let private practice
of medicine flourish. For instance the government
subsidised significantly the growth of private medical
practice by training medical personnel from tax-payer
funds and by providing bulk drugs al very low prices to
private formulation units. However, the government look
the entire responsibility of public health largely preven
tive and promotive programmes with curative services
(the primary need of the population in terms of demand)
taking a back-seat
Investment in Health Sector
As mentioned earlier, at independence the investment
in the health sector was marginal. Hospitals, dispensa
ries, health centres, health personnel and pharmaceutical
production were abysmally low to have any impact on the
health of the population, especially the poor masses. Be
tween independence and today the growth of the state
health sector has not kept pace with the needs of its
population and quality.
Between the beginning of the first plan and 1986 the
number of hospitals have increased from 1,694 (1,17,000
beds) to 7,474 (5,35,735 beds) but in terms of availability
to the population the situation has not very siginificanlly
improved. Thus in 1951 one hospital served 1,34,001
population (3,085 population per bed) and in
1986,
1,003,48 population (1,400 population per bed). The
situation gels worse when we look at the rural - urban
differentials. For the earlier years this figure is not available
but even in 1986 only 21 per cent of the hospitals (and 12
per cent of the beds) were located in rural areas, one rural
hospital serving 3,49,394 rural population, and one rural
bed serving 8,135 rural population. In comparison to this in
the same year one urban hospital served 34,281 urban
population and one urban bed served 432 person., in the
urban areas. In 1956, 24 per cent of all beds were in rural
areas but in 1986 this figure had declined to 12 per cent
(GOI-CBHI, respective years). Further when we consider
access factors like morbidity rates, sanitary conditions,
malnourisment etc, the rural health sector investment ap
pears to be only a marginalised investment. (See Table 1).
18
It also appears that compared to the growth of the private
health sector the growth of the state health sector is ver)
slow. For instance in 1974, 16 per cent of all hospitals were
in the private sector (16.2 per cent beds) but within a
decade in 1984 private hospitals had grown to 42.3 per
cent of all hospitals (26.7 percent) (Ibid). This means that
availability of health care for the poor classes, who
constitute more than 3/4th of the population, i$
becoming more and more expensive as they have to in
creasingly rely on market forces.
The urban population, besides having the cream of the
state and private health services also have access to
relatively good and well organised local-body sponsored
health services, and the organised sector working class in
addition has the benefit of having either health insurance
[ESIS, CGHS] or reimbursement of costs (by employer)
orcven special health care facilities by railways, mines,
defence, public sector undertakings, corporate health fa
cilities).
To check this imbalance a network of primary health
centres have been established to cater to the needs of the
rural population. Between 1956 and 1986 the ratio of
population served by one PHC has changed from 5,51,724
to 88276 but no siginificant impact on the health of the
population is perceptible. The problem with this is that
PHCs arc different from hospitals and dispensaries.
People’s need and demand is for curative services (i.e.
hospitals and dispensaries), rather than public health and
family welfare. On an average only 1/5th of PHC fundsand
time of the staff arc spent on curative services when over
90 per cent of those who visit the PHC seek curative care.
When curative care supply in such institutions increases,
such as in case of upgraded PHCs, its utilisation by the
population also increases. Similarly a good PHC doctor (in
terms of providing curative care) increases’ the patient-load
of the PHC substantially.
Drug production is one area (the other being the produc
tion of doctors) in which considerable success has been
achieved and the targets surpassed. The reason is simple
that profitability is high and an effecicnt (even though
largely irrational) pharmaceutical industry is the lifeline
of private practice of medicine and vice versa. Pharma
ceutical formulation production (including net of import/
export) has increased from Rs.51 crore in 1956 to
Rs. 1993 crore in 1983 [FRCH, 1987]. In terms of popula
tion served, this means drug availability of Rs. 1.30 per
capita in 1956 and Rs.27.68 per capita in 1983.
But the most important segment of the health sector in
India is the private medical practitioner. Today there are
over 700,000 medical practitioners- (including institu
tionally
and non-institutionally qualified and non
qualified from all systems of medicines); out of these 36
percent -(250,000) are allopaths. Besides this there are
about 800,000 paramedics, pharamacists, nurses, various
medical teachnicians etc. Of all qualified Allopathic
Radical Journal ofilealth
ATnfUt°hnerSanly28perCentarelocated in niral areas and
°U uh ■ eSC •
Cent WOrk in 1116 80vernment’s rural
health institutions. Of all non-allopathic (qualified as well
as others) practitioners. 56 per cent work in rural areas;
and from among these only 2 per cent work in the state
health sector 6 per cent of qualified non-allopaths) and of
course, most of them practise allopathy. So here again
we see that rural-urban differentials- are very marked
And finally what -is the proportion of medical
professionals working as private practitioners? ’Of the
qualified allopaths about 172,000 (or 69 per cent) are in
private practice. And of all the non-?llopathic (qualified
and not qualified) practitioners 90 per cent of 400,000 work
as private practitioners. This means that about 5,72,000
practitioners (one per 1300 population) of all sorts consti
tute the largest chunk of the health sector, [extrapolated
from Census -1984; GOI, 1986].
This overview of health infrastructure development and
investment in India clearly shows that the pattern of growth
of the health sector in India has only contributed to its
underdevelopment. The three high growth areas of medical
education, pharmaceuticals and private practice have only
helped imperialism and monopoly capital. Development
of health care service has been concentrated in the en
clave sector benefitting largely the urban-enterpreneurial economy. Health care services, like all other
sectors of the economy, in the periphery are backward and
what little exists is both poor quality and of difficult access.
There are various issues health and non-health, involved
in this debate.In this article the discussion is limited to the
nexus between imperialism and the health and population
control policy in India and how they perpetuate underde
velopment
Health Policy and Imperialism
In the colonial period health policy was unabashedly in
favour of the enclave sector. The periphery existed
only for expropriation, not deserving even lip sympathy.
However, a few years prior to Independence both the
Government of India and the Indian National Congress
decided that the health of the periphery needed attention.
The now famous Bhore Committee and the National Plan
ning Committee’s reports on the health situation in India
and what could be done about it appeared on the eve of
independence. Both these reports clearly favoured jthe
establishment of a broad based integrated national health
system that would be equally accessible to the entire
population, irrespective of their ability to pay. s
The Bhore Committee report used the Flexner Report of
the USA as its basis in chalking out the plan for health care
services for India but the influence of both the British
National Health Services that was then emerging and the
Russian model are clearly perceptible. However, it is
evident that the Bhore Committee Report was clearly
June 1988
designed within the framework of welfare economics. It
is a different matter that most of the recommendations
of the report were rejected by the Indian state because the
shrewd Indian bourgeoisie preferred a system of health care
services where health care and medicine would be com
modities (for instance the then prevailing Indian Medical
Service that could have become the foundation of a
national health service, was truncated and finally dis
solved ). The state was given the responsibility of public
health and health care services for the periphery. The state
was also made to provide the infrastructure medical educa
tion and research, bulk drugs, tax rebates and subsidies.
Private medical practice developed as the core of the health
sector in India initially strengthening the enclave sector,
then gradually spreading into the periphery as
opportunities for expropriation of surplus by providing
healthcare increased due to the expansion of the socio
economic infrastructure.
It must be noted that this
pattern of development of the health sector was in keeping
with the general economic policy of capitalism. And
Indian capitalism had clear links with imperialism. Thus
the health policy of India cannot be seen as divorced from
the economic and industrial policy of the country. In India
until recently there was no formal health policy statement.
The policy part and parcel of the planning process (and
various committees appointed from time to time) which
provided most of the inputs for the formulation of health
programme designs. However what programmes were to
receive priority was decided by imperialism.
In the early years after independence the Indian state
was engrossed in helping and supporting the process of
accumulation of capital in the private sector through large
scale investments in capital goods industry, infrastructure
and financial services. Social sectors like health and education were low priority areas. Industrial growth was the
keyword. But by the end of the fifties imperialism had
convinced the Indian state and the bourgeoisie that if the
periphery was left out of the development process then not
only surplus expropriation but the existence
of
capitalism itself would be threatened. Imperialism did not
want another Cuba or China. Earlier the US patented CDP
had failed. Thus the Green Revolution and subse
quently other rural development*programmes came to
India through assistance from the US Technical Mission
and Ford and Rockefeller Foundations. Along with this
came support for health programmes also. The aid that
came to India was not only financial and technical but also
political and ideological. The entire policy framework,
programme designs and foci, financial commitments etc.
were decided by the imperialist agencies. For instance,
during the fifties malaria, which constituted, an interna
tional threat, was the main focus of our health care delivery
system an overwhelming majority of the health budget
going into spraying out the mosquito menace. This
priority was dictated largely by US imperialism - 78 per
19
ccm of the US (health) technical assistance and 68 percent
of PL 480 grants went to malaria control and eradication
[USIAD, 1976]. Similarly in later years small-pox eradi
cation assumed importance. This lime 57 per cent of all
WHO assistance to India between 1973-76 went to small
pox eradication [WHO, respective years].
In die fifties and sixties the entire focus of the health
sector in India was to manage epidemics. The health in
frastructure remained grossly inadequate, catering largely
to die enclave sector (see Appendix 1).
Another area of imperialist influence has been medical
education and research. The entire curriculum of medical
schools in India is oriented to serve western capitalism.
Trained medical graduates, who have studied in public
financed medical schools have migrated to western
capitalist countries on masse, the latter gaining cheaply
(for them) trained medical manpower. Imperialism
directly perpetuates this form of medical education and
migration centres of medical excellence in India (AIIMS,
PGIMR etc.) have been funded by imperialist agencies.
For instance between 1950 and 1974, 98.7 per cent of all
health sector assistance by the Rockefeller Foundation to
India went to medical education and research [Rockefeller
Foundation, respective years].
In Lhe early sixties, alongwith the great push given to the
•Green Revolution imperialism was preparing the ground for
a fundamental change in India’s health policy. The epi
demics that were being controlled were bringing down the
death rate rapidly. The consequence was a sudden spurt
in population growth. India already had an official
population programme but in lhe Mahalanobis scheme of
things population growth was not a priority factor
in
planning.
For imperialism the high growth
of
population (compared to their own declining growth) in
India and rest of the underdeveloped world was a major
threat. The initial beginnings in guiding this policy
change in underdeveloped countries was routed through
private foundations of American capitalism [for details
see Mass, 1976]. In India, for instance 84 per cent of all
Ford Foundation health sector aid between 1955 and 1979
went to population programmes and reproductive biology
[Ford Foundation, respective years].
In the first two plan periods lhe family planning pro
gramme was mostly run through voluntary organisations
under the aegis of FPAI which received funds mainly from
IPPF, Population Council and the FPA of Britain. It was
only during lhe third plan that government agencies began
to actively participate in pushing population control. It
was at the end of the third plan that Family Planning
became an independent department in lhe Ministry of
Health (meaning its status for financial commitments etc.
would be increased substantially) and the camp approach
was tried out for the first time under the advice of the Ford
Foundation. The budget Sky-rocketed from a mere Rs. 2.2
crore to Rs. 25.0 crore (an increase of 1036 percent as
20
compared to only a 128 percent increase for the entire
health sector) (Government of India 1982].
During lhe same lime US imperialism had made inroads
into the United Nations policy with regard to population
control [Mass, 1976].
Following this in 1966 a UN
advisory' mission visiting India strongly recommended
that population growth must be curtailed immediately
and for this the resources of the health sector were to
be used. “The directorate (Health and Family Welfare)
should be relieved from other responsibilities such as
maternal and child health and nutrition.
It
is
undoubtedly important for Family Planning to be inte
grated ( it had been integrated with MCH in 1963 ) with
MCH in the field, particularly in view of the 'loop'
programme, but until the family planning campaign has
picked up momentum and made real progress in the states,
lhe Director General concerned should be responsible for
family planning only. This recommendation is reinforced
by the fear that the programme may be otherwise used in
some states to expand the much needed and neglected
maternal and Child Welfare Services” [UN Advisory Mis
sion, 1966].
Taking the cue the Indian government for the first lime
evolved a traget-oriented approach for slcrlisation and the
IUD programme. Resources were considerably enhanced
and in the first >ear of its implementation the ‘loop’ pro
gramme netted a phenomenal 8.13 lakh acceptors (much
more than sterilisations which had started 10 years before
it). And with regard to stcri 11 isations the number of female
acceptors also increased substantially.
The above was made possible by redirecting the efforts
and inputs of die Third Five Year Plan’s ANM-subccntrc
health scheme, which was mainly designed to reach out
health care to women and children, the most vulnerable
section of the population. Before this massive investment
of the third plan could reach its target, population with lhe
various health programmes — child immunisation, ANC,
PNC, domicilary curative services, preventive and promotivc health programmes — the imperialist agencies had
reoriented the policy to attacking the ‘population menancc’. Thus the entire basic health care services which
were designed for the periphery were reduced to a popula
tion control programme al the behest of imperialism. This
distortion of an already underdeveloped health sector
continues even today.
The population control strategy was based on the im
perialist hypothesis that imporved health care necessarily
accelerates population growth. [World Bank, 1980; Mass,
1976]. Therefore to check population growth health inter
vention was to be kept at a minimal level, a level that
would generate adequate surplus labour to perpetuate
exploitative relations. This was to be realised through
heavy financial assistance and export of the ideology of
the ‘population bomb’ by the imperialist powers. The pat
tern of financial assistance and population growth in
Radical Journal of Health
underdeveloped countries is given in Table 2. It shows that
the initial lead was taken by private organisations
(mostly foundations of the corporate sector) and gradually
transferred to bilateral and multilateral agencies through
their influence.
(It is also evident that two decades of vast financial
commitments did not dampen population growth in under
developed countries. Their hypothesis was proved incorrect
but this did not decrease their interest in population control.
Their own studies in the seventies showed that in underde
veloped countries there were strong economic reasons for
high fertility. The nature of the subsistence economy makes
it expedient for a household to have a large family so that
exploitation of fluctuating opportunities of source of in
come can be maximised, especially so when most of these
opportunities coincide in a particular season — monsoon in
India [Chaudhary, 1982]. Also under such conditions chil
dren arc highly cost-effective. The cost of their raising far
outweighs the benifits that arise due to their plenitude
children contribute substantially to households through
their labour (not necessarily wage-labour) in the fields,
outdoor activities (fetching water, firewood etc) and
household
maintenance (babysitting, cleaning etc.)
[Caldwell, 1977; Epstein ct. al., 1975; Hull, 1977; Nag,
1978]. Further, these studies also indicated that an
important determining reason for high fertility was high
infant mortality. The World Bank selectively picked up this
latter point [World Bank 1980] and advocated the “child
survival hypothesis” to replace the older one mentioned
earlier. That is, significant effort needs to be invested in
assuring the survival of children so that parents can visibly
perceive lower infant and child mortality rates. Thus,
instead of direct support to population control activities
support to universal immunisation of infants, children
and pregnant women becomes thtf key for achieving, lower
levels of fertility. Related to the child survival hypothesis is
the corollary of'safe-motherhood'. This corollary is essen
tial because of high maternal mortality and neonatal
mortality rates. Il is unfortunate that these important issues
of survival arc being-dealt from the perspective of
lowering fertility. In India the current mission approach
(Sam Pitroda variety) to immunisation is a ease in point. It
may be further noted that the issues related to the subsis
tence economy of underdeveloped countries referred to
above * have been completely ignored because the
underdeveloped countries can overcome their subsistence
nature only with the destruction of imperialism.
The Indian state and bourgeoisie have found this
imperialist ideology beneficial for their own survival.
All problems (especially economic and health) arc
linked by them to overpopulation. For capitalism and
imperialism it is important to regulate fertility because
surplus labour beyond a certain level can pose a threat.
(The World Bank calls it the spectre of communism).
Further, modern capital intensive technology makes gen
Junc 1988
eration of surplus labour under capitalism even easier, thus
making the need for population control even more urgent.
Population control policy is one area of imperialist inter
vention in the health sector of underdeveloped countries
which has kept health care services underdeveloped in
these countries. The other area is promotion of low-cost
primary health care for the periphery of these countries.
In India the Narangwal experiment in Punjab in the
sixties set the framework for the ‘low-cost’ ‘self-care’
approach (Johns Hopkins 1976]. Following this similar
experiments and projects were undertaken in Maharashtra
and other states by various non-government organisations
(Jesani, ct.al. 1986). The consequence of this was the
questioning of the medical model (especially the Bhore
Committee) and promotion of a “community” health care
approach. This proliferation of NGO experiments and mod
els became the basis for an important change in the health
policy framework of the state. The population control
obsession of the health policy of the decade between 1966
and 1976 suffered as set back, albeit temporary, after it
had reached its peak during the emergency.
It is interesting to note that the liberal western
economics offered full support to the coercive popula
tion control activities during the emergency by stepping
up their financial assistance for the family planning pro
gramme. When in 1976-77 the state’s expenditure i^
family planning increased by 114.6 percent over 1975-76
(and sterilisation by 204 per cent, assistance by imperialist
agencies (bilateral and multilateral) increased by 50.8 per
cent in the subsequent year. But when the Janata
government came to power in 1977 and government
expenditure declined by 46 percent (and sterilisation de
clined by 88 per cent) the cut in international aid for the
subsequent year was 43.4 per cent. And to prove that this
was not a mere coincidence the coming back to power of
Congress (I) in 1980 increased population control aid by
111.7 per cent [Government of India, 1982].
In the mid-seventies a global change in the health
strategy in underdeveloped countries was being worked
out by the international agencies. It emerged in the form
of Alma Ata declaration of 1978. India had anticipated this
earlier with the influence of NGO models which were
mostly funded by international agencies [Jesani et.aL 1986).
India had officially started with the Community Health
Worker Scheme (now called Community Health Guides) in
1977 with the idea of decentralising further the PHC and
subccntre model which had failed to work, except in
meeting Family Planning targets. There was no guarantee
that the CHW scheme would not end up pushing family
and planning traget precisely the same thing happened.
Before the introduction of the CHW efforts had been
made to integrate the paramedical workers of the
vertical health-programmes (malaria workers, vaccinators,
ANMsctc.) through the multipurpose worker scheme as
suggested by the Kartar Singh Committee. This integra
21
lion idea had again emerged from the Narangwal experi overall approach to health care and the restructuring of the
ment. “The committee unanimously agreed that the con health services, not much headway is likely to be
cept of muiu-purpose workers at the periphery was both achieved in improving the health status of the people
the operational research experience of Narangwal, unless success is achieved in securing the small family
Gandhigram, conclusion** [Giridhar et.al.,1985]. But the norm, through voluntary efforts, and moving towards the
integration did not help in anyway in even starting the goal of population stabilisation. In view of the vital
process of deceleration of the underdevelopment of importance of securing the balanced growth of the popula
health in the periphery. On the contrary all the health tion, it is necessary to enunciate separately, a National
workers (alongwith many non-health workers, supposedly Population Policy [Ibid: Point 6, pg.4]
to justify the promise of interdepartmental-cooperation and
There is ample evidence in implementation of this policy
integration) were laden with carrying the burden of popula to prove that the population control programmes empha
tion control targets.
sised in the NHP has been accorded an overriding focus in
The consequence of this, over the years has been that the the “comprehensive primary health care programme’’ and
state’s health care services in the periphery are today rest all (specified in the first quote from NHP) is just for
viewed by the people as family planning clinics. People the record!
in general have developed a distrust for the stale’s health
The consequence of this health policy making in India
care delivery system. Thus, thanks (sic) to imperialism and the resultant programmes with the assistance,
primary health care, health services integration and Uni guidance and ideological inputs of imperialism has kept
versal Immunisation Programme 'child survival') have the health sector underdeveloped. Even today in India 80
become ‘new’ flag-carriers of the population bogey.
per cent of all health resources and medical manpower are
In the midst of all this for the first time in 1983 an located among the 25 per cent urban population when 75
official National Health policy (NHP) was announced. It per cent of the country’s population resides in rural areas
was largely based on the ICMR-ICSSR Committee Report even in urban areas 80 per cent of the health resources arc
[ICMR/ICSSR, 1981]. The policy slates: India is committed accessible only to the top 20 per cent of the socio
to attaining the goal Health for All by the year 2000 A.D. economic strata. This shows that the enclave sector
through the universal provision of comprehensive pri structure of health care services continues even today.
Inspite of this apalling situation the government is talk
mary health care services. The attainment of this goal
requires a thorough overhaul of the existing approaches to ing of privatisation of health services : The policy (NHP
the education and training of medical and health personnel of 1983) envisages a very constructive and supportive rela
and the reorganisation of the health services infrastruc tionship between the public and the private sectors in the
ture. Furthermore, considering the large variety of inputs area of health, by providing a corrective to re-establish
into health, it is necessary to secure the complete integra the position of the private health sector.... with a view to
tion of all plans for health and human development with the reducing governmental expenditure and fully utilising
overall national socio-economic development process, untapped resources, planned programmes may be devised
specially in the more closely health related sectors, e.g. related to local requirements and potentials, to encourage
drugs and pharamaceuticals, agriculture and food produc the establishment of practice by private medical profes
tion, rural development, education and social welfare, hous sionals, increased investment by non-govemment agon
ing, water supply and sanitation, prevention of food adul cies in establishing curvative centres and by offering
teration, maintenance of the prescribed standards in the organised logistical, financial and technical support to vol
manufacture and sale of drugs and the conservation of the untary agencies active in the health field [Government ol
environment In sum, the contours of the National Health India, 1983].
This process of privatisation is not confined to India or
Policy have to be evolved within a fully integrated planning
framework which seeks to provide universal, comprehen to underdeveloped countries but has also been going on in
sive primary health care services, relevant to the actual western developed countries w'hich have state supported
needs and priorities of the community at a cost which the health programmes. Further privatisation is not limited to
people can afford, ensuring that the planning and imple the health sector but extends to all sectors of the
mentation of the various health programmesis through the economy. Privatisation is a response of imperialism both
organised involvement and participation of the commu to firm its control of the international economy so thai
nity, adequately utilising the services being rendered by any process of socialisation of production and services is
private voluntary organisations active in the health truncated and reversed, and a response to tiding over the
fiscal crisis of the state.
sector [Government of India, 1983: point 5, pgs. 3-4;]
This process has begun in India too in a big way. But this
Very progressive and comprehensive indeed! but all
this gets pushed into the background with the paragraph is in contradiction io the policy of promotion of low-cosi
that follows the above: Irrespective of the changes, no self-care health models. However, this contradiction docs
matter how fundamental, that may be brought about in the not appear sharp because of the enclave structure of our
22
Radical Journal of Health
economy. The high technology and corporate health
services are for the few who already have more than
adequate health services accessible to them, and die lowcost models arc for the periphery.
The low-cost model strategy is a deliberate attempt to
keep health care out of the reach of the periphery because
without the latter’s underdevelopment the over-develop
ment of the centre cannot exist. This takes us back to the
Bhorc Committee model which talked of a level of devek
opment of the health sector for India which was on par with
developed countries during that lime. That level of develop
ment is the minimum required if health care services must
be adequately available to all. The Bhorc Committee also
rc-commcndcd that health services should be available free
of cost to everyone. The rejection of the Bhorc Committee
report as a policy statement and instead shaping our health
services over the years on the whims and fancies of imperi
alism is one of the important causes in underdevelopment
of the health sector in India. Of course the Bhorc
Committee could only have been implemented if our
economic policy had also been radically different
[Conclusions]
To sum up the discussion one can conclude that
the underdevelopment of health care services in India (and
similarly in the rest of the underdeveloped world) is part of
the process of undcrdcvclopcmcnt which is the conse
quence of monopoly — capital and imperialism. Impe
rialism controls, monitors and manipulates every aspect
of the social structure to the extent that it also expropriates
the culture and mind of the population in under-developed
countries. Our policy makers, planners are brainwashed
and bought over so that our underdevelopment is
perpetuated for the development of imperialism. Thus for a
small investment in brainwashing and a paltry financial
assistance imperialism is able to sell underdevelopment to
underdeveloped countries.
Since independence health policy making and the design
of health programmes (like all other development pro
grammes) have been guided by programmes of imperial
ism. The core of the entire health policy and program
ming of the Indian state has been population control. This
has been largely due to imperialism’s successful propaga
tion of the ‘population bomb’ phenomena. As a result the
Indian peripheral population has been denied state spon
sored health care services (that exist theoretically) and
have instead had to depend on the vagaries of the market
forces in which operates the overwhelming private heuldi
sector that has virtual monopoly of curative health services,
being supported to the hill by the multinational pharmacculical industry. Today the policy of privatisation is making
the scenario for the periphery even worse.
Privatisation, high tcchonology, population control,
low-cost models, aid and the consequent dependency arc
the means of imperialism to shape our health policy
and programmes. Imperialism exploits, expropriates,
creates dependency and generates underdevelopment ,
both within and outside the health sector. And to prevent
underdevelopment from getting out of its control imperial
ism keeps throwing up new tricks (or old tricks in new
garbs) each time the contradications of its existence
threaten to knock it down. In India too these new tricks
have surfaced time and again and have helped underdevel
opment survive, even though breathless.
Table 1 : Growth of Health Infrastructure and Investment in
Population (’000s) Served Per Rupees Per Capita
POPULATION (000s) SERVED PER
YEAR
HOSPITAL
DISPENSARY PHC
(RURAL)
1951
1956
1961
1966
1971
1974
1982
1986
130(NA)
120(NA)
140(NA)
120(NA)
140(NA)
150(16%)
100(44%)
100(45%)
55.4
56.3
46.7
48.3
50.3
60.3
41.7
27.9
550
140
80
80
80
90
90
HOSPITAL
BED
PERCENT
3.2 (NA)
2.5(25%)
1.9 (NA)
1.6 (NA)
1.7 (NA)
1.7(13.2%)
1.4(13.4%)
1.4(12.5%)
RUPEES PEk-CAPITA
MEDICAL
COLLEGE
12890
8230
7310
5410
5770
5530
6600
7070
QUALIFIED
ALLOPATH
DOCTOR
5.8
5.5
5.4
4.2
3.6
2.9
2.5
2.5
DRUG
PROD
UCTION
STATE
HEALTH
EXPEN
DITURE
0.96
1.30
2.27
3.90
6.11
7.55
27.87
NA
0.9
1.60
2.67
4.13
6.86
11.71
36.26
53.94
Compiled from : Handbook ofHealth S/arisrics.CBHI, respective years; Combined Finance and Revenue Accounts,CAG,
respective years; Commerce (supplement) Pharamaceutical Industry - A Growth
12,1977. Health Status of the Indian People, Sonya Gill (cd,), FRCH, 1987.
(First Flo~r)3*
TM r ~
r
BANGALORE001 *k
June 1988
23
International Assistance for Population Control 1960-1980.
Assistance by Selected Major Donors (000’s USS)
Year
Western
Government
I960*
91
1970*
87187
1980 ♦*
369800
Multi-Lateral
Agencies
Private
Organisations
Population Change in
Underdeveloped
Countries Over Last
Decade (Percent)
3107
22.4
18750
56012
25.6
287900
16000
31.6
Source : * Quoted in World Bank Staff Report: Population Policies and. Economic Development, John Hopkins
Press 1979.
** Compiled from Population Reporters January-February 1983, Population Information Programme, John
Hopkins 1983.
*** World Bank, World Development Report, 1983.
References
Amin, Samir: Accumulation on a World Scale, Monthly
NY. 1957.
Review Press,
Baran, Paul: The Political Economy of Growth, Monthly Review Press,
NY. 1957.
Caldwell, John: The Economic Rationality of High Fertility, Population
Studies 3\ (1), 1977.
Hull, Valeric : ‘Social and Economic Support for High Fertility in Peasant
Communities’, in the Economic and Social Supports of High Fertility
LT Ruzica (cd.) ANU, Canberra, 1977.
ICMR/1CSSR : Health for All: An Alternative Strategy, Indian Institute of
Education, 1981.
Jcsani /Xmar, Guptc Manisha and Duggal Ravi : NGOs in Rural Health
Care, Volume One FRCH. 1986.
Census - 1981 : Five Percent Sample Report, Census of India RegistrarGeneral, Government of India, 1984.
Johns Hopkins : The Functional Analysis of Health Needs anti Services,
Departments of International Health, Johns Hopkins University,
Asia Publishing House, Bombay, 1976.
Chaudhary, Rafiquc : Social Aspects of Fertility,
New Delhi, 1982.
Lcvit, K.R., Lazcnby II., Waldo D.R., Dav i doff L.M.: National Health
Expenditure, 1984, Health Care Finance Review, 7 (1), 1985.
Vikas Publishers,
Duggal, Ravi: Health Expenditure in India, FRCHNews- letter vol.] no. 1,
November-December 1986.
Epstein, Scarlet ct.al. (cds): The Paradox of Poverty, Macmillan, New
Delhi, 1975.
Mass, Bonnie, Population Target The Political Economy of Population
Control in Latin America, Charters Publishing Co.; Canada, 1976.
Nag, Moni: Economic Value and Costs of Children in Relation to Human
Fertility, Population Council Working Paper 36,NY, 1978.
Ford Foundation: Annual Reports 1955-1979, respective years.
Frank, Andre Gundcr: Capitalism and Underdevelopment
America, Monthly Review Press, NY, 1967.
in
Latin
FRCH: Health Status of the Indian People, Sonya Gill (cd); Foundation
for Research in Community Health, 1987.
Navarro, Vicente:‘The Crisis of the International Capitalist Order and its
Implications on the Welfare State,’in John McKinlay (cd.) Issues in
the Political Economy of Health Care, Tavistock, 1984.
Navarro Vicente : Medicine Under Capitalism, Prodist, NY, 1976.
Ramasubban, Radhika: The colonial Legacy and the Public Health System
in India, in Socialist Health Review, vol. // No. 1, June 1985.
Giridhar G.Salia J.K. and Subramania Ashok : Policy Studies in Health
and Population -A Review in public Policy Analysis in India by R.S.
Ganapathy cLal. (cds.) Sage Publications, New Delhi, 1985.
Rockefeller Foundation : Annual Reports, respective years.
Government of India: Health Survey and Development Committee Report
(Bhore Committee), Government of India, 1946.
United Nations Advisory Mission: Report of the Family Planning Pro
gramme in India, United Nation NY, 1966.
Government of India: National Accounts Statistics - New Series, Central
Statistical Organisation, 1988.
USAID : Technical Assistance : Completed Projects and Activities, Office
of Controller. USAID. 1976.
Government of India -.National Health Policy, Ministry of Health, 1983.
Wallcrscin, Immanuel: The Modern World-System
NY, 1976.
Government of India: Year Book of Family Welfare
Ministry of Health and Family Welfare, 1982.
1981-82,
GOI - CBHI : Handbook of Health Statistics 1951, 1956, 1974,1986.
Government of India, respective year.
24
Academic
Press,
World Bank: Staff Working Paper no. 412; Health Problem and Policy in
Developing Countries, world Bank 1980.
WHO : Financial reports 1973,1974,1975, 1976, 1977, WHO, Geneva,
respective years.
Radical Journal of Health
Health on Political Agenda in Pakistan
SAR
In April 1987 the Pakistan People’s Party (PPP) released a well-researched and scholarly document entitled
the People s Health Scheme, which together with Benazir Bhutto’s speech at that time may he taken to
comprise the party’s health manifesto. Can the PPP hope to implement it successfully in the event it comes to
power?
(Reprintedfrom Viewpoint, July 16,1987)
THE People’s Party has issued a 72-pagc document en
titled the People’s Health Scheme. The document was
released on April 30, 1987, at a function attended by
Benazir Bhutto, whose speech is also included in the docu
ment of the party. Given its inclusion, one assumes that it
is also part of the document, as it docs indeed raise a
number of very relevant points.
and educated society in order to build for growth and
progress. She has also recognised the fact that of the
10,000 medicines produced in Pakistan, only 250 arc
needed, as recommended by the World Health Organisa
tion. She has promised to supply the minimum number of
essential medicines at very low prices and intends to keep in
line with the. WHO recommendations.
Before I proceed to the contents of the documents, there
arc some things which need to be said about the presenta
tion of the document. I have been most impressed by the
document, for it is one written by a group of professionals
who seem to know their stuff well. The document has
numerous references to statistics and publications from
the government and international sources, thus giving it
great credibility and authenticity. The statistics have not
been presented just for the sake of the exercise and a very
intelligent and well-researched methodology has been used.
The salient features of the main report arc as follows:
The People’s Party is the only political party which
has openly and courageously expressed its views on
numerous issues, all in published form. Whether one
agrees with the contents of the published stands of the
party, or with the ideological approach of the parly, is
something different, but at least we have the opportunity to
know its stands and then make a decision for ourselves.
Further, despite the fact that some of their published docu
ments have come in for a lot of stick (the Awami budget,
the Labour policy), the parly has continued the process of
making its altitudes public, all backed up by hard facts. It
goes to the credit of the People’s Party to be able to
organise teams of experts on various subjects and then to
publish and make public their views.
In her speech which serves as a preface to the document,
Bhutto has raised some relevant points about the health
system in the country today. She has lamented the plight of
doctors, their unemployment and poor enumeration; the
role of the last PPP government has been discussed and
Benazir has cited the opening of medical colleges, large
hospitals, and expansion of facilities under Bhutto; she
has clearly understood the causes of ill health when she
says “Good health is less the work of doctors and hospitals
than of advances in public health. We need improvement in
clean waler and sanitation; improvement in housing and
nutrition”; she has also understood the need for a healthy
June 1988
(i)
To decentralise the entire health set-up by creating
elected District I Icalth Officers — dcmocralisation at
the local body level.
-—\(ii) The upgrading of public health services.
(iii)
A broadening of the social security scheme.
(iv)
'Pho private health sector will be given incentives to improve
and enlarge its scope and will be completely separated from the
public health sector. General practitioners will be given soft
loans for buildings, equipment and cars.
(v)
All medical graduates will be given jobs as soon as they finish
their house jobs and rural service.
(vi)
A National Formulary for drugs based on the WHO
list will be introduced and these will be made
available even in the smallest villages of Pakistan.
(vii)
The obsolete Mental Health Act shall be replaced and new
laws according to the present needs will bcmadc.
(viii)
Laws relating to quackery' shall be strictly implemented.
(ix)
Hikmat and Homoeopathy will be formally organised.
This seems to be a rather comprehensive programme
which should be a positive step towards providing ’Health
For AH’ by the year 2000. Il is not the purpose of this article
to cither belittle the programme of the People’s Health
Scheme, or to find faults with it, or to point out all that could
have been said and which was not mentioned in the
document (the role of multinational corporations in the
provision of drugs). The purpose is to analyse the pro
gramme, which on paper seems to be quite good, within
the broader social, economic and political structure of
Pakistan, for one cannot look at health, or education, or
employment, out of a wholistic context
It is my contention that the problems of health care in
the country arc linked directly to the prevailing social,
economic and political system that determines the alloca
25
lion of resources within or outside the health sector. It is
this class system which is responsible for the lack of
adequate infrastructural and health facilities in rural areas
and urban slums and this class system is also responsible
for the reluctance of doctors to practise in these areas.
Very briefly and in a simplified manner, we can identify
five basic issues in the health sector today which affect the
distribution and availability of health care.
Urban and Class Bias
The first point regarding the health system which strikes
us is that despite the fact that 70 per cent of the population
lives in rural areas, most of the medical and health facilities
arc found in the cities. For example, 85 per cent of the
practising doctors work in urban areas giving a doctor :
population ratio of 18.01 for urban areas and 1:25.829 in
rural areas. In Sind, the rural doctor : population ratio is
1:57.964. For nurses, this ratio in Sind is an astonishing
1:58. Similarly, 23 per cent of the hospitals in the country
arc located in rural areas and only 8,754 beds arc available
for a population of 60 million.
This ‘urban bias’ in health (and almost all other) facili
ties exists due to a few reasons. For one, the ruling class,
whether, bureaucrats, military personnel, industrialists, and
even absentee feudal landlords, live in cities and enjoy the
fruits of ‘development’. Secondly, organised, articulate and
politically active groups, such as trade unions, students and
professionals, who live in urban areas, have also acted as
pressure groups and raised their voices to demand social
infrastructure. The elite, the middle classes, and the politi
cally‘noisy’sections of society live in the cities and, thus,
it is largely this section which determines the allocation of
resources. The ‘natural’ outcome will be an ‘urban bias’.
It must be emphasised, however, that this ‘urban
bias’ is an impressionistic bias and only reflects the geo
graphical location of health services. There exists a deeper
and more fundamental bias which is main dctcrmincni of
' access to health facilities. This is the class bias. The facts
reveal that not all urban inhabitants have equal access to
health facilities, nor arc all ruralilcs equally discriminated
against. Il may be easier for a feudal landlord to have
access to good health care than for a slum dweller in a large
city, A ‘basti’ dweller may have ‘apparent’ access, in the
sense that he may know of existing facilities, but it is not
likely that he will be able to afford the high cost of quality
private care. At the same lime, the quality of care at a
government hospital OPD which is available to him, where
a doctor has less than 60 seconds for a patient, is indeed
questionable. Similarly, for residents within cities, great
differences in access exist. Those with money can afford
the ’best and latest’ technology and have immediate
access to facilities, while the majority, like our slum
dweller mentioned above, faces innumerable hurdles.
26
Thus, despite the apparent urban bias, we can conclude
that irrespective of geographical location, it is class loca
tion which determines access to health facilities.
The purpose of medical education is to produce medical
personnel who can work effectively in the existing model
of health care in a country. Thus, the doctors produced
after six or seven years of training in Pakistan arc those who
work best in the selling described above: one that is urbancare oriented, and work in the interests of the richer
inhabitants of the country.
Medical students in Pakistan arc taught from books
written in and for the developed countries. The diseases
our students learn about are more specific to developed
capitalist nations than to underdeveloped ones. For ex
ample, they learn from their books that cardiovascular dis
ease and cancer arc the main killers, while the real
situation in Pakistan is that parasitic and infectious
diseases arc responsible for 54 per cent of all deaths, while
diseases of the rich and of western countries (heart disease
and cancer) account for less than 2 per cent of deaths.
The teaching methods and books leave such a profound
influence on the students that they begin to believe that one
of the main causes of death in Pakistan is indeed cardio
vascular problems!
Not only docs the diagnosis of the disease come from
western sources, so docs the appraoch to care and cure.
The developed country curative care approach is copied in
underdeveloped countries where the emphasis turns to
urban-based hospitals. The teaching faculty plays a con
tributory role in accentuating this ‘cultural imperialism’.
Professors go to the west for training and urge their
students to do the same to acquire skills in disciplines
such as neuro-surgery and plastic surgery. When (if) these
doctors return, they become even more alicntcd from the
masses of their country, who live in urban slums and rural
areas. Firstly, they lose touch with common ailments
which afflict the poor, such as gastroenteritis and tubercu
losis, and can deal best with the diseases of the rich.
Secondly, and more importantly, the western-trained doc
tors arc available to only a select few who can afford their
high fees.
In underdeveloped countries like Pakistan, where most
diseases arc of a communicable and preventable nature,
the emphasis should be on training doctors who arc wellversed in primary health care techniques. Yet, the course
in community medicine in medical schools is taken very
lightly by students and teachers, who have no real
community experience. Often one finds examples where
qualified doctors arc unable to cope with simple and
common problems, such as snake-bite. The training and
practical experiences of medical students arc solely depend
ent on their interaction with patients who come to their
Radical Journal of Health
urban hospital, again, for a curative approach, when a pre
ventive one may be preferable.
The
explanation for this inappropriate medical
education is quite straightforward. Since it is the ruling
class which essentially determines the dynamics of the
health sector, it is also responsible for the production of
a specific kind of doctor. This ruling class requires a
doctor who works best in a hospital-based curative-care
setting and can deal effectively with the diseases of the rich
of Pakistan, which arc similar to those common in the
developed countries. Consequently, the curriculum in
medical colleges is designed to produce the desired product.
An important outcome of this type of education and
training is the‘westernisation’ of doctors. Since doctors
in Pakistan arc taught about ‘western diseases’, most
doctors can, after some acclimatisation, work easily in
hospitals in the developed countries. Our system of
medical education has been a major reason for the
medical ‘brain drain’ from Pakistan, with nearly 50 per
cent of our doctors practising outside the country.
Had the curriculum been designed to suit the needs of the
poor masses of Pakistan, with more emphasis on condi
tions in rural areas and urban slums, this problem would not
exist. At present, given their medical education and doctor
migration, the UDC’s arc subsidising the West!
One would think that, given the poor health status of the
population and the poor distribution of facilities, a feature
like doctor unemployment would be quite unheard of in
Pakistan. But this is not the ease. Al present, government
sources themselves claim that more than 11,000 doctors arc
unemployed in the country. On the one hand, the country is
faced with this unemployment, while on the other, the
infant mortality rate is 125 per thousand and the doctor
population ratio in rural Sind is 1:57964.
The crisis of the unemployed doctors has been brewing
fora number of years and has only just exploded. Given the
policy of successive governments towards health care, this
crisis should have been anticipated. Governments have
been obsessed with the urban-based curative-care approach
and have accordingly built medical schools to provide for
the main pillar of the system, the doctor. This one-sided
approach to health care has backfired: by not building
medical infrastructure to absorb the entire output from
medical schools, the doctors have ended up without jobs.
Had a more balanced approach been followed, and had
facilities been built in accordance with the distribution of
population, the doctors may have been able to find jobs,
and some may have even considered moving out of the
larger cities. Today the situation is indeed ironic and sad
that despite the shortage of doctors in the country, the gov
ernment has advised the unemployed doctors to seek em
June 1988
ployment in the Middle-East.
In Pakistan more than 7,500 medicines arc produced
de :tc World Health Organisation recommendations that
onl; ’50 arc enough for underdeveloped countries. Signifi
cant
85 per cent of total pharmaceutical production in
Paki. n is controlled by 15 MNCs!
There arc two main reasons for this state of affairs,which
is quite common in most underdeveloped countries.
Firstly, in a country which supports a doctor-oriented
curative-care model, the doling out of medicine becomes
an essential requirement of the system. Doctors must have
plenty of medicines to give to their patients. If, on the other
hand, the approach to health care in Pakistan was preven
tion-oriented, with intervention taking place much earlier,
the need for medicines would decrease and the cure would
also be cheaper. The second reason for the continued
prominence of pharmaceutical MNCs in UDCs is the link
these MNCs maintain with the doctor community and with
the state bureaucracy. Many MNCs sponsor international
seminars with the ostensible aim of promoting medical
science but which arc essentially conducted to promote
their own product. In many countries doctors arc given
numerous perks to promote certain medicines. Links with
the bureaucracy arc strengthened and influence is
exerted to ensure favourable treatment in the ease of
pricing and production.
In the ease of Pakistan, little research has been carried
out on the pharmaceutical industry and it is time that
some scholars look upon themselves the task to do so. Il is
important not only to know the profit that the MNCs made
each year, but also to expose any unethical practices that
they indulge in.
In 1978, a revolution look place in the field of health
care. More than 130 countries signed a declaration in \tfhich
they promised to give their people adequate health care by
the turn of the century. Pakistan was one of the signatories
to the Alma Ata Declaration.
Eight years have gone by since the signing, and only 14
years arc left before this century comes to an end. Yet any
impartial observer would be distressed by the status of
health of the people of Pakistan. Not only have no signifi
cant changes been made in the last eight years, given the
present trend none can be expected in the next 14. Al best
one can expect some small cosmetic changes within the
warped health care structure in Pakistan, but no real indica
tions exist for the overhauling of the structure itself.
Thus, it is quite clear that health care is a reflection of
the social, economic and political structure prevalent in a
country. If a small ruling clique controls the resources of a
country and little or no participation by the people is
(Continued on page 32)
27
UPDATE
News and Notes
Continuing Disaster
The minority report of the Supreme Court Commit
tee for Bhopal Gas Victims recently placed before the
judges is a telling illustration of the impotcncy, inertia
and inefficiency which charcctcriscs our public funded
research establishments. It also highlights a more fun
damental issue : the growing signs of an erosion of au
thority of the judiciary and a disregard for legal proc
esses. Tangentially, the report also draws attention to
another aspect of the situation of Bhopal — that the
disaster and all its ramifications have remained but a
peripheral concern for opposition parties. As a conse
quence, little pressure has been put on the government,
both central and state, to give the disaster the priority
it requires.
The committee was constituted in response to a writ
petition filed in July 1985 by Dr. NishitVoraand others
who were then in charge of a dispensary administering
the only known antidote to the poisoning, sodium
thiosulphate. The dispensary had been summarily
closed down, its records seized and its doctors arrested.
The petition pleaded for a court directive to the state
government to allow the administration of NaTS. In
August the court issued directions urging the state
government to implement a time-bound scheme for
detoxification as per thcguidclincs issued by the Indian
Council of Medical Research in April that year. The
state government on the pretext of seeking a clarifica
tion from the ICMR on-the efficacy of the treatment
even in August, did not reintroduce the programme.
On a rcapplication by the petitioner, the court con
stituted the Committee for Bhopal Gas Victims com
prising experts. Anil Sadgopal represented the peti
tioners and Dr Sujit K Das was nominated by the
members. The committee was asked to specifically
give recommendations regarding the detoxification
with NaTS, thcquality ofmedieal relief bcingprovided
to the victims, the use and relevance of the various
surveys being conducted at that time for determining
compensation and to ascertain what further work
needed to be done. In other words, here was an excel
28
lent opportunity for reassessing the emerging medical
and scientific data and evolve, ever, at this late stage
a programme for health services beginning with de
toxification.
In keeping with everything that has happened in
Bhopal, the committee muffed the opportunity. After
11 months of desultory functioning all it could come
up with was aonc-and-a-half page ’report'— the ma
jority report. The committee asserted that NaTS ther
apy was ’efficacious’ and it had been found to be useful
in providing symptomatic relief. It concluded that
"had the NaTS therpy been provided earlier a larger
number of patients might have been bcncfillcd." None
of the other issues touched upon by court directive
were even considered.
Il was in these circumstances that the minority of
two dissenting members, Dr Sadgopal and Dr. Das
decided to undertake the stupendous task which the
committee had opted out of. In doing so the report
throws light on the disinterest of members about a
matter of life and death concern to the people of
Bhopal; it brings out the puzzling reluctance of the
committee to call for information from the various
institutions or even from the centres in which some of
the members worked; and the marked lack of rigour in
analysing the data placed before it. This committee it
must be stressed was not of merely academic signifi
cance; it was constituted at a time when Bhopal’s
victims were gravely ill and many dying, to work out
the best possible programme for detoxification. That
it decided after 11 months to confine itself to one
single recommendation, and even that on insufficient
material is a shocking criticism of the, ‘experts’ who
constituted the committee.
In contrast the minority report delves into a vast
amount of data, obtainined with great difficulty. The
report painstakingly documents the sequence of
events in Bhopal — nothing short of an expose —
which has led to the rapidly deteriorating health status
Radical Journal of Health
of the population. Il once again raises questions which
have been asked before but never been answered :
Why was the ICMR so lackadaisical about imple
menting its early guidelines on detoxification ? Why
was the state government health administration, espe
cially certain sections of the Gandhi Medical College,
so opposed to administering NaTS even when they
could very well discern its subjective efficacy ? Even
after the government apparently agreed to administer
the antidote, why is it lhalonly a miniscule proportion
of the total population needing it has received it ? And
most importantly, was the basis on which NaTS was
prescribed and promoted by activists who took the
experts — Dr Chandra’s early study and ICMR's
double-blind clinical trial — scientifically sound?
ing set up a Bhopal Gas Research Centre to ostensi
bly coordinate the work. For instance, the AIIMS
team investigating thyroid activity in the affected
population found evidence of persisting toxicity.
Surprisingly however, although this loo was an
ICMR study, albeit not among the 24 listed as Bhopal
studies. Not only were the findings disregarded, the
project itself was terminated! Similarly, Dr NP
Mishra, one of the loudest members of the anti
thiosulphate lobby in Bhopal, was forced to recog
nise in his October 1987 report for the ICMR the con
tinuing morbidity of his gas-affected patients who
had been treated symptomatically. Even this failed to
makean impacton thcCouncirsundcrstandingoflhe
situation.
Even more significant however, is the report's
rcvclction that to this day there has been no effort to
coordinate the various research projects being under
taken in Bhopal. For instance, although the ICMR
listed 24 projects in Bhopal, it docs not as yet seem to
have made any attempt to collate the findings in order
to evolve a broad toxicological perspective. This has
meant that there is no cohorcnt understanding at
present of the manner in which MIC has affected the
population. The report points out that the possibility of
systemic persistence of MIC or its metabolites in the
victims and their role in the chronic phase have not
upto now become a focus of attention. And yet there
were enough data to indicate further investigations in
this direction. What is even more puzzling is that three
independent studies did in fact propose to focus atten
tion on this matter: Prof Hccrcsh Chandra's early toxi
cological study; as early as May 1985 the ICMR
postulated the possibility of chronic cyanide toxicity
among the victims — the author of this was none other
than Dr. S. Sriramachari; and in December 1986, the
ICMR update stressed the need to study the "biologi
cal effects and metabolism of the toxic principals".
And yet the minority members have not been able to
obtain any information about these aspects.
Equally difficult to understand is the fact that in
vestigations on animals exposed to MIC conducted
in institutions other than ICMR such as the Defence
Research and Development Establishment in Gwal
ior were probably not even known to the medical re
searchers. As such they failed to influence the direc
tion of research being conducted over all. The minor
ity members have also failed to discover any material
which attempts to integrate the findings of the clini
cal, toxicological, epidemiological and autopsy
findings and analyse them in the perspective of the
results of studies on the chemistry of the decompos
ing products in MIC tank 610.
Part of the reason is of course the shroud of secrecy
which surrounds every investigation in Bhopal. The
minority members themselves had to contend with
this constantly, despite the Supreme Court directive
that all information was to be made available to the
committee. This raises disturbing questions on the
necessity of this secrecy. What was it meant to
achieve: to keep information from Union Carbide or
was it in fact to keep information from being dissemi
nated to the people ?
— P. P
In fact the ICMR appears to have been rather adept
atcompartmcntalising its research— this despite hav
June 1988
29
Dialogue 1
Problems in Documenting EP Drugs Campaign
anant r s
THE two articles on high-dosc EP combination published in
RJIl Vol II. no. 3 do not aim at giving an account of the
movement to ban this hazardous drug-combination. But
there arc certain inadequate or inccuralc statements about
the same. This response is to correct the unintentional
misleading impression created by these statements.
A few activists and journalists belonging to health and
consumer groups had gathered in Pune in January, 1983 to
discuss and chalk out an action-plan on mutually agreed
issues. In this discussion it was decided to take up a
campaign against high-dosc EPcombinalion. The technical,
background material was then prepared by Mira Shiva and
Satyamala of Voluntary Health Association of India. V.S.
Mathur, Professor of Pharmacology at the post-Graduate
Institute of Chandigarh, prepared a ‘dear doctor’ letter. This
was circulated amongst different health, consumer,
women \ groups and signature-campaign was undertaken.
We requested women’s groups to include the demand for
a ban on this combination, in the list of demands on the
International Women’s Day March 8 that year. We also
managed to get articles published in news papers all over
India on March 8 (which was incidentally a Sunday) arguing
for a ban on this combination. This was followed up with
representations to the concerned authorities.
The second source of determined opposition was in the
form of petition in Supreme Court by Vincent Pannikulangara against the continued use of a number of hazardous
drugs including high-dosc EP combination. The Supreme
Court ruling on this petition resulted in the public enquiry.
Thirdly, an article in the Onlooker published from
Madras, claimed that Palaniappan from Madras has reported
a very high incidence of congenital anomolics consequent
to the administration of high-dosc EP combination to preg
nant women. There was a lot of uproar on this issue after this
article. Questions were raised in the Parliament.
As aconscqucnccoflhisdctcrmincdopposition from dif
ferent sectors, the Government requested the Indian Council
of Medical Research to give its opinion about this issue
once again. (Earlier, ICMR had said that there is no need
to ban this product; only a warning be given along with the
product that it should not be used in pregnancy.) We had
argued that this warning, was not going to slop the misuse
of this drug. Since there was no scientific indication
whatsoever for the use of this combination, consumers
would not be deprived of anything if this hazardous combi
nation was banned. This second committee of ICMR also
30
recommended its total ban. It is thus not correct to say that
the use of high-dosc EP combination “has created such havoc
that the victims,i.c.someof the women,could not bear it any
longer. Their protests led to the banning of the drug.”
The relative succcssofthccampaign on this issue in 1983
was one of the important factors responsible for the continu
ation of this networking that had taken shape around this
issue. The All-India Drug Action Network, consisting of
around a dozen health, and consumer groups, was born and
continued to follow-up the demand for a ban on high-dosc
EP combination.
In the public hearings on high dose EP combination,
member-organisations of All-India Drug Action Network
have played a significant role. The method of publishing the
noticcabout the public hearings in an inconspicuous manner
and not informing the concerned action groups was severely
criticised. So also the reported decision of the Drug
Controller to slop the hearings after the Calcutta hearing.
Fraternal organizations outside AIDAN, like FMRAI and
Health Sendee Association of West Bengal also put up a lol
of pressure on this issue. As a result of these efforts from
different groups, the Drugs Controller had to decide to hold
hearings in Calcutta and Bombay and had to send
invitation-notices about these public hearings in Calcutta
and Bombay loall the concerned groups. MiraShiva(VHAI),
Satyamala (MFC), Vishwas Ranc (Arogya Dakshata Mandal), Amit Sen Gupta (Delhi Science Forum) gave a valiant
fight at the Delhi hearing even though the pro-EP forte lobby
was in the majority, had a few prestigious gynaecologists
on their side. All these organisations arc members of
AIDAN. In the Bombay-hcaring also ACASH, ADM, MFC,
LOCOST—(all members of AIDAN) along with other simi
lar groups presented asolid technical case against high dose
E.P. combination, whereas various women’s groups pre
sented a social critique of die continued use of this
combination against the interests of women. Amilav
Guha’s article, unintentionally glosses over the role ol
AIDAN in this movement.
The movement against high dose EP combination thus
does not follow a classic pattern. It was not initiated b/ an\
women’s group, nor did the women’s group consistent!'
follow up this issue, or took a lead in it. A lawyer
(Pannikulangara), ajournalist of Onlooker, a few committed
health-activists from certain health-action groups (some of
which arc incidentally foreign-funded) played at least a>
important a role as women’s groups or the trade union
FMRAI, alongwith many others, did AIDAN remained the
Radical Journal of Health
Dialogue 2
‘Cut System’ Dilemmas
murlidhar
forum which helped to pursue the matter and helped to co
ordinate the lobbying.
The above clarification is not at all meant to be a criticism
of women’s groups but to communicatcas to how things look
shape in reality. Il indicates that somciimcs initiatives arc
taken, events occur in such issues in health in a rather
unexpected manner. What is the significance of this unor
thodox picture? What arc the lessons to be drawn? I hope,
that there would be some discussion in RJ11 on this topic.
Today a friend of mine, a consultant earned Rs. 100/ out of which he gave Rs. 60 to the ever willing hands of
the local GP. This patient had come to him with a
diaganosis of ‘chronic’appendicitis. The G P instructed
my friend to gel a host of investigations from a specific
pathologist and a radiologist who in tum give their
respective cuts to the GP. All his medical leaching was of
no avail as he unnecessarily subjected the patient to a host
of investigations and unnecessarily operated on a patient
who actually had a mild attack of Amoebic typhlitis.
It is said that nearly 80 pcrccntofprivatc health practice
is part of this nexus of commission and cuts between the GP
and the consultant. They go to any lengths to earn their bread
and butler and probably, jam. They may be part of the so
called ‘Arab practice' or the ‘Kidney transplant nexus’.
They admit patients in their ICCU’s with a (mis) diagnosis
of an infarct. They manage seriously ill patients till they
become critical before sending the patient to a general
hospital. They even have nexus with the Medical represen
tatives who give cuts for prescribing a particular drug albeit
spurious or banned like EP forte for example.
The health services of our country like most others
like pharmaceutics is an industry in itself. It is profitoriented. All the slate run health services arc poorly
equipped to deal with the illnesses of 700 million people,
the government is not interested in providigbctlcrfacililics,
because of the poorcost-to-profil ratio. The drug industry
is the second most profitable industry in the world after the
arms industry. Hence there is flooding of spurious, banned
and bannablc drugs in the market.
Where docs a doctor figure in the above maze of profitoriented industries?
On one hand is what we have learnt and understood for the
past 26 years, on the other is the pull exerted by the profitoriented industry. Most of us do not have a capital to rely on,
‘hence, tend to get pulled to the latter side. If we resist, then
there is a theoretical possibility of falling into the abyss
June 1988
between the two philosophies.
We have to choose whether we arc going to practice
rational medicine or whether we arc going to join the rat
race. The laltcrchoicc is irreversible. Ifwcchoosc the former,
we can set an example for others to follow and hope that the
profit oriented economy of drug and health services will
surely meet its hour of crisis when the average patient says
in unison “I cannot stand it any longer”. Can we stand the test
of lime?
The irrational ‘cut’ practice was not so prevalent say 50
years back. At that lime our ciders insisted that honest, and
ethical medical practice is important and unethical practice
is to be shunned. Now, the same elders and colleagues say
that if one wants to just about make both ends meet, he
should practice irrationally. Why has it changed so drasti
cally?
Even at that lime there were two types of health services,
namely 1) private practice and 2) the slate run hospitals
supposedly working selflessly. Over the last 50 years, a lot of
money was poured in to set up large-scale drug industries
or extensive diagnostic centres. The above works only to
increase the invested money. The owners do not think about
the average consumer but only in the amount of profits they
get.
The health budget of the state of Maharashtra is one of
the highest. Il is believed that the effects of the increased
budget would ‘trickle’ to the bottom increasing the health
status of the millions of exploited in the city. Actually it
appears as if that it has had no effect at all. Otherwise nearly
100 infants would not be dying of every 1000 live births or
50,000 people would not die of TB every year or thousands
would not become blind every year due to lack of Vitamin A!
Let’s now look at private practice in this respect. The
private doctor is no longer an independent healer. He is part
of the system whose owners arc interested in the profitability
of their drug enterprise or the diagnostic or therapeutic
equipments. He is controlled by the very system that pro
motes the increase of capital at the hands of few industry
owners. He no longer practices rational medicine. His
idealism remained purely lheorilieal that is taught in the
sheltered class -room of a medical college. He becomes a
commodity that can be bought and sold by money.
Is it possible to fight this manacc?Ifso will we get support
from colleagues or others who arc passing through the same
process in oilier fields?
31
(Continued from page 27)
tolerated, then the health sector will reflect this pattern,
with health for a few and not for all. To bring about a
revolution in health, it becomes necessary to bring about a
revolution in society. The experience of socialist-oriented
societies shows that once they have changed the pattern of
the distribution of resources within the society, they have
been able to change the pattern of health care, making
access more equitable. Apart from socialist countries,
some social democratic nations with a long history of
participation by the masses have also provided adequate
health facilities to their people and the resulting improve
ment in their health status is quite enviable. Thus, one
cannot expect significant improvement in the health
sector in Pakistan without substantial participation of
the masses in the workings of society, and without
substantial changes in the power structure as it exists today.
So, where docs the well-meaning People’s Health
Scheme fit into all this? The People’s Party is a populist
party which means that it cannot and will not change the
basic economic and political power structure as it exists in
the country today. Thus, one cannot expect that it will
drastically change either the health system or substantially
increase the accessibility of health services. Il is true that
under the Bhutto regime, the expenditure on health care
was much greater than it has been since 1977. But, caught
up in a pseudo socialist populist trap, the policies followed
looked good only on paper. The eight medical colleges
built in the country were created to appease the noisy
middle classes. Had the government really been sincere it
would have built rural health centres and basic health units
instead of these great buildings called medical colleges.
(For the cost of one medical college, 251 rural health
centres or 556 basic health units could be built which would
serve 5.56 million people - all of whom live in rural areas!).
Thus, the People’s Health Scheme is a step in the right
direction, and one can assume that some changes on the
margin will indeed be made. However, meaningful radical
change in the health sector, which would truly and
honestly serve the people, will only come about once lhe
existing social, political and, most importantly, economic
relations arc broken.
32
REPRODUCTIVE AND GENETIC
ENGINEERING
[Journal of International Feminist Analy
sis] [(published three times in a year)] RGE
is designed to facilitate the development of
feminist multi-disciplinary and interna
tional analysis on the new reproductive
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their impact on women worldwide. The
policy of the journal is to recognise the use
and abuse of women as central to the
development of reproductive technologies
and genetic engineering and to highlight the
relevance of the application of these tech
nologies to the past, present and emerging
social and political conditions of women.
RGE is edited by International Editorial
Collective and Editorial Advisor}' Board.
Subscription: One year (institution) $ 75
Two year (institution)? 142.5
One year (individual) $ 25
Send International Demand Draft or Money
Order to:
Reproductive and Genetic Engineering Pergamon Journals Limited ,Headington Hill
Hall, Oxford 0x3 OBW England.
Radical Journal of Health
INDEX TO VOLUME 2, 1987-88
Beyond Medical Solutions by Poi levin Guy Book Review...................... ............................................................................ 70
Development of Medical Technology. The Example of Neurology by Desai Bindu T................................................... 3
Explosion of Alternative Information on Drugs by: PP Book Review .............................................................................. 42
Eyesight Problems Among Workers (Update)....................................................................................................................... 38
Fee for Service in Maharashtra Hospitals by ACJ (Update) ............................................................................. •.................. 99
Good Manufacturing Practices: How Serious is the Government by Guha Ainitava............................................. 91
Impact of Patent System in India on Indigenous Drug Firms By Chaudhuri Sud P......................................................... 53
Indian Workplace; ‘Safe’, ‘Clean’ and ‘Healthy’ by PP (Update) ..................................................................................... 37
Issues and Debates: Banning Pre-Natal Sex Determination - I by Sctalvad Tccsta........................................................ 6
Law, Medicine and People by Pilgaonkar Anil (Editorial Perspective).........................................................................
77
Medical Ethics: An Introductory Essay by Singh Gayatri..................................................................................................... '’3
Medical Malpractice and Law by Desai Mihir.......................................................................................................................
Medicine in USSR: Anal}sis Lacks Rigour by Anant R.S. (Dialogue).............................................................................. 44
Norplant: The Five Year Needle : An Investigation of the Bangladesh Trial by UBINIG ......................................... 10 •
Obsession with'Socialism by Oza Rohit (Dialogue)............................................. ;.............................................................
108
On Headaches by Dalton Roque (poem) ..................................................................................................................... (covcr/1)
Pharmaceuticals: Limitations of Left Perspective by Anant R. S. (Editorial Perspective) ........................................... 49
Polio, Politics Publicity and Duplicity : Ethical Aspects of Development of Salk Vaccine by Brandt Allam M.
63
Politics of Contraceptive Technology. Depo provera in New Zealand by Washington Sally G.
14
....................
Politics of MCH by Prakash Padma (Dialogue) ..................................................................................................................... 45
Reinterpreting Homeopathy by Rao Subha C. V. (Dialogue).............................................................................................. 75
Responsibility of Industry, Doctors and Government - High Dose EP Drugs - I by Guha Amitava ........................... 55
Scope and Limits of Maharashtra Legislation: Banning Pre-Natal Sex Determination - II by Jesani Amar....
88
Strengthening the Cuckoo’s NcSl? by Duggal Ravi (Update)............................................................................................... 36
Systems Approach to Problems Solving by RD.(Book Review).......................................................................................... 43
Technology in Medicine by Jesani Amar (Editorial Perspective).......................................................................................... I
The Baby ‘M’ Court Case in the US by Jaquilh Cindy.......................................................................................................... 32
The Hungry Sparrow by Pandey Gorakh (poem) ....................................................................................................... (covcr/2)
The Socio- Political Dimension — High Dose EP Drugs II by Qadeer Imrana............... ................................................ 60
Why Should We Learn to Read by Moitra Satyen (Poem)........................................................................................ (cover/3)
Women’s Health Care in Brazil by Barroso Carmen ..........................................................................................................
We.
39
Ideology and Science. The Case of Medicine by Navarro Vicente..................................................................... 18
Workers’ Health and Labou Militancy by Markowitz Gerald (Book Review)................................................................ 43
AUTHORINDEX
ACJ.......................................... ;...................................... 99
Anant R. S......................................................................... 44
Ananl R. S'. ...................................................................... 49
39
Barroso, Carmen...........................................................
Brandl Allan M................................................................. 63
Chaudhuri Sudip...........................................................
53
Dalton Roque ......................................................... cover 1
Desai Bindu T..................................................................
3
Desai Mihir...................................................................... 79
Duggal Ravi ..................................................................
36
GuhaAmitava...............................................................
91
Guha Amitava............... ................................................
55
Jaquith Cindy ................................................................
32
Jesani Amar.>..................................................................
88
Jesani Amar.................................................................. "...
1
Markowitz Gerald.........................................................
43
Moitra Salycn .........................................................cover 3
Navarro Vincente ........................................................... 18
Oza Rohit ............................................. ........................ 108
Pandcy Gorakh ....................................................... cover 2
Pilgaonkar Anil............. .................................................. 77
Poitevin Guy......................................... .......................... 70
PP.............................. ............. ........................................ 42
PP..................................................................................... 37
Prakash Padma ................................................................45
Qadeer Imrana.......................................... ....................... 60
Rao Subha C. V................................................................ 75
R D................................................................................... 43
Sctalvad Tecsta.............................................................
86
Singh Gayatri 95
UBINIG........................................................................
101
Washington Sally.................. ..... ..... .... ............. ...... ......... u
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