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The World Bank
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FOR OFFICIAL LSE ONLY
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DRAFT
, CONFIDENTIAL
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Report No. 10859-IN
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INDIA: HEALTH SECTOR FINANCING
CO PEN G WITH ADJUSTMENT
OPPORTUNITIES FOR REFORM
June 30, 1992
H Asia Coar.uv Department II (India)
■■ation i’d Human Resources Operations Division
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INDIA: HEALTH SECTOR FINANCING
COPING WITH ADJUSTMENT
OPPORTUNITIES FOR REFORM
Table of Contents
Rage No.
EXECUTIVE SUMMARY AND HIGHLIGHTS
V
ISSUES AND ACTIONS IN PUBLIC HEALTH
PREFACE AND READER’S GUIDE
INDIA’S HEALTH CARE SYSTEM: AN OVERVIEW OF PROGRESS
AND PUBLIC POLICY
A.
'B.
G.
D.
E.
Evolution of Public Policy
Progress in Health
.
Changing Patterns of Disease and Causes of Mortality
Public and Private Spending on Health Care
.-Resource Constraints and Choices in Health Care Provision
1
1
2
5
6
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SPENDING IN THE HEALTH SECTOR: WHAT POTENTIAL TO REDUCE
INEQUITIES?
8
A.
B.
C.
D.
E.
F.
G.
H.
Overall Spending on Health: Public and Private Sources
Government Spending: Definition and Constitution
Constraims . /. . .,
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Historical Overview of Public Spending
. ....
Government Spending on Health in 1991-92
Central Budget Priorities under Adjustment:
Fiscal Year 1991-93
Special Topics
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Conclusions
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Recommendations............................... ?.
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27
37
37
Health Sector Finance Study team visited India from 18 March to 15 April to initiate a
w °^ue between the World Bank and the Government of India on leading issues of direction
P°^cy f°r the hea’th sector in the face of structural adjustment. The team consisted^of :
fcmianos Odeh (team leader), K. Subbarao (human resource economist), Stace Birks
Ijnsultant), Ruth Levine (consultant) and Charles Griffin (consultant).
*
lir._Rayishankar, of the World Bank Resident Mission, New Delhi, provided invaluable
hUation of budget data and analysis of financial trends. Mr. Peter Berman joined the
fusion during the first part of its stay.
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K0JIN HEALTH INDICATORS,
133 AUS
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SFRVICES. AND UTILIZATION
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, 63
Health Policy in India 7-..................... « . .
Health Status of the Indian Population . . .
Variation in Access to Health Services . .
Health Manpower
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Other Aspects of Differential Access . . .
Variation in Utilization of Health Facilities
A.
B.
C.
D.
E.
F.
STRUCTURAL CAUSES OF IMBALANCES
LN THE HEALTH SECTOR
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The Center
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The States
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The Center-State Relationship
A.
B.
C.
69
•71
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THE NATURE AND CAUSES OF INEFFICIENCIES IN
THE PUBLIC HEALTH CARE DELIVERY SYSTEM .
A.
-74
A Critical Interlock: Efficiency, Morale
and Equity
..................... . .
Optimal Combinations of Resources for
Efficiency: Packaging
.The Outcome of Inefficiencies: Inequity
and Inappropriate Referrals > .. . . .
B.
C.
ADJUSTMENT, EFFICIENCY AND
ENHANCED CARE FOR THE POOR
. . 74
75
81
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MEDIUM-TERM POLICY CONSIDERATIONS;
THE REFORM OF FINANCING FOR ENHANCED
OUTCOMES AND EOl
•
A.
B.
88
Medium Term Objectives . ...............
The Environment of Longer-Term
Restructuring for Equity
Basic Policy Aims and Recommendations
Leading Practical Actions
Center-State Budget Recommendations .
C.
D.
E.
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89
90
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92
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^XK STRATEGY IN FUTURE
INDIAN HEALTH SECTOR FUNDING . .
A.
B.
• C.
D.
7. . . .
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Equity and Assistance at a Time of Adjustment*/.
Expanded and*Refined Assistance to
the Spectrum of Ongoing Projects
.
New Initiatives in the Bank Program
A Partnership to Enhance Equity and
Quality of Health Care
94
OF OFHCIALS MET
XES;
Development of the Health Sector in India
The Planning and Budgeting Process for the Health Sector
Third-Party Payment for Health Services
Cost Recovery
Municipal and Local Finance
Related Health Financing Studies .
TISTICAL ANNEXES
Financial Data
State Economic and Human Development Statistics
4 Health Infrastructure by State
Household Use and Expenditure Summary
Medical Personnel Statistics
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405
ISSUES AND ACTIONS IN PUBLIC HEALTH
In this action-onented document, it is appropnate to isolate a senes of priority
jyives and to lay out-a program of actions to meet these prime objectives.
The following section, before the main text, lays out these pome objectives.
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INDIA
HEALTH SECTOR FIN \NCE STUDY
EXECUTIVE SUMMARY AND HIGHLIGHTS
The Purpose of the Report
t.
This first Health Sector Finance Study initiates discussions
between the Government of India (GOI) and the World Bank (WB and the
Bank) on health finance and policy. This dialogue will: (a) clarify issues of
direction and policy in the face of adjustment; and (b) it will influence the
pattern of cooperation between the GOI and the Bank in the health sector for
the next few years. This report will serve as background to the GOI-Bank
dialogue and is a statement of the Health’Finance Mission’s findings.The Research Process
This study assembles information and analysis that-reflect Indian
health sector planners’, administrators’ and practitioners’ understanding of
the challenges that the sector faces. The Bank team worked with India’s
leading operational and policy research institutions in health and family
welfare, under thecoordination of the Ministry of Health and Family Welfare
(MOHFW). The team also reviewed budgets and other documents. Several
states were visited to obtain the views of health sector officials and to gather
additional information about the structure and functioning of health facilities.
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3.
The analysis and policy outcomes were widely discussed and
generally endorsed by senior health sector personnel. The same themes that
emerge from this report were vigorously discussed at a meeting of India’s
most eminent health policy researchers, chaired by the Secretary of Health
and attended by the Bank team. These interactions have given the team
confidence in the acceptability and viability of the analysis and
recommendations contained in the report. In many ways the report is a joint
statement of the considerable achievements of the Indian health system since
independence, and the means of tackling the daunting challenges that it still
faces before the turn of the century.
4.
The report focuses upon the health expenditures of the
Department of Health, though it considers expenditures, within the
Department of Family Welfare, especially where they impact upon primary
health care provision. The report describes and analyzes patterns of
allocation of resources to primary care, hospitals and medical education.
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I Pnmarv care is taken in this report to mean all levels of curative and
| preventive care from the’level of the Community Health Center and below.
- Health care facilities above the Community Health Center level are labeled
generically as hospitals. Jt examines how resource allocation patterns are
related to health indicators and service utilization. Some emphasis is also
given to the role of the private sector, which constitutes the main provider of
health services in the country.
Center State and Efficiency Issues
5,_
The analysis presented in this report provides information on the
implications of the relationship between center and state spending, and on the
ways in .which central-level policies can affect the sector. Although the
Indian constitution gives primary responsibility for health services to the
slates, the center can play a key role in formulating national policy. It has
also played a significant role in the control of major diseases through
’ centrally-sponsored schemes.
6.
The-report describes how health financing is related to'efficient
and equitable provision of health services. It reviews resource allocation
patterns and trends, and finds that public health financing is characterized by
an emphasis on hospitals rather than primary care; urban rather than rural
population; medical officers rather than paramedics (again with an urban
bias); services that have larger private than social returns; and family
planning and child health to the exclusion of wider aspects of female health.
7.
This pattern of resource allocation impedes the government as it
seeks to provide the greatest level of benefit for the broadest community, and
specifically for the poorest populations..
Without determined change in policies, there is a danger that
these patterns of low-return public expenditures will be reinforced rather than
ameliorated. This is particularly so in the context of adjustment.
t
I Adju;<1111 ent. Equity and Directions in Health
9This report is timely. The challenges facing he health system
are thrown into high profile by fiscal constraints the government faces under
adjustment. During this period, health administrators wish to ensure that
budgetary constraints do not reduce the scale, equity, and quality of health
service provision, and they are prepared to take difficult decisions toward
these ends. It is clearly perceived that any redismbutions or cuts in
resources to health must be accompanied and offset by operational
improvements that enhance efficiency and equity.
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The impact of structural adjustment in increasing inter-ministenal
10.
■'ompetition
for shrinking resources will be exacerbated within the health
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sectot by: (a) the epidemiological transition, which will bring pressures IQ
allocate still more resources to adult health and the chronic diseases of the
elderiv, and (b) the emergence of AIDS, which will further stress the system
in both preventive and curative domains.
fl.
’ « Overall, the environment for change is positive. Indian health
planners and policy makers are acutely aware of shortcomings in the services
they provide, and of the responsibility to provide returns to government
expenditure that benefit society as a whole. Therefore, the major concern
under adjustment must be reallocation of health sector expenditures to
achieve greater effectiveness in solving national health problems, especially
for the poor, who suffer disproportionately from poor health and high
mortality. The means available to achieve this goal are: (a) targeting
communicable diseases with public spending; (b) reinvigorating other primary
care activities that produce the greatest benefits to the community and to
lower income groups in order to make them more efficient; and (c)
encouraging effective-private sector .health service delivery. These themes
run through this analysis and its recommendations.’
InGia’s Achievements in Health to 1990 and Their
Extension Into the Future
12.
It is .fashionable to express disappointment over progress in
health, outcomes in India.- Indicators are judged not to have advanced as they
could or should, by international comparison. In fact, the gains have been
considerable since Independence, although unevenly distributed across states
and social groups.
13.
The health infrastructure has grown dramatically; over the past
20 years, the number of hospital beds has increased two and a half times. In
rural areas, the primary care network has grown rapidly, particularly during
the last two plan periods. The government now operates more than 1,900
Community Health Centers, 22,000 Primary Health Centers and 130,000
Sub-Centers providing basic curative care. The lower level facilities serve as
the base ror communicable disease control and family welfare workers. The
incidence of malaria, tuberculosis, cholera and other communicable diseases
that disproportionately affect the poor has been reduced. Smallpox has been
eradicated. Leprosy cases have reduced from 3.5 to 2.2 million. Spending
is increasing to counter the threat of emerging diseases like kala-azar and
AIDS.
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Overall progress is reflected in health indicators. The Infant
M*ortality Rate (IMR), a sensitive indicator of both socioeconomic
development and access to health services, has been reduced from 146 per
1 000 in the 1950s. to 110 in the early 1980s, and to 91 at the begimnng of
he 1990s. Sii.ce 1965, life expectancy for women has increased from 44 to
59 years.
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Expenditure Patterns Behind Gains in Health Status
15.
Not all the improvements are attributable to the public sector
health services, of course. They reflect an amalgam-of public inputs ranging
- from water applies, sewerage, and education to nutrition and integrated
child development schemes. Improvements also, derive from private
expenditures upon health and living conditions, indeed, it is the private
sector that is the prime provider of many types of health care in India today,
even to the rural poor. The extent of private health care provision provides
an opportunity to consider more broadly the optimal role for the public
sector. Evaluation of the public sector’-s comparative advantage in improving
health, the potential for increasing public sector efficiency, and its role in
improving equity of access to basic health services is of great practical
'importance.
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16.
The report documents that the achievements have been made
despite the fact that health and family welfare received slowly declining
shares of total spending* after 1970, with a precipitous decline occurring in
the 1980s. The main result of the combination of a declining share of public
budgets for health and contemporaneous expansion, of infrastructure has been
increasingly inadequate support of recurrent costs. This "double squeeze" on
the health system has limited the center/state capacity to create an efficient
and equitable* system of finance and service delivery.
17.
The remainder of this summary emphasizes the impact of these
problems. The amelioration of these problems underlies the importance of
the government’s reaction to structural adjustment. Depending upon its
nature, the government’s response to adjustment might either exacerbate or
address the problems. GOI/donor actions in the short and medium term need
to face these problems of efficiency and inequity head on. The means to do
more in a sensible direction are clear from the report: (a) expand spending
on health care and the communicable disease program, especially central
spending; (b) redirect public resources to health activities with broad benefits
to the whole nation; (c) improve the efficiency and effectiveness of service
delivery primarily through adequate financing of an appropriate blend of
inputs; and (d) redouble efforts to address inter- and intra-state equity
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problems through the redistribution and targeting of puolK^expendinires
raising the primary health care services to an acceptable minimum standard.
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Key Ivmes: Efficiency, Equity and Disparity of Hgatth Provision
Goals and Practicalites of Health Care
18
A goal of India since Independence has been to improve living
conditions for the poor. In health, this goal has been pursued principally
through: (a) the communicable disease preventions programs;- (b) the
construction over the past two decades of the primary health care system; and
(c) extension of the family welfare program to the village level. In each ot
these areas considerable accomplishments have been documented.
W 19.
In the face of budgetary pressure and the start of the adjustment
■
process, the health sector faces a critical decision point today. The health
S • system must cater to a large population that is quickly approaching the one
fl
billion mark. It must struggle to contain more than half of the known cases
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of major endemic disease in the world. It must opera-re within states with
-fl -marked vanability in economic and social, progress. In dbin-g so, it operates’
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an infrastructure that stretches existing budgets very* thm and results in
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inefficiencies so marked that outreach of services to margins of the health
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system is hampered almost to the point of ineffectiveness. Has the time
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came to re-evaluate and re-deploy available resources to attack inequities that ;
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remain? In other words, has the existing primary health care system become ;
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so inefficient that it needs restructuring completely to reach the'poor?
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Alternatively, will existing approaches continue to yield'significant gains?
Re-Evaluation is Essential
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20.
The report concludes that a re-evaluation is appropriate, indeed
essential. The years of expanding the health system to reach to the village
level, educating personnel to operate the system, establishing a logistics
system to support it, and simultaneously funding both hospitals and
traditional communicable disease programs is a phase that is completed. The
infrastructure is now generally in place, but is undersupported,
underbudgeted and inefficient in operations. A new pu'ise of consolidation
and adequate support of recurrent costs is called for.
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[ Inefficiencies Hamper Improvement of Poorest
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Although the extension of the system has expanded coverage;
rersistent inequtues have emerged that require in some cases redoubled
effons and. in others, innovauve solutions. The two areas of concern are
dlose!v’related: inadequate funding of the system to the point at which, in
cnucal areas, it simply ceases to operate; and, .solving persistent inequities.
22. -'
Of all the inequiues in the system, those of gender are the most
striking. Health services have not been targeted to address the fundamental
disparity in access between the sexes. In India, as in few other countries,
females continue to be at greater risk than men of dying from childhood
through their childbearing years. The sex ratio remains unbalanced, and in
some states appears to be deteriorating. Publicly-supported reproductive and
other health care for women has barely begun to meet the needs, particularly
among the rural poor. Health professionals must take responsibility for
-addressing the health problems of women that put them at such risk- in -India
: during infancy and their reproductive years.-
23.
Persistent disparities in provision, access and impact of public
health services can be seen when comparing poorer states to wealthier states,
rural to urban areas, workers in agriculture and the unorganized sector to
those in the formal sector, and individuals with-few resources to those with
more personal wealth-; The persistence of these inequities is related to the
failure to fund primary health services adequately to provide the personnel
and supplies necessary to deliver health care of an acceptable minimum
standard.
24.
Similarly, communicable disease programs have suffered from
inadequate funding. Most require matching state funds, which the poorer
states are least able to provide. , Funds from the center are withdrawn if state
frequently occurs, to the obvious
matching grants do not come forward. This
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detriment of such programs in the poor states. Yet ___
residents
of poorer rtntoc
states
suffer most from the associated health problems.
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Funding Falls Below a Critical Level
25.
These imbalances illustrate how the goals of primary health care,
despite success in establishing the system, can be impeded by practical
constraint’; of public finance reducing resources below a critical level. Suboptimal blends of inputs such as, drugs, other consumables and staff,
overstretched logistics, lack of in-service training, absence of maintenance,
and stress upon curative rather than preventive efforts prevail. Primary
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services have been squeezed by declining expenditures and ever more costly
hospital care. The result js uneven coverage of services and poor primary
care. Until the system is fully and effectively functioning, it cannot properly
or adequately reach the poor, the disadvantaged and the marginalized. It
therefore cannot, with its low standard of efficacy, ameliorate inequides in
access to health, care and in the poor standard of health care at the margins.
26.
This report addresses the means of refocusing government efforts
within the existing policy framework to provide health services that are
efficient and cost effective, that enhance equity and increase social returns to
public expendirure. Adjustment provides the immediate stimulus.
The fiscal Reality of Adjustment; Manifestation of Priorities in the
1992/93 Budget
Positive Outcomes of Adjustment
■- 27.
-Structural adjustment can facilitate-flexible, imaginative strate-gies
and operational changes that will redirect public spending to ameliorate
disparities and increase efficiency. If the opportunity is grasped positively ;
the health sector could emerge from the period of financial stringency,
stronger, more capabfe, more effective and better targeted.
28.
Alternatively, austerity can elicit a fiscal response in which all
programs are cut arbitrarily across the board or a political.response in which
programs with the narrowest, best organized constituencies are spared from
cuts and those with the broadest and poorest beneficiary base are slashed.
Under either approach the public health service would quickly become
inefficient in delivering health care, and increasingly hampered in its
operations by insufficient and ill-distributed inputs less equitably and
appropriately targeted. Given its weak funding situation pre-adjustment, it
could easily reach a state of paralysis within a short time in many areas of
'Operation.
An Initial Response to Adjustment
29.
The central plan budget has been the first to be affected by
adjustment. The central plan budget is important, although it is less than six
percent of public expenditure on health, because it provides a demonstration
effect and has leverage over state patterns of spending.. For 1992/93, this
budget was shocked by significant cuts. The budget cutting and reallocation
process expose priorities at the center. They are a first test of tlie center’s'"
interest and ability to respond positively to adjustment.
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budgct allotted to health in 1992/93 is Rs 302 crores,
^■arbitrarily the same, in nominal terms;as the previous year. In fact, new
H fun(js for' AIDS of Rs 58 crore for a World Bank assisted project are part of
■ this allocation, so the health allocation was actually cut to Rs 244. This
■ continues a trend since the 1970s of health receiving a declining share of
■ central plan expenditure. Now existing programs in the plan budget have
■ bcen<ut, in one year, by 20 percent, without even accounting .for inflation.
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How did the MOHFW react? The communicable disease control
■ programs are the big losers. The National Malaria Eradication Program,
■ which funds the multi-purpose health workers who participate in many of the
■ vertical disease control programs, was cut 40 percent, from Rs 83 crores to
I 50 crores. Tuberculosis programs were also cut. In contrast, medical
I- education gained. Hospitals and allopathic dispensaries also gained by 13
i percent. It is disquieting that this represents a shift to expenditure that rises
r disproportionately in major urban centers and toward programs with
[ relatively few externalities at the expense of a program with large
- externalities and benefits to the rural poor. Central institutions are
I maintained at the cost of a program which will have negative ripple effects
through all communicable disease programs and throughout the health system
I down to the village level.
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32.
It is important to note that the cut in the malaria program was
not made on efficiency or technical grounds, but is a fiscally-driven response,
k will continue the drift downwards of central expenditures on such
programs.
33.
The current budget shows that the central government has not
used this opportunity to apply leverage, through budgetary allocations, to
respond positively to adjustment. Its choices do not tilt states’ expenditures
towards health, and particularly toward communicable disease control and
primary health care with high positive externalities and strong justification
for public expenditures. If anything, it has done the opposite. In short, the
center has missed an opportunity to raise spending on health and family
welfare during adjustment as part of a social safety net. It has compounded
this loss for the poor by redistributing its smaller budget for health away
from programs that have large public benefits, especially for poorer areas.
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The response of the states to the cuts have yet to be seen but can
be predicted. The malaria program, for example, is operated as a matching
scheme, with the states contributing at least half of the costs. With the cut at
the center, states may be unlikely to increase their matching contribution to
compensate. The poorer states, the very states that need to allocate more to
this program, will be the least able to compensate for cuts at the center.
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There is an urgent need for additional central funds for the health
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MOHFW needs to address such adjustment-related budgetary —
[ sector
i55ucs as a strategic niauei-
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36
The following sections provide recommendations for action.
They arc divided into short-term responses to adjustment and medium-term
structural shifts in the health sector that can become the basis for long-term
cooperation between the GOI and the Bank. * ?
The Short-Tenn Policy Response to Adjustment; Immediate Actions with
limited Scope for Manoeuver
Enhancement of Efficiency through Redirection of Funds
37.
In the short term,.efficiency gains must be sought to facilitate the
flexibility needed to redirect funds. The same discipline must be imposed 7
upon government that is expected of the private sector. The available
resources must flow to the areas of highest returns. This would be facilitated
by enhancing flows to primary health care including communicable disease
controlTdn a selective basis' to minimize inefficiencies, such as ineffective
packaging of inputs. In particular, care must be taken to protect the flows of
drugs and other consumables. Inputs to vertical programs should be more
carefully planned and integrated to secure savings and to give’mutual
mitigation of cuts. The capacity for economic analyses at the MOHFW
should be enhanced.
Restore Cuts to the* Malaria and Tuberculosis Programs
38.
Under adjustment, funding must be protected for programs vyith
the greatest externalities, such as these communicable disease programs. The
malaria program is critical because it is the source of funding for the
multipurpose worker, who is responsible for many communicable disease
control activities at the village level. These cuts will be devastating to the
communicable disease program. An immediate response of the MOHFW
should be to restore, at a minimum, funds for malaria control, to their
1990/91 level in real terms.
*
Increase Spending on Communicable Disease Control
39.
By the same reasoning, additional spending is merited for
communicable disease control. The center’s contribution to aggregate
spending on medical care and public health grew in real terms by only 0.8
percent per annum over the 1980s. Spending on these programs did not keep
up with population growth and, especially, growth of the poor elements oT
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■HPT : <;■•
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, „ growth in GDP, or growth in government spending. Public ,
Lfce population, g .
bnjnt of
shortfall.
W^Jble disease problems m India are far from solved, and they
Co""™'114 h g0Vemment and pnvate out-of-pocket expenditures for
prtC,P Xre to ueat preventable problems. Growing support for these
curauve car
.$ .ustified by
^onc. But furthermore, it is the
programs
-- who benefit disproportionately from spending on communicable disease
poor
• , Z thev are least able to protect themselves from the associated health
SXms Preliminary estimates inaicate, for example, that with an annual
J^nd tu’re ofUSS20 million up to the year 2000, leprosy could be
eradicated or at least brought under complete control. By all criteria, these
programs merit immediate attention.
Increase Selective Spending on Non-Salary Inputs for Primary Care
Health Services
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n is well known that spending on health care, once a person
becomes ill, is very high in India. Spending patterns are also somewhat
perverse. The poorer 40 percent of the population spend more on acute care
when they go to government doctors than do the richer 60 percent. Rural
residents pay more than urban residents. Using government services in some
cases is more expensive than using private services. There is wide
agreement that, since 1986, primary health care services have deteriorated.
This observation-is home out by falling real expenditures for rion-salary
IL
inputs on a per-facility basis. Salaries, however, have been maintained. ‘ ff
Under adjustment, these facilities, which are key to many programs, such as
communicable disease control, immunization, prevention, health education,
and family welfare should be enhanced rather than allowed to deteriorate
(10 ■
further. It is important that the central government place the highest priority
Q.* ifeXyC ’
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on assisting states, especially the poorer states; to increase spending on non., <A /. 0
salary inputs, such as drugs, during this fiscal year. Otherwise efficiency of L
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primary health care will sink so low that, in many of the more poorly served F 5M
areas, the services will collapse altogether.
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Develop a Health Economics Unit in the Department of Health
41.
Decision makers must be fully informed of the effects of their
program and budget decisions in terms of efficiency outcomes and the final
impact on equity. Only clear information about the consequences of cuts can
combat naturally strong tendencies to respond to the strongest constituency
during the adjustment phase. It will require very strong analytical work to
argue for higher budgets and a stronger policy making role for the
Department of Health during the adjustment process and after. At the
present time, the MOHFw does not have any such capacity. Indeed, the
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I present organization is oriented to medicine, public health, and managing
I ^rvice delivery’ systems, not to the economics of expenditure poficy fh the
I sector. This means the MOHFW is in a weak position in arguing for^extra
funds and justifying changed disposition of funds at a time of adjustment.
Action should quickly be taken to develop a Health Economics Unit in the
DOH. One of the first charges upon it will Ik to examine various policies
relevant to selective cost recover.
■s
Begin Policy Development for Cost Recovery in
Hospitals anu Medical Education
42
Higher health budgets are essential, but spending should be
targeted toward programs with greater country-wide health impacts. Without
doubt, the end result will be lower public spending on hospitals and medical
education, two areas w^here the private returns are highland the social returns
relatively low. However, these programs lend themselves, for the very same
reasons, to cost recovery. Cuts in government support to them do not have
to mean cuts in budgets, because they have the ability to charge for their
sen-ices. Sensible policy development requires that preparation (analytical,
regulatory, and legal) begin so that these facilities can start to generate
revenues to cover at least a fraction of their operating costs. The policy for
cost recovery should ensure protection of the poor.
The Medium-Term Perspective for the-Indian Health Sector
43.
It is difficult to translate intense immediate fiscal stress into
longer-term structural adaptation. The 1992/93 budgetary decisions indicate
preoccupation with the present and the near future. The time frame and
political viability of reforms link with the states’ different socioeconomic,
achievements. Action at the center is sensitive because it has leverage and is
needed to direct longterm reform for sustainable health care, aimed
preferentially at the poor.
There is wide agreement over policy aims: (a) target public
money to basic health care provision, including control of communicable
disea^s, that will enhance efficiency of operations and disproportionately
benefit disadvantaged populations; (b) enhance the quality of hospital care;
(c) capture wider resources, through cost recovery, internalizing benefits for
particular institutions; and (d) improve returns to private spending by benign
regulation and selective encouragement of the private sector. Several of
these issues are of immediate concern and have been discussed above. This
section is divided in:o two categories of action, "leading practical actions"
and "center-state budget recommendations".
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I
Practical Act tons
Pr rnarv Health, Including Communicable Disease Programs, the
Make Primary
of the MOHFW Budget
.
.
7he present center and state health budgets combine public
expenditure of widely differing social.benefits. The mix of education,
primary, and hospital care disguises real cuts in specific programs within the
overall budget, and blurs priorities in reallocation to secure efficiencies.
46
Therefore, medical education, research, and hospitals should be
accounted under new, separate directorates’ budgets, similar to the family
welfare budget. This separation would highlight top priority public
expenditure for primary health provision, including: the Community Health
Centers, the Public Health Centers, sub-centers and communicable disease
programs. These expenditures should reinforce each other, with large
benefits that reach beyond the individuals receiving care.
Independent Hospitals: Improved Quality and Resource Enhancement
47.
Lesser priority for public expenditures should be given to
hospitals.- Increased.cost recovery, moving back to at least the levels of the
lW)s is•justified. - Cost’recovery and greater administrative autonomy for
hospitals will allow state financial support to decline.
I
I
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•iK.
Hospitals, might be grouped for quality control under a Council
for Hospitals to administer grants, with few exceptions, no greater than
constant in nominal terms, from center and state. Hospitals would administer
independently these grants and funds raised through cost recovery. The cost
recovery system would have prices based on local conditions, and would
include provisions to protect the poor. Eventually, as cost recovery becomes
established, government subsidies would be targeted specifically to needy
patients.
’
Medical Education: Fees, Quality and Equity of Access
49.
Medical education should pass to a Council for Medical
Education,'linked with higher education as well as health. Fees should be
charged for medical education, since high private rates of return prevail, and
there is no shortage of doctors in India. A suitable scholarship package
could be linked with reservation policy, and incentives to_serve in rural
^eas. Merit scholarships could contribute to maintaining high quality
students.
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tsp Council for Medical Education would also: (a) revamp the
50
nr -umculum of medical education; (b) study manpower nornfs and
content anc^urnc
suitable nursc
paramedical training; (d)
- evaluate
’ Jni
(e) coordinate medical research onehting it
S^ids migwous communicable diseases; and (f) regulate private medical
colleges.
.
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The two departments within the MOHFW must improve -
Is^^XcuX^
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( rntcr-State Budget Recommendations
Die Rank of Primary Health Expenditures in the Social Sectors
should be Enhanced
s;
There has been a trend at center and state levels toward
underpaying of primary’health care, including communicable disease
control arc otheranterventions that provide benefits not only to the individual
bui also y the larger community. This trend should be reversed, after
disaggr“gition of lhe budget, as discussed above.
Policy Ch er Centrally-Sponsored Programs
53.
The potential leverage of centrally-sponsored programs to
implement national policy is being under-exploited. Disbursement of center
expenditures by the center related to primary health should: (a) eliminate
arrears ir the family welfare account with the states; (b) consider
comnbunons by the center for payment of some recurrent costs in
communicable disease control and primary health care, to ensure that the
existing programs operate efficiently; and (c) modify the criteria \ w ic
the center transfen funds to states to better target poverty and specific
disei<s. There is also scope for better targeting of these funds towards
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and more disease prone areas within states. If the states are to
poorer better in this task, their analytical capacity needs imprdvement. too.
Enhance the Center’s Role in Diminishing Inequity:
Targeting
Better Grant
C
-Under the Social Dimensions of Adjustment Program (SDA), the
54.
could
adopt, in the special case of primary health, a poverty basis for •
center
distribution of grants to states, rather than the general population based
formula. This would link primary health expenditures more closely to health
indicators and outcomes.
•5.
Increase the Center’s Role, but with Flexibility and Efficiency
55
- Transfers of project-designated money, or even commodities such
as sprays from center to state should be replaced by transfers of funds, on a
menu driven basis, for areas of primary health care and communicable
disease control. State governments could work from local needs and
priorities.
. The Center’s Regulatory Role
56.
- With such a large share of care being provided by the private
sector, the state’s.regulatory role should be upgraded. The present nature ot
regulation, often counter-productive, should be reevaluated. Quality control
over drugs, and delivery of private care services deserve scrutiny. The poor
need more protection as patients, but encouragement of legitimate private
sector initiatives must be facilitated.
Positive Approaches to Enhancing Primary Health Care
57.
At district, block, and village decision making levels, efforts
should be made to empower health officials by having them participate more
fully in the planning process to integrate health with other sectors. This
change would facilitate targeting and development of priorities based on
- village and block tribal composition, degrees of aridity and type of local
economy. Enhanced supervision and positive.management are integral to
this, to generate new information flows. For example, in the face of such a
large burden of water-borne diseases in India, and recognizing that
development of new water supply systems is housed in other ministries, the
primary health program could have a key role in monitoring and improving
the safety oi drinking water in villages.
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Possible Bank Approaches to Assistance for
primary Health Care and Disease Control
The first priority for World Bank assistance must be to deal with
62.
primary health care, including disease control. There are two possible
aiLpproaches to dealing with disease control programs:
--------------------
.
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(a)
The Comprehensive Integrated Approach would represent a new
initiative administered as one project along the lines of a sector
investment loan of simultaneous, coordinated and combined
support to vertical communicable disease programs and other
primary health care services. This one-project, one-budget
approach could: (i) ensure additionality; (ii) avoid duplication;
(iii) protect investments through maintenance programs;
(iv) benefit from relationships in the delivery system; and
(v) improve blending of resources. Technical support within the
MOHFW is essential, with health economistsand analysts to
establish relative benefits of various spending packages; and
(b)
Another possible approach would focus on discrete problems. In
this case, specific diseases would be treated within a carefully
programmed strategy that would be linked with key sectoral and
institutional aims. Care would then be taken so that resources
would not shift away from these agreed priorities/ Among the
highest priorities, for the "discrete0 approach would be Malaria.
Tuberculosis and Leprosy.
1
63.
General assistance to the Primary Health Care System would be a
separate activity under this disease-specific pattern of assistance. It would
seek, within a first phase of consolidation: quality improvements through
packaging and blending, "rationally and flexibly, the related actions needed to
deliver health care at a village level; monitoring of outcomes with refined
targets effective in enhancing productivity and quality of service provision;
and widening of primary health care services to pursue equity of access.
5
Hospital Assistance: A Catalytic Role for the Bank
64. >
As a second priority, the Bank could work with the MOHFW
and other donors to develop a strategy to assist hospitals in their
transformation to semi-autonomous, self-financing organizations^ with the
following specific goals:
►
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- xxi -
^ist the new over-arching administration that
id supervise independent hospitals, for institution building
w<0 pSs researS into cos. recovery and honns » pro.ee.
and o]
Staffing and training would be important. The
the poor, role would encompass standards in the private sector.
regulatory
(b/
(c)
of Tpedjcal education, through a health manpower
♦k
on in-service training and upgrading,
project, wi
increased-output of nurses and paramedical
Srcos. «overy 'and scholarships would be imponan., as
would medical management; and
t to<n.,al-sneeific sene, of olneommed packages of inso.u..oni^S7would be par. of mis suppon.
fill need to carefully
The Bank and the (jovemmeni ui
be related to activities
review the manner in which the above strategies can
and investments of the center and of the states.
in addition Bank assistance must take a long run perspective.
^6.
In addition,
developments in the Indian Health
The Bank cannot have a fruitfu impa
useful impact
Sector through individual,XdHocu^d rdX'efiorS°StItTs^gly
true, in addition, for cataract blindness and the improvement of y.
services.
*
Enhanced Efficiency.-Quality pLHeahh Qp? and-EquM
67
To continue to improve health provision, the GOI must establish
prionties, target with increasing refinement, secure more: efficient practices
and oJStion^ seek to obtain greater social benefits I
investments in other sectors, and couple
^J°V1 ifft k b t heightened
communicable disease program. This is admittedly, onirc , ,
discipline in the health system, to improve efdirections for health
effort to eradicate poverty. In this, the Go can pursue airecu
care provision that maximize returns to public expend
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"
In precipitating actions to set such trends, adjustment is an
mwrtunitv not to be missed. Certainly, technical opinionun the health
°P\or 5 aware of this. There is some urgency in securing a positive
evolution of policy, before fiscally driven cuts, with little regard for the
efficient functioning of the health system, effect secure damage to the quality
and equity of the services that can be-delivered.
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P°nQr5 35 Partners in Affirmative Change
Bank involvement in the health sector will, in the short term, be
58i need bv the need to alleviate the impact of adjustment. Primary health
mfluenv
nel Over
medium term, the Bank’s concern
C<ljt be to enhance equity and efficiency of sustainable delivery of primary
rijth care, with communicable disease prevention programs emphasized^. A
ondarv aim will be to ensure effective hospital care that does not detract
the primary health care budget and that supports primary health care.
The analysis suggests that Bank and other donors’ assistance
should continue in existing activities and financing reforms to: (a) facilitate
wider control of communicable diseases; (b) provide public sector primary
care and protection targeted for the poor; and (c) ensure quality of hospital
care and medical education, in part through cost recovery in the public sector
..nd regulation of the private sector health services.
Expanded and Refined Assistance to Ongoing Projects
bO.
The Bank currently supports several projects that have close ties
to the health sector, and that serve, even if indirectly, to support the
financing reforms recommended in this report. These include support for
maternal and child health activities, and projects in the fields-.of population,
nutrition, education and AIDS prevention. Such supporting activity should
pay close attention to the issues raised in this report, and in particular, to the
potential of decreasing efficiency that infrastructure projects have suffered
Decause of diminished supporting funds for current expenditures such as
maintenance, drugs and other medical consumables.
N?w Initiatives in the Bank Program
Immediate Actions under the Social Dimensions of Adjustment Program
ol.
The Bank will work with the GOI within the SDA program to
support the actions listed earlier under the recommendations for the short
term policy response to adjustment. Top priorities for the Bank are
restoration of cuts to the communicable disease programs, and increases to
key programs. The Bank considers additional recurrent support to PHC
programs for specific non-salary inputs, such as drugs, medical supplies and
fuel to be essential to support the communicable disease programs.
J
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ISSUES AND ACTIONS IN PUBLIC HEALTH .
ISSUE ~
Bud pel
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Declining Health Budget:
The 1992/3 plan budget at the center is arbitrarily the same
(in nominal terms) as the
previous1 year's (Rs. 302cr.)
contrary to the spirit of
structural adjustment, the share
of health in total central outlays
was reduced from 0.70 in
1991/92 to 0.62 in 1992/93.
The new funds for AIDS
(rs.58cr.) from the Bank are
part of this all< cation. This
means that the health budget
was actually cut to Rs.244 cr.
Accounting for inflation, the
budget was cut by over 30%
from the level of the previous
year. Per capita health
spending will be further
reduced by the population
growth rates.
Declining Budget for Endemic
■ Disease Programs:, In the
1992/93 budget, the Malaria
Program was cut by 43 % in
nominal terms, TB was cut by
16% and Goiter, Encephalitis.
Filana and Guinea Worms
programs were reduced from
8 crores to about one crore.
The cut in Malaria is especially
senous since this program
finances the multi-purpose
health workers who participate
in many vertical disease
programs. TB is expected to
nse as AIDS begin to show its
impact. In contrast to budget
cuts in endemic diseases,
medical education and hospitals
gained. It is disquieting that
this represents a shift to
expenditures that rise
disproportionately in major
urban centers and toward
programs with relatively few
externalities at the expenses of
a program with large
externalities and benefits to the
rural poor.
ACTIONS
’Restore the health budget to its
previous share of total Central
Plan outlays.
Increase allocations to health to
th$ Ifvel of histoncay budget
increase (About 3 % m real
terms). .
Double allocations to endemic
disease control programs within
a strengthened health budget.
Restore budget cuts,to.the
Malaria, TB and other
programs to"the level of (he
previous year.
Develop a plan of action to
strengthen the Communicable
and Endemic Disease Programs
with corresponding allocations
of sufficient resources.
At a minimum, double the
Endemic Disease Program
Budget at the center and
encourage states to do likewise
over a reasonable period "of
time.
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Budgets tor
Health
hnprose Cost Recovery
I»n) ihr Altluent in Medical
hii .ut
»n
ISSUE
ACTIONS
Input Imbalances: Increase- in
the numbers of ppmary health
institutions (CHC. PHC and
SubC) were not matched by
corresponding health/family
welfare budgetary increases.
Expenditure per facility is
rapidly declining. Decreased
allocations per facility
disturbed the fragile balance m
the input packaging of
non-salary res uices.
Examples of vehicles without
drivers or gasoline money,
unavailability of certain
required drugs and lack of
other supplies are very
common among CHC’s, PHC’s
and SubC’s.
Define an effective
package/standard of input for
CHC. PHC and SubC and
quantify the resource
requirement needs ov<«f the
next 3-5 years.
Almost Total Absence of Cost
Recovery: Medical Education
Students pay- 300-400 Rupees a
year, a fee structure
determined over 20 years ago.
The cost of producing a
Medical Education graduate at
government schools averages
between 100-120 thousand
rupees. In the private sector,
medical education costs average
about 150 thousand Rupees.
Fees should be charged for
medical education from
students from affluent families,
since high private rates of
return prevail and there is
currently an oversupply of
doctors. Cost recovery could
be used as a mechanism to
rationalize the present system
and improve equity
considerations. A suitable
scholarship and loan system
could be linked with
reservations policy and
Agree on a time-bound plan for
allocating appropnate budgets
to deliver a meaningful input
package as defined above.
Begin providing an effective
input package/standard under
adjusted budgetary allocations
Prepare guidelines for cost
recovery measures which aim
at recovering around 20# ot
costs within 3 years. -
Announce the Cost Recovery
Policy.
Give Hospitals appropnate
authority to introduce cost
recovery measures, ensunr
that funds collected would
largely remain at the level of
the institution.
Begin cost recovery and freeze
the central operating budget tor
Hospitals at the 1992/93 level.
Primary-level health services include both services provided under the Health budget (ie. in CHCs and
PHCs) and services provided under the Family Welfare program (ie. in SubCs).
£
-3 -
ISSUE
actions
incentives to serve in rural
areas, and would ensure that
medical education remains free
for students from poor
families-. Budgetary savings
could be channeled to produce
needed paramedical personnel.
Cost Recovery
At fluent for Hospitals
T1
CoordinaHon with
Kia! Sectors
Inadequate Cost Recovery
Efforts: Less than one percent
of hospital expenditures is
collected from patients. The
revenue generated is currently
diverted to a central pool and
does not revert back to the
health sector, let alone the
institutions collecting it.
Hospitals have no incentive to
undertake cost recovery as the
cost of doing so is often higher
than the revenues collected.
The Cost Recovery System
should have prices based on
local conditions and should
include provisions to protect
the poor.
Weak Coordination: Health is
very much influenced by
availability of clean water
supply to villages, effective
sewage ^disposal facilities and
an informed citizenry. Health
should be in a position to lobby
for improved coverage and
quality of water, sewage and
educational services that target
the vulnerable groups.
(Effective delivery of health
services is also a function of
adequate provision of other
sector services, e.g. transport
•and security). Currently no
formal coordination mechanism
Prepare guidelines for cost
recovery measures which aim
at-recovering around 20% c: "
costs within 3 years.
.Announce the Cost Recover*
Policy.
Give Hospitals appropriate
authonty to introduce cost
recovery measures, ensuring
that funds collected would
largely remain at the level -or
the institution.
Begin cost recovery and
the central operating budge:
Hospitals at the 1992 93
Establish a Social Sectors
Coordination mechanism at the
J^ational, State and Co mm unit)
levels including the Panchavais.
Review performance and
implement improvement
recommendations.
is in place
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ISSUE
ACTIONS
: pevelop Institutional
in Policy Planning
i [•umorruc Assessment in
and Family Welfare
Weak Planning and Absence of
Economic Assessment: Dunn
the adjustment phase (and
beyond) programs competing
for limited resources must be"
based on clear policy objectives
and a strong
analytical/economic work to
present justifiable arguments
for budgetary support. At
present no unit, department (or
even a single staff) in the '
Ministry of Health and Family
Welfare js responsible for
economic assessment and
planning, or the evaluation of
health impact brought about bybudgetary shifts.
Prepare terms of reference tor
the Health/Family Welfare
Economic Planning Unit
Define institutional
arrangements. staffing,
budgeting and resources needs
of the unit. Define a work
program for the first year
which would include
preparation of an operational
plan for implementing die
"Action Plan for Revamping
the Family Welfare Program In
India" and the beginning ot
similar work on Health
programs.
Obtain formal approval,
sanction the needed posts and
appoint a Director General to
bead the unit.
Establish the unit and initiate
the work program as agreed.
ide Meaningful
•’Hiauon for Effective
: jcn Making
Inadequate Health "Information:
Available health information is
incomplete, of historical nature
and basically ineffective as a
tool for decision making.
Identify key information needs
for effective decision making.
Define a detailed plan of action
to deliver effective health
information, including
institutional arrangements at
center and states, staffing needs
and resource requirements.
if
Initiate the implementation of
Health Information System.
‘ reng then Research iin
Endemic Diseases
u ■ ■ .. E
Inappropriate Research: The
1992/93 research budget was
cut to almost half its level of
previous’ year (from Rs.21.5
to 11.3 crores). Research on
cancer represents the lion share
of total research budget. The
Central Government should
increase its research activities
in public health diseases that
i__ '
Develop a research agenda for
endemic disease and estimate
its resource requirements.
Increase the research budget on
endemic disease (not cancer)
and seek support from external
ounces to augment local
resources.
t .
I
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-5ISSUE
ACTIONS
affect the majont^ot xhe Indian
Population.
Capiur Investment
Ins gnjficaot Mamtepajjcc
Budget: Currently , only two
percent of health institutions’
budget is allocated for
maintenance. This limited
budget is often diverted to
other pressing needs. The
economic life of much of the
health infrastructure is
drastically reduced for lack of
maintenance.
Ensure that maintenance budget
is not diverted to other
expenditure areas (by enfo-cing
current regulations).
*
Double the maintenance budget
and ensure that it is earmarked
for dus purpose.
li
L
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I
Health Delivery
tu Improve
iVcnr-V,
Inadequate attention tc
Paramedical Personnel: The
system is currently producing
too many doctors and too few
nurses. The ratio of doctors to
nurses is 3:1. Doctors are
facing growing unemployment,
while nurses and paramedical
personnel are in short supply.
Weak coordination between the
Department of Health and the
Department of Family Welfare.
The two Departments within
the MOHFW must improve
' coordination of their activities.
Both have stakes in the
successful operation of the
PHC system, but they currently
are competitors for resource
, within that program. In areas
such as maternal and child
health, immunization and
communicable disease control,
greater coordination (if not
complete integration) would
ensure the effectiveness of the
programs.
Prepare a Health Personnel
Requirements Study with
actions required to produce
more nurses and paramedics.
The study should recommend
steps to meet a more balanced
medical education
specializations.
Prepare TOR for integrated
health delivery system.
Implement the study; define the
action plan and its resource
requirements.
Discuss the findings with the
States and agree on a course of
action to implement the agreed
recommendations.
/
-F">
6-
Improve Productivity
ugh Staff Training
ISSI2E
ACTIONS
Low PnQrify to Staff
Development: Other than
pu ect specific training through
externally funded programs,
staff training is completely
neglected. Public sector health
staff i-^ceive no training or
upgrading of health knowledge.
Training is viewed as attending
seminars. The numbers
involved are extremely
insignificant. Resources for
such activities are covered
under travel budget.
"Training" as such is not a
recognized part of the budget.
Prepare guidelines for a Staff
Development Plan (including
Doctors. Nurses. Paramedics.
Hospital Administration. Health
Finance, etc.).
Prepare the Staff Development
Plan including the resources
needed to implement itK
Establish a Training Dept at
MOHFW and approve its
budgetary allocation^
(Encourage States to tollow
suite).
Introduce "Training' as a line
item in the Health Budget with
an initial allocation of no less
than one percent of total
budget. Secure Government
commitment to increase the
training budget to no less than
three percent of total budget
within three years.
. Lnsure Responsiveness of
iedKal Education to Public
Milh Needs
Limited Orientation of Medical
Education: The present system
pays little attention to public
health orientation; it
emphasizes tertiary hospital
type of. specialization.
Additionally, Management and
Health Finance courses are
totally neglected yet doctors are
expected to manage health
institutions (from specialized
hospitals to rural health
centers) without formal
onentation.
Review the Medical Education
Curriculum with a view to
improving content based on
health needs.
Allocate sufficient funds to
implement recommendations.
s
-7-
ISSUE
pr.>ate Sector
Througii
Regulations
Weak Quality Control:
Available drugs are of uneven
and unproven quality. Health
stores dispense drugs
(antibiotics, etc.) without
' referring to prescriptions by
qualified doctors. A major
portion of "Doctors" in the
private sector have no formal
qualifications.
ACTIONS
The central Government should
develop a quality control
program to regulate (benignly)
private sector practices in
dispensing drugs and define
acceptable standards for private
sector doctors. With the court
system being very slow and the
absence of "malpractice"
culture. Government
regulations take on added
significance and urgency.
Refine regulations based on
experience.
■
i
'T
IA
HEALTH SECTOR FINANCING
PREFACE AND READERS’ GUIDE
Impose and Background to the Report
I
The purpose of this Health Sector Finance Study is to initiate
discussions between the Government of India (GOI) and World Bank (WB
and "the Bank") on Health Finance and Policy issues. This dialogue will
serve to determine the main areas of cooperation between the GOI and the
Bank for the next few years.
I
I
I
[
*
2.
- Planners, administrators and practitioners in the Indian health
services are already acutely aware of the main challenges that the sector
faces. Furthermore, there is broad agreement between the Bank team and the
policy makers in central, state and other capacities, about the chief health
planning and finance issues, and about the most rewarding areas of potential
cooperation. This report is therefore a joint statement of the considerable
achievements of the Indian health system since independence, and the
daunting challenges that it still faces.
V
The task facing the health system has been thrown .into high
:eiic'f by the present fiscal constraints under conditions of adjustment.' The
report is timely, in that one of the concerns of the Bank, the health
administrators and policy makers is to ensure that the budgetary constraints
do not reduce the access of the poor to health care services. To avoid *
deleterious impact, any cuts must be accompanied by operational adjustments
that enhance efficiency, and so maintain or enhance outreach of services,
avoiding damaging equity of access to health services.
Fiscal Cuts, Efficiency and Equity
This raises the general question of equity of access of the poor to
£ Indian health services, and the degree to which public expenditure militates
in favor of reductions in inequity by favoring the poor, disadvantaged and
vulnerable groups. Analysis in the report supports the widespread view that,
before the present period of acute adjustment, low levels of operational
efficiency, together with structural fiscal and administrative procedures,
impeded the ability of the public sector to alleviate.inequities. Disparity of
provision ai. access are suggested when making comparisons based on
region, gender, income, social category, level of education, and health status.
■
-
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■
This report addresses the degree to which the government can
uke advantage of current conditions to refocus its strategic and practical
operations, within existing, admirable policy aims. The objective is to
provide health services in a manner that increases equity and enhances
returns to public expenditure. The imriiediate stimulus for this action is the
adjustment process, as characterized in the 1992/93 budget.
6
The present period of adjustment is of great signifidance If GOI
strategies in health are flexible and imaginative in identifying gaps in.health^
status and access to care, and determined in operational changes to redirect
public spending to ameliorate these disparities, then the discipline of
adjustment vuii provide an ideal and facilitating environment. After the most
stringent period of adjustment is over the health sector will be more
efficacious, more carefully targeted to remedying the prevalent causes of
morbidity and mortality, and of more utility to the large majonty ot the
population. Equity of public health care will be enhanced.
7
if, on the other hand, the line of least resistance is taken and
health provision is allowed to suffer essentially fiscally-determined cutbacks,
a less effective outcome will result from adjustment. Under these
circumstances, the public health service will, in a couple of years time, be
even less effective and efficient operationally and even less equitably and
- appropriately targeted. The reductions in efficiency, in health care delivery'
could hamper the functioning of services to the point of paralysis in some
aspects. Under these circumstances, the health service would become a
maior drain upon the public spending of the states and center with little
positive impact upon the health status of the population at large.
The Structure of the Report
8.
. Following the executive summary, Chapter 1 places the health
situation in India within its regional context, highlights the considerable
health achievements, and.provides a brief overview of sources of financing.
Chapter 2 analyzes trends in health spending, focusing on the distribution of
the sector’s resources along programmatic lines. Chapter 3 looks in more
detail at trends and patterns in health indicators, access to health services,
and health care utilization. Chapter 4 discusses characteristics of the health
' system’s organization and financing that influence the sector s ability to
alleviate existing imbalances in distribution of resources. Chapter 5
highlights key efficiency-related issues that affect the allocation and quality of
health services.' Then chapter 6 highlights priority areas for operational and
procedural change with a view to enhancing effectiveness, targeting and,
therefore, equity of health care delivery under the current conditions of
t
■
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-3-_
-
structural adjustment. Chapter 7 presents medium-term policy
considerations, with an emphasis on reforms that will be fiscally and
administratively sustainable. Throughout, the focus is upon efficiency gains
and reorientation of spending priorities. Enhanced equitv and a greater
capacity to ameliorate inequities should result. Jri Chapter 6; the analysis IS
interpreted in terms of its significance upon the.World Bank’s view of
opportunities for donors to assist the Indian health sector.
*
9.
Throughout the report, there is scope for analytical improvement
and stylistic enhancement. Data and the reporting of data, still need to be
refined. It was, of course, not possible to condlict an exhaustive analysis of
Indian health financing during a five-week mission. More detailed sources of
fiscal information are, at present, under publication. More surveys are about
to be launched. All will help refine the picture, but these information
constraints do not detract from the analysis since the condition of the health
sector is clear, the analysis straightforward and the highlights of the
conclusion unequivocal.
Above all, this is an action oriented document, designed to
provide suitable guidelines, based on careful evaluation of available
improvements in health care provision under conditions of structural
adjustment.
R
.
.
• rv>;:
'■^•-5
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I. INDIA’S HEALTH CARE SYSTEM; AN OVERVIEW OF
PROGRESS AND PUBLIC POLICY
* Ij
Any assessment of India’s heakh-sector must begin by
acknowledging the progress already made, the most notable being a .sustained
increase in the life expectancy of the population. Infant mortality rates have
faiten, and health Infrastructure has grown manifold in both rural and urban
India. Compared to the situation at the time of Independence, most Indians
Avuld find that .they have more to eat and are less vulnerable to famine, and
many would find a better chance of avoiding severe illness. Among large
portions of the population, both socioeconomic and health indicators compare
- favorably with countries such as the Philippines and Thailand. Given that
population has nearly trebled over this period, this is no mean achievement.
It is attributable at least in part to the concerted efforts made by the
^Government of India (GOI) to provide the population with benefits under
health and other social sectors.
1.2
At the same time, progress has not been uniform across the
country’s population. India is vast and diverse, geographically,
economically, socially and culturally, and wide differentials exist among
sub-populations. While the health status of much of the population has
improved, certain states and certain groups continue to experience extremely
- high'levels-of morbidity and mortality; these groups have very limited access
to affordable and good quality health services.
?.3
More than many other sectors, health has taken on the respon
sibility to help close the gaps between rich and poor through its allocation of
resources. The extent to which it has succeeded has been influenced by a
range of factors both within and outside of the sector. To date, progress in
reducing the differentials in health indicators between better- and worse-off
populations has been slower than many would hope. In part, this is
attributable to the levels and patterns of resource allocations, and associated
inefficiencies within the health sector.
1.4
This chapter provides a brief review of the achievements in the
health sector, placing the Indian situation into its regional context. It also
provides an overview of the sources of health financing, which are then
discussed in greater detail later in the report.
A. Evolution of Public Policy
1.5
Improvement in health status has been one of the primary goals
of development policy in India. A fundamental tenet of public policy has
been to provide free health services, curative as well as preventive, to the
entire population. In the years following Independence, several committees
p.
r;
*
Pnv“ ot’ S
<=« compnS.ng.Sub<enten (SubCsC Pnntary Health
sySlC (PHCs) and Community (taluk) Health Centers (CHCs). This system
? dr5icuiar emphasis was .placed on the coi
I-
*
__
».C P
• ; medical training and research institutions and teachihg hospitals,
“"nn four
fS major
major cities,
urban Ind,a.
cities, but
but graduaUy
gradually in
in the
the r«t
rest of
of urban
India.
5
4
i
I
!
Under the Indian Constitution, the primary responsibility for the
lublic provision of health care rests with the state governments. The center
nlavs a limited, though important, role. The states differ vastly in their
^10-economic development, disease and morbidity patterns, ability to rase
^sources and invest in health care, and managerial capacity to coordinate
and administer programs. Recognizing both the socio-economic dlf[erences
across the states and the national importance of improving the population
health the central government has assumed an active role. The center
provides financial transfers, institutes and financially supports vertical disease
control programs and family welfare programs. By influencing strategic
choices in the provision of health care, the center has the potential to
complement strongly the states’efforts.
B. Progress in Health
1.7
Considerable progress has indeed been made. Life expectancy
has risen from 32 years at the time of Independence to 57 at the close ot the
1980s. Overall mortality has declined throughout the country, largely as a
result of considerable decline in the infant and child mortahty rates.. These
broad favorable trends reflect the country’s real achievements not merely in
controlling communicable diseases, but more generally in f
pr uction
and availability, in overcoming the severity of famines, and in reducing
malnutrition and hunger.
1.8
Comparison of India with other nations in the region, that started
with a similar resource base several decades ago, however, shows that India
has not fared as well as might have been expected. Many countries ave
done better, starting from a similar base, including China and Indonesia (see
Table 1.1).
a.
‘ e:r—.- t : - -■
I W’
- a-
y- ;
nS2CiaLlD^32£»
1960-90
e U: W
Life
expectancy^
>t birth
Gain
(years)
1960
1990
r<j»»
-..•leo'ng
r>! r I»s
School
Adult
tjteracy
Under-5
mortality
(per 1,000) Gain
1960
1989
Enrol Iment
(prim*-sec) Gain
1970
1987
1970
1985
44.0
59.1
* 34%/
282
145
-49%
34
44
47.1
70.1
49%.
203
43
-79%
n/a
n/a
41.2
61.5
49%
225
100
-56%
46.2
62.8
36%
- 233
116
-50%
39%
35%
‘66
83
26%
-72
33% -
49
84
71%
46
60
30%
55
70
27%
54
’
49
66
s«va < LI on and SubOarao (1992)
in India
Crwperison of Health Indicators for Grcxfjs of States
1991
POPULATION
(■i Ilion)
yrvf v a
i (M t
29
.391
389
844
1988
INCOME PER CAPITA
(current Rs.)
2598
3291
2213
3835
1986-91
FEMALE LEB
(years)
1909
RURAL IMR
(per 1,000)
1989
URBAN IMR
(per 1,000)
71.1
61.9
53.9.
59.1
23
81
11498
15
52
70
58
- '
itates are categorized basis on trfeir Infant Mortality Rar.es.
-----.EB - Life i.Expectancy
at Birth
■MP
infant Mortality Rate
.uwr 8 (IMR < 90 per 1,000)
a Andhra Pradesh, Gujarat, Haryana, Karnataka, Maharashtra, Punjab, Tamil
Nadu and West Bengal
>. ower 6 (-IMP > 90 per 1,000) ■
Assam,/Bihar, Madhya Pradesh, Orissa, Rajasthan and Uttar Pradesh
Soj'ce:
Calculated from Health Information India, 1990 and 1991 Census
1.9
The broad aggregates hide large disparities within India. Nearly
half of the population, living in eight of the 15 major states, has health
indicators that approach those of countries widely believed to be far better off
than India. With a per capita annual income in 1988 of more than
Rs. 3,000, these better off states have an infant mortality rate (IMR) of about
72 per 1,000, and a female life expectancy at birth of nearly 62 years
(Table 1.2). These states have benefitted most from, the country’s social and
economic development, and from the investments made in development of the
public health sector.
s
z'
-4 -
I |Q
The population of Kerala, which stands out dramatically from the
<es[ of India in terms of soci?J development, has health indicators that far
surpass those in other states, and in most other countries of the world. With
a pe^ capita income of just over Rs. 2,500 jn 1988, Kerala has lowered its
IMR in rural areas to 23 per J,000, and in urban areas to 15 per 1,000.
Women live, on average, to 71 years.
Ij]
The situation is starkly worse for much of the rest of thepopulation. In the poorest six states of the country, which also include the
states with the largest populations, per capita yearly income in 1988 was
about Rs. 2,000. In those states, 10 out of every 100 children bom will die
before reaching the age of one year; on average, women live only 58 years.
These states, limited in their own internal resources and ability to raise public
funds, have not benefitted as much as they might have from the efforts of the
GOI in the health sector.
1.12
The outreach, efficiency and equity of India’s public health care
system differ vastly across the states and by rural or urban location, as do
health outcomes. For example, the infant mortality rate in urban India in
1989 wa^ 58 deaths per 1,000 live births, while the corresponding rural rate
was 198.
1-.T3,
Disparities in health.go beyond those associated with region.
The most'stark disparity is that between the sexes; As seen in almost every
health indicator, women are at a pronounced disadvantage. India is among
'.he seven countries in the world which record a lower life expectancy for
women than for men, and the public health care system has been, unable to
target health and nutriuon interventions to overcome the per/asive societal
inequities that discriminate against women. Health indicators and the reach
of.the public health care system, also differ considerably across social*
classes. Among the historically disadvantaged scheduled castes and
scheduled tribes, infant mortality is markedly higher than for others, in both
rural and urban India.
114
In the face of both the progress that has been made in much of
the population, and the disparities that still remain between the advantaged
and the disadvantaged groups, the polity question is: How can the health
system’s organization and financing facilitate the sector’s ability to "close the
gap" by bringing the standards of health care and health outcomes in the poor
states up to an acceptable minimum? How to raise the standard of health
care targeted to the poor and how to increase their access serve as guiding
questions for this report.
- *
p
o
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changing Patterns of Disease and Causes of Mortality
The 1980s saw much attention being given to infant and child
-control programs in India and elsewhere. A major national-level
m S’Integrated Child Development Services) was introduced to
prOghat important diseases-via immunizations, oral rehydration therapy, and
numtion supplementation. These are either fully or partially centrallyf nded. External agencies are active in supporting these programs.
reproductive health also received support, albeit in a limited way,
"rougfHhe maternal health components of the family welfare program.
i.l?
By far the most important programs addressed by central funding
1.16
are the v ertical programs to combat communicable diseases, Most ot these
programs are either fully or partially "centrally-funded. There are interesting
•.rends in the incidence and seventv of these diseases. Tuberculosis is known
to be
tx- rising
d.e mid-1980s in incidence but declining in terms of
rising unuugi.
through the
tatalitv rate (Snnivasan, 1992). Forty years of a national program has only - j fi
xtjAcz
barely abated its severity but not substantially reduced its incidence, largely
preventive care'-which, in the long run, may place a
due to Lunsuccessful
-_
greater burden on curative services. Malaria cases remained stable over the
_
efforts seem inadequate relative to
i980s. increasing in recent
years. Current
<
cases have reduced by-over one-third during the 1980s.
-needs.’ Leprosy
1
•■s
\ 17
Other important communicable diseases are kala-azar,
encephalitis and meningitis. From a public health stand point, urgent action
is needed, but adequate resources are not mustered to control of these
diseases. Considering that the incidence of these diseases is greater in poor
' states such as Bihar and Uttar Pradesh, it is particularly hard to exercise.
spending choices across a variety of competing demands when resources are
shrinking.
1.18
Cardiovascular diseases and cancers are rising as a proportion of
all deaths reflecting the epidemiological transition which is now underway.
Their treatment places exceptional burden on the public hospital system, and
increases the potential of the rich, urban elite to lobby for more budgetary
allocations. The emergence of AIDS will further encroach upon resources in
the future.
1.19
In sum, recent evidence suggests that overall progress made in
controlling the major communicable diseases is impressive. The very gains
in life expectancy, however, have resulted irv increases in mortality iiom
chronic and degenerative diseases of adulthood, and in life style related
diseases (e.g., heart ailments). These trends are likely to persist, and will
most likely be complicated further by the onslaught of AIDS
a-
—------------ j
~
1c
I
6 - -
’
-'
.
.
--ital health hazards. Three trends are clear: (1) the poor and
e tviromnen
from life threatening
‘Jed classes continue to suffer
i.
„
. communicable
-.he depn such as TB; (2) the middle class and the affluent are likely to suffer
diseases
,'■ diseases; and (3) AIDS and environmental1 hazards are likely
- from "life style
These transitions raise ijnportant issues of resource
l0 hit everyone.
across competing demands/ They add urgency and perspecuve to
allocation
JJeTsk of examining how^the government can gain the most from every
spending decision.
D. Public and Private Spending on Health Care
How much does India
spend1 on the social sectors and on health
1.20
has central funding fared in recent years?
care? How 1--------fhjhlic Spending
i oi
India spends close to 6 percent of GDP on the social sectors.
Tlie share of health and family welfare in the total social sectors was about
20 percent in 1990/91.
The central plan expenditure
to 0.05.percent of GDP by 1991/92 (according to revised budget estimates),
in the Budget Estimate it further fails to OJKpercent of GDP (projected).
Clearly plan expenditures on direct public health programs have been
declining, so that in real terms the expenditure in 1991/92 was less than m
1985/86 The centred non-plan spending on direct public health rang a ou
0 03 to 0.04 percent of GDP since 1985-86. The share of water supply and
-sanitation in plan spending was erratic; but ranged between 0.14 to 0.10
percent of GDP; the latest budget estimate for 1992/93 shows a sharp fa
compared to the previous year. By contrast, the share as well as the real_
amount of funding for family welfare has steadily ?r.creased.
>
i-
--
~i
ii
*
* ll*"
-T
The plan .spending by the states on health
family planning
1.23
fell from 0.37 percent of GDP in 1985/86 to 0.33 of GDP in 1989/90. The
non-plan spending by the states on health and family welfare ranged around
0.65 percent of GDP since 1985-86.
1 24
Taken together, the center and states’ plan spending on
health has declined in the recent past. If all resources of the center and the j
.rates, plan and non-plan, are added, it amounts to no more than 1 percem of |
GDP for basic health care. If water, sanitation and family welfare are added,
it would be about 1.6 percent of GDP in 1990/91.
a
■
m*.
‘.I
-7-
I
It is worth stressing that India’s public spending on health is nt '
IcsTihan the developing country average/ In fact, it is slightly more than
mat of both China and Indonesia, countries with significantly much better
health outcomes than India. Clearly, public spending per is no panacea for better health; Ffow money is spent-bv.Indian govemment(s) appears as
important as how much money is spent. This is*especially the case in the
prevailing context of fiscal contraction.
private
• 26
Contrary to popular perceptions; the_popn.are spending more than
R's. 150 per head per annum on health care in India, w'hereas the public
.sourceTamounted to only Rs. 75i/. This by itself demonstrates that the origi
nal intention of planners, viz., to provide free health care to all has not been
realized. Moreover, it also suggests that the poor as well as the nch are m
faci spending considerable amounts on private provision of health care.
Assuming an annual spending Rs. 150 per annum by the bottom deciles,
private spending on health amounts to 3 percent of poverty threshold income
per head.
E. Resource Constraints and Choices in Health Case Provision.
1.2-7
Impressive as India’s gains have been in creating a health system,
and onnging about significant improvement in living conditions, there is
much to be done. The overall modest level oi public resources going to
basic health care, the sluggish response of the system (in terms of health
outcomes) to public spending, and the observed inequitable distribution ot
benefits from public health, clearly suggest the need for improved allocation
orresources to the health sector, and within the-sector itself. Within the
sector, systemic constraints are intertwined with issues of resource allocation
among competing demands: (a) primary health care versus hospitals;
(b) rural versus urban; and (c) vertical disease control programs versus basic
curative services, for example.
1.28
The system is being stretched beyond fiscally sustainable levels
as it seeks to provide free services and medical education with little internal
resource mobilization, alongside expanding primary health services, direct
disease control programs and family welfare activities. Given the resource
constraint following fiscal contraction, the provision of health care can no
longer be divorced from its financing. More than < er, the government is
-It must be noted that informitioci on annual per capita private spending is limited, so all figures presented on
individuals' health expenditures are estimates baaed on incompleu data. Information on (he public sector, on the other
hand, is both reasonably complete and of good quality.
-8.3Ced with difficult choices in the health sector — but also with the opponunito reorient spending pnonti io reflect those which will provide the most
people-, and especially the most disadvantaged populations, with the greatest
... xnenis.
Any discussion of measures to bring about a more efficient and
1 Stable use of resources in health care must be based on a detailed ..
^sessment of the recent trends in plan and non-plan spending in the central
ernment and. across the states. It must also include an assessment of the
Pattern and severity of diseases and morbidity prevailing in the states and
Imong cistinct populations. The following two chapters address these issues.
II: SPE-NDI5G IN THE HEALTH SECTOR: WHAT POTENTIAL TO
REDUCE INEQUITIES?
This chapter reviews health spending in India, including overall
2.1
spending on health, trends in public sector expenditures over time, and the
distribution of public spending across programs. It also addresses some
important issues in expenditure policy.
A. Overall Spending on Health: Public and Private Sources
2.2
Table 2.1 displays mission estimates of total spending on health
unices in India for 1990/91, the most recent year for which estimates of the
components are available. Overall spending, at about 6.0 percentof GDP. is
quite high for a country as poor as India. Other estimates of health spending
in India all for much earlier periods, ranging from 1982/83 to 1986-87, have
ranged, from 2.9 to B.3 percent of GDP. One analyst distills from these
studies, as a "best guess" that about 5.5 percent of GDP was devoted to
health in the mid-eighties, or about US$16 per capita at-the time (Berman
1992).
2.3
Using the mission estimate, annual per capita spending in the
early 1990s was Rs. 330, about US$13.20, which is substantially lower than
in earlier years when the exchange rate was more favorable. Private out-ofpocket spending dominates this estimate, accounting for about 75 percent of
the total. Government spending accounts for the next largest share, with
states accounting for 19 percent and the central government accounting for
about n percent of the total. Local governments and external assistance
accounted for an estimated 1 percent of the total. Third party payment
systerns are in their infancy in India and account ior tne remaining 3 percent.
. r.y
-
• ■■■
■
• '4<-.
J
Estimate of local Spending or ' Ieg h from All Sources, |OOO-Q1. in ^Rupees per Capiu
Per Capita
Estimate'
Share
of
Total
Share
0.1%
of
GDP
PUBLIC SECTOR
Center
6.6
2.1%
Slates
59.2'
18.6%
1.1%
Mumcipaliues
1.5
0.5%
0.0%
1.4
0.5%
0.0%
68.8
21.5%
1.3%
240.0
75.2%
4.5%
ESIS
2.4
0.8%
0.0%
Various Gov’t Schemes
4.3
1.4%
0.1%
Private Employers
3.8
1.2%
0.1%
4.7%
External Assistance
Sub-total Public
PRIVATE
Out-of-Pocket
0.0%
Third Party
Sub-total Private
250.5
78.5%
TOTAL
319.3
100.0% 6.0%
Source:
Misaion estimates
As will.be explained, this high level of private expenditure is not necessarily
a 'desirable feature.
‘
2.4
The 1990 NCAER national survey of household expenditures, on
which the private.spending estimate above is based, found that the poorest 40
percent of rural household spent an average Rs. 157 per illness episode when
receiving care from government doctors and Rs. 131 when purchasing care
from private doctors. The richer 60 percent of the rural population paid less
for government doctors, Rs. 137 and more for private doctors, Rs. 215. The
overall average of spending per illness, no matter which source of care was
used, was Rs. 139 for the rural poor and Rs. 195 for the rural non-poor.
Expenditures per visit were actually lower on average for the urban
population (NCAER, 19Q2). The 42nd round of the NSS survey, completed
in 1987, estimated the average amount paid for treatment when using
government facilities by rural residents was Rs. 115; for private providers, it
was Rs. 85. In cities, spending related to government care cost less, at Rs.
103; private was higher at Rs. 91. Although the absolute size of spending
varies between the two surveys, the spending patterns are similar.
I
•-
-i.
t
■4
4
....
- —" ~~ ---- -
-
..............
*
r
i
1
10* These data have several important implications for policy under
j -
2.5
gjiustmenf and for health sector policy over the linger term:
Private out-of-pocket SDs-ndine is probably too high a share of (he
(Ptal. This may be a surprising conclusion, but in a country
where people suffer from preventable illnesses, it is entirely
possible that higher government spending, carefully targeted to
health problems with high externalities, could markedly reduce
private out-of-pocket spending. High spending on private health
services by the poor is an indication that the government system
is not delivering low-cost or free care effectively. Improved
funding and management of primary health care services should
be reflected in lower out-of-pocket spending by clients of
government services. Attention by government to changing
spending prionties to address these problems during adjustment
would result in a safety net for those whose ability to purchase
care from the pnvate sector becomes constrained temporanly.
(a)
(b)
Finally, even if nothing is done about these two problems, a high
share of private spending is indicative of a relatively high
incidence of economic catastrophe for households because of
health care emergencies. A larger share of spending through
third-party payers would mean that the institutional mechanisms
had been developed to help households:share these risks. Clearly
these institutions do not exist. They merit longer-term attention
by governments.
(c)
Out of-pocket expenditures are a greater burden on the poor.
When the poorer 40 percent of the population pay as much or
more on health care than the other 60"percent, clearly they are
paying out a significantly higher percentage of their incomes on
health care. Those who are least able to pay are bearing the
largest burden. The household surveys cited above indicate that
medical care is second only to dowry as a cause of indebtedness
for rural populations. Under structural adjustment, the incomes
of the rural poor may be affected relatively little (but perhaps for
the large share of landless), but the urban poor are likely to
suffer. It is the urban poor who may be the first to drop out of
making private sector purchases. But the evidence shows that
they will save little or no money by choosing government
services, which carry transaction and other costs. Protecting the
poor under adjustment requires immediate attention io this
I
•s
'- ■ i-
>
. . -
'■
.
,
,
,
’
■
■
■
•
..
■'.’3
'
..
•■'I-
■
-
-
-11 -
Central government spending on health is small. In 1991, before
transfers to the states, the central government controlled about 56'
percent of all government spending and about 17 percent of GDP
(Ravishankar estimates for the mission, 1992). It spent about 0.5
percent of this amount on health (and another 0.7 percent on
family welfare). Playing such a small role in the health sector,
the central government is virtually incapable of affecting the mix
of spending in Table 2.1 for better or worse. However, it has a
potentially important role to play in constructing a^social safety
net for the poor in the health sector, for developing strategies to
reduce the burden of illness on households, and for developing
institutions to share risks. There could be considerable payoffs
in the short and long terms to a more activist, jpolicy-oriented
approach to the health sector by the central -government,
concentrating on the externalities that can spread benefits
broadly.
.
\
The remainder of this chapter concentrates on both the central
2.6
and states’ roles in the health sector as indicated by spending patterns.
B. Government Spending: Definitions and Constitutional
Constraints-
i
India accounts for government spending using two different types
7
of budgets. The plan budget contains spending for new programs associated
with the.current Five-Year Plan. This budget contains both recurrent and
capital spending, including virtually all capital spending. The non-plan
budget finances regular government operations, including programs that have
moved out of the plan budget and into the regular appropriations process.
Typically, the non-plan budget contains no capital-spending, although there
are minor exceptions to this generalization.
2.8
The Central Government, the States and the Union Territories
employ this accounting practice. The practice also has some policy
significance, because the center has almost no independent ability to carry
out programs based on current expenditure in the states. The center typically
uses projects in the plan budget to accomplish this end, in negotiation with
the states. The center funds all or part of such projects, with the states
administering them. These projects are of three types: (a) temporary
projects that are completely funded from the center and are expected to be
absorbed completely by the states in their non-plan b dgets; (b) temporary
projects that require both central and state contributions and arc also intended
" See Appendix 2 for a more detailed discussion of the budgeting process.
'yr -jkja.a y
MS-4-"'
R'- '■
- 12Ksorbed by the states; and (c) projects that fall into one of these two
V * es but have become permanent parts of the plan budget. The prime
v4tcgon
latter ]S the fami]y welfare program, 100 percent funded by
. e*afT1P‘
some vertical disease programs are funded by a combination of
^d center spending, typically 50 percent funded by the center, (in the
sUir ihat
nipee allocated by the center must be matched by the state,
^iFno ceiling on other state contributions but with a fixed limit ombe..
rntral contribution). Others, such as kala azar, are funded completely by
. me center.
•
,Q
in a formal sense, health service delivery is primarily a state
* sponsibility in India. In the constitution, the State List includes public
health', hospitals, dispensaries, and so on. The constitution assigns very few
these tasks exclusively to the center through the Union List, except in the
rase of administration of Union Territones without legislatures. Most of the
enter s functions are shared with states under the Concurrent List, including
■xipulauon control, medical education, vital statistics, and health sector
regulation. The center is also charged with developing broad policies,
technical assistance to states, and implementation of important national health
programs. In practice, many of these distinctions are blurred, and the center
has found ways to carry out programs through negotiation with the states that
do not precisely fit into these categories.
"The national Department of Health focuses most of its health
activities on a number of national hospitals and research institutions, health
services for central civil servants, medical education, and health care in the
centrad v administered territories. Family planning and vertical disease
programs have also received considerable attention from the, center. National
policv development is accomplished through the Central Council of Health,
but relatively few resources are devoted to the tasks of data collection,
analysis, and policy development.
■ 2.10
■
C. Historical Overview of Public Spending
Plan Expenditure, 1951-1993
2.11
Figure 2.1 shows plan total, center and state expenditure over the
period from 1950/51 to 1992/93. The separate family welfare program,
which is, even today, almost exclusively a family planning program with
minor expenditures on maternal and child health (MCH), accounts for a
barely perceptible share of expenditures until the second plan, from 1956/61.
Health and family welfare have consumed a fairly steady 3 to 3.5 percent of
plan budgets over the 40-year period, with family welfare growing at the
expense of health. The result is a persistently declining share of plan
/
f-
TT—-'-. -------------------
*
-13-
o
2%
52 1956-5'? ’961-52 1966-67 1971 72 19 76-77 1981-82 1986-8 7 ’99’ -.
'-'-rzZa.
■I Heann
Y///\ r a mu v Welfare
-^'.32 & 1992/93 estimaieo irorn-Cemrai
Trend in Plan Expenditures for Health and Family
Figure 2.1.
Welfare. 1951-92.
' I. There is a decline for expenditures for health over the entire 40 year.period
health' wi th
t each plan period, which is clear by the steps in the graph.
2 12
By 1991-92, family welfare matched health as a proportion ot
total national plan spending, but that is only because of considerable state
4h>cations for health.
2.13
Considering the budget aFthe center, alone, family welfare is
approximately three times larger than health in the plan budget. In 1990/91.
external assistance supporter 28 percent of expenditure for family welfare,
which is substantially higher than in previous years and may correspond to alower domestic fiscal effort for family planning than is reflected in the
graph.17
i' The source for 1950/51 through 1989/90 is Central Bureau of Health Inullirence, Health Information Indis^
1990. The aource for 1990/91 and eatimates for 1991/92 and 1992/93 ia World Bank eatimatea by V J.
Ravishankar For 1991/92 and 1992/93. suu cor ributiona are aaaumed to remain the same as in the previous year,
•nd the Change, in the rrsnh reflect onis chanre. in the central allocation State e-imate. are not available for these
1*0 years. The rraph took, like .
funciwn op lo 19S0 becuM e.ch yeer up w lh.l po.nl repne-nu .he .nnu.1
• verage for the plan.
I
- 14 -
•r
^jjljublic Sector Spending. 1951ZLSIC
, ,<
Figure 2.2 illustrates- total, center plus state recurrent and capital
’ "ding on health and family welfare.from.combined plan and non-plan
begets over the seven plan periods. Comparison ot Figure 2.1 and
u ure 2.2 shows that family welfare ^accounts for a much smaller proportion
ofVverall spending than of plan spending, which is due to the fact that it is
primarily funded from the center through the plan budget (also see
footnote 3).
corcenf oi Total Soenoinq
■5-1-56 !°.56-6! 1961-66 1966-69 J969-74 1974• 79 1979-80 198O- 85 1985 5 5
Plan Penoa
■■Health
Family Wei t are
Figure 2.2. Trend in Total Central and State Expenditures for Health
and Family Planning, 1951-90.
2.15
The picture of health and family welfare spending that emerges
from Figure 2.2 is of a long-term decline in the proportion of total center and
state spending budgeted to the two p'ograms. Since the Fourth Plan penod,
1969-74, health has accounted for 3.29 percent of total government spending;
family welfare has accounted for 0.51 percent.
of spending
2.16
However, health has fallen steadily as a proportion ot
until, by the Seventh Plan, it accounted for an estimated average of only 2.7
percent of spending, by far its lowest share in India’s history. Family
-
“
■'
-
.
t
■
- 15 -
e has, in contrast, crept higher as a share of total expenditure over the
Jan periods, ending up as 0.60 of total spending in the most recent plan.1
u:h in Public Spending[7 ’
Has the secular decline in health spending as a proportion of both
*lan and total spending translated into lower real spending? The presumption
^u5t be that growth in the economy and government budgets would have
suited in an increase in spending despite the decline in share, and this is the
case From 1975 to 1989, states’ spending on health (medical and public
health) at constant prices rose by 6.2 percent per year, compared to an 8.4
ne'cent increase in overall state spending. State spending on family welfare
rose by 10.2 percent annually. Over the same period, central spending on
health rose by 5.8 percent annually, compared to 8.2 percent for overall
spending. The center’s contribution for family welfare rose by an average ot
iO.O percent annually, apparently reflecting a high priority for family
welfare. Thus the decline in share of public spending on health occurred as
real spending on health increased (rising, however, at a slower rate than
overall spending). The slower rate of increase at the center resulted in a
shift in spending toward the states.
2.18
There are two distinct periods that merit discussion. Most ot the
growth in both state and center spending on health occurred in the 1970s.
During the second half of the 1970s, state spending on health rose by 9.8
percent; for the center, the rate was 13.9 percent. For the 1980s, the annual
increase in state’spending on health was about 4 percept; in center spending,
only 0.8 percent. The opposite trend is apparent in family welfare spending,
wjth faster growth rates in the 1980s. State spending on family welfare rose
by an average of 7.2 percent and center spending, by 4.7 percent from 1975
to 1981. Both took off in the 1980s, with state spending rising by 12 percent
per annum and center spending rising by almost 14 percent.
1' The numbere underlying Figure 2.2 were calculated from Duggal, 1992. Table 11. Duggal doei not
diaaggregaie health from family welfare nor doei he include totala for the Seventh Plan. Here are health and farruly
welfare diaaggregated by aaaunung that all family welfare apending was contained in the plan budget and subtracting
this amount from Duggal1 a figures to get total health spending. This technique may underrate family welfare
spending by 3 to 5 percent, but the total of health and family welfare is correct. As for estimating Seventh Plan
spending, non-plan spending averaged about 40 percent of total spending since 1951. Plan spending for the Seventh
Plan is known and can be assumed to be about 40 percent of total spending, which gives an estimate of total
spending for that period. Actual spending on health and family welfare is available for all but the les: year of the.
Seventh Plan. The final year was estimated by adding the average percentage increase to me previous year For the
Seventh Plan, annual anendinr crwnes from tables produced by Dr. V. B. Tulasidhar for this mission.
i1 Thii section is based on V. B. Tulasidhar, “Slate Financing of Health Care in India: Some Recent Trends.’
Nsuonal Institute of Public Finance and Policy, New Delhi. March 1992.
.... "
■■
-16■
R .•
*■
Shifting attention to per capita spending, the net result of
in population growth is that real per capita spending on health
foctonng
;• r over the fifteen-year period by 4.38 percent for states.
annually
for the center, and 4.25 overall. For family welfare, the J 48 percent
were 7.8 percent by states, 7.6 percent by the center, and 7.8
incrc^;
percent overall-
2.19
constant 1988/89 prices, average per capita expenditure on
.
2.20
■ j states was Rs. 37.38 over the period 1986/89, about 50 percent
health by
,f._i In 1974/78. Spending on family welfare was Rs- 8.29 per capita.
higher than i100 percent higher than the 1974/78 level. Central spending per capita
about
available for the same period.
is n°(
, ?]
The share of national GDP devoted to health through central and
state governments was 0.97 over the period 1986/90. An additional 0.25
nercent was spent on family welfare.
Conclusions
Highlights include the following characteristics of public
spending on health and family welfare:
(-a)
Constant overall share Qf plan spending. Health and family
welfare together have accounted for 3 to 4 percent of plan
spending1 for four decades.
(b)
Declining share of health in plan spending. Increases in family
welfare spending within this ceiling of 3 to 4 percent for both
programs has resulted in a decline in health spending from over 3
percent of plan expenditures in the First Plan to less than 2
percent in the Seventh Plan.
♦
if
s
(0
A fairly constant share of overall government spending. Heal th
and family welfare have accounted for 3-4 percent of overall
government spending.
(d)
A drop in the share of even?// spending since 1985, Health and
family welfare experienced a clear decline in share of overall
spending during the Seventh Plan, attributable almost completely
to cuts in health spending.
(e)
Rising real per capita spending. Despite these declines in share,
real per capita spending on both health and family welfare has
risen since 1975.
J
.
'
-
r
■
-V
.•
-5-
’
.
x ‘*5
I'
Is
- 17 -
(0
Smaller increases in health spending in the 1980s. Although
increases in real family welfare spending have accelerated during
the 1980s, increases in health spending have slowed markedly.
Increases by the center have not .even kept up with population
growth. The center has not maintained the leverage over health
spending that it had in the^past.
p Government Spending on Health in 1991-92
->j
This section discusses the allocation of recurrent spending by the
center (plan and non-plan) to all expenditure categories for the most recent
vear for which.data are available, 1991/92? The first section includes all
spending, but subsequent sections focus on recurrent health expenditure only.
Table 2 J■ Total Amount and Distribution of Current Central and State BudgeU, 1991/92, jn Crores
Central 1991-92
State 1991-92
Amoun Percent Amount Percent Amount Percent
t
56.9
Hospitals
Shares
All-lndia
1991-92
Central
Stale
3.6
1792.1
42.4-
1849.0
31.7
3 1
96.9
794.7
18.8
794.7
13.6
0.0
100.0
76.3
1.3
100.0
0.0
PHCs & Dispensaries
0.0
0.0
Central Goveniment
76.3
4.8
Employees State
Lnsunnce’Sysum
0.0
0.0
341.8
8.1
341.8
5.9
0.0
100.0
Education <&. Research
212.0
13.3
296.1
7.0
508.1
8.7
41.7
58.3
Administration
9.6
0.6
76.9
. .*1.8
86.5
* 1.5
11.1
88.9
Public Health
197.9
12.4
678.5
16.0
876.4
15.0
22.6
77.4
0.4
57.0
1.3
64.0
1.1
10.9
89.1
373.7
6.4
49.7
50.3
Health Scheme
Other
Capital (Health)
185.7
-11.6
188.0
Family Planning
736.4
46.1
2.5
0.1
<738.8
12.7
99.7
0.3
MCH/EP!
114.6
7.2
0.4
0.0
114.9
?0
99.7
0.3
Total
1596.3
100.0
4227.9
100.0
5824.3
100.0
27.4
72.6
Source;
Mission estimates based on MOHFW Performance Budget 1991-92. additional
tables on stales budgets by Dr. V.B. Tulasidhar. tables by Ravishankar produced
for the mission, and Tulasidhar (1992).
Note:
Family Planning include* both recurrent and capital spending.
i
_ .rs
MSP"4-
I^V
’ I
- 18 -
Table 2.2 displays mission estimates for Department of Health
at both- the central and sate level-for fiscal year 1991-92 J' The
budgets
shows total spending by the center and the states. The figure of
bottom lme
is about 0.96 percent of estimated GDP and Rs. 69-.0 per
RS 5 82R is nof possible to calculate the, percentages of state budgets devoted
^h^lth and family welfare in 1991 92, but they averaged about 6.8 percent
state revenue expenditure over the period 1986/894Tulasidhar 19921; there
no reason to expect that it would have changed much:
* - 24
*
X
>
->5
in 1991-92, the center contributed 1.5 percent of budgeted
spending to health and family welfare.. The all-India total comprises 27
percent by the center and 73 percent by the states.
-2.26
->0
Two items will be netted out of the budgets when discussing the
distribution of spending below. First to be excluded will be capital spending
for health, which accounted for 6.4 percent of overall spending. It was
shared about equally between the center and the states. Family welfare is
also eliminated, which includes family planning and MCH/EPI. It accounted
for about 15 percent of all-India spending and 53 percent of center spending.
Dropping these two programs from the discussion, eliminates an •
extraordinary 65 percent of the center budget, but only 4.5 percent of state
budgets. Capital spending for health and family welfare spending together
amount to 21 percent of all-India spending.
. 2.27
The remaining amount, which is recurrent health spending, was
0.76 of GDP in 1991/2 and Rs. 55 per capita. It was financed 12 percent
from the center and 88 percent from the states.
-2.28
This procedure identifies one of the major themes of this repon:
that the center pays relatively little attention to health. It has too little
leverage over health spending or health priorities in the country. The amount
the central government spends on recurrent costs for the DOH was only 0.5
percent of total center spending in 1991/92. This is an underlying reason for
the lack of support for health facilities. Furthermore, this low spending
translates into little leverage over all-India health spending, as the center
accounts for only 12 percent of recurrent spending. When the distribution of
spending is discussed below, it will become clear that the 12 percent figure
!*
- The data have apparently not been coUecced in thia format before. Two caveats are in order. Pint, these are only
budgeted amounts, not revised or actual figures. Second, atatt budget figures was available for 13 of the largest 15 sisles, -sd en
was made to scale their pending up to the whole country. This adjuMment affects the Ur-al
•mount cMim^d foe the Xatcs end tberefotc the atMre between center end MM, but dm the distribution acro» program*
Grants to atates under the plan budget have been allocated to Public Health and Education and Research in the center
budget, and they have been netted out of state spending.
/
I
a '-n
jRaf
■
w-:
^
-■L
- 19 -
.
F '
0Verstates the amount of leverage. Yet in many ways the states still
p STto the center for a lead.
of Recurrent Health Expenditure bv Frogram - Centra]
I
i
'
|r
L
!
B •
“trpigure 2.3 shows the distribution of central government
2-29 nt spending for the 35 percent of the MoHFW’s budget going to
health spending for 1990/91. Little distortion is introduced by using
^^nele recent year because spending patterns have changed only
””’ “ ntaJly over the past five years. The largest program at the center is ■
'^.cal education and research. It absorbs 38 percent of current spending. >
P Mie health ranks second; this mainly involves grants to the states, which
nvolve 70 percent of spending. The remaining 30 percent remains at the
center to suppon central institutions with a role in the control of diseases,
•■ich as national institutes for various communicable diseases, a preventionfood-adulteration unit, public health laboratories, and so on.
- 30
The third most important program is the 17 percent allocated to
the Central Government Health Services (CGHS), to provide medical services
to central government employees.-' Central hospitals receive 10 percent of
the budget. From analysis of the budget, them, the DOH has four basic
functions: (a) educating physicians;-(b) operating large national hospitals andrescarch centers; (c) providing primary medical care to central government .
employees: and (d) supporting public health activities in the states.
’I
.
2.31 f
Only about one fourth of the central DOH budget creates a
significant interaction with the states, that portion, provided to states for
public health spending. In other words, that portion of central spending on
health that carries with it some leverage over state and local priorities is
limited to 4 percent, not the full 12 percent.
2.32
Of course, this sutement disregards non-budgetary way<> that the
center can influence the states, which may be important in subtle aspects of
health policy, but the center is indeed quite constrained in terms of budget to
influence spending priorities at the state level. Similarly, it is extremely
limited in its ability to counter interstate-inequalities or to address other
important equity problems.
■I
-i
I
1' In 1990/91,this Khemeco* R>. 822 per cardholder and R>. 183 per beneficiary, h rona a total of314 clinic
type uniu. spending about Rs. 2.232.000 per unit in 1990/91. Some reimbursed expense, for costly private sector
surgeries are included in this figure.
I L
«-
-
*.
.
;
.
.’
.
.v' .-i r
.
ite
wyf-.W'.-. •..
5V '>
: - .
-
, .■ ; >
i < >
• -
.
'<>
- -\ -■■■^■:^
■w
- 20-
iir
K*fc.
- y •;eseafcr
38%
Hosoiiais
Ot her
«cy
Aarnmisuai on
1c
3:^
Figure
Figure 2.3.
2.3. Distribution of Cunent Central Spending for Health,
Budget Estimates 1991-92.
___________________
13
The health budget at the center allocates insignificant resources to
ihc primary health care system which is supported, however, through the
ijmily welfare budget, which has a heavy emphasis upon family planning
services. Indeed, nor do the states spend heavily in the HC system. ANMs,
PHC and subcenter staff are all paid for by Family Welfare. The states build
the facilities, but subsequently earmark no funds for maintenance. The PHCs
(like hospitals) are therefore very exposed to lack of maintenance within
these constraints. The center has very little room to maneuver in terms of
national health policies.
Distribution of Recurrent Health Expenditure bv iuto^JT m — States
2.34
Figure 2.4 shows the distribution of current state health spending
m Table 2.2 under the major heads. The Departments of Health at the State
level are obviously much more concerned with service delivery titan the^
central DOH. Hospitals consume the largest share of spending (44 percent)
and primary care adds another 20 percent. Adding the amount devoted to
public health (17 percent) exhausts just over 80 percent of spending. The
states are required to contribute 12.5 percent of the Employees State
Insurance System’s budget, which consumes about 8 percent of state buugets.
This insurance system provides health services to formal sector employees.
The small remaining shares of state spending go to education and research.
4
■
.-•i
f
A-.
..-'rf-
'.
■
-osD-.a-t
4496
Other
!%-
p n s ar • e s
E
3 •': n
Figure 2.4. Distribution of Current State Spending for Health, Budgets
for 1991-92
Hie All-India Picture
2.35
Finally, Figure 2.5 summarizes the total amount of spending by
the major programs as well as the share of the center and the state in them.
By the standards of developing countries, the overall distribution of «
expenditures is laudatory. Hospitals are by far the most important program,
consuming 40 percent of all-India recurrent spending. This might seem
excessive but, in fact, this figure is often well over 60 percent in a country at
India’s level of per capita income.
2.36
Public health spending runs a distant second, at about 19 percent
of expenditures. In many other low-income countries, this figure is well
below 10 percent. PHGs and Dispensaries account for 17 percent of
spending, also a relatively high figure for low-income countries. The
problem is less the distribution of spending by major head than the
inefficiencies that result from the low level of current expenditures relative to
the massive infrastructure that exist.
|
- .
__...________
t s
2j5.,c -ea-in
F
* Qisoensaries
Edu <3uon & Oesearcn
' 5ufance
n e'
•220
-jcees
■■ Cen!er
-• cJ n
''
Ju
? 3'e
Y//A S’2ie
Figure 2.5. Amount of All-India Current Health Spending and Share
of*Center and States, 1991-92 Budget Estimates.
2 ^7
it is from this perspective that the level of spending about Rs._ 54
per capita, less than 1 percent of GDP-and less than US$2 per capita at.
current exchange rates is low. And it is the unsatisfactory nature, to the
consumers, that explains why this low public spending takes place in an
environment of high private spending. The question must, as a result, be
posed, could increased public spending targeted to weaker groups in the
" result
—in lower
society and to interventions with high externalities actually
private spending, particularly by those low income groups and for
preventable health problems?
Leverage in Communicable Disease Programs
2.38
Public health and medical education are the only two activities in
which the central government plays an important role, contributing almost
half of spending on medical education but less than 25 percent of public
health spending. The latter is interesting and most important because the
central government’s spending is channeled through either 100 percent
centrally financed schemes or 50/50 matching grant schemes. Here central
leverage is at its most acute, and potentially the center couiu make a major
contribution to health expenditures with demonstrable externalities. In fact,
since central expenditure amounts to less than 25 percent of public health
spending, patently expenditures are insufficient.
I
wi
*3
||bF' _ Eg
—
-£
*
--’Af
- 23 If central expenditures on these programs were adequate, one
uid expect to see the center account for well over 50 percent of all-India
*Cndin£ which is clearly not the case. States obviously "top up" central
dine However it is the wealthy states which "top up" the public health,
budget "overspending" relative to the norms suggested by thercentral
expenditures are these shared schemes/ The ability of poorer states to
ufovide adequate public health services may depend on their own inadequate
ux capacity. One or two states often fail to contribute even the matching
funds, and so lose central expenditures, far from topping up public health
expenditures. These are poorer states which are most in need of spending.
E. Central Budget Priorities under Adjustment: Fiscal Year 1992/93
2 40
This section considers decisions on central plan allocations for
the !Q92-93 budget. These decisions bring into stark relief the center’s
miual budgetary priorities and its beginning response to structural
adjustment. We have seen above the role played by the central government
m the health sector, being limited, the plan oudget is its primary policy
statement for the states, because within it is contained all of the center-state
transfers for special and continuing projects. At the center, the plan budget
accounts for 53 percent of planned outlays in 1992/93 and the non-plan 47
percent.
2.4!
-In budget negotiations for 1992/93, the DOH originally prepared
a request for Rs. 700 crore, over twice the previous year’s budget, in the
expectation that there would be some restructuring in favor of health. In the
lace of perceived-central budget difficulties, Health cut its request to the
Planning Commission to Rs. 502 crore. On submission to Finance, an
arbitrary reduction to 90 percent of the previous 1991/92 budget level was suggested. Negotiations within the Planning Commission restored the Health
budget to the same level as the previous year: Rs. 302 crore. In fact, new
funds for AIDS of Rs 58 crore from the Bank are part of this allocation, so
the MoHFW was actually cut to Rs. 244. Effectively, Health’s plan budget
for continuing projects has been cut, in one year, by 20 percent without
accounting for inflation.
2-42
This budget signals: (a) a central government decision not to
target additional funds for health to help construct a social safety net as the
economy is liberalized; and (b) a signal to the states that they are on their '
own, at least as far as health is concerned, to solve adjustment-related
problems. This budget cutting process exposes priorities at the center and i:IS
the first test of the center’s interest and ability to respond positively to
adjustment.
:-..O 'MW
- 24 -
r
s;3
1
' .
■
a- the MoHFW react to the DOH budget cuts?
:.43
Ht°he biggest loser was the mafaria program, which was cut 43
Surprisingly ' oiter encephalitis, filaria, and guinea worm programs were
.xnxni. TB.. Table
goner2.3 and Table 2.4). Medical education and hospitalsuferc
also cut
receiving budget increases. The National Malaria Eradicauon
2L*,nnCfi nds multi purpose health workers who participate in many of the
Control programs, so such a large aOrffiat program will be
XuS STystem^all the way to the village level. To character^
the mimsffv’s response, programs providing benefits to narrow groups of
A based beneficiaries were preserved at the cost of programs with broad
enemXs that strongly benefit rural areas and the poor The ministry
responded to immediate problems and potentially vocal clients rather than
taking a strategic, social welfare approach to the budget cuts.
44
The response of the states to these cuts have yet to be seen but van be predicted. The malaria program, for example, which is operated as a
■matching scheme, will impose higher net costs on the states. Richer states
may be able and willing to compensate. Poorer states, the very ones that
should allocate more to this program, will be the least able to compensate for
cuts at the center. The center is bound by fixed allocation formulas so that it
cannot quickly reallocate spending to soften the blow to the poorer states.
Ultimately, those who will suffer from this adjustment episode are the
poorest, weakest elements of-society,
’
2.45
Table 2.4 (a) reviews a wider selection of centrally-sponsored
schemes, and shows the sharp cuts in rural drinking water (of 30 percent)
and Rural Sanitation (of 47 percent). The rationale for programs that
received ~cuts and for those thabdid riot is undlear.
2.46
it would appear that the same central expenditure targets could
have been met with less severe cuts in particular programs, had the GOI
iooked at the possibilities of more flexible fund sharing in family welfare.
*
2.47
Adjustment creates a paradox for the center. It presents an
opportunity for strategic changes of direction in budgeting and planning that
o^n result in more effective and equitable health programs. Yet this
en v iron ment of change may not necessarily evoke a strategic response.
Rather, the bureaucracy may respond by making across-the-board cuts or by
responding to its most powerful clients and their lobbies. A mixture of these
’wo responses occurred in the recent experience described above. Using the
adjustment process to protect the weakest elements of society and to achieve
the health sector’s stated policy objectives in which medical education and
hospitals receive low priority requires strategic thinking within the DuH and
A.
'
- ’
:.^.
w-'4
ssjfcfea, '■ .- MSte- . -.=»h •1''■"
'-2 ■
iBw
S’R^C*.
■-- ■•
••••'.• -'.W■■’•
■
.
HP
- 25 ■■DepartmenT of Health Plan Expenditure,
1991/2 ana
1991/92
Plaq
Budget
1992/93
Plan
Budget
Malaria
$3.0
50.0
Leprosy
24‘.0
24.0
TB
16.0
13.5
BIi ndness
12.8
13.5
Kalo-Azar
5.0
15.0
Goiter
4.5
0.5
Encephalitis (a)
21.0
0.0
Pi I a ria
2.5
0.0
Guinea Worm
0.6
0.0
Subtotal
149.4
116.5
II. AIDS
4.0
70.0
All India Inst. Med. Science
12.7
14.4
Post Grad. Med. Education Inst.
10.0
13.3 -
Regional Inst, of Medical Educ.
1.5
0.0
Other Med. Education Institutes
4.5
5.2
28.6
32.9
Indian Council of Medical Research
2S_.O
20.0
Cancer Research
21.5
11.3
4.9
3.5
Subtotal
51.4
24.8
Hospitals, Dispensries
V.
(Allopathic)
9.6
10.8
14.3
10.9
VH. Drug Standard Control
2.5
1.3
VI11.Prevent ion of Food Adulteration
0.4
0.5
Table 2.3
India:
J. Major Diaaase Program
III. Medical Education
Subtotal
Medical Research
IV.
Other
r
Indian System of Medical and
VI.
IX.
Training of Nurses
1.1
1.3
X.
Other Health Institutes
3.1
2.5
XI.
Other and Administration
37.5
20.6
301.9
302.0
Total
Note:
(a) 1990/91 budget included 4 crores of assistance
s
■
T’T'~
........................... ....
/ -"Tl' 5.4^
- 26 Table 2.6
India:
Dec Ii nes n Department of Health Plpn £xpe- ^iturex_
1991,-2 arc 1993. Plan and Mon-Plan
Percentage
Decline
i. om
Previous
Year
Percent
of
Declines
‘ -32.9
-38.9
42.6
0.0
0.0
0.0
-2.5
-15.6
3.2
-4.0
-88.9
5.2
-1.0
-100.0
1 .3
Filaria
-2.5
-100.0
3.2
Guinea Worm
-0.6
-100.0
0.8
-1.5
-100.0
0.8
Indian Council of Medical Research
-4.3
-10.5
5.5
Cancer Research
-10.1
-44.3
13.1
Other
-1.2
-11 .'9
1.-5
-2.8
-10.6
3.7
Drug Standard Control
-1.2
-48.0
1.6
Other and Acininistration
-12.7
-10.5
16.5
Total
I.
.'Major Disease Programs
Malaria
Leprosy
IB
Goiter
Enceprial i tis
11.
Medical Education
Regional Insit. of Medical Education
! 11 . Medical Research
-
: v. Indian System of Medical and Homeopathic
Col leges
VI.
effective presentation of a strong program to the Planning Commission and
the Ministry of Finance. It also requires that the DOH reverse the long term
secular decline in the share of central spending allocated to it. Matching
grant programs need protection. Apart fronr protecting matching grant
schemes, adjustment also creates pressures for the introduction of flexibility:
' it is time to review the rigid share of center and state within each program
across all states. Consideration should be given to the center making ap a
higher share of matching grant programs in poorer states. But most
importantly, the DOH ideals cannot be realized when it accounts for such 'a
small share of public sector spending on health. The need is to attract
additional central funds to the health sector, with a decision in the MoHFW
to address adjustment-related budgetary issues in a strategic manner. The
need for both is urgent, but in the longer run, the MoHFW would benefit
greatly from a well institutionalized and much stronger internal capability in
health economics and health finance policy development.
... .
■
■
i
••
-
ft
..... .. . _———- —--- ------- -
r -: • ■ i-.i;
-27f Spec'3* Topics
-
*
^^^olLConstrained Budgets
41
---.48
’4g
Distortions in Inputs io tfe Health Delivery System, a large
share of spending by states on health services is allocated to salary support.
The tendency for salaries to dwarf other inputs ialheJ;bor-intensive health
sector is observed in public systems throughout the world, and this is'
‘ certainly the case in India. Also universal is the difficulty of maintaining an
adequate level of funding for drugs, medical equipment, and other necessary
health service inputs during times of wage inflation and tight budgets.
Governments rarely have much latitude to shed employees, so budget curs
almost always disproportionately reduce nonsalary inputs, such as drugs,
medical supplies, fuel, and maintenance. The result is that operations
become less efficient, as employees attempt to make do with less of what
the\ require to perform their jobs. In the extreme, for example, simple .
physical exams may become impossible for lack of basic equipment, and
physical exams are no longer done. Immunization programs may come to a
halt for lack of sterile needles even though vaccines are available. Patients
may find themselves required to purchase inputs in the market before coming
io a public clinic or hospital, or they may be required to make several trips
to the facility as they purchase the required inputs or wait for them to
oecome available at the facility.- Whatever the reaction, output, drops in the
public sector, patients’ costs rise, and the length of time required for
treatment also rises.
*
2.49
In the private sector, where complementary inputs are almost
always available as needed, salaries usually account for well under 50 percent
, of total costs, usually in the range of 40 percent. In the public sector, the
ratio is usually well above 50 percent; in extreme cases, salary costs have
been known to account for over 90 percent of public expenditures.
if
2.50
Due to peculiarities of accounting procedures, it is not possible to
obtain complete information on the inputs compositioa of health expenditures.
From Performance Budgets, however, it is possible to discern the relative
spending on salaries, commodities, and capital works out of the health
budget. About 60 percent of the Health Department’s expenditures are
allocated to salary support; nearly all the rest is devoted to vehicles, office
equipment, and other material inputs. Between 1987 and 1992, the relative
expenditure on salary declines slightly, from 61 percent to 56 percent (Table
2.5).
B -: -
-
'A
■'
p
<
■■ ■
'T
- 28 -
rgmpos.uon of Exnendnur^, (Revenue .nd g.pi*»l. H«n Agd
Only
Tab** * 5 Inpui
-I Central Level 1987-199;.
’n°'‘ Me^iol and Public
Son-PI*n) at,
Family
Welfare)
.Excludes £1990-91
1989-90
1988-89
198’>88
(KE)
(KE)*
(BE)
(KE)
Lipu»
’ 58.5% >
58.8%
63.1 %
61.4%
Salanca
41.5%
41.2%
36.9%
38.4%
Convnodiuea
0.0%
0.0%
0.1%
0.2%
captt*.
1.751.559
1.533.166
1.761,874
1,788.008
Subtotal
1.4
1.4
- 1.7
1.6
Salanei.Commodities
F*
s.Hin.r
1991-92
(BE)
56.3%
43.7%
0.0%
1.943.292
1.3
Performance Budget. Vanous Yean
4
4
allocated to the purchase of commodities (drugs, medical equipment, oth
“
vefcles).- The remaining 9 percent was invested m cap,mi.
primarily in construction of buildings.
-• S'The -general trend has been toward spending on salaries and away
from commodities at the state (service delivery) level. Frotr> Jhe Period
1974-78 to the period-1985-88, the proportion of exPendltur“ ^1^aries
salaries increased. On average aver the 15 major States in 1974-78 paries
consumed nearly twice the amount of funds as .commodities, by 1985-88. that-
figure had risen to 2.6 times (Table 2.6).
2 53
A few states deviate from the pattern of increasing relative
expendirures on salary inputs. Assam, for example wb,ch devotrf only 48
percent of its health budget to salaries tn 1985-88 (the lowest share
sates), had spent relatively more in the past. Salary expenditures m Punjab
also accounSTfor a smaller share in 1985-88 than tn the,
.
However, both were relatively high^capital spenders, so it is not neces^ V
true that this low salary share necessarily translates into better provisio
consumables than is observed in other states.
L
schemea/prograim/orgatuMUon.-, whsch together account tor ncany
central level, but are reflected in oau and UT ailocauons.
at the
-m
/
•
-' ’
hisasi
!"‘V*r A’
!
- v •
. -■ y
J''-'
;----- -
..
-29 -
--ssa.
Y
i;
Expenditure (Revenue and Capital, Plan and Non-Plarp,
( f^rryosiuon
'Otiuon ot Medical and PuSic Hea■ uh
,Contpared tn 1985-88
Saljne«
Con\m<xli(ic>
n«**»A4
'*•»< ftrngai
’
1974-78
1985-88
1974-78
1985-88
Ji 3%
25.3%
59*0%
66.1%
36.5%
22.5%
58 6%
29.8%
22.5%.
20.5%
34.5-%
27.7%
25 4%
Capiul
Sii«nc$ CommiHiities
1974-78
1985-88
1974-78
l98\-88
9.7%
8.7%
1.9
2.6
74.1% ‘
4.9%
3.4%
1.6
3.3
58 6%
48 4%
15.7%
17.1 %
1 8
; 4
54 5 V
74 4%
12.5%
.0.9%
3 3
5 I
14.7%
67.0%
68 6%
4.7%
6 9%
2 4
2 8
24 6%
67 6%
'3 6%
19 5%
5 3%
28.3%
21 1%
-55.1%
65 1 %
10.3 %
< 8%
30.5%
23.0%
66.5%
71 3%
3 1%
5 7%
29.7%
23 3%
62.8%
70.6%
7.6%
6.1 %
2.1
3 0
31.6%
25 9%
64 1%
66.2%
4.4%
7.9%
2.0
2.6
26.8%
,14.4%
70.7%
80.9%
2.5%
4 7%
2.6
5 6
21.5%
29.1%
64.4%
59.6%
14.1%
11.2%
3.0
2.0 .
30.2%
19.4%
64 8%.
71.0%
5.0%
9'7% .
2.1'
3 ?
36.6%
'27.8%
51 6%
63'0%
11.8%
9 2%
33.7%
30.0%
614%
56.0%
4.9%
14 0%
1.8
i 9
34.4 %
28.7%
46.1%
62.7%
19 8%
8.6%
1 4
.
T
3.1
I9!2; T.ab,C 4 1
?8) A>-Um“
exPendirurei
’Olhef’ «ugofy (mottly inmu-.n-a.d
IO
disinci panchayati) arc allocated in the same proporuon aa fundi apent directly by the
,
! Mate government. Thu probaWy
urxieremmales the proportion devoted to salary and overeaumatei the'proporuon
to commodities and capital. This information
.annex be obtained at the stale or nabonal Jeveh; it » available only in district
accounts.
-•54
Notably, in three of the poorer states, the share of the health
budget devoted to salaries (relative to commodities) expanded greatly between
the two reference periods and is running much higher than the admirable
example of Assam. In 1974/78, Bihar spent slightly more than 3 times as
much on salaries as on commodities; by 1985/88, the state was spending
more than 5 times as much on salaries as on drugs and equipment. In >
Rajasthhan, the relative allocation to salaries increased from 2 to nearly 4
times the funds devoted to commodities. In Orissa, the ratio of salaries to
commodities increase from 2.6 to 5.6 over the period. Madhya Pradesh and
Uttar Pradesh were able to maintain their commodity allocations at relatively
high levels, in contrast to the experience of the other poor states.
T1
- 30-
In these poorer states, the lack of complimentary inputs, and in
" ocular drugs, has reached a point close to collapse of some provision in
areas. This is developed in the next section.
, -0
Spending on Primary Health Care. A major concern that
emerged from interviews in the states is that the drop in the share of public
sector spending on health after 1986 that is evident in Figure 2.2 has had a
.deleterious effect particularly on the primary health care system. Quality ot
service delivered has plummeted. Table 2.7 provides some financial data to
examine this issue between 1974 and 1990. This was a period of tremendous
expansion of .the primary health care system. The number of PHCs grew
from 5.321 in 1974/78 to 15.619 in 1986/90. Rural dispensanes increased
from 8.840 to 13,005.
-
IH.
I'i
1i
f
TabIc 2.7: Estimate of Trends in Spending on PHCS and Rural Dispensaries, 1974-90
PHC
Rural Disp
PHC + DISP
Est Pop
(Mill)
Per Cap
P + D Exp
Est Exp
P + D (Mill)
Est Exp
Per P-D
!'J'4-78
5.321
8.840
- 14,161 -
61-1,899
2.89
12768
124.877-
-K2
5,512
11.353
16.865
688,721
3.35
2.240
132.832
6,367
12,180
18,547
727.983
3.88
2.825
152.293
15.619
13.005
28,624
792JQ92
5.24
4,151
145.003
wif-
;-86-90
r
estimation Method and Assumptions:
*
average; calculated from data in Health Infot mation India 1990,
Number of PHCs; fur-y’car
i
Table 9.1 (page 115)
Number of rural Dispensaries* calculated from data presented in Jesam and Anantharam.
Table 9 (page ix); assumes^dl rural dispensaries are operated by the public sector.
Estimated Population: calculated assuming exponential growth model from Census data
(1971, 1981, 1991), reported in Family Welfare Yearbook, 1989-90, Table A.l (page 92)
Capita Expenditures on PHCs and Rural Dispensaries: calculated from Tulasidhar. 1992
Table 3.3 (B) (page 45); Table 3.8 (A) (page 65); and Table 3.11 (page 73). Applies to all
states the un weighted average for 10 major states on allocation of medical relief
expenditures to PHCs and rural di sprat
Table 3.11 is Tulasidhar, 1992)
I
- 31 -
- 57
As a^consequence of this growth, real per capita expenditures on
primary health care rose from Rs. 2.89 in 1974/78 fairly steadily to
5.24. a tremendous accomplishment.
-
c
However keeping in mind thats the higher per capita expenditures
2.58.
were also supporting a much large service structure, do these numbers
translate into higher expenditures per facility? There was substantial growth
up to 1982/86, but after 1986, expenditures per facility fell by about 5
percent in real terms. However, if the salary/commodities ratios discussed in •
the previous section are applied to these numbers, the -change in spending on
non-salary inputs dropped 10 percent below the level achieved 15 years ago,
m 1974-78! In contrast, real spending on salaries rose by 30 percent over
the period.
2.59
Although these results are only approximations, they indicate a
substantial drop in material inputs to the primary care system that has
occurred since 1986. In fact, these calculations should be conservative.
Lower levels of a health system usually suffer disproportionately from
shortages of supplies, so that PHC facilities would be in worse shape in
terms of spending on commodities than .is indicated by overall averages.Lack of drug supplies has reached a crisis point at PHC and SubC level A
recent national survey showed that: (a) 58 percent of PHCs and 80 percent
of SubC were without antibiotics; (b) 37 percent of PHCs and 55 percent cf
SubCenters had no analgesics; and (c) 26 percent of PHCs and 53 percent of
SubCenters had no antidiarrheal drugs (table 2.8). Even those which had
these drugs were low on stocks.
2.60
Such undersupply has eroded credibility in the system amongst
the population at large, and the morale of the staff. Unless remedied, under
adjustment, the supply situation could deteriorate further, leading to primary
health care facilities being regarded,’ in may villages, as an empty shell.
"-•61
That it is possible, with funds supporting more determined
logistics, to supply PHCs is indicated by the fact that percentages of items
out of stock are low in the case of those funded and delivered through the
family welfare program (including vaccines and contraceptives).
The ratios applied in the calculation are averages for the whole system, including hospitals.
which are
probably better Supplied with commodities.
■■■■
•
au.
.1.
-32-
*
Table 2.8 Stock of General Medicine»_at. PHC» and SubCs
% Out of Stock or Inadequate
PHC
SC
Analge»ics/Antipyretic*
32.7%
55.2%
Antibiotics
57.5%
80.3%
Antidiarrheal
26.1%
53 3%
Antispasmodic
36.4%
Medicine
21.6%
47.2%
Anti mala rial
13.3%
46.8%
Antihistamines
43.2%
ORS
35.7%
84.8%
Antiasthmatics
42.2%
84.5%
Antihypertenwvei
48 0%
96.6%
BCG Vaccine
27.6%
Polio Vaccine
23.1%
Sedatives
I
i
8.8%
DPT Vaccine
TT Vaccine
7.5%
Measles Vaccine
32.2%
IUDS
5.0%
Oral Contraceptives
8.8%
Nirodh Condoms
6.0% '
.4
Persistent Inequities
2.62
Uneven Spending across States with an.
Minimum
^i^Tm^saCT?usSTeS
tends to reflect the relative per capita income levels
richer states enjoy high public per capita spending on
’tkTL.1v Wav to
that the poorer states are more in need of higher spending.
■
the
address this problem is through transfers from the center, u ,
center: (a) accounts for such a small proportion of spending; (b) ha^ limited
■tself to support to states primarily through constructs promts in the plai
budget; and (c) formulas that govern transiers
- ."J
room for the center to compensate for these interstate inequities.
ry
troublesome problem that cannot be solved immediately.
«
■
■
■
3
- 33 -
■* 63
dan£er *s t^al
adjustment period will exacerbate the
nequi^es and tensions caused by this problem. Consequently, a high priority .
earlv in the adjustment period must be’emergency measures to solve the
problem of targeting center funds to redress these interstate inequities. A
change in policy will require both more spending’oKhealth by the center and
considerable flexibility in center-state relations to solve the problem. There
is some urgency in this.
*
2 64
Spending and Gender Inequities. A serious problem for the
□OH is how its resources might be used to help redress the gender-based
inequities in health outcomes that are unique to South Asia. Girl babies are
more likely, to die than boy babies despite their inherent physical superiority.
Women expenence substantially higher death rates than men during their
voung adult years simply because they are at risk during pregnancy. Gains
m life expectancy for women have come primarily in the older ages (after
40), so the improvement in overall life expectancy statistics mask these
problems. The next chapter delves more deeply into these issues. The
question to be posed in this chapter is what level of spending does the DOH
currently target to these problems? It is clear that the DOFW targets most of
ns resources to women. But close inspection of those expenditures indicates
that very little goes to solving women’s-and girl’s health problems; most goes
to reducing population growth. There appears to be no independent or even
coordinated effort led by the DOH focused on gender inequities.
-65
Spending and Health Inequities. The infant mortality rate (IMR),
the prime aggregate measure, of health status, is closely related to income
(although with some exceptions, such as Kerala)(See Figure 2.7). Those
states with higher health expenditures have lower infant mortality rates.
Naturally, this relationship should not be treated simply. However, if there
were a targeting mechanism that allowed spending to be increased where
infant mortality is highest, this simple relationship could be reversed no
matter how complicated the underlying determinants. It is possible that
targeting a health statistic, such as infant mortality, rather than states, as
would be necessary if difference in state-level per capita income were the
targeting focus, would allow the center to skirt some of the restrictions in
center-state budgetary rules. A program targeting poor IMR areas would
have multiple benefits: it would target areas needing additional resources, it
would tend to target poorer states, and it would be a vehicle for targeting
gender-related health problems.
F
1^'0
r' '
- 34 -
-: ? j
■soef
I
33 ’
40
zef Caoiia Health Exp (1989-90)
Figure 2.6 Relationship between State-Level Health Spending and
Income, 1988.
Special Health Financing Problems
2.66
Negligible Role of User Fees in the Public System. Table 2.9
shows the low and declining level of cost recovery in the health sector for
15 states. In 1975/76, about 6^4 percent of expenditures on medical and
public health services were recovered from clients, principally in hospitals.
After a steady decline over the following 15 years, cost recovery by 1989
was only 1.6 percent of costs. This change reflects a tremendous loss of a
resource for the health sector: the ability to charge patients, who can afford
them, for services which have few or no externalities. Cost recovery will
become much more important in the health sector if efforts are successful to
reallocate public spending tc programs with high externalities. Hospitals and
clinics can prosper under such a reallocation if they are allowed to raise their
own funds and are provided the independence to do so, while maintaining
publicly subsidized access for the poor.
2.67
The Nature of Delivery of PHC Services. PHC medical care
services are provided according to civil service rules. Medical staff work
fixed hours, and whilst they might be "on call" outside those hours they close
their facility to the public.
/
-.X
-35-
UHP
This, unfortunately, means that PHC facilities are open only
rural population is at its busiest with agricultural and other work.
SI? I i
the
• the private sector facilities, if available, remain open in the
.. W contrastjr
-pds is when the rural population is free to attend to its medical
evening
More flexible hours are needed in PHCs, to provide better service to
needs.
ir^j populations; this will, in turn, require more flexible budgeting and
the ru
7- X6S
actives.
Maintenance of the Health Infrastructure- Given the accounting
,
" rdiods it is difficult, at any level higher than individual institution, to
^late the maintenance element of budgets. However, field visits make it
startling clear that maintenance budgets are starkingly inadequate for all but
model institutions, at all levels of’heal th care.
Tabic 2.9 Cost Recovery jn Medical ind Public Health Services-(Non-Esis)
Amt. Recovered
in ‘88-89 as %
of 1975-76
1975-76
1980-81
1984-85
1988-89
Avenge
Receipts
15 Major Stales
6.38
4.07
3.04
1.6
3.8
25.1
A'xlhra Pradesh
2.92
3.37-
3 79
0.82
28.1
Assrm
3.89
3 47
1.58
40 6
Binar
16.99
8 49
3.27
Guiant
3.65
4.99
1.9
2.58
Haryana
6.44
3.87
7.66
1.47
4.9
23.0
Karnataka
11.0
3.23
2.67
6.56
5.9
59.6
Kenla
3.8
4.J2
3.72
1.55
3.3
40.8
Madhya Pndesh
4.88
2.39
6.36
2.42
4.0
49.6
Maharashtra
12.95
3.52
1.74
1.7
5.0
13.1
Onsaa
2.59
3.03
4.34 »
1.13
2.8
43.6
Punjab
15.64
5.57
4.29
5.44
Rajaalhan
3.98
3.87
2.53
0.8
2.8
20.1
Tamil Nadu
3.98
9.46
3.19
1.59
4.6
39.9
Utlar Pradesh
534
1.87
1.33
0.53
2.3
9.9
West Bengal
2.2
2.1
2.08
-0.78
1.4
-35.5
Stale
0.0
70.7
34.8
Source: Tulaaidhar. 1992; p.85
■■
>
-
_>
Building maintenance budgets are based on norms that, in some
*
instance'. have not been revised for decades. Complexes that have
*'utC de£) have maintenance budgets based on pre-expansion floor space.
ct?^1 especially in the poorer states, there are simply not enough
^itenance funds to prevent buildings from leaking rain (and spoiling
nment, dosing wards) and becoming tumbledown. Maintenance budgets
^ild be quickly enhanced to forestall huge reconstruction <x>su.
. 7I
Negligible Role of Risk-Sharing in the Private System. Despite
India's high private out-of-pocket spending on health care, there has been
very little development of risk-sharing mechanisms. The ESIS is well
established, but has only provided benefits tied to its own delivery system
nd has been slow to expand membership. Private insurance has been slow
•0 expand for many obvious reasons. There could be a public sector role to
piav in this area. If policy initiatives are to be appropriately staged, the
development of user fees in hospitals will be accompanied by initiatives in
expanding risk sharing schemes, just as charging tuition in medical schools
must be accompanied by the establishment of scholarship funds.
i
I :?
2 72
The States’ Concern for Their Poor, and PHC Funding. Once a
PHC is built, it is staffed by ANMs and other staff paid for entirely, or in
part by the center through Family Welfare and other centrally sponsored
■ schemes. The state makes little contribution, limited to doctors, if present,
some drugs, and maintenance. Family welfare budget pays for ambulances,
most drugs and other aspects of the infrastructure, which PHCs rely heavy
upon. So most inputs to PHC come through centrally sponsored schemes.
This dissociates the states from this basic provision for their
2.73
poor. They have only loose-responsibilities, in practice, for aspects of
monitoring and supervision. If the total responsibilities, with an appropriate r
budget, for PHC and SubCs were passed to the state, health provision would
become more accountable to local populations.
2.74
Government Capabilities in Health Eoonomics/Policy
Development. As indicated earlier, the DOH and MOHFW as a whole have
little internal capability to provide the types of inputs to policy that can be
supplied by a health economics unit. As financial pressures mount and
opportunities for sector change through major financing initiatives arise, the
department will suffer more acutely from this vacuum.
'.
7
•:
’"WWi
4^4;.
r.->
T3!..
■• X •• ?■- 2
.'oF-
-17
■
- 37 jl Conclusions
2.^
T
cWtcr
(aj
(b)
Conclusions from the analysis> are scattered throughout this
Statements of the main issues, although the
Listed below are short
s---- ---------,o means exhaustive:
Decline in. importance of health in the central Government;
Little Capacity at the Center to Combat Inequities or Problems;
(C)
Reasonable Overall Distribution of a Low Level of Spending;
id)
The First Test: An Inadequate Response to Adjustment;
(c)
Persistent Inequities Demand Attention from the Center; and
(0
Primary Health System is in Trouble in Terms of Supp.lie.s_ot
Drugs-and other Consumables-
1. Recommendations
‘ The report’s major recommendations in these areas are
2.76
summarized below:
(a)
Raise spending at the center and target it carefully;
(b)
Reassert Center’s Role in Policy and Health Development;
(c)
Widen Scope for Maneuver;
?
I I
!r-
'
- \ -
r '• ■
(d)
Support recurrent spending in states;
(e)
Develop equity and health-based criteria for targeting;
(0
Address gender-related health issues;
(g)
Explore options to increase resources within sector; and
(h)
Initiate health economics section.
- 38 -
Jh:
Ta bi* *• 10
Declines in Department of Health Plan Expenditure, 1991/^ and
1992/3 flanand Von-Plap
' ’
Total
Percentage
Decline from
Previous Year
Percent'
of
Decline
-32.9
-38.9
42.6
0.0
0.0
0.0
-2.5
-15.6
3.2
-4.0
-88.9
0.2
-1.0
-100.0
1.3
-100.0
3.2
-0.6
-100.0
0.8
-1.5
-100.0
1.9
-4.3
rl0.5
5.5-
I. Major Disease Proj'grams
Malaria
Leprosy
TB
Goiter
Encephalitis
Filana
Guinea Worm
HI Medical Education
Regional InSt of Medical Education
Medical Research
Indian Council of Medical Research
Cancer Research
Other
VI IIndian
System of Medical and Homeopathic
Colleges
VII Drug Standard Control
XI Other and
-
-10.1
13.1
-1.2
-11.9
1.5
-2.8
-10.6
3.7
-1.2
-48.0
1.6
-12.7
-10.5
16.5
s=.
W- .
HF*'
■-
■
--39 -
HI. PHTERENTIALS in health indicators.
SERVICES AND UTILIZATION
Since Independence, the state ahd^ccnff^l governments in India
3.1
have taken as their responsibility the direct provision of health services to the
Population, regardless of ability to pay. In every plan period, both central
and state governments have set ambitious goals for the development of health
Mrrvice infrastructure, from primary to hospital levels, and for improvements
m health status, particularly of vulnerable rural populations. The government
has explicitly recognized the potential of the health sector to reduce existing
^equities between rich "and poor, between urban and rural segments of the
population. In many states, major achievements have been made in reducing
mortality and morbidity, often closing the gap between the better-off and
jxiorer segments of the population. In other states, however, differentials in
health status and access to health services have persisted and even increased.
Throughout the country, despite tremendous investments in building and
operating the public health infrastructure, few clear relationships exist
between public health service inputs and overall health outcomes.
*
3.2
This chapter .first provides a brief overview of the India’s health
policy, then draws upon the available data to highlight, in turn, the key
systematic variations in health indicators, access to health services
(particularly public health services), and health care utilization, among and
within states. Finally, it comments on underlying variation in social and
economic conditions, acknowledging that these differentials both help to
produce and reinforce the observed patterns.
A. Health Policy in India
Evolution of Health Policies
3.3
From the time of the 1943/46 Bhore Committee, which
established the country’s landmark health sector policy, to the current draft
Eighth Plan, the government has stated its desire to pursue ambitious
achievements in health, and acknowledged the close relationship between
good health and equitable economic development. For instance, goals for the
Seventh Plan, 1985/90, included lowering the IMR to 87 per 1,000 by 1990
and below 60 per 1,000 by the year 2000; increasing the proportion of
pregnant women receiving antenatal care from 60 percent in 1988 to 100
percent in 2000; and decreasing the net reproduction rate from 1.34 in 1985
to 1 (replacement level) by the year 2000.
■..zz.
H
I'I
KfjR ■-40-
V
Bl.
Traditionally, the government has chosen a single approach to
34
[hese goals: designing and creating a publicly-funded system ^ot
'services
throughout the country, from primary care to hospitals, to.
Kvide both curauve and preventive care (as described in Annex 1).
frorn the principle that equitable allocation of health resources means
> . Sorting
LLii location of health facilities on a per capita basis, nationwide
’ !2oulauon-based norms were set for the distribution of health facilities and
Empower. Over the past two decades, the central and state governments
^ve invested heavily in building up this infrastructure ter meet the target
norms.
J
principles of Free Access to Health
55
The principle that all citizens should have access to public
services, regardless of ability to pay, has been translated into a system ot
financing that is based almost entirely on distribution of general tax revenues.
Public health services are funded through a combination of sources, all
derived almost exclusively from tax revenues at the central, state or
municipal levels. - In concept, public health services are provided free or at
Ajnlv a token charge to the population although, as shown later, both
transaction and out-of-pocket costs are considerable for people seeking care
at government institutions .
J
B. Health Status of the Indian Population
16
Some powerful positive trends dominate the picture ot the health
status of the Indian population. Overall, mortality has been declining
throughout the country. Life expectancy at birth, for example, has increased
from about 32 years in 1951 to-about 60 years today. This trend is driven to
a large extent by declining infant and child death rates. Infant mortality, for
instance, declined from 129 per i,000 live births in 1971 to 91 per 1,000 in
1989. This improvement reflects real achievements in reducing malnutrition
and hunger, mounting programs for'control of communicable diseases, and
increasing (if slowly) general standards of living.
3.7
While mortality levels have been declining, particularly among
children, communicable diseases continue to account for an estimated threefourths of all deaths in India. In general, water- and airborne diseases
(diarrhea and acute respiratory infection) account for the majority of infant
and child deaths. According to official statistics, diarrheal disease accounts
tor a far greater share of child deaths than do immunizable diseases (measles,
diphtheria, tetanus, poliomyelitis, etc.). Communicable diseases affecting
adults include tuberculosis, malaria, leprosy and others.
i_ *
■-
11
X .:. .
J
T-
.
■
41 -
I? ThtI
nicable Disease Problem
Highlights cf the importance of several communicable diseases
3.8
jmformation is drawn from Health Information India 1990 and Knster. 1989)
include:
(a)
Diarrheal diseases account for 10-20 percent of infant deaths (at
least 500,000-100,000 annually). On average, an Indian child
suffers from three episodes of diarrhea each year, affecting his
overall health and nutrition level;
(b)
Tuberculosis has been called the leading public health problem of
India, in terms of morbidity, health care burden and economic
loss. TB has been rising through the mid-1980s in incidence
though declining in. case-fatality rate. Forty years of a national
program may have succeeded in stemming the growth of the
disease, but has not resulted in a true reduction in either
incidence or prevalence. An estimated half-million or more
deaths are attributed to TB annually, and estimates suggest that
by the year 2,000, India may have at least 20 million active TB
patients. with one-fifth of those infectious. About 47,000
hospital beds are devoted to in-patient care of TB;
c-)
In the early years of the national malaria eradication program,
annual incidence fell dramatically, from 75 million to less than 1
million between 1958 and the late-1960s. In the 1970s,
however, prevalence rose again, and in more recent years
malaria cases have remained quite stable or slightly increasing, at
about 2 million annually in recent years. Reported fatality rates
are low (268 deaths in 1989);
(d)
Leprosy cases have been reduced by about one-third to one-half
during the 1980s, with 2.1 million cases still under treatment,
and about 4 million leprosy victims in all. The all-India
prevalence rate is estimated at 5.72 per 1,000. India has about
one-third of the world’s leprosy victims, and about one-quarter of
these are children;
c
(e)
Filariasis was reported to affect 19 million persons in 198S with
about 25 million disease carriers; and
. 4T
_
■
•
eft.
- 42 •r
IL
(0
' z
I
1r
■?
i
3
i
: 4
*8
J
I
1
' n
■1I
u
I
.1 j
1
I
The all-India health picture disguises the most important feature
• ,
>- of the population s health status, the differences in patterns of morbidity,
.rtality and fertility among sub-populations. The most critical comparisons
,n make are among states, which differ in social, economic and
rnvironn.eatal conditions; between urban and rural areas; between organized
and unorganized sector workers; between scheduled and non-scheduled tribes
and castes; and between men and women. In each companson, it is possible
t0
the substantial gaps that exist, and the extent to which these gaps have
lessened or increased over time.
‘3-9
■ i
I
r
AIDS, a newly emerging problem, currently appears to be
confined to certain high-risk sub-groups of the population, though
there is increasing concern about wider spread of the disease,
particularly through an unsafe blood supply. The World Health
Organization estimates 400,000 HIV-positive individuals in India,
and 1 million people with AIDS by the year 2,000.
1
J
i. i
gL
Variation in Health Status across States and bv Rural-Urban Residence.
Differences among states in their populations’ health status are
3.10
known
and well-documented. For the most part, the correlation
wellbetween health status and underlying .economic welfare is consistent and clear
(see section E of this chapter for a discussion of socioeconomic differences
among states). The poorer states of Bihar, Madhya Pradesh, Assam, Onssa.
Rajasthan and Uttar Pradesh have very high death rates, particularly among
mfants and children. However, due to environmental peculiarities, certain
communicable diseases are more likely to be found in some of the better-off
. regions of the country.
-*
■
Enfant Mortality
3.11
Looking first at infant mortality, a sensitive indicator of basic
>ealth status and underlying socioeconomic conditions in a population, states
range from having an IMR of 122 deaths per 1,000 live birthsin Onssa to
less than one-fifth that level in Kerala, with 22 deaths per 1,000 (Table 3.1).
As one would expect, die states of Madhya Pradesh, Rajasthan and Uttar
Pradesh all have exceedingly high IMRs of close to (or more than) 100 per
1,000, while the northern and southern states have substantially lower levels
of infant mortality.
■ s
,
.a
4
F’ ■
- 43 -
Trf>(e 3-1:
Selected Health Indicators for India's 15 Major States
1989
IMS'
(per
1,000
births)
TATE
E- ■
I
1
81
91
91
86
82
80
22
117
59
122
67
96
68'
118
77
AAdhr« Pradesh
As/*
Bihar
Gujarat
Haryana
Karnataka
Kerala
Nadiya Pradesh
Maharashtra
Orissa
Ptn j ab
Rajasthan
TamiI Nadu
Uttar Pradesh
west Bengal
% CHANGE
IN IMR
1980-89'
-12X
-12X
N/A
-24X
-20X
13X
-45X
-18X
- -21X
-15X
-25X
-9X
-27X
-26X
_N/A
1988
1987
CHILD(0-4) TFR
MORTALITY (child
-par
(P»r
woman
1,000)
27
37
38
31
29
24
8
51
22
37
21
52
21
47
22
3.6
•’4.0
5.3
^.6
4.3
3.4
2.2
4.7
3.5
3.7
3.4
4.8
2.6
5.5
3.8
% CHANGE
TFR
1981-87
1986-91
MALE
LEB
(YRS/
-10X
-2X
.-7X
-16X
-14X
-6X
-21X
-10X
-3X
--14X
-15X
-8X
-24X
-5X
-10X
59.1
55.7
58.2
58.3
63.4
62.2
66.2
56.2
61.9
57.1
65.6
57.8
60.9
54.1
60.0
Sources: Family Welfare Yearbook 1991; Duggal, 1992; Table 5
V12
The greatest relative (percentage) gain in reducing infant
mortality between 1980 and 1989 was achieved by Kerala, which nearly
halved the rate of infant deaths over less than a decade. Other states,
including the relatively disadvantaged Uttar Pradesh, achieved sinking
declines in infant mortality, as well. The rate of improvement in infant
survival was hardly uniform, however. For example, Rajasthan’s 1989 IMR
of 96 per 1,000 was little changed from nine years earlier.
3.13
Child mortality confirms the established pattern and, more than
infant mortality, reflects access to health services: Kerala achieves far
greater levels of child survival than other states; on the other extreme, Bihar,
Madhya Pradesh, Rajasthan and Uttar Pradesh all suffer from extremely high
levels of child mortality.
Fertility Between States
3.14
On average, women in Kerala and Tamil Nadu have the lowest
fertility, due to both relatively high age at marriage and relatively high
contraceptive prevalence. Each woman in the poorer eastern states of Bihar
and Uttar Pradesh has an average of more than five children. The most rapid
declines in fertility in the past decade have occurred in Tamil Nadu and
Kerala; the slowest in the most disadvantaged states.
..
■
■
■
■\
■'I^F
J
- 44 -
r■
i
ff i
A.
t Birth bv State
Somewhat less variation among states can be observed in life
' 15 tancv at birth, an indicator that reflects the combined influence of
e*^ of death at all ages. At the lowest extreme Uttar Pradesh, where
' “^live (on average) to be about 54 years; the highest life expectancy is in
^a. at about 66 years.
,6
\ny effort to identify interstate differences in morbidity is
nered by a lack of valid and reliable information, and the confounding
rri-uonship between health service-coverage and availability of statistical
nformatio'n. However, with caution it is possible to at least see some of the
relative burdens that specific communicable diseases place on the states
populations.
I
i
1 17
Table 3.2 presents the absolute and relative distribution of
3.17
selected diseases among the 15 major states for a recent year. The lack of
uniform distribution of the diseases, due to a host of natural and manmade
influences, is apparent. For example, reported malaria cases are
concentrated in the states of Gujarat, Madhya Pradesh and Onssa.
Combined, these three states account for only about 17 percent of the total
population of the major states, but have nearly 60 percent of the reported .
malaria cases. Leprosy, on the other hand, is disproportionately likely to be
found in Andhra Pradesh, Bihar, Tamil Nadu and Orissa, and is relatively
scarce in Assam, Gujarat, Punjab and other states. According to reported
esumates of the number of diseased persons, filaria is most concentrated in
Bihar, Kerala and Uttar Pradesh, and relatively uncommon in much of the
rest of the country. Most strikingly, kala-a/ar is clearly isolated in Bihar, which had more than 86 percent of all cases in 1988, and West Bengal,
which reported about 14 percent of all kala-azar cases.
J
■
3.18
The vast interstate disparities in the extent to which these
3.18
communicable diseases affect the population can most vividly be seen by
comparing the situation in Bihar with that in Maharashtra — states that differ
only a little in size, but greatly in incidence and prevalence of these illnesses.
Bihar, which accounts for about 11 percent of the population of the major
states, has only about 2 percent of all malaria cases; at the same time, Bihar
has 20 percent of all leprosy cases under treatment, nearly 29 percent o. all
persons with filaria disease; and nearly all of the incidence of kala-azar.
Maharashtra, with 9.4 percent of the fifteen states’ population, has 6.4
percent of the malaria cases, 8.5 percent of the leprosy cases under
treatment, less than 1 percent of all filaria-diseased persons, and almost no
t 1
F
*
i
L
&
i --
If®
' •
4T
,-».,
.
.
.
S
*
•
‘
•
’
; r“
■'
-
'
.
w4.-~
- -7—--1
/'
_
' W
o.
-rr- '■
s—
P'
-45-
E
3.2:
p ■ stributon o* Selected Conwurncwble pfse»se$ Across States
1989
EST
MALAAIA
X Of
CASES
POP
Of 15
STATES
fTATt
Pradesh
h-
Aas*
If her
Gujarat
mryana
UrnataKa
larala
Mac* ya P-radesh
Meharashtra
Or i»»a
Punjab
Ba jasthan
-«nil Nadu
jttar Pradesh
west Bengal
Sources:
1989
1989
x OF
LEPtOST
MALARIA CASES
CASES- twa
TKEATMEVT
1989
1989
X Of
FILAJUA
LEP805T DISEASED
CASES
PERSONS
1988/89
1989
1988
X OF
K-A
FI LARJA CASES
CASES'
1988
X of K-A
CASES
(■ill)
8.OX
82,510
3.IX
62,274
10.7X
40,001
5.IX
598,653
2.OX
23,711
5.7X
106,683
3.8X
6,126
8.OX
252,886
9.4X
122,314
3.9X
260,815
2.5X
32,146
5.5X - 112,316
7. IX
90,478
17. OX
101,815
8.2X
18,822
■4.3X 249,791-"-11. ex
3.3X
17,984
J.9X
2.IX 423,219
20 OX
31.3X
32,617
1.5X
1.2X
1,344
0.1X
5.6X
66,264
3.IX
-0.3X
57,431
2.7X
13.2X
93,569
4.4X
6.4X 180,298
8.5X
13.6X 177,842
8.4X
1.7X
3,177
0.2X
5.9X
15,596
0.7X
A.7X 273,696
12.9X
5.3X 309,408
14.6X
1.0X 211,644
10.OX
100.OX 1,911,550
100.0X2,113,880
100.OX
2.24
0.08
0.16
1-37
H/A
N/A
1.19
6.87
0.02
7. IX
0.3X
28.5X 19,639
0.7X
O.OX
0.4X
11.8X
0.4X
0.8X
9
7.2X
O.OX
O.OX
6.3X
36.2X
19
0.1X 3;068
0.1X
13.5X
18.99
100.OX 22,735
100.OX
1.35
0.09
5.41
0.13
N/A
0.08
*
86. AX
o.ox
Health Infonaetion India 1990
Aee-Sp^ific Death Rates bv Rural-Urban Residence
3.19
Differences in health status between urban and rural areas within
a given state are at least-as striking as those observed between states.
Socioeconomic differentials between the 26 percent of the Indian population
living in urban areas and the 74 percent now in rural areas are apparent in
basic health indicators. Comparing age-specifif death rates between urban
and rural areas (Figure 3.1 and Table 3 3), substantially higher rural
mortality is seen, particularly under age 35. In the youngest age groups
(under age 10), rural children are more than twice as likely to die as are
children in urban areas.
if
1
3-20
Between 1970 and 1988, as mortality was falling throughout
India, the gap between urban and rural crude death rates diminished a bit. In
the early 1970s, people in rural areas were about 1.7 times as likely to die as
those in urban areas; by 1988, that differential had diminished marginally to
about 1.6. In part. The relative jack of progress in closing the urban-rural
gap is a result of the differences between states. In Bihar, for example, there
was no change in the dinerence between urban and rural death rates between
1970/88; the ratio of rural to urban death rates remained at 1.65 during the
period. In Maharashtra, the gap widened: in 1970, the ratio of rural to
urban death rates was 1.44; by 1988, it was 1.58. And in Kerala, the
chances of death in urban and rural areas not only closed, but
it then became inverse. In 1970, the ratio of rural to urban death rates was
1.12; by 1988, it was 0.92.
/
■fl- _
&
'
,v'
, ..._„jshs- -•
rs '~~'
<‘-r
-‘Z-i-i 25-2S 30-34 35- 39
.
45-49 50-54 55-5= £3-64 65-69
-oe
■
*
-ura
v— jroan
Figure 3.1: Age-Specific Death Rates by Rural-Urban Residence, 1987
Irban-Rural Differentials irr Infant Mortality
3 2]
Turning to infant mortality (Table 3.4), for every 1,000 births in
urban India, 58 infants die; in rural India, infant mortality is far higher, at 98
deaths per 1,000 births. The differential between urban and rural infant
mortality is pronounced in nearly all states; in at least some, it has persisted
with little change over time17. In some states, including Andhra Pradesh,
Haryana, Orissa and Rajasthan, there has been considerable convergence
between 1980 and 1989. Over that period, rural infant mortality declined at
a much faster rate than did urban infant mortality. In others, including the
high-IMR states of Madhya Pradesh and Uttar Pradesh, the gap between
urban and rural rates has narrowed very little.
It is important to note that these data probably undersuic the gap between urban and rural areas due to the
pattern of registering by place of death. An unknown infant deaths occurring in urban areas (for example, in
hospitals) are of child n who are brought in from rural areas.
.....
F
- 47 -
I
T^jle 3.3:
Age-Specific Death Rates by Rural and Urban Residence
ASDR
RURAL
AGE
J
■
1
0-4
5-9
10-14
15-19
20-24
25-29
30-34
35-39
40-44
45-49
50-54
55-59
60-64
65-69
70*
ALL AGES ,
Source:
Table 3.4:
ASDR
RURAL:URBAN
ASDR
URBAN
7.9
12.1
18.2
31.5
42.6
89.6
18.2
1.6
1.0
1.5
1.9
1.9
2.3 .
2.9
4.3
6.4
10.7
16.7
27.5
41.2
88.5
2^
2.4
1.6
- 1.6
1.7
. 1.6
1.5
1.4
1.3
1.2
1.1
1.1
1.1
1.0
1.0
12.0
7.4
1.6
39.7
3.9
1.6
2.4
3.1
3.0
3.5
4.0
5.7-
1987
Health Information India 1990
Urban-Rural Differentials in Infant Mortality and Total Fertility in 15 Major States
1989
I Mt
URBAN RURAL
RATIO OF RURAL:URBAN
IMR
1989
1980
1987
TER
URBAN
RURAL
RATIO Of RURAL:URBAN
TFR
1987
1981
ALL INDIA
58
98
1.7
1.9
3.2
4.4
1.4
1.5
Andhra Pradesh
Assam
B ihar
Gujarat
Haryana
Cam^taka
Kerala
Nadiya Pradesh
Naharashtra
Oriaaa
f^mjab
Rajastan
Tamil Nadu
Uttar Pradesh
West Bengal
53
63
63
70
58
53
15
78
44
76
53
59
43
75
53
87
93
93
92
88
89 B
23
124
66
126
72
103
80
126
82
1.6
1.5
1.5
1.3
1.5
1.7
1.5
1.6
1.5
1.7
1.4
1.7
1.9
1.7
1.5
2.6
1.6
N/A
1.3
2.1
1.8
1.2
1.9
1.6
2.4
1.7
2.3
1.6
1.7
N/A
3.1
2.6
*4.2
3.3
3.6
2.9
2.2
3.8
3
3
3.1
3.9
2.4
4.3
2.4
3.8
4.1
5.4
3.8
4.5
3.7
2.2
5
3.7
3.8
3.5
5
2.8
5.8
4.4
1.2
1.6
1.3
1.2
1.3
1.3
1.0
1.3
1.2
1.3
1.1
1.3
1.2
1.3
1.8
4.6
1.2
.4
1.5
1.3
<1.2
1.4
1.3
1
1.2
1.3
1.4
1.5
2.0
Source:
1.4
Family Welfare Yearbook, 1989-90
■/T
-
J'-
4 \ 'A-
■
•'
- 48 -
an Fertility Rates
-
i
Fertility rates show similar patterns: Rural women have 4.4
children t on average, while women in urban areas have an avenge of 3.2
5
children. With the sole exception of Kerala, where both urban and rural
^omen have very low (replacement-level) fertility rates, all states exhibit the
expected rural-urban differential, with modest declines between 1981 and
q87, the most recent year for which data are available. Assam stands out as
i state that has a sustained large differential between urban and rural fertility.
Variation in Health Sums by Social Grou?. within geographic
-23
areas, variation in health status is seen by caste. The LMR for scheduled
.- -p.stes and tribes in rural areas is 22 percent higher than for the general rural
popelation (Table 3.5). In urban areas, infant mortality is 44 percent greater
for these disadvantaged groups than for the general population. With respect
*io child mortality, the differentials by caste are even more pronounced.
Caste-specific variation is also seen in fertility rates, though differences are
less marked.
3.24
According to a study in rural Tamil Nadu (Sundari, 1992), the
incidence of complications of pregnancy and childbirth is closely related to
social (or caste status), with the lowest most disadvariaged (’’scheduled”)
groups having at least one pregnancy-related problem m 42 percent of the
cases studied, and less disadvantaged (but still "backwara") castes
experiencing pregnancy-related problems in about 3u percent of cases.
f
’•tole 3.5:
Interaction between Rural-Urban Residence and Scheduled Caste/Scfryduled Tribe
if
POPULATION
1981
INK
1981
CNIU)
MORTAL ITT
1981
TFR
Rural (All)
98.5
149.4
5.4
Rural (SC/ST)
120.5
190.0
5.6
Urban (All)
57 5
78.7
4.6
Urban (SC/ST)
83.0
121.5
5.0
Source:
Computed from Census India, 1^81
>
...
■
■
-
-
h;-
• <v
K?Hr-
- 49 fl.
■'
i
2
\\
A
9
-.5. 14 15- ’9 2C-2- 25- 29 3C- 3-» 35-39 40-44 45-49 50-54 55-59 60-64 65-6^
Aae
^ura 1 Ma e
Rura 1
Fema 1 e
Figure 3.2: Age-Specific Death Rates in Rural Areas, by Sex, 1987
Gender Differences in Health Status.
■I
I
3.25
India is one of only seven countries in the world in which
women have higher mortality (At least up to age 35) and lower life
expectancy than men. As shown in Figure 3.2, in most parts of the country,
girls are more likely to die than boys. In general, states with the highest
overall mortality levels have the greatest differentials between males and
females (Chatterjee, 1989: 3).
3 26
The difference between rural and urban areas in the relative
disadvantage of women can be seen in Table 3.6, which in the first two
columns show the ratio of rural to urban age-specific death rates for men and
women separately, and in the second two columns show the ratio of female
to male age-specific death rates in rural and urban areas. While for both
men and women, urban populations are better off than those in rural areas,
among adults that differential is greatest for women in the reproductive ages.
Tlie excess mortality of women compared to men is seen in both urban and
njral areas, for the most part, but is greatest in the rural populations.
Particularly in the years of the greatest childbearing.
a.
i;
^••4^
iii
...
»:•
- 50 I
The excess mortality of .females is reflected in the unfavorable
' ratio throughout all of India; with the sole exception of Kerala,
r^turbinglx^ there was an unexpected 5-point decline in the sex ratio
1981 and 1991 (from 934 to 929 females per L000 males), after a
aenod when most had hoped that both socioeconomic development effons
ind health services were reaching out to a larger portion of disadvantaged
women.
28
respect to morbidity, several studies demonstrate that girls
are more likely than boys to suffer from several illnesses, including
respiratory infections that are the cause of a large proportion of childhood
deaths. Diarrheal disease has been found-to be more prevalent among female "
children, as well. (Cohen, 1987; Pettigrew, 1987; Levinson, 1974, all cited
in Chatterjee, 1989). A national survey found that visual disabilities were
nearly 50 percent more common in men than women (National Sample
Survey Organization, 1983, cited in Chatterjee, 1989).
<29
It is critical to note that gender differentials in morbidity are
extremely difficult to quantify. Ironically, the methodological difficulties
result from the very same influences that cause the differentials themselves:
despite their increased mortality, women are less.likely to consider their
health conditions as “sicknesses,” and still less likely to seek care outside the
home. Therefore, any provider-based information on morbidity is likely to
: be heavily biased.
C. Variation in Access to Health Services
3.30
Based on the description of variations in mortality, morbidity and
fertility in India, a compelling argument can be made that the health service
requirements are vastly differeat among states and population sub-groups.
We now turn to examine how access to health services varies among these
same populations, in an attempt to understand the availability of health
services to specific sub-groups.
Inter-State and Rural-Urbap jDifferences in Facilities and Manpower.
3.3!
In 1990, the population per hospital bed in India ranged from a
low of 422 in Kerala to a highiof more than seven times that figure, or more
than 3,000 persons per hospital bed in Bihar Once again, the poorer states
tend to have the least favorable population-to-bed ratio, while the northern
and southern states have considerably more access to hospitals, by this
indicator. Involvement of non-governmental organizations in providing
■
; IS
RURAL:URBAN
AGE
0-4
5-9
•0-14
'5-19
20-24
25-29
30-34
35-39
40-44
45-49
50-54
55-59
60-64
65-69
^0*
FEMALE:MALE
URBAN
RURAL
F
M
2.1
2.5
1.5
1.8
1.6
1.3
1.3
1.3
1.2
1.3
2.3
2.3
1.8
1.5
1.8
1.8
1.7
1.4
1.6
1.2
1.2
1.2
1..1
1.3
1.0
1.0
1.5
0.8
1.5
1.3
1.5
1.1
1.0
0.7
0.7
0.8
0.8
0.8
0.8
0.9
0.8
0.9
0.6
C.8 .
0.7
0.7
0.7
. 0.7
-0.8
ALL AGES
1990
HOSPITAL
1990
POP/BED
BEDS PER HOSPITAL
GOVT
PUIVATE GOVT
X GOVT
BEDS
OF TOTAL
Andhra.Pradesh
Assam
Bihar
Gujarat
Maryana
Karnataka
Kerala
Nadiya Pradesh
Naharashtra
Orissa
punjab
Rajasthan
"anil Nadu
’ ripura
Uttar Pradesh
West Bengal
36,400
14,460
28,137
46,374
7,003
34,477
70,349
22,103
111,420
13,988
15,018
21,815
48,780
1,531
47,278
53,977
1,735
1,691
3,011
871
2,305
1,293
422
2,852
666
2,211
1,303
1,993
1,141
1,652
2,828
1,201
69X
81X
SOX
36X
68X
77X
38X
N/A
56X
90X
74X
9OX
78X
N/A
72X
86X
73
96
93
98
82
126
193
61
90
50
60
87
135
67
64
179
42
47
101
19
112
144
16
N/A
29
45
97
54
87
H/A
76
54
1.8
2.0
0.9
5.1
0.7
0.9
12.3
N/A
3.2
1.1
0.6
1.6
1.5
N/A
0.5
3.3
26
.....
•
■.
■
■■
_
....
<
- 52 -
f
j3.32
32
Not surprisingly, urban areas have a relatively greater supply of ...
nospital beds than do rural areas. This should not necessarily be taken as an
indicator ot urban "bias,since even urban facilities serve patients from rural
yeas, and .location in more densely populated areas is often the only
economically efficient appioach. However, the ratio of urban-to-rural
hospital beds does indicate relative access to health care of urban and rural
populations.
’
3.33
Table 3.8 shows that urban hospitals consistently make up about
two-thirds to three-quarters of all hospitals. The population per bed in rural
areas is three times that in urban areas (Figure 3.3).
’'■’Ousa nas
^sd • t a 1
Seos
' 33 “
1579
"983
’986
’ear
Rur-a 1i
iSSI Uroan
Figure 3.3: Hospital Beds by Rural-Urban Distribution, 1951-88
fcunary Health Infrastructure
3-34
The public sector has built a'very large infrastructure of health
™ ,n
31635 throughout the country. In 1991, there were some
1,000 SubCs, 22,000 PHCs and nearly 2,000 CHCs. Functioning of the
rood health network depends on the existence of a referral network, from the
uoC, which provides essentially no curative care, through to CHC, which
*1 liArAfnrA
ino<itient
«
it ic
----------- .w, av *>»
*
vailability of one level of care versus others.
w cAtuumc me relative
a.
I
■
--
--“ - .~-r-
- -1
-IS-
*
-■T3?
■p1 '
I
■
■■
_
- 53 -
S'
The ability of the states to achieve the established facility norms pHC for every SubC; one CHC for every four PHCs - is shown in ♦
, i 9 With respect to the ratio of SubCs to PHCs, most states approach
- JExceptions include Assam and Madhya Pradesh, each of which
tfy oonrirnor
10 SubCs per PHC, far above the ratio intended to provjde
j moree than
f
SubCs with adequate supervision.
F j36
F
5
t Turning to the ratio of CHCs to PHCs, on the other hand, a
picture emerges. In sUttar. Pradesh, for instance, there are
rnuch more varied
1
jpout five PHCs for every CHC - only slightly more than the norm. In
Bihar, there are more than 23 PHCs that, on average, can refer to a given
CHC Surprisingly, an even greater number or PHCs per CHC is found in
•he relatively well-off states of Andhra Pradesh and Punjab.
i r
Table 3.10 displays the average rural population covered by the
•^rcc basic tiers of the rural health network. Compared to the norms, nearly
aiI states fare well in coverage by the lowest level, SC. Similarly, only a
states, including Assam, Gujarat and Madhya Pradesh, fail to meet the
wm of one PHC per 30,000 population. Punjab appears to have an
twersupply of PHCs (at least comparedhto the norm), which helps to explain
•he anomalous nearly one-to-one corres|x)ndence beM’wn pure
Q,.krc hat state. On average no state has met the norm c.
j population of 80,000 to 120,000, and some states have extremely htue
- overage at the CHC 4evef (e. ' Andhra Pradesh, Bihar and West Bengal).
li!11>glances Between States and Levels of Health Care Provision
38
From this review of the available state-specific facility data on
the rural health network, two major implications emerge. First, that there
? 4rc great differences in the availability of hospital ^resources among states,
**nd this variation is closely tied to the’participation of the private sector,
* hich in turn is linked to the states’ levels of economic development.
Second, in the rural health network there are notable imbalances in nearly all
states among the three tiers of the system, implying that investments have not
Seen pursued in an well-integrated and packaged form.
: I
-
:f
■ -j.
-
-
-
-
jW
: ~
I
-S
- 54 Table 3.8:
Rural-Urban 0 i str i tSUt i on of Hospitals
YEAR
HOSPITALS (% RURAL)
HOSP BEDS (X RURAL)POP PER BED
195
196r
1969
1979
1983
1988
12,694 (N/A)
13,054 <32.8X) * '
4,023 (30.7X>
5,766 (25.6X)
6,901 (26.4X)
9,381 (31.5X)
117,000 (N/A)....
229,634 (15.8X)3431,589
328,323 (21.0X)3101,295
446,605 (13.1X)3381;139
486,805 -n3.3X)3691,109
SOURCE:
585,889 (15.8X)3631,034
Health Statistics of India, various years; Statistical Abstract 1984,
1985; Directory of Hospitals in India, 1981
Table 3.9:
Distribution of Rural Health Facilities
SUbC* PER
PHC
STATE
5.9
11.4
Andhra Pradesh
Assam
Bihar
Gujarat
Haryana
Karnataka
Kerala
Madhya Pradesh
Maharashtra
Orissa
Pun j ab
Rajasthan
Tami I Nadu
Uttar Pradesh
West Bengal
6.1
11.5
5.9
9.5
6.3
6.8
5.6
10.0
5.7
27.9
7.5
23.5
4.5
8.9
7.7
16.8
6.8
5.8
12.2
29.9
6.6
19.6
5.4
17.7 •
6.0
5.3
1.4
6.1
6.1
6.0
5.1
1991
PMCs PER
CMC
All 1ndia
NORM
4.0
SOURCE:
STATE
1951-88
Rural Health Statistics,, 1991
Table 3.10:
Population Covered by Rural Health facilities
1991
AVERAGE
RURAL POP
SERVED IT
X DIFF
FROM
MATIOMAL
X DIFF
FROM
MATIOMAL
AVERAGE
AVERAGE
RURAL POP
SERVH) BY
A PHC
A SU8CEMTRE AVERAGE
X DIFF
FROM
MATIOMAL
AVERAGE
AVERAGE
RURAL POP
SERVED BY
A CMC
(in 100,000)
All India
4,576
0
27,168
0
3.10
0
Andhra Pradesh
Assam
Bihar
Gujarat
Haryana
Karnataka
Kerala
Madhya Pradesh
Maharashtra
Orissa
Punjab
5,803
4,228
4,853
3,947
5,103
3,771
4,565
3,975
4,842
4,786
4,638
27X
-8X
6X
14X
12X
-18X
OX
-13X
6X
5X
IX
-12X
-10X
4X
29X
35,710
48,890
28,795
37,644
29,701
25,920
25,529
40,053
27,529
25,262
6,499
24,665
25,117
28,356
30,052
31X
BOX
6X
39X
9X
-5X
-6X
47X
IX
-7X
-76X
-9X
-8X
4X
11X
9.96
3.66
6.77
1.69
2.86
1.98
4.30
2.70
1.60
3.09
1.94
1.62
4.91
4.35
5.33
221X
18X
118X
-45X
-8X
-36X
39X
-13X
-48X
OX
37X
-u8X
58X
4 OX
72X
j aS tiioTii
/
4
, UJ I
Uttar Pradesh
West Bengal
4,134
4,764
5,894
HORM
5,000
Tamil Nadu
SOURCE:
Rural
30,000
1991
0.8-1.2
3-
ii o
*1
■■
- 55 -
F-
P
r;
3.11:
Registered Doctors and Nurses per 100,000 Population
.1971
DOCTORS
NURSES
•
22.2
23.9
^ra Pr&esh
I xar
Gujarat
wryana
lamataka
tarala
wcfiya Pradesh
Martarashtra
0< issa
Pin j at)
aajasthan
Taan I Nadu
Uttar Pradesh
west Bengal
tource:
27.6
27.5
29.3
51.0
46.0
8.1
65.4
30.7
72.0
25.4
65.7
21.5
60.2
13.0
11.1
-14.5
• 14.0
14.0'
37.5
15.5
54.0
11.3
94.6
15.3
51.8
6.8
16.2
39.2
22.0
43.0
27.2^
26.2
43.
12.9
45.5
14.6
58.0
6.3
19.4
9.6
39.1
7.5
. 64.7
11.0
34.4
3.9
11.4
27.6
14.7
26.4
27.1
11.5
45.3
19.7
52.3
1986
DOCTORS
20.3
16.7
11.0
6.5
9.5
s 18.5
26.2
:nD[a
1981
NURSES
DOCTORS
by State,
Health Information India, various years,
19,71-86
NURSES
NURSE: DR
> 62.3
54.7
13.3
55.7
32.8
74.5
28.3
74.3
22.9
61.6
24.3 •12.3
11.6
17.3
18.5
21
136.5
17.9 •
47.7
13.7 P
105.9
19.3
51.7
7.7
18.8
0.3
2.5
1.3
0.9 .
0.4
1 .4
0.7
0.7
0.3"
-0.3
41.8
27.1
0.6
48.9
0.9 ,
0.%
0^
0.4
in Duggal (1992)
I). Health Manpower
The Supply of Doctors
;
With respect to manpower in the health sector, data from 1986
and earlier years (Table 3.11) shows quite a close relationship between the
number or doctors per 100,000 and a state’s relative economic and social
condition. In Gujarat, Karnataka, Kerala, Punjab, Tamil Nadu and West
Bengal, far more medical manpower is available per capita than in the poorer
states of Assam, Bihar, Madhya Pradesh, Rajasthan and Uttar Pradesh.
Ibf Supply of Nurses; Imbalances between states are acute.
4l)
The supply of nurses, low in nearly all parts of India, is cause
for the greatest concern in the traditionally .disadvantaged states. In Uttar
‘jadesh, for example, there are only 7.7 nurses per 100,000, while in Tamil
* adu there are nearly 52 nurses per 100,000 population. In nearly all areas
°‘
00110try, the number of doctors exceeds the number of nurses, in some
(such as West Bengal) more than three-fold. There are some
exceptions to this general rule — Kerala, which has a remarkably large supply
0 nurses, compared to the rest of the country; Madhya Pradesh, which
to suffer from severe shortages of both doctors and nurses, and
unjab, which appeals to have a relatively good supply of both types of
nealth professionals.
-56¥
g^pjjrban Differences in Health Manpower
, 4|
Data on the urban-rural distribution of doctors, nurses and other
* rsonnel are available only from the decennial Census, so the most recent
formation
<./ailable is from 1081. (The 1991 tabulations by occupational
fcatego1? have not yet ^>een made available.X Table 3.12 shows that, in
eeneral, allopathic doctors are more likely to be found practicing in cities. >
while non-allopathic doctors*(even registered ones) are most often in rural
- areas. Interestingly, however, between 1961 and 1981, the proportion of
* rural doctors officially registered to practice allopathy has increased from
about 40 to 62 percent.
a
Rural-Urban Distribution of Medical Manpower, 1961-81
Table 3.12>:
YEAR
f?:.
ALLOPATHIC DRS
TOTAL X RURAL
65,024
126,353
196,554
1961
1971
1981
MON-ALLOPATHIC DRS
X RURAL
TOTAL
61.IX
61.3X
58.9X
29.5X 100,247
39.4X 105,155
27.2X 120,515
ALL RURAL DRS
X ALLOPAT
TOTAL
231,508
39.3X
54.6X
317,069
62. OX
165,271
j?
Rural-Urban Distribution of Mursinq and Other Paramedical Manpower, 1961-81
t^jIc 3.12b:
TEAS
NURSES.
TOTAL'
76,20:9
1961
1971
1981
103,610
167,188
Source:
Duggal, 1992
X RURAL
38.2X
30.6X
31.3X
MIDWTVES/HEALTN VISITORS
X RURAL
TOTAL
51,194
36,320
49,579
66.4X
65.3X
59.9X
3.42
With respect to nurses and-other paramedical personnel, the
picture is much the same. Trained nurses are most often urban-based;
midwives and other paramedical manpower are most often in rural areas
(Table 3.12).
3.43
Variations of staffing of Health Facilities. In the rural public
health network, quite striking variation is seen in the vacancies in
government health facilities. Table 3.13 presents vacancies among physicians
and paramedical personnel at the PHC level. The picture is not a clear one.
For example, all sanctioned positions for physicians are said to be filled in
Assam and Bihar, two of the poorest states, while in Madhya Pradesh and
Uttar Pradesh, two of the other disadvantaged states, the vacancy level for
doctors at PHCs is 18 and 40 percent, respectively. On the other hand, in
Gujarat, Haryana and West Bengal, relatively better-off states, significant
vacancy levels are also found.
.....
8^
.J-57-
F
' Vacancy levels among-paramedical personnel are also strangely
J-44
varied- A few examples point out the apparently unsystematic differences in
vacancy levels: Assam and Bihar report no vacancies among Health Workers
(Male) (also known as malQ multi-purpose workers), and yet relatively high
vacancies among Health Workers (Female) (also known as Auxiliary Nurse
Midwives, or ANMs). On the other hand, Kerala, which reports a full cadre
of doctors has nearly 24 percent of its male and none of its female health
worker positions vacant. And Uttar Pradesh, apparently very short on
doctors in sanctioned positions, seems to have few if any vacancies among its
paramedical personnel. Overall, the manpower statistics available present a
picture ot imbalances between the numbers of health workers supervised and
the doctors and nurses who are assigned the responsibility of supervision.
This imbalance, in one form or another, is present in nearly every state,
regardless of economic condition or spending in the health sector.
Table 3.13:
STATE
Andhra Pradesh
Assam
Bihar
Gujarat
Haryana
Karnataka
Kerala
Madhya Pradesh
Maharashtra
Orissa
Punjab
Rajasthan
Tamil Nadu
Uttar Pradesh
West Bengal
Source:
Health Manpower in Rural Areas, 1990
Gov't Drs
per 100,000
53
11
29
7
8
70
14
-14
85
15 •
18
31
87
6
46
Vacancy
On it PHC
18.8%
0.0%
0.0%
20.4%
23.9%
13.7%
0.0%
18.2%
15.0%
14.3%
5.3%
0.8%
0.0%
40.2%
14.9%
Health Infonaetion Indie 1990
Vacancy
Health Worker
Rale
at PHC
11.9%
0.0%
0.0%
15.5%
19.0%
13.4%
- 23.5%
4.2%
7.6%
11.3%
14.6%
9.1%
- -15.5%
1.6%
10.0%
Vacancy
Health Worker
Female.
at PHC
10.7%
23.7%
24.9%
16.2%
‘4.7%
8.4%
0.0%
6.4%
4.8%
0.0%
0.0%
12.5%
2.0%
0.0%
19.8%
BPf ’
*
IF
-58-
Other Aspects of Differential Access.
Differences in Access to Health Services between Qrggj.tzed and .
M^^yintred Sectors. Only an estimated 8 |o 10 percent of the Indian work
|K7is employed in the organized sector!/; the remaining workers are either
Fj'^rganized agricultural production or the informal, non-agricultural
As shown in Table 3.14, more'industrially developed states such as
^^arashtra and Gujarat have a disproportionately iarge number of organized
tgcVT workers, while the more agriculturally-oriented eastern states of Bihar
I ■
t’ttar Pradesh have a small organized sector, relative to their .population
(Note that figures are presented in this fashion because it is not
given the available information, to arrive at state-specific labor
force participation rates.) The participation of women in the organized sector
tl ^ throughout India, though it ranges from slightly less than 7 percent
fc;»uL' to about 35 percent in Kerala.
P'
3.U:
Distribution of Organized Sector Workers by State
1989
NUMBER IN
ORGANIZED
SECTOR-
X OF ALL
15
STATES
- X FEMALE
OF- ALL
WORKERS
8.OX
3.IX
10.7X
5.IX
2.OX
5.7X
3.8X
8.OX
9.4X
3.9X
2.5X
5.5X
7.IX
17.OX
8.2X
1,681,197
995,398
1,653,747
1,615,485
587,174
1,385,555
1,096,251
1,615,267
3,563,757
724,626
764,876
1,124,509
2,229,454
2,644,589
2,464,994
7.0X
4.IX
6.8X
6.7X
2.4X
5.7X
4.5X
6.7X
14.8X
3.OX
3.2X
4.7X
9.2X
11.OX
10.2X
12.3X
29.4X
6.8X
12.3X
11.7X
16.IX
35.IX
9.7X
12.8X
7.9X
13.4X.
12.2X
20.6X
7.6X
10.OX
100. OX
24,144,879
100.0X
13.6X
_X OF ALL
15 STATES
POPULATION
■*’E
Pradesh
AtS-M
**'"Yana
^rnatsie
***Y» Pradesh
■^•rashtra
^’ssa
^jab
jasthan
. -’“H Nadu
Pradesh
-est Bengal
’5
States
Source;
Family Welfare Yearbook 1990
as all eaubliahmcnu in the public sector irrespective of size of employment and those non-arncuhumi
a** in the private sector employing 10 or more persons.
a.
.
....
■.
-
..c
-z
•s .
■'
'
; W IB
.
c
x:? iA . A.- ..C
-r
>3
Ml
J
HE*-'
I
B'-
- 59 -
to
ate In5urance Scheme.
j 46
llh
t0 health, services, organized-sector workers have
ppQj-e resources available than do workers in agriculture or the
^organized (informal) sector.- Several institutions that exist to provide
workers in the organized sector and their dependents with health services are
7 d^nbed briefly below, and in more detail in Annex 3. The largest of these
is the Employees State Insurance Scheme' (ESIS), a government-subsidized
insurance plan established under the Employees State Insurance Act of 1948
to provide benefits to employees of the organized sector in case of sickness,
maternity and employment injury." In essence, it provides low-wage
employees in the organised sector with many of the health services associated
with social security systems in other countries.
3.47
As implemented, the ESIS covers a rather narrow band of
workers and their dependents: employees receiving wages of not more than
Rs. 1,600 per month who are employed in covered factories and
establishments17. The threshold wage currently is being increased to Rs.
2,500 to reflect wage inflation.
3.48
Rather thaivfinancing care through general public or private
health providers^ the ESI.Scheme provides services directly through a
sizeable and growing network of dispensaries, ESI hospitals and annexes, At
the end of the first quarter of 1991, 1,384 ESI dispensanes and 111 ESI
hospitals were functioning. Including ESI hospitals and beds assigned to the
plan in other facilities, nearly 23,000 beds were available to the
approximately 27 million beneficiaries. These schemes are valued by
.employees as a welcome alternative to wider public sector health services.
Given that the plan is expressly designed to cover employees in the organized
sector, it is not surprising that both beneficiaries and facilities are
concentrated in industrialized urban areas.
3.49
In addition to ESIS, which covers low-wage workers in the
organized public and private sectors, moderate-sized and large private firms
typically provide some, type: of medical benefits to employees. A- study of a
sample of 134 companies carried out by the Foundation for Research in
Community Health found that most firms offered at least one type o medical
benefit: 87 firms offered reimbursement claims, 22 offered a lump sum
allowance, 74 provided services in their own or rented facilities, and 38
~ Covered establishment* include non-seasonal factories usin^ power and employinf 10 or more persons, and
'xxvpower factories employing 20 or more persons, or in shops, hotels, restaurants, cinemas, road motor transport
enterprises and newspaper establishments employing 20 or more persons
-
.: -V
fl?'-'•' ■
, - 60 offered insurance coverage. Of tfiq 134 companies, about 54 percent also
^ncipated in ESIS.
Government Health Care Scheme »
■ 'X
J.50
Workers in specific public sectOf'enLerprises are covered
through special health schemes. The Central Government Health Scheme
(CGHS), initiated in 1954, was designed to provide comprehensive medical
care facilities to central government employees and their dependents. In
;OQ0, CGHS provided care to 3,833,000 beneficiaries through a network of
about 300 dispensaries, 3 yoga centers, and 13 poly-clinics in 15 cities,
dost of the dispensaries specialize s allopathic care; a limited number
provide ISM care. -While CGHS dispensaries provide the basic health care
and emergency services, hospitalization is provided through central,’state or
municipal hospitals. In the few instances when government facilities are
unavailable, private hospitals are authonzed to provide inpatient services for
CGHS beneficiaries.
3 51
Not surprisingly, given the population being served, the facilities
are again highly concentrated in a few major metropolitan areas. The vast
majority of services (e.g., two-thirds of the dispensaries) and a large share
(43 percent) of the beneficiaries are in Delhi. Bombay, Calcutta and
Hyderabad together account for another 25 percent of dispensaries and 25
percent of beneficiaries (NCAER, 1992).
3.52
Other categories of public sector workers, including those in
defense, postal, telephone, mine and enterprises, have their own health
services, financed through the ministries under which tile workers are
employed. Coverage of these services is shown in Table 3.15.
T«ble 3.15:
ektify
BASIC
HEALTH UHITS
HOSPITAL BEITS
POPULATION COVERED
'■ sis
1,334
22,714
26,748,750
CGHS
313
o
3,833,397
POSTAL/
telecomm
$2
0
N/A
hica MINES
19
180
N/A
IRON ano other
ORE MINES
23
235
N/A
LIMESTONE
dolomite
36
0
N/A
I >>
60
N/A
RAILWAYS
655
12,644
8,618,000
defense
N/A
N/A
N/A
ano
SEED! yORKERS
Source:
..
_____
Health Providers for the Organized Sectdr, Special Categories of Workers
ICC
Health IMorwation India 1990
&
-
Y
-
- 61 -
-
in Access to Health Services Among Distinct Social Groups.
The norms for public health infrastructure are designed to favor
■ X53
’ bal (and •••*•,
hilly)/ —
areas. ^Vhile in most of
country,
e mbai
- the
-----------j' there is supposed to be
’
: SubC ratio
SubC for every 5,000 people, in tribal areas the population:
i
7 lowered
to
3,000:1.
For
PHCs,
the
national
norm
is
one
for
every
jowei—
T)0 000; in tribal areas, it is one for every 20,000 population.
; 54
Of the 3,507 PHCs estimated to be required for tribal areas
(based on population size), 91 percent were in place by the end of the 1991
fl5Ca] year. Of the 23,586 SubCs sanctioned for tribal areas, approximately '
SO percent were in place. Table 3.16 shows the variation in coverage of
inbal areas by state. The range of coverage is wide, and not clearly related •
cither to the state’s available resources or to the total size of the tHbaf
population, as might be expected: In Bihar, for example, only about 42
percent of the PHCs. required in the tribal areas are in place, while in
Madhya Pradesh, whictrbas a larger tribal population, about 84 percent of
the required PHCs have been constructed. With respect to SubCs, the states
showing the greatest deficits are, oddly, Bihar and Kerala. The reasons and
consequence are different though. This represents deprivation in Bihar, but
■in Kerala is a consequence of good communications, combined with effective .
and available higher level care.
- .
1
3.55
Unfortunately, no quantitative information is available to show
whether the existing PHCs ancUSubCs are more or less likely to be
' functioning than those in other areas. However, knowledgeable individuals
consistently report that medical manpower shortages are particularly acute in
these areas, and a relatively large share of the rural public health network in
■ these areas is not able to provide curative services.
Table 3.16:
STATE
A chi eventent of Coverage p£ Tribal Areas by State 1921
PMC
SC
t£Q IN PLACEX ACHIEVED
REQ
IN PLACE X ACHIEVED
Andhra Pradesh
Assam
Bihar
Gujarat
Karnataka
Kerala
Hadhya Pradesh
Maharashtra
Orissa
Rajasthan
Taail Nadu
Uttar Pradesh
West Bengal
Major States
Source:
1,930
1,855
380
5,019
1,806
2,300
1,019
70
1,381
712
445
1,824
1,632
1,850
131
4,935
1,685
1,854
931
111
1,376
91
3.Z12
2,965
92.3X
21,713
17,519
266
55
752
654
915
804
3,522
■..i
•-'i
■ ITTVi. 7 .V t -Z
... ;
84.7X
61.2X
42*. 5X
55.4X
115.4X
105.5X
84.2X
97.8X
112.IX
92.6X
108.3X
86.3X
389.7X
71.5X
55.3X
'51.8X
84.6X
99.7X
34.5X
98.3X
93.3X
80.6X
91.4X
158.6X
99.6X
12.8X
80.7X
Rural Health Statistics 1991
:
.
2X1
354
185
12
219
107
116
74
208
163
307
58
633
. 265
397
125
13
189
417
137
1Z1
489
■ *?.4r
ri-’t
T
.
'?
^5
____ 7 ~
.
.\T
.
--
■p -
*
-62-
E
■»
*n
to Health Services bv Gender
When examining access of women to medical care, it is critical
to recognize the cultural and economic (demand-side) influences that are
' "
-peraung. The literature i^ replete with studies showing that young boys and
— consistently given picicrcnuai
preferential treatment, parucuiariy
particularly in seeiang
seeking
are
health care, relative to young girls and women (Chatteijee, 1989 provides a
‘ rr/iew of these studies).
i
-• 1
' ?
'1
‘ .1
I
1
'i
;4
■“M
1
: f"
From the provider side, several services are specifically targeted
a: •~’omen. In particular, the family welfare program, combining family
P^mng and maternal and child health, operates almost exclusively through
aKMs at the SC and PHC .levels. Without question, the vast majority mated at 75 percent -- of the ANMs time is devoted to family planning
: To a large extent, this involves identifying potential family planning
acceptors, and motivating those women to obtain government-provided
sterilizations. The remaining time, allocated to MCH activities, is mainly
spent on child immunization, by all reports. Therefore, it appears that there
is ittle specific attention given to women’s health needs, and almost none to
:re health needs of women that are not directly related to their children’s
health.
•
' ?8
As one indicator, it is useful to look at trends in the proportion
of rregnant women who are attended by trained personnel, or who give birth
:r an institution, since this indicator is closely related both to access to health
se-vices and to a major source of excess female mortality, maternal deaths.
For both urban and rural populations, there has been an increase in -*
- institutional childbirth oyer the past 20 years or so, though the gap between
rural and urban attendance has persisted. In 1971, only 7.8 percent of rural
births and 32.1 percent of urban births took place in medical institutions; at
Lua: time, 11.3 percent of rural births and 24.5 percent of urban births were
amended by trained personnel. By 1987, 14.7 percent of rural births and
nearly half (48.7 percent) of urban births took place in medical institutions.
Ar that time, 1718 percent of rural births and 25.5 percent of urban births
^ere attended by trained medical practitioners (Family Welfare Yearbook
1989-90).
- 59
Whether a birth takes place in a home or an institution appears to
largely a function of whether a functioning public facility is nearby, at
for rural women. A study of more than 3,000 rural mothers carried out
by the Indian Council of Medical Research (1991) found that among women
hving in a village where a PHC was located, about 55 percent gave birth at
borne, versus about 35 percent in the PHC. Among women living in a
village with a SC, more than 80 percent gave birth at home, and less than 10
>r.'V ;
1
- 63 -
■
prftxni( m the SC or the referral PHC. Finally, nearly all women living in
remote. villages, without close access to either an SC or s PHC, gave binh at
Variation in Utilization of Health Facilities
I
I
Ironically, for all the vast differences in economic and
160
environmental conditions that characterize distinct sub-groups in India, and
despite the regional and other differentials in the extent to which the public
health network provides coverage, there is a remarkable consistency in health
senice utilization patterns. In every state, in rural and urban areas, among
nch and poor, the vast majonty of people seek health care from the private
jector. And, whether obtaining medici care from the public or the private
jector, almost all individuals pay a substantial amount out of pocket for
health services. In many cases, those who can least afford to pay - the rural
prxir - pay the most.
Two sources provide useful data on households’ utilization of
health services: the 42nd round of the National Sample Survey (NSS) (social
.onsumption survey), carried out in 1986-87; and the National Council for
Applied Economic Research (NCAER) study of household expenditures,
earned out in 199(1. Using these data, it is possible to see differences in
ut/hzauon and expenditure patterns by state, by rural-urban residence, and bv
income group.
’ 62
Table 3.17 shows the use of health: services for illnesses
requiring treatment for each of the 15 major states. In all but three states
lOnssa, Rajasthan and West Bengal), private hospitals account for a much
“tfger share of all health services than any other source. In 10 of the 15
states, government hospitals provide less than one-third of all treatments.
* He PHCs rarely provide more than about 10 percent of the care,
terestingly, in Kerala, which has by far the most favorable health
11
PHCS Were f°und to Pro™16 essentially none of the curative care;
Public hospitals provide about 30 percent of all care. Private hospitals in that
late were found to provide 42 percent of all treatments.
3 63
According to information from NCAER, the preferred health
provider in both rural and urban areas' was the private doctor (54.8 and 55.5
Percent of all treatments were from private doctors in urban and rural areas,
respectively) (Table 3.18). Despite the documented regional differences in
availability of doctors, hospital beds and the public health network there is
s.
i
;
-•«:
•
—.....
- rr- -7 2... .-?•' ,7T ,_. 5
km
- 64 J
i
gjsentiallv no rural-urban difference in people’s behavior when seeking health
care.
.
r? ■
p ’ ■
B1
Y^>le 3.17:
Utilisation of Health Services
SlXTE
I
GOVT
HOSP
ESI
PRIVATE
HOSP
«OSF
31.5X
36.IX
21.4X
27..4X
20.8X
39.7X
29. IX
29. OX
17.OX
61. IX
12.2X
48.8X '
36.4X
17.9X
15.5X
8.1X
3.IX
1.0X
0.0X
fry State
PHC
1990
OiARITAB MEDICAL
DI ST
SHOPS
OTHERS
X
^ra Pradesh
1
Alta*
lihar
Gujarat
x»ryana
(•rnataka
itrala
Mactiya Pradesh
Meharasntra
Or issa
Ptrijab
»>jasthan
'mxH Nadu
uttar Prad
west Bengal
Source:
o.ox
o.ox
2.7X
0.2X
0.8X
a. ix
o.ox
8.7X
o.ox
0.5X
1.5X
29.7X
39.6X
48.5X
66.2X
44.IX
50.IX
42.OX
48.1X
49.IX
7.2X
47.OX
14.6X
58.2X
58.7X
16.8X
6.2X / 0.3X
10.3X
1.8X
10.9X
0.9X
3.IX
O.OX
10.3X
O.OX
1.9X
O.OX
O.OX
2.7X
1.7X
2.6X
20.8X
O.OX
15.8X
0.3X
18.6X
O.OX
O.OX
1.6X
2.5X
O.OX
8.6X
0.3X
7.1X
2.6X
Medical Treatment Used and Average Expenditure per Illness Episode
URBAN
TYPE Of TREADCMT
I
- ■ 1
i
<-
J
1
J
1
£
£
11.5X
1.4X
7.9X
1.4X
0.0X
3.7X
3.2X
9.2X
4.2X
10.IX
2.7X
10.7X
2.5X
7.OX
15.6X
NCAER Survey of Household Expenditures
i^ile 3.18:
1i
12.7X
> 7.7X
9.4X
1.4X
24.8X
4.7X
20.2X
9.2X
8.OX
5.4X
19.6X
15.7X
0.5X
6.9X
41.OX
RURAL
X OF EPISODES
AVERAGE EXP
(Rs.)
X OF EPISODES
AVERAGE EXP
(Rs.)
Government Doctors
Private Doctors
Paramedical Person
Rituals
Self-Medication
39.1
54.8
1.2
0.2
4.7
126.32
164.44
51.30
118.09
48.22
38.3
55.5
1.2
2.5
168.99
146.70
127'15
165.94
18.98
Total
100
142.60
100
151.81
2.&
Source: NCAER Survey of Household Expenditures
£pst$ per Illness Episode
3 64
The NSS found a similar utilization pattern (Table 3.19). The
private sector accounted for about 75 percent of all health care in both rural
and urban settings. Out of the public sector’s 25 percent share, only about 5
percent of all treatments were from primary health centers in rural areas;
nearly 18 percent were from public hospitals. In urban areas, public
hospitals provided a marginally higher proportion of public sector care. In
toe private sector, the majority of care is provided by private doctors, with
no difference between urban and rural patterns.
as
1
3
_-.--I"
W-.' s - --4
*
- 65 With respect to expenditures per episode, which include direct
transportation
, transaction payments and other access costs, drugs
charges.
all other expenses, it appears from the NCAER data that individuals in
areas spend slightly more than those in urban areas, possibly both
t^use they are more severely ill when,seeking treatment and because
asportation costs are relatively high. On average, patients pay Rs. 140150 per episode. No estimates could be made of transaction costs, such as
waiting time, though all indications afe that these are extremely high in many
public sector facilities.
Trfjle 3-19:
Household Utilization of Medical Services in Rural and Urban India
RURAL
1986-87
URBAN
16,692
9,136
PUBLIC HOSPITAL
PRIMARY HEALTH CENTER
PUBLIC DISPENSARY
SUB-TOTAL
17.7X
4.9X
2.6X
25.2X
22.6X
1.2X
1.8X
25.6X
PRIVATE HOSPITAL
NURSING HOME
CHARJTABLE JNSTiTUTION
ESI 'DOCTOR
PRIVATE DOCTOR
OTHERS
SUB-TOTAL
15.IX
0.8X
0.4X
0.4X
53.IX
5.2X
75. OX
16.2X
1.2X
0.8X
1.6X
51.7X
2.9X
74.4X
.TOTAL
100X
100X
SOURCE OF TREATMENT
AVERAGE AMT PAID TO AGENCY FOR TREATMENT (RS)
GOVERNMENT
PRIVATE
ALL
73
77
76
74
80
79
AVERAGE TOTAL AMT PAID FOR TREATMENT (RS)
GOVERNMENT
PRIVATE
Source:
115
85
103
91
NSS, 42nd Rocrd
3.66
NSS expenditure data also indicates little difference between
urban and rural expenditures per episode. In the NSS sample, individuals
seeking care from public sources paid a total of Rs. 100-115; they paid
considerably less, Rs. 85-91, on average for private care.
I
- 66 -
Reach the Poor?
TDC335 important question is whether the public sector
sucsiGized services to the poor. Data from NCAER
trjSL zl both urban and rural areas, low-income persons
'• cny to seek treatment from government doctors than
- ‘44 percent vs. 26 percent in urban areas; 40
ir “_’ai areas). It is worth noting, however, that for
seer "5an and rural areas, the private sector appears to
tz Trc^ider.
--
E»J:o
|febci
"
w|N0
-
I VI
>
..ffi
a
I
-
S-''?
4
-■sea and Average Expenditure per Illness Episode
c Income Class
^OW INCCRC
AVENGE EXP
(Rs.)
|gp;
. -M
fcad’Ca’
HIGH INCOME
X OF EPISODES
AVERAGE EXP
(Rs.)
5.3
122.05
131.33
46.57
109.07
62.21
25.7
-70.2
-0.2
0.1
3.8
126.32
164.44
5T.30 118.09
48.22
X
122.55
100
142.60 1
LOW INCOME
AVERAGE EXP
(Rs.)
X OF EPISODES
HIGH INCM
AVERAGE EXP
(R«.)
*0.0
5w.e
2.1
^.2
2.-1
156.64
131.27
124.83
115.49
9.33
25.0
74.5
0.5
0.0
0.0
136.90
215?01
25.00
"00
138.55
100
194.59
TSFxf»«’ 1 ** Episodes
»• Dor •
Mr—artica
►e'vcn
&"■
by Urban-
‘•i MCA?* s^vey of Household Expenditures
se Patterns of low and High Income Groups
** seryiCE
’c Sare
1 Sray
rH’_aent
42nd Round
OOwp®
All India
1986-87
PROBABILITY OF USING GOV'T PROVIDERS
TOP 60X
BOTTOM 40%
URBAN
URBAN
tURAL
RURAL
69X
72X
74X
34X
- 67X
75X
66X
25%
50%
51X
52 X
33X
- 56X
65X
55X
25X
r<-
A
*
-67The average^expenditure for private services is at least slightly
than for public services in all except the poorest group. Among rural,
-income, households, NCAER surveys found that individuals pay an
of about Rs. 160 per episode when they go to the public sector, and t
Rs. 130 when they seek care from private doctors. On average, better
individuals do pay somewhat more than the poor for health care - about
’ percent more in urban areas, and about 40 percent more in rural areas.
i
According to the NSS, as shown in Table 3.21, government
hospitals provide 66 percent and 55 percent of the hospitalizations used by
the bottom 40 percent and top 60 percent of the expenditure distribution. .
xspectively, in rural areas; and 74 percent and 55 percent for similar groups
;n urban areas. In other words, public sector hospitals are by far the
predominant source of hospital care for India’s poor and also provide a vignificant amount of services to the non-poor.
i 70
Because of the differences in the frequency of hospitalization
between expenditure classes, the composition of patients is more biased
toward the better-off. About 44 percent of patients at rural public hospitals
and 48 percent at urban ones are from the bottom 40 percent of the
expenditure distribution (Table 3.22).
i*le 3.22r Servrce Use Patterns for Low Income Groups
PERCEMTAGE OF PATIEMTS FROM BOTTOM W OF
(XPTOITURE
TYPE OF SERVICE
GOVERNMENT FACILITIES
URBAN
RURAL
URBAN
RURAL
Antenatal Care
Pediatric Care
Hospital Stay
Acute Treatment
57X
57X
48%
52%
37%
36%
37%
41%
40%
38%
32%
46%
-•xirce:
Per Episode Expenditures by Source of Health Care
PROVIDER AVERAGE PATIENT
EXPENDITURE PER
EPISODE
BOTTOM 4OX
UPPER 60X
URBAN
GOVT
NONGOVT
385
1206
137-696
602-865
218-945
1,020-2,565
HOSPITAL STAY - RURAL
GOVT
NONGOVT
320
735
191-495
515-783
238-429
649-893
ILLNESS TREATMENT - URBAN
GOVT
NONGOVT
74
80
40-143
50 75
2V-180
53-142
ILLNESS TREATMENT - RURAL
GOVT
NONGOVT
73
77
51-74
46-73
50- 109
51- 134
TYPE OF SERVICE
hospital
Source:
f
52%
50%
44X
47%
NSS, 42nd Round
r«6le 3.23:
•S-
NON-GOVERNMENT FACILITIES
STAY
RANGE OF PATIENT EXPENDITURE
NSS, 42nd Rotnd
;
-ft
1
- 68 -
I
F-
Expenditure data on hospital stays is also available (Table 3.23)r
J . ,
nditure per episode in a public hospital is on average less than one-third
private hospital, although this is without controlling for case
cost off a private,
w
Poorer patients repon lower expenditure levels than richer ones in both
public and private- facilities.
I
r
1
I
'1
I
j
r
L
r
■
f- '
; 72
Information on acute treatment contrast sharply with the
3.72
hospitalization picture. For the poorest 40 percent, government providers
account for 25 percent (rural) and 34 percent (urban) of acute treatment
contacts, and 25 percent and 22 percent, respectively, for the upper 60
percent of the expenditure distribution. However; patients from the lower
expenditure group make up 47 percent (rural) and 52 percent (urban) of the
patients at government facilities. The bottom four deciles of the expenditure
distribution also comprise more than 40 percent of the patients at non
governmental providers, suggesting that they may have a greater propensity
to use acute treatments than the better-off group.
3.73
Expenditures on illness care show little difference between
government and non-govemment sources, or by economic class. Again, this
contrasts with the hospitalization data, in which there are sizeable cost
differences between public and private sources of care, and differentials in
expenditure by economic class. ^This suggests that users may perceive little
financial difference between public and private providers for acute treatment
and may explain, in part, that much more limited role played by public
sources of treatment.
FV. STRUCTURAL CAUSES OF IMBALANCES
IN THE HEALTH SECTOR
1
4 1
As long-term trends in budgetary allocations have suggested, and
as GOI’s recent response to structural adjustment has indicated, the system of
health planning and financing in India does not facilitate achievement of the
stated goals of increasing equitable allocation of health resources. In this
chapter, we look directly at how the structure of the public sector’s financing
of health services affects the allocation of resources to the needs of the poor
and how inefficiencies and inappropriate packaging of resources hinder
equitable service provision. The analysis examines the center, then the
states, and finally the center-state relationship.
^•2
This is not intended as an exercise to arrive at an exhaustive list
of the ways in which health sector spending reinforces inequities. Rather, it
is an attempt to identify the spending patterns that can be affected by policy
reforms to achieve the greatest social benefit.
- --
mr
■ ■
' '
'
--A
.
■■
IT
■I
- 69 -
4. The Center
I
-:
e
fesxSsES:“'-t,n
(l) it sets national policy imd establishes goals and 0Cat,°" In the sector; ,
------through
/_
, its
. own di^retio^v'
goals and norms; (b) it demonstrates
pnonues ..
to .uthe states
narr or entirely, nropramc
.
7
pn
programs c»i7»h
» fimds. in
jchemes that are administered through thTstatesaTd^T
communicableC disease COnth)l ■'
projects under the plan budget, which ^e then exTti f
new
the states in subsequent plans. (The first
1
taken over
- - -bv
the second two are discussed in section C on t^ deSCnbed in tflIS section;
relationship.)
t10" C on
n^re of the center-state
■3
1
Xorm^ and Targets
P-
41
centra] government typically has based its rio
size. For example, the targets for const™r Om™e"dallons on population
network of Sub-Centers, PHCs
CHC<
°i 1
Pnmarv heaJ[h
Norms are uniform throughout^ou^
On W^ton.
tribal and hilly areas. The uniform dicr^’ • * S lght mod^lcaOons for
diverse population is an attemp Ten tend
°Ver a
nmal areas are seen as requinng the sfm '
The
serv.ces as the better off^nes Although T
°f PUbi'C heajtfl
henetlt in equal measure to wealthier tommn
COmmunitl« at least
115 bud£et constraints to the limit and nrn a 1UeS’ 'he govemmen' stretches
Poor than would be possible w7^ £s exT?
°f 3 SUbsid-v t0
Pyrans. !„ sum,
National Priorities
t!
„oms owr.r£h^
—ully ^gced
’
'
-
ace of cuts. this is a clea^nXstation ofTUniCab,e
COntroi in the
prov,d'"8
,eads to relati- ely large cuts iiT^'h
On 016 Other hand’ budgetary stress
•hat have fe.er
a SEATS'*
t
s.
’ •W-'-
Bi-70-
B-.-v 4 b
F
i
I
Due to historical patterns of spending by the central government,
little
room for flexibility in plan spending, and still lessen non-plan
there is
5pcndmg As shown in Chapter 2, medical education and research consume
^5 percent of the center’s revenue expenditure^/. Commitments to the
Central Government Health Scheme account for 14 percc. t, and 10 percent
eoes toward central government hospitals and dispensaries. .This leaves little
"room for spending on public health programs, and less for primary health
care, apart from indirect flows to that program through the family welfare
budget.
. - -
public Support for Medical Education; Unwise Use of Funds
gt the Center
47
The allocations to medical education serve as an example of- the
wavs in which pnonties in central level spending may reinforce existing
differentials in resources between rich and poor. In concept, the center has
taken the responsibility for supporting medical education under the
assumption that this is a means of providing quality training for doctors w ho
will enter the public health system. To some extent, this has happened:
nearly‘all public sector doctors attended publicly-supported medical schools.
However, more than three-quarters of India’s medical graduates enter the
private sector. The vast majority of private doctors establish practices in
urban areas, while rural areas remain underserved. In the past, many have
migrated, taking the precious public investment in their education to
industrialized countries (see Statistical Annex 5).
4.8
These doctors benefit personally from the public investment, but
the social returns are small. Funding of medical education by the public
sector, without either cost recovery in education or effective bonding of
graduates into public^service, results in a net flow of resources to better-off
populations both within and outside of the country. Under fiscal constraints,
other facets of the health system, with greater externalities, become
underfunded.
Revenue expenditure including grinu-tn-eid to the Ha let.
fey'•'s
6?
; -- W
- 71 -
The States .
at the State Level
4Q
At the state level, where most health spending takes place, 'the
existing differentials between richer and poorer communities, and between
urban and rural areas tend to be reinforced by the level and pattern of health
spending. This happens through the overall allocation to the health sector
‘rom the state budget. This is a function of: (a) each state’s ability to collect
•he taxes: (b) the share it receives in central taxes, statutory revenue gap and
. ;pgradatiion grants it obtains'from the center; and (c) the competing demands
vf other sectors within the budget. It is nearly a tautology that the poorer
states have a lower capacity to raise internal resources. Thus, without
effective redistribution through the powers of the central government, poorer
states’ which have greater health sector requirements, have far fewer
resources with which to work. And in the poorer states, health may be seen
to have a lower pnonty, relative to industrial production, agriculture,
irrigation, or other economic sectors. The disparity in the ability and
willingness of states to spend on health is clearly reflected in their budgets:
Between 1985 and 1988, per capita total expenditure on health, water supply
and nutrition in the riche.st state was 2.7 times greater than that in the poorest
state (Tulasidhar, 1'992). There is every sign that, in the poorer states health
services delivered by the state in poor areas are already below an acceptable
minimum, because of structural inefficiencies aggravated by inadequate
funding, and are.deteriorating further.
4 10
Trends in health spending, as described in Chapter 2, suggest
that both the state and the central government are decreasing their
commitments to the sector; Between 1974/78 and 1986/89, for example, the
relative share of health in the 15 major states’ revenue expenditure declined
from 7 to about 5.5 percent.
4.11
States devote an estimated 45 percent of their medical and public
health revenue expenditures to medical relief activities that are not identified
as PHCs or rural dispensaries. For the most part, this is support for public
hospitals, which are located in major cities and provide free or very highly
subsidized in- and out-patient care, regardless of ability to pay Cost
recovery has declined in public hospitals over the 1980s, further moving the
burden for individual curative care off the individual and onto the state (see
Annex 4).
;
■
.-w
- 72 <■
Monies that states*do allocate to the health sector - on average
i 1 percent of state domestic product, and 6-8 percent of total state
kJ
account spending - rarely are targeted to reach The most
K fr C^ntaged
nue '
populations. \ large share of state spending typically goes
^□rd'hospitals. benefittmg a small number of individuals, and at the same
drawing resources away from puMie-heaith activities that have the
potential to benefit broader, often poorer, segments of the population.
4 1-
*
jj^j^pnsition of the States’ Budgets and Growing Tertiary Level
Qjniniitmer^
8
i
.4 I
In India, as in many other countries, public sector support for
hospital-based curative care in urban centers has become a severe drain on
public sector resources. As the costs of providing medical care-increase, and
demand expands due to population growth, urbanization, aging of the
population and other factors, hospitals increasingly compete with public or
community health programs for the state’s resources. The state is placed in
:hc uncomfortable position of choosing between providing immediate care for
Jcnufiable individuals — those who walk in the door of the public hospital in
the capital city, for example - versus funding programs that may have
longer-term benefits for a wider, less well-defined community.
4 14
Spending on hospitals not only has the effect of.drawing scarce
resources away from public health efforts. It also reinforces rural-urban
differentials in access to health services. The balance is tipped even further
m view of urban populations access to these hospitals which are operated by
town councils, (see Annex 5 for-a oescription of the role of local bodies in
health spending).
C. The Center-State Relationship
4 -15
The relationship between the central and state governments in
India is fraught with legal and bureaucratic complexities and is the subject of
intense debate that is highly politicized. On a grand scale, in concept, the
central government has the power to unite the country under one
administration, and to some limited degree, to redistribute resources across
states.
4 16
The relationship between the center and the state governments in
the health sector occurs at two distinct levels. First, in the overall allocation
of resources by the center’s Planning and Finance Commissions to states,.
which constrains or provides opportunities for states’ initiauves in new
projects. Second, in the intra-sectoral allocations of grants-in-aid and. other
ppp’'
pT-' '
- 73 -
EH
arked funds from center to state. It is this second level th r is relevant
health sector study.
Mechanisms used by the central government to fund health
at
the slate level have the potential to reduce dispanties in^
programs
-purees among states, and even within states. As currently organized,
however, these mechanisms are not designed to overcome existing inter-state
inequities. This phenomenon has been noted-in many sectors (see'the Second >■
Report of the Ninth Finance Commission). In the health sector, it is
manifest in the following ways:
4.17
(a)
Some central schemes depend on matching funds from the states.
A few. of the centrally-funded communicable disease programs,
including the largest one, the National Malaria Eradication
Program, are funded on a 50-50 matching basis by state and
central budgets. Some poorer states are unable to come up wUh
sufficient matching funds to make optimum use of the program.
It should be noted that even the 50/50 matching schemes often
require more than 50 percent contribution by states, since
overhead and some other recurrent costs borne by the states are
excluded from the estimate of total program cost. Our estimates
- indicate that states financed about-9.3 percent of p'ublic health.;
spending,- far'more than a 50-50 share.' Poorer-ytates are least
able, but most in need of supplementing central allocations to
these programs;
Cb) 4 The central government has gone into debt to the states. In
recent years, the family welfare program and a few other
centrally-sponsored, schemes have fallen behind in their payments
to the states. Therefore, the states effectively have been paying
for schemes that were supposed to be centrally-funded. Over the
medium- to long-term, these debts will be repaid. However, in
the short-term, it is the states that can least afford additional,
often unanticipated, outlays that suffer most;
Plan schemes revert to non-plan schemes after five years. States
are wary of participating in projects initiated by the central
government under plan budgets, since participation implies that
the state will bear the responsibility for recurrent costs in
subsequent plan periods. For example, extensive construction of
PHCs under one plan period can become a severe liability during
the following period, when all operating costs must be found
within the non-plan allocation, and the center withdraws
assistance. The integration of Indian Systems of Medicine
(c)
- -
\''L
.
*■
- 74 -
doctors into PHCs. undertaken by J he-central government in
Mianv states in an earlier plan period, must now be supported by
the states, w hich find themselves with additional personnel costs.
Again, the be.;ter-off states are able to take advantage of plan
projects to a much greater degree than are the poorer states.
though Jhey may require the efforts less; and
B-
If
1
I"-- ”
IP’i
(d)
The Family Welfare budget pays for the staff of PHCs.
In sum, the health sector budgeting process and structure limit
abiiitv of the central and state governments to overcome existing
’.hC
differentials in the resource base. From r ;olicy perspective, reform in the
health sector depends on the-ability of both central and state governments to
urget better their spending toward the needs of the disadvantaged
pupulations. This, in turn, will require modification of the ways in which
nudgets are constructed; and in the nature of the relationship between center
and state governments. Such recommendations are presented in Chapter 7.
' I4?
v. 7 HE NATURE AND CAUSES OF INEFHCIENCIES IN THE
PUBLIC HEALTH CARE DELIVERY SYSTEM
V
A Critical Interlock: Efficiency, Morale and Equity
VI
Policy makers, administrators, and interested commentators on
’he Indian health sector agree that there are considerable inefficiencies in the
health care delivery system. These inefficiencies stem from long-term trends
;n health sector organization and spending, and from the more immediate
consequences of structural adjustment.
-2
St is also widely acknowledged that staff morale is low in
general, with some notable exceptions. Low morale stems, in part, from
poor management, but also from staff being placed in circumstances under
which they cannot achieve desired results. Inefficient allocation of resources
or under-funding prevents staff from performing; they are faced with
shortages and unsuitable blends of resources, or are themselves
inappropriately trained to use the available resources to respond to
circumstances. As a result, they do not deliver the most effective.health
^e. Efficacy of health care delivery is very sensitive to the combination of
resources available at the point of health care delivery, the PHC or SubC.
- ... . |
18^;.
-r
t
- 75 -
If public sector resources are inappropriately combined - poorly
then staff weaknesses are exposed and inability to respond to 10b
or to pauent needs erodes motivation aftd morale. In some
ances. an absence of critical inputs hampers health care provision to the
■
<<ee that the system becomes paralyzed. A combination of low efficiency
~
cumbersome logistics means that-det-cnorating services are poorly
? delivered, especially at the margin. It is the most marginalized rural and
urban populations for whom the problem of quantity and quality of
government services is most acute.
53
■■■■
II
I
L
*
54
Inefficiencies are of particular concern in India today for two
reasons. First*, there is a very high opportunity cost for any wasted resources
m a country which devotes relatively little (especially of its plan outlay) to
rhe health sector. If investments are made in facilities or training of
jx-rsonnei -- for example. PHCs and SubCs are constructed, or physicians are
:nuned al the government’s expense -- and yet because of inappropriate mixes
of inputs, poor maintenance or staff vacancies, health services of an
acceptable level are not provided, the system has experienced a tremendous
resource loss. Second, in a time of budgetary contraction, the only means of
maintaining or improving services is through gains in efficiency.
5.5
This chapter highlights causes of inefficiencies that result in poor
health service, and sets the stage-for recommendations in Chapter-6. It.
should be noted throughout that assertions always allow for regional
diversity, and generalizations should be evaluated with this in mind. ;A
critical inefficiency in a poor state dpuld easily be overcome in a state with a
higher per capita income and oetter infrastructure.
& , i
B. Optimal Combinations of Resources for Efficiency: Packaging
N
5.6
In the provision of healfh care, planners and managers find it
difficui o ensure the appropriate blend of resources, properly trained staff,
drugs, and other consumables, together with appropriate infrastructure, at all
levels of the health system.
Inter-sectoral Blending of Resources
5.7
At a sectoral level, provision of health care is not closely
enough linked with infrastructure and service provision from other sectors.
This is clear at the margin of primary health care provision in poorer states.
In hilly and tribal areas, the PHC or the SubC is often the main form of
government presence.
£
- 76-
’r
As shovvn in Table 5.1, which presents data from a recent studv
inv of service provision in the rural health network (ICMR. 1991).
about 84 percent of PHCs are in villages with "pucca" (reliably
I ' hie) roads. For SubCs, only about half are in villages, with good roads.
|
villages, communication facilities and transportation services are
t^Lsent in genera^; *n
villages, there is much less penetration of public
^ Swtructure, and still less in the remote villages without direct access to the
Jblic health system.
* /
;
* *
t 5,1:
Developmental Indicators in PHC, SC and Remote Villages
IOICATOR
X OF PHC VILLAGES
pyCCA ROAD
84.4%
SERVICE
iADIO FACIL-ITIES ONLY
•, FACILITIES
MCTR’HCATION
92.7%
;<x,'’ ce:
23.5%
73.1%
97.4%
X Of SC VILLAGES
54.1%
70.4%
45.6%
47.8%
38.7%
X Of REMOTE VILLAG: S
32.5%
44.7%
60.9%
28.6%
77.4%
1CMR, 1991
s9
Major gains have been made in providing the rural population
with a supply of good water, largely through the Minimum,Needs Program,
in fact, investment in water and sanitation has grown (though from a‘very'
;x^r beginning) at a much more rapid rate than investment in health.
Seventh plan outlay for water and sanitation was almost equal to plan outlay
for health and family welfare, combined. Despite this progress, much of the
rural population still lacks access to potable water, particularly in the poorer
eastern states.
5.10
The lack of public infrastructure, from communications’to water
supply, has two effects on the health sector: First, the health of populations
m remote areas is adversely affected by their environmental conditions, and
the resulting morbidity may place a strain on limited public health resources.
Second, poor living conditions, with no schools or other public facilities
results in high vacancy levels, among public sector employees, particularlv
among professional medical personnel who have opportunities in more
developed regions.
5.11
In these cases:
(a)
■
The investment in primary health caic does not benefit from
externalities and reinforcing benefits that would come from a
more integrated government package. For example, efforts to
give medical care are much enhanced by contemporaneous
r■
■1
If
I
I -1
- 77 provision of at least basic educatic.i.-Many PHC costs would be
cCiipsed had suitable sewerage and sanitation arrangements been
made contemporaneously with the establishment of the PHC;
U-
F?
•-*71
■ b)
-s
J
(C)
• ■‘1
’■I
i
Primary health care is weakened by the complete dependence ‘
upon itS‘Own internal logistics which, especially at the margin —
at the end of supply and supervision lines — become stressed; and
Extreme stress is placed on the staff. In the absence of their
families (in school at distnct-level centres) Medical Officers-inoharge absent themselves frequently. In their absence, PHC
service is diminished’with lack of supervision. ANMs also
. commute to villages where it is considered unsuitable for them to
be a permanent presence, even though integration with the village
society is one of the keys to their success.
Effects of lack of inter-sectoral support are not limited to
5.12
primary rural care. The unreliability of state gnd-provided power, or the
failure of water supplies (in volume or quality) reduces effectiveness of
health expenditures in hospitals, as well. . ' - ’
Intra-sectoral Blending of Resources
s.13
Programs within health are implemented with insufficient*
coordination. The PHC officers lack detailed logistical links with the vertical
communicable disease control programs. When resources are scarce.
medical and'health programs become effectively competitive, rather thancomplimentary. Thus the family planning activities, so strongly targetdriven, tend to crowd out other activities, rather than stressing that they are
alternative approaches to improved health status.
1
? ■■
$
•2i
3
3
S i
is
5.14
Vertical programs are carried out with insufficient reference to
one another, even when directed at similar target populations.-. The use of
multi- purpose health workers, while perhaps sound in theory, has not had a
beneficial result for many of the disease contro1 efforts. It is reported that
the current system is one of confused aims, witn imperfect multi-reference
supervision, high vacancy levels, low morale, and a conflict of loyalties.
The staff trained under one high-priority program may become a liability that
hinders the objectives of new projects. This is often because of inappropriate
training, poor job descriptions, an unworkable blend of authority and
technical skills at points of health care deliver}', and a weak chain of
administration and logistics. Contradictory and uncoordinated messages to
target groups result, breeding confusion. Legitimate demand for health care
is perhaps suppressed, especially among the groups least able to express it.
zV
---------------- ---- ----------------- .
_
- 78 ,,
turn away trpm public provision toward more costly alternatives. Micro
studies are undenvay to evaluate these problems.
pf Medical Logistics
Weaknesses in the drug procurement, storage and distribution ' ■
JI?
- irsums, result in a sub-optimal drug blend at facilities, especially in the more
remote irural areas. Wastage, mal-prescription and patient diversion either
through inappropriate referral (to the public hospitals), or transfer (at private ■
to the private sector) of patients occurs while SC and PHC
nfrastructure remains under-utilized.
< lb
. Poor resource packaging includes the provision of vehicles to
pHCs tand other points of care delivery) with too little fuel, and perhaps
■Aithout drivers. In extreme cases, critical elements are missing altogether,
cspojally when budgets are under pressure, and when cuts are unrelated to
medical logistics.
V’7
Drug supplies are a particularly vulnerable input, for several
reasons. First, they are relatively costly items,rand recent changes in drug
pricing and import policies have led to a rapid escalation of drug costs to the
public sector. States now report that they must spend up to three times as
much per unit.of medicine as they did one to two years ago. Second,-in
India (as m many countries) there is substantial leakage of pubiiciy-purchasec
'.iieuictnes into the private sector. Reduction in this type of leakage depends
on advanced systems_Qf±^entpryLcontrol. Third, medicines are perishable
items, so there is potential for substantial amounts of wastage. At the same
time, drugs are a parUcnlarLy important input into the health system, both
because they-provide health benefits and because their presence reassures
patients that quality service is being provided. For these reasons, chronic
shortages of drugs in PHCs and SubCs is a problem that is difficult to solve’
and has wide-ranging negative effects. There is a need for supporting drug ’
provr-on under adjustment.
I
I
I
J’ 8
The severity of the problem was quantified in the ICMR (1991)
stu y, which evaluated the inventory of essential medicines available at PHCs
an SubCs. As shown in Table 5.2, 37 percent of the approximately 400
”HCs studied had insufficient (or no) stocks of analgesics and antipyretics;
nearly 60 percent were lacking antibiotics; and about half had insufficient
■stocks of anti-hypertensives. Most disturbingly, perishable vaccines,
^eluding measles,_BCG and polio, were unavailable in sufficient quantities in
‘3-32 percent of the health centers. The situation was found to be still more
acute at the Sub-center level. Of the drugs that were supposed to be present
at the SubCs, most were not in the vast majority of centers, it is interesung
I
f
3-
■'
------------------------
,
■
- T—
• 'A'
- 79 ■f
noie that, while basic medical treatments were in shoe Supply, very few
-ralth facilities were lacking in the standard levels of contraceptive
^rnmodmes, for w-hich discrete budgets are available te_.estabirsh stronger
.logistical support.
■s
rrf)le 5.2:
Availability of Medicines .at P-HCs-and SubCs
jOICINE
% with None or Inadeouate Stock
PHC
SC
anALGESICS/ANTIPYRETICS
antibiotics
antidiarrheal
antispasmodic
ORS
antimalarials
ANTIHISTAMINES
SEDATIVES
antiasthmatics
ANT 1 HYPERTENSIVES
BCG VACCINE
POLIO VACCINE
DPT VACCINE
TT VACCINE
MEASLES VACCINE
I'JDS
ORAL CONTRACEPTIVES
N'lROOH CONDOMS.
J7.2X
57.5%
2T6.1X
36.4%
21.6%
13.3%
43.2%
35.7%
42.2%
48.0%
27.6%
23.1%
8.8%
7.5%
32.2%
5.0%
8.8%
6.0%
Source:
55.2Z
80.3%
- 53.3%
^7.2%
-6.8
84.8%
84.5%
96.6%
r1
ICMR, 1991
Packaging of Human Resources
19
The considerable achievements of the Indian health sector are
mirrored in the-large stock and quality of trained and practicing medical
manpower in and outside the country (see Chanter 3 and Statistical Annex 5).
But characteristics of this large stock of trained personnel also imply a meed
lor flexibility, redirection, and enhanced selected investments to improve
quality and efficacy of service.
5.20
Ratios in employment of doctors, paramedical staff and nurses do
not reflect optimal functional relationships. Numbers of nurses in the system
are today related to number of beds, rather than to a doctor support function.
This results in the inefficient and inappropriate employment of doctors to
carry out functions equally well (or better) and more cheaply carried out by
nurses.
-
............
- 80 -
-r
<
'•-■
Despite the relative abundance of doctors in the Indian system.
Chapter 3) there are great variations in the physician supply across states
-tnd. more obviously^ between urban and ruml"areas. In Andhra Pradesh, for
example there are about 53govcrnment doctors per 100,000 population; in
=' Madhya Pradesh, there are only 14 doctors per 100,000.
< 22
Aside from the problems associated with uneven distribution of
.mecicai personnel; there are inefficiencies related to the responsibilities given
to doctors. Doctors placed in the CHCs and PHCs have a largely managerial
role. Yet their medical college education has not prepared them for this.
They are untrained to monitor expenditures, manage stores, maintain
puddings, take decisions about personnel or supervise others working in
diagnostic or preventive tasks. Doctors tend to assert a managerial role because of lack of training and the strongly rigid hierarchical service — that
punitive with too little problem-solving. This approach has pervaded the
empirical approach to targets that has damaged family planning programs.
5.23
Lack of a management cadre means tertiary care institutions are
also managed by doctors, promoted into management positions without
regard to the criteria needed for effective management. Yet neither type of
management skill is the subject of in-service training.
- 24
Within the medical discipline there is inappropriate blend of
doctors’ skills. Diagnostic skills most in demand in the rural areas, at
district hospital level and below, are not stressed in medical college. There
is a lack of social content in medical teaching; community health issues do
not feature in medical colleges. This is not redressed by in-service training
or orientation before the urban-trained doctors (often of urban origin
themselves, notwithstanding reservation policy) are posted to rural areas.
5 25
At various times, the public health system has made concerted
efforts to integrate practitioners of Indian Systems of Medicine into primary
care delivery, particularly in remote areas. It was perceived that ISM
doctors would provide care that was culturally acceptable, and would be
more willing than allopathic doctors to take up service in rural regions.
However, in practice it appears that the links between the ISM and the
allopathic systems have failed to strengthen th service in the manner
imagined.
5-26
Among paramedical staff, male multi-purpose workers are more
hkely to be in short supply than are the ANMs. This is due to the financing
arrangementf the family welfare budget, coming from the central
government, funds the ANMs, while the multi-purpose workers are funded
out of disease control schemes, with the funds usually coming from the
-3
- 81 -
Ip
st*'-.'
intnbution tp the malaria eradication program. Because the tamilv
funding is more secure than the state's contribution to the disease
urogram, it is easier to hire and retain jhe female workers.
There is a need to closely consider the staffing norms, to
' ’ nr me whether they reflect the actual needs of PHCs and CHCs.
nalizauon of manpower patterns would entaiTa substantial effort, but
have the benefit of increasing efficiency of both health and health
raining investments.
( .
The Outcome of Inefficiencies: Inequity and Inappropriate Referrals
An outcome of these deficiencies is the inefficient referral
< 28._
r. In terms of equity of health service delivery, inefficiencies are ot
[ direct
impact at primary level. But their effect exacerbates weaknesses
Cn provision of hospital care, as well.
Patients’ perceptions of shortcomings in public sector primary'
5.29
health care result in bypassing ot .SubCs and PHCs, with two main impacts:
(a)
Individuals, even many of the poor, have.initial recourse to the
private sector, rather-than using the public sector as first choice:
and
(b)
Those who do use the public sector either: (a) find themselves
referred quickly from PHCs to hospitals because of unwillingness
of PHC staff to accept responsibility or inability to prescribe
appropriately (often because of drug* shortages), or (b) bypass the
PHC and head straight-for out-patient care at hospitals. This is .
not an effective pattern of referral.
In both instances, ‘this process incurs higher than necessary
5 30
private and public costs. Thejmpact upon the public sector is to exacerbate
the expensive structure of health provision by overweighing demand for
hospital care.
’
>
5.31
Overall, the inefficient investment in primary care aggravates
conge□ Lion in hospitals, and introduces inefficiencies at this most costly level,
while diminishing further access of the rural poor to public sector health
service. The drive should be to increase efficiency.
Enhanced efficiency would result in a disproportionate increase
5.32
□f-resources available to poor, leaving more resources for better primary
care. It would ease pressures on tertiary care, enable its standard to be
e.
———---- --------------- ------ ------
3
f1
--.ei
- 82 >
nroved. and pave the way for cost recovery at tertiary level. This is the
■hallenge unat faces the system under structural adjustment, and is the basts
tor recommendations presented in Chapter 6.
VI. ADJUST IJJ ENT, EFFICIENCY AND ENH ANCED
CARE FOR THE POOR
p I
The impact of adjustment-induced fiscal contraction orr the health
budgets is already visible from the current (1992/93) central budget; more
•Aiil be known ai uie state budgets become available. If the speed with which
the health sector adjusts its expenditures to promote efficiency is less than the
pace of adjustment, then cutbacks could occur at random with the potential
for the system to become even more inefficient and/or regressive. There, is a
great merit in appropriately planning the budgetary cuts rather than accepting
the cuts passively all along the line down to the PHC and SC level.
Unplanned cutbacks - as much as unplanned enhancements -- could typically
result in the elimination of spending items that do not enjoy a lobby, but
whose cutting could further impair efficiency as well as equity.. Protecting
-cntical health inputs during adjustment is crucial; to this extent, adjustment is
botn a challenge and an opportunity to enhance efficiency and equity.
r .2
How, serious is the problem of cutbacks? How do the states and
the center exercise options? Although the states’ own resources fund a
substantial proportion of health investments, the total financial flows to the
health sector may be affected if central allocations to specific programs '
decline. For example, this has already happened inasmuch as the central
plan allocation to. malaria control has declined from 83 crores in 1991/92 to
50 crores in the plan budget'for 1992/93. States’ own resources to the health
sector may also contract. If the overall (central and state) allocations arp
reduced to the health sector (which is a strong possibility in the resource-poor
states), two scenarios can be visualized: (a) a proportionate and
undifferentiated cut is effected on all programs/components. or (b) cuts are
effected on specific programs/components after a careful consideration of
choices.
Options with Fiscal Cutbacks
6.3
The easiest option is to effect a proportionate cut on all
programs. Indeed, field visits to hospitals and PHCs, as well as discussions
with senior health officials in the state governments strongiy suggested this
possibility. An undifferentiated, proportionate decline on all items and
programs would very likely lead to slower progress in improving health
&
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-VC'- . ’
*
OS
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- 83 the weaker states. In such a case, the most likely possibility
eacv reported in both rural and urban hospitals, and rural primary health
a_
is that salaries to staff will be maintained, but cuts will plague
Medical supplies, drugs, and equipment. It is well known that the quality ,
management of health services is already problematic in'these states:
clearly it
worsen with the drying up of complementary inputs1'.
4
If governments have to exercise choice in effecting cutbacks,
uhat should be the guiding principles? Given the pressure on public
resources, the governments, both central and the states, should now focus
•heir expenditures on those services, programs and critical inputs that have
the largest externalities, and are crucial for improving the overall efficiency
of delivery. Discussion in the previous chapters has argued the importance
of maintaining a blend of inputs for effective primary care delivery, and the
deterioration in this attribute over the last five years. Further budget cuts
will only exacerbate the problem considerably. Inappropnate blend of
inputs, poor packaging of complementary' supplies and generally poor quality
of services has beer extensively documented for family planning (Stout
1.988), health (Chatteqi 1990) and nutrition (Subbarao 1990).
0.5
If cutbacks are preceded by a careful consideration of choices,
•hen clearly there is-much to be gained. Adjustment is basically a move to
facilitate the flow of resources from less productive to more productive uses
in both private and public sector operations. That principle should apply to
the health sector as well.
Achieving Gains in Efficiency with Fiscal Cutbacks
0.6
To facilitate more productive use of resources already invested, it
is essential to ensure complementary supplies of inputs and an appropnate
blend of paramedics at the primary health center level where the externalities
are the greatest, and the prevailing returns to investment appear to be the
lowest. This, by itself, would raise efficiency levels across the board to the’
benefit of the rural poor.
6.7
It is possible that resources may not be immediately available to
ensure such a move towards more functional PHO If so, a beginning
could be made to prioritize the selection of PHCs for reform. Such priorities
might start first with the very poor tribal blocks, unirrigated (semi-arid and
- Such indiscriminate cuts in basic health will probably have quite i short time kg in sdverseiy sfTecting hes.'ih
outcomes. While there are no comparable esumates or auidies for India, a recent, long time serie* analysis of the effects
of changes in public health spending on infant mortality m Sri L&nka indicates strong effects (of cutbacics) in the current
year as well as sustained lagged effects (sec Anand and Ravalhoin. 1992).
i.
X J-g!- 1C-
j
- 84 . and g^dually up to the relatively richer irrigated zones which arc
•rndy better served than the poorer areas by private practitioners.
4n) ?(ines
itrri
.
It is better in terms of efficiency enhancement, health outcomes
r
1/
reductions in inequities to”pool resources and channel uiem in
1 appropriate blend to at least a majority of PHCs in regional concentrations of
poverty to render them functional and dependable rather than spread the
^ce resources thinly over all PHCs. In sum, the present policy of
jniformity of spending should be replaced by a more appropriate mix of
resources, supplies and manpower concentrated more heavily upon poorer
areas, for w'hich alternative privately supplied medical services are not
readily available. This policy could ensure the highest return to the marginal
rupee invested which is so basic to the success of economic reform without
worsening of equity.
\fnintaining the Emphasis on Primary Health Care Under Adjustment
6.9
Morbidity and mortality patterns in India differ by regions and
by social/income classes. As already noted,-.the middle class and the affluent
?je beginning to experience the "life-style" diseases, whereas the poor do not
seem to be adequately protected from the life threatening communicable
diseases. Available evidence suggests that the morbidity from diseases like
malaria which strike during the peak agricultural labor demand -season cause
vonsiderable damage to poor households as'well' as to the economy — loss of
wage income (and consequential indebtedness) to the poor households and
loss ot productive man-days to the economy, driving it towards a lower
production surface. Thus, considerations of efficiency as well as equity
strongly favor continuing public support to the major disease control
programs, again ensuring an appropriate blend of inputs and manpower.
6.10
Yet the very first budget under adjustment offers no perceptible
moves towards greater efficiency or equity in the health sector, whatever be
its merits in bridging the fiscal deficit.
11
For the first time in the history of India’s planning, allocations to
communicable diseases have been drastically slashed; these reductions run
counter to the logic of adjustment, to the extent that externalities of
investment in communicable diseases are by far the largest. Considering that
emerging diseases like kala-azar are further aggravating the communicable
disease situation in poor states like Bihar and Uttar Pradesh, such cutbacks
are likely to erode the capacity of these poor states to face up to the
challenges. In fact the consequential decline in morale as well as outreach is
bound to further reduce program effectiveness.
I
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- 85 hJVocesses Voder Adjustment Seem Regressive
The new budgets, although facing a period of crisis and the need
•or a s.<ial safety net, have practically no innovationsjo overcome the" L . ,egressiveness of partially and fully funded central programs, nor even in ■
L. njan schemes. With respect to the former, even if 50:50 sharing of expenses
r" Offered, most poor states which are unable to match resources simply tend
•o lose central allocations, asmoted in Chapter 4. Even in the case of fully
centrally funded programs, the-poorer states tend to lose, because of tht
central policy of arrears, i.e. the center’s insistence on the states to jpend
•■rst. and only then claim reimbursements. Some poor states do not have
cash flows. They simply fail to take advantage of the schemes.1
*• r
. o.!3
Even under the minimum needs program, the allocations are
?op^iation-based, and not based on the distribution of poor population,
furthermore, the plan schemes are transferred to the states after a given
urne: so the states, for fear of financial overload as plan schemes become
non-plan schemes, often opt not to take up new projects. Alternatively, they
accept the new projects, but make virtually no financial provisions for the
maintenance of old projects and programs, and non-plan funds virtually
exhaust with salary payments. Indeed, plan outlays as a proportion of total
outlays gradually declined over time, virtually leaving no room for
manoeuvre for mid course correction of priorities, while non-plan_outlays
:er.d to be consumed in salaries. These factors render central allocations both
nefficient and regressive.
6.14
A rising share of non-plan allocations is now going to salaries,
effectively cutting non-salary inputs. Even in the present budget, no efforts
are made tojmprove non-salary components so that vehicles go with 'oil,
PHCs with cold chains, x-ray units with films, and so on.'
Adjustment, Blending of Resources and Efficiency
6.15
At a macro level; the budget also does not refine packaging of
inter-sectoral outlays that have a potential to maximize returns to health
investments. Equipping PHCs with water, sanitation, proper housing and
security is crucial for efficient delivery of service. Yet, plan allocations
under the budget are cut for water and sanitation.
■
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r 'r ’
Creating a balance between doctors and oaramedics requires
.^c-term planning, but in the interim flexibility in the personnel allocations
.ir
a long way in restoring that balance; moreover, since movement of
fnOriC7 across se^tors/programs is difficult, moving people apoears to be tfce
tx-sr sti^egy to redress manpower shortages. Such intra-depanmental
personnel moves can also'overcome seasonal overloads, such as with the— *
sudden outbreak of epidemics. To facUitate gains in efficiency of health
.^rvicer more flexibility could be introduced.
Adjustment a$ a Stimulus to Cost Recovery
0.17
An immediate measure that would ease fiscal pressures on
communicable disease control programs and PHCs would be to protect the
primary health care budget from the-demands of hospitals This is possible
by charging user fees from the middle income and high income groups for
curative services, ensuring that the poor get free services as in the past
Such moves may not conform to the original intentions of the health planners
to provide universal free health care, but they certainly ensure that at least
the poor have access to free services.
18
At present, because so few and such small user fees are charged
[here is excess demand for services: hospitals are crowded and often the
resourceful or influential people get easy free access. In contrast, the poor
often incur transaction costs" to get access to treatment and hospital beds
Fhose pcor who could not afford these transactions are effectively shut out or
hospital care: instances of poor patient diversion are too common to be 1
stressed. Graded cost recovery from the non-poor would restrictdemand for
oeds, thereby releasing substantial places for the poof. Thus user fees are a
step towards restoration of equity: the poor should benefit proportionately ’
more than the non-poor. At the same time, hospitals would depend less on
•he public exchequer for incremental resources thereby ensuring a pro-poor
alignment of public resources. In sum, cost recovery at hospitals benefits the
poor in two ways: (aj more resources to the primary health care and
communicable disease control programs; and (b) easy and free access to
‘hospitals.
Effective Co$t Recovery Needs Independence
619
Cost recovery is a worthwhile proposition to hospitals only if
they are able to plough back the resources raised internally for hospital
improvement. At present, the government hospitals that do have some cost
recovery have to surrender any revenues resources to the common pool
This is a disincentive to raise resources in the first place. Granting autonomy
to public hospitals with a proviso to ensure that the poor are freely
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- 87 rnienained would create the necessary enabling environment for raising
-•emal resources. This is already being attempted in some states, such as
Andhra Pradesh, and can be emulated m other states and-at the central level
, :nsututions.
1
^y^ustment-and'Kegi<>nal Pi very/y
r-
20
above policies need not be .followed with uniformity*
•hroughout the country: regional diversity in hospital and PHC efficiency is
so considerable that no generalized policy prescriptions should be offered,
far example, user fees may not yield great returns in regions where poveny
is widespread. In some instances, any amount of redeployment of resources
and manpower may not yield returns because health is already so under♦ jaded. Detailed, region-specific policies are beyond the scope of this
'eport, but are an important step and one that comprises an important context
:o the short term across-the-board cuts that appear to have been made
Hitherto.
Maintaining Health’s Budgetary Position Under Adjustment
6.21
To.-sum up the argument, health has no doubt lost ground under
the current budgetary-pressures. But adjustment-induced pressures .on
resources need not promote despair or resignation. Instead, appropriate,
immediate and fairly simple policy changes can greatly improve efficiency,
render the institutions and programs of direct relevance to the poor more
functional and efficient, encourage internal savings within the health sector
and promote equity of access.
<
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n
1
6.22
The most critical of such policies are those aimed at ensuring
non-salary inputs in optimal combinations at places and times most needed,
restoring funds to the disease control programs, and streamlining procedures
for the timely release of central funds to the states. These short term policy '
changes promote equity via enhanced efficiency: a most desirable outcome
during adjustment.
'
,
6.23
But these are only short term measures. India’s health sector has
fairly deep-rooted structural distortions and systemic imbalances that can be
eased only by introducing longer term policy changes. These are discussed
in the following chapter.
A
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vn- MEDIUM-TERM policy CO.YSIDERATIONSTHE REFORM QF FINANCING
FOR ENHANCED OUTCOMES AND EQUITY
A. Medium-Term Objectives
*
The Health System at a Cross-Roads TodgY
7-1
In
face of budgetary pressure and the start of the adjustment
process, the health sector faces a critical decisren point today. With the
inevitable vanability in economic and social progress across states and social
groups that has emerged over the last 40 years, coupled with a much larger
health sector infrastructure that stretches existing budgets thin, has the time
come to re-evaluate and re-deploy available resource to attack inequities that
remain, or will existing approaches continue to yield significant gains?
7.2 '
A re-evaluation is appropriate. The years of expanding the
health system to the village level, educating personnel to operate the system,
establishing a logistics system to support it.'and - simultaneously adequately funding both hospitals and traditional communicable disease
programs is a phase that is successfully completed. A hew phase of
consolidation .and adequate support of recurrent-costs is called"for.
•3
Although the extension of the system has made it more equitable
overall, persistent inequities have emerged that require in. some cases
redoubled efforts and in others, innovative approaches to solve. The two
areas of concern, adequate funding of the system and solving persistent
inequities are closely related.
Resource Allocation, Efficiency and Equity
'-4
This report has described the main ways in which health
financing is related to efficient and equitable provision of health services in
India. It has reviewed resource allocation patterns and trends, and found that
public health financing is characterized by an emphasis on hospitals rather
than primary care; urban rather than rural regions; medical officers rather
than paramedics (again with an urban emphasis); services that have larger
private than social returns; and family planning and child health to the
exclusion of the wider aspects of women’s health. This pattern of resource
allocation impedes the government as it seeks to provide the greatest level of
benefit for the broadest community, and specifically for the poorest
populations. Without determined change in policies, there is a danger that
these patterns of low-return public expenditures will be reinforced rather than
ameliorated.
s.
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.
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Persistent disparities in provision, access and impact of public
-■ T,.. ^rvices can be seen when comparing poorer states to wealthier states.
“
to urban areas, workers in agriculture and the unorganized sector to
m the formal sector, and individuals with few resources to those with
^ire These persistent inequities ar? less related to availability of outlets for.
ubhc
than f°r fa^ure t0 fund ^em adequately to provide the_ -__ _
Personnel and supplies necessary to deliver health care.
■?
-r
Longer-term reform should be guided by the principle that public
funds should flow increasingly into the areas presently most neglected by the
health expenditures - rural areas, community health services, and women's
hea’th care. Private funds should be directed, through cost recovery, into the
areas of high private returns.
a.-
B. The Environment for Longer-Term Restructuring for Equity
J
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It is difficult to translate intense fiscal stress into longer-term
structural adaptation. The 1992/93 budget indicates preoccupation with the
present and the near future. The time frame and political viability of reforms
:ink with the states’ different socioeconomic achievements. Action at me
center is sensitive because it has some leverage and is needed to direct long
term, re form for sustainable health care, aimed preferentially at the poor:
"’.8
Recommendations for general restructuring must acknowledge the
differences among states. The state budgets are very differently constitutes.
and revenues and prionties vary greatly from state to state. The states are
therefore poised for different policy steps. Thus the time frame fp. reforms
and political viability are closely related, and make action at the center
sensitive^- _£
_
7.9
Restructuring to enhance equity, as supported by this report, > must also take into consideration that the constitution and center-state
finances are finely balanced. It is not reasonable to consider health care finance as grounds for general restructuring. It is, however, feasible to find
some room for positive change within the health sector.
7.10
The aim of these recommendations r to set directions for long
term reform to achieve equitable, sustainable public'health programs,
directed preferentially at the poor to redress the existing inequities, and at
community ’ ealth to achieve the greatest externalities from investment.
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C, Basic Policy Aimsand Recommendations
There is wide agreement over policy aims:
(a)
Target public money to basic health care provision, inciudipg
inciudjpg
control of communicable diseases, that will disproportionately
benefit disadvantaged populations:
*
(b)
Enhance the quality of hospital care;
(c)
Capture wider resources, through cost recovery, internalizing
benefits for particular institutions; and
(d)
Improve returns to private spending by benign regulation and
selective encouragement of the private sector.
7.12
Several of these issues are of immediate concern and have been
discussed above. This section is divided into two categories of action.
ieading practical actions and center-state budget recommendations.
D. Leading Practical Actions
Make Primary Health, Including Communicable Disease Programs, the
Heart of the iMoHFM' Budget
Tbe, present health center and state budgets cofnbine public ■
expenditure of widely differing social benefits. The mix of education,
primary, and hospital care disguises real cuts in specific programs within the
overall budget, and blurs priorities in reallocation to secure efficiencies. -
'
Therefore, medical education, res*^arch, and.hospitals should be
accounted under new, separate directorates’ budgets, as the family welfare
budget is. This separation would highlight top priority public expenditure for
primary health provision, including: the Community Health Centers, the
Public Health Centers and communicable disease programs. These
expenditures should reinforce each other, with large benefits that reach
beyond the individuals receiving care.
Independent Hospitals: Improved Quality and Resoiirce Enhancement
^•15
Lesser priority for public expenditures should be given to
hospitals. Increased cost recovery, moving back to at least the levels of the
1960s is justified. Cost recovery and greater administrative autonomy for
hospitals will allow state financial support to decline.
&
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'’.16
Hospitals might be grouped for qual:-<y control under a Council
for Hospitals to administer grants — no greater than constant in nominal
terms — from center and state. Hospitals would acminister these grants and
funds raised through cost Recovery independently. The cost recoverv system
would have prices based on local conditions, and^would.. include provisions to
.protect the poor. Eventually government subsidies would be targeted
specifically to needy patiefits.
7.17
In addition to the grant from the council, newly independent
hospitals might be assisted by a package that would, include: possible
provision for criticaJ items if needed to raise service to a basic acceptable
level: management staff and/or training; (c) maintenance star? and/or
training.
".IS'
Studies using examples of success already operating in India
would determine appropnate management and regulation, and ways to protect
access for the poor, while charging the non-poor. These should be earned
out under the supervision of the MoHFW.
'W
x'W -
Medical Education: Fees, Quality and Equity of Access
‘7.19 .
, Medical education should pass to a Council for Medical
Education, linked with higher education as well as health. Fees should be
charged for medical education, since high private rates of return prevail, and
‘here is no shortage of doctors in India. A suitable scholarship package
could be linked with reservation policy, and incentives to serve in rural
< areas. Merit scholarships could contribute to maintaining high quality
students-. .
20
Money raised through charging
fees should remain in the
councils budget to facilitate development of its other functions. This should
enable central funding to be in the form of a nominally constant grant, as
with hospital funding.
Medical Training; Skills and Manpower Blends
•21
The Council for Medical Education would also: (a) revamp
medical education; (b) study manpower norms and evaluate incentives: (c)
encourage suitable nurse and paramedical training; (d) establish in-service
training; (d) coordinate medical research orienting it towards indigenous
communicable diseases; and (e) regulate private medical colleges,
encouraging innovation whilst protecting minimum standards.
—1
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Wider manpower issues would also fall under the aegis ot the
Cou heii of Medical Education. It is important to ensure that human
resocrissues-do not focus exclusive!) upon doctors. Interventions are
needed to establish suitable scales and qualities of training for nurses and
^medics following evaluation of the staffing patterns in the sector. The
^ouncil should have technical support to supervise studies to address policies
•#n this area.
E. Center-State Budget Recommendations
•i
Phe Rank of Primary Health Expenditures in the Social Sectors Should
^Enhanced
There has been a trend toward underfinancing ot primary health
eluding
communicable disease control and other interventions that
care; in1
provide benefits not only to the individual but also to the larger community.
This trend should be reversed, after disaggregation of the budget.
■'.23
7.24
In the 1970s, the system was funded at a much higher level.
Since then, spending per capita has risen because of expansion of the system,
.hut is has fallen on a facility basis by 5 percent in real terms since 1986.
This drop has been magnified for non-salary inputs as_salaries have increased
meir share of expenditures. The central share of overall expenditures is also .
reduced. There is a strong case for elevating present spending to-past levels.
PoKcy Over Centrally-Sponsored Programs
—
t:
7.25 .
'The potential leverage of centrally-sponsored programs to
implement national policy is being under-exploited. Disbursement of center
primary health expenditures should: (a) eliminate arrears in family welfare s
account with the states; (b) consider contributions by the center for payment
o: some recurrent costs in communicable disease control and primary health
care, to ensure that the existing programs operate efficiently; and (c) modify
the enteria by which the center transfers funds to states to better target
poverty and specific diseases.
Increase the Center’s Role, but with
exibility and Efficiency
7.26
Transfers of project-designated money, or even commodities
(such as sprays) from center to state should be replaced by transfers of funds,
on a menu driven basis, for areas of primary health care and communicable
disease control. State governments could work from local needs and
priorities; this would ensure accurate earmarking of money for the purpose
•11
-
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•ntended in primary health care and disease programs, whilst allowing more
•’exibilitv in response to regional diversity.
XhclCenter’s Regulatory Role.
7 27
'TtfTsiJcn a large shar% of care being provided by the private
sector, the state’s regulatory role should be upgraded. Quality control over
drugs and delivery' of private care services deserve scrutiny. The poor need
more protection as patients.
Positive Approaches to Enhancing Primary Health Care
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- 28
At district, block, and village decision making levels, efforts
shouid be made to empower health officials by having them participate more
fully in the planning process to integrate "health with other sectors. This
change would facilitate targeting and development of priorities based on
village and block tribal composition, degrees of aridity and type of local
economy. Enhanced supervision and positive management are integral to
this, to generate new information flows. For example, in the face of such a
large press of water-borne diseases in India, and recognizing that
development of new water supply systems is housed in other ministries, the
primary health program has a’key role to.play-in monitoring and improving
the safety' of drinking w'ater in* villages.
Enhanced Supervision and Management of Primary Health Activities
".29
Interventions to produce the conect blend of human resources for
the health sector must be integrated with other aspects of resource allocation
in the sector. Manpower must be suitably deployed. Village, small scale,
primary and huge, urban hospitals are all rendered inefficient by incorrect
staffing or by inappropriate combinations of staff with other resources.
<3
7.30
Such structures need to be reflected in the budgeting procedures.
Thus the correct combinations of staff with appropriate specialties is part of
the wider packaging of the overall blend of inputs to medical care. Budgets
need to be rationalized to support provision of physical infrastructure (power,
water, buildings), maintenance, transport, drugs and other medical inputs to
ensure that resources arrive at health service delivery points in a package that
facilitates effective provision of care.
II
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9^ -The process of rationalization is itself a lever that can at once
,-rv. existing resources and - by showing greate; returns to expenditures -become a tool to justify greater resource allocation to health in its
v-umpetition>'with other sectors also oi high priority within the government’s
overall planning.
:
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Vm. BANK STRATEGY IN FUTURE INDIAN
HEALTH SECTOR FUNDING
A.
Equity anti Assistance at a Time Of Adjustment
g. ]
This first health sector finance study enables the WB to take
stock of its pattern and scale of assistance to the sector. It also facilitates the
GOFs considerations of the nature and scale of external assistance that it
might consider appropriate to the health sector.
8.2
The concern is to assist the government in reinforcing and
promoting appropriate health financing and delivery approaches. The
emphasis is to ensure sustainability — administrative and fiscal -- to enable an efficient and effective system to emerge from the process of adjustment.
This could mean a rethinking of choices and some difficult decisions on the
pan of both the WB and the GOI. This document and these suggestions to
shape future directions of a Bank program of assistance are a first step in the
discussion process. The outcome should be a joint program to enhance
health delivery, throughout India, and particularly to the poor and deprived.
This will of course also be a perspective that might be of use to other
donors, and of relevance to other social sectors in India.
8.3
Future Bank involvement in the health sector will, in the short
term, rightly be influenced by the pressing demand to alleviate the impact of
adjustment in this area of the social services. In the medium to longer term,
the concern will be to enhance equity and efficiency of a sustainable delivery
of primary health care defined to include the communicable disease
prevention programs at primary level. An impor nt facet of this is to ensure
sustainable and effective hospital care that does not — for administrative and
historical reasons — detract from a minimum primary health care budget.
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* The operational significance of the study’s conclusions for the
tenure program suggests actions that:
gB.44 ’
J
(a)
assist the GOI by financing reforms and strategies that allow the
government to fulfil its policy defined role of controlling
communicable diseases;
*
(b)
provide public sector primary care and protection for rhe poor:
while
•<c)
at the same time, ensuring quality of hospital services and
medical education, in pan through regulation of the private sector
health services.
1
The suggestion is as a result of .the foregoing analysis that the
<5
ikink will therefore.assist the GOI in a spectrum of actions to:
1
al
(a)
reinforce and expand present GOI activities where they fall
squarely within policy goals; and
(b)
buttress the government’s efforts at long-term reform that refine
heaJth provision and disease prevention programs, more
effectively to meet the aim.of provision for the poor. In the short-term, this aim includes protection of the vulnerable from
potentially adverse effects of adjustment.
B. Expanded and. Refined Assistance to the Spectrum of Ongoing
Projects .
^■6
As.highest priority, to facilitate the Bank’s involvement in
primary health care, support could be delivered though the following means
and project areas. * .
Maternal and Child Health Activities
8.7
Maternal and child health activities are an expressed priority of
the government. This report’s analysis does not cause this to be questioned
in principle. The Bank should continue its support.
I
8.8
Immunization programs and some support to PHCs, SubCs and
CHCs exists within these MCH activities. They should, in the near future,
be expanded to facilitate specific strengthening of the primary level delivery
svstem. This should be with special consideration of improvements to
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packaging of resources at SC and PHC level and in the enhanced
administration of PHC dependent programs.
#j
Also important is more effective and^practical coordination with
other programs. In particular, facets of MCH activities such as nutritional
provision targeted to lactating mothers would gain from — and yield —
externalities if better coordinated with other, wider nutrition programs.
*
X.10
There is also, scope .-under MCH programs for direction of
rationalization and upgrading of manpower resources within the-health care
delivery system. Higher pnority for these items -- for example, attention to
-he widespread and rerious problems associated with the utilization of ANMs
would be appropriate.
fMpiilation Projects
X 11
The series of population projects has important relationships to
health not operationally exploited at state or district level. The health
implications of child spacing and safe motherhood practices could be tied
more specially with other programs, especially under the threat of AIDS.
8.12
The delivery system of birth control materials is being
strengthened -- 'with positive implications for PHCs and SubCs. But this
effort at-improvements must be integrated with overall improvements to
PHCs and SubCs, with care being taken to avoid development of a parallel
system of distribution.
8.13
Overall, the population projects’ interaction with the PHC
infrastructure should be consciously exploited to improve PHC Operation, and
to blend appropriate resources available and supportable at village level.
This might involve redressing the crowding effect of family planning
programs upon other activities in order that the family planning activities
operate as and are perceived as a true complement to other health related
activities.
Nutrition Projects
8.14
Refined targeting and coordination remain a high priority.
Targets-are likely to shift fast under the impact of adjustment. As patterns
evolve, information and targeting information are of wide relevance to other
primary level health activities.
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8.15’
Nutrition-related activities ought to be the element of Bank
assistance that is most finely targeted towards indices of poverty and
deprivation. It is again, by definition, related to raising standard among> :ne
poorest. The prime role of nutrition in poverty alleviation suggests ven
p^icular relatipnship with primary health care that is as yet only nasce-
Protects
—Education
•—
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8.16
Also of particular importance in terms of extemalitie-s isprovision of education, and especially female education.
Rural Water Supplies
8.17
Here the call for inter-sectoral coordination is very strong.
Many public health and primary health care concerns are water-relatec.
These span narrow logistical, but critical, issues like fresh water proviso :o
PHCs. to curbing seasonal water and.sewage borne diseases that overwre n:
PHC services.
8.18
Yet rural water suffers erratic and recently declining centra
support. Furthermore, there is little fiscal support for sewage and sannaion.
The question becomes: Given the potential for inter-sectoral linkages arc
externalities, is so little support appropriate?. As an element of program
development, the government and the Bank should look at approaches to me
sanitation problem.
AIDS
8.19
In recent support to the government’s AIDS program, the Bank is
responding to a major shock to the health system. In its aggravating impact
upon morbidity of other diseases, and its potential drain upon the finances
and resources available for the treatment of other diseases, AIDS is unique
It could rob, in the not too distant future, resources now deployed to allevi.i.e
morbidity from "a wide range of diseases.
8.20
Bank support for the prevention and monitoring of AIDS will
therefore remain of major importance. AIDS support should, with the
proviso that monitoring can demonstrate effectiveness, be strengthened and
expanded. The focus should remain (unless-indicators show this to be
inappropriate), on prevention within targeted vulnerable groups. Real future
savings through the preventive strategy must be demonstrated.
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Assessment of the Bank’s contribution to AIDS prevention should
S*1 be in the light of the huge potential that AIDS treatment has io eat up
■7 always
-s from primary care to hospitals. Its propensity to do this has
already been demonstrated in the 19^2/23 health budget., raising
ideratiohs of sustainability and additionality noted in new Bank initiatives
con si4
’ Coordination of expenditures’ related to AIDS with other
is
programs appropriate where they have tight focus upon the some target
groups.
(j
Sew Initiatives in the Bank Program
Approaches to Primary Health Care and Disease Control
s 23
There are two approaches to this high pnonty issue: (a) the
S.23
comprehensive, integrated one-project strategy;, and (b) the communicable
disease specific approach.
The Comprehensive Integrated Approach
X.24
One possible approach to Bank assistance would be to address
‘ vertical communicable disease programs and other primary' health care
services in one coordinated project, probably along the lines of a sector
investment loan. This one-project, one-budget approach could: ensure
additionality, avoid duplication, protect investments through maintenance
programs, benefit from relationships in the delivery system, and improve
blending of resources. Technical support within the MoHFW is essential,
with health economists and analysts to establish relative benefits of various
spending packages. This approach could be piloted in a single state.
However, a form of it might also be effective for working with the center.
Priorities Under a Discrete but Programmed Approach
Another possible approach would be to treat specific diseases
8.25'
within a carefully programmed strategy, care being taken that resources do
not shift the budget away from stated priorities. In addition, in this
approach, projects could also contain sectoral or institutional development
components. This approach, too, might be applied at either the center or
state level.
Within the disease specific approach - a number of high priorities
8.26
would emerge:
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(a)
Malaria would be a very high prionty (as is indeed expressed in
policy, though not financial, terms by government). It is
- important to reestablish confidence and efficiency in the malaria
program at state level,'following the cuts. Thirpidgram might s
target also filaria, kala-azar, encephalitis, where the regional
environments demand such integration. Since this tends to be in
the poor states, there would be high externalities, and these
should be deliberately sought. Malaria programs should have a
major equity enhancing effect. Research and monitoring should
make policy clearer. Detailed aims of the program would vary
on a regional basis. "
-
(1))
Tuberculosis must also be given priority. This is not least
because of its close relations and association with AIDS. TB
features increasing incidence amongst the urban poor. As a
major health care cost to the urban poor it is likely to increase.
Reduction of TB incidence has a major poverty alleviation
element. Urban slums are a high priority target. In so targeting,
the supporting project must be structured to integrate with other
projects aiming at this same target population, and to ensure
externalities are acknowledged. Health education could be.-an
important element in TB, overlapping designedly into AIDS
programs.
(c)
Leprosy will remain very important Tor at least another decade
- Eradication is the aim. Assistance should establish a critical
resource package aggregated to national level and target and
timetable a full eradication program. This would focus on most
critical regions as highest priority. Reducing* the number of
cases to below 200,000 by 2000 is feasible. If aid is
contemplated, there is little economic point in mounting a less
than realistic package for total eradication. Leprosy assistance
should also feature rehabilitation, at low cost, of cured target
groups, an important income generating element. Cheap
allopathic surgery an other operations to suppress lesions have
quick returns. One of the major benefits pursued under this
strategy is medium term liberation of resources for other disease
control programs.
.
•
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Blindness programs could have an exceptionally high return.
However, these programs should lend themselves to a major
collaboration with the private and voluntary sector. They would
aim at long term improvement of ophthalmic services, as well as
reducing the astronomical backlog of untreated cataracts.
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g 27
More general assistance io the Primary Health Care System
would be a separate project under this disease-specific pattern of assistance.
Within a first phase, essentially of consolidation, the prionties would be to
ensure:
(a)
£
Quality improvements through packaging and blending, rationally
'flexibly, the related actions needed to deliver health care at a
village level. This should be within h minimum, flexible menu
of health care that can be defined at district PHC-and sub-center
level.
This quality improvement program would include the
fundamentals for administration, communication, resource inputs
and delivery within each disease control program. This must be
ensured within the wider program, al national and state level, but also within the package of resources needed at the delivery
points, and on interaction-with the patient, within the drug and
medial provision blend. Packaging also applies to human
resources - and so is coordinated with training - and supporting
logistics, and so. to simple but essential support (jeeps, in
association with fuel and drivers). Efforts must be made to
. ensure that such packaging, once proven efficient, is fully
protected from’fiscal stresses that would reduce effectiveness and
efficiency by altering the blend of resources.
''Tri
^^9
. The aim would be to provide a service that stops patient passing
of PHCs and other levels of rural and primary level facility.
Priorities could be developed to determine which PHCs and
^SubCs to help first using remoteness and the accessibility of
health facilities as criteria.
Outcome monitoring and appropriate data. Refined targas are
needed that are effective in enhancing productivity and quality of
service provision. This needs to be achieved without producing
the unreasonable subservience to simple empirical targets that has
characterized family planning efforts, to their great detriment.
These targets, by focussing more on evolving health outcomes of
patient system contacts, can become a subtle indicator of quality.
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Villagers respond quicklyMo perceived quality of hrH|th care
8.28
t roved
public primary-services will be utilized once quality and
•onfidcnc<; dre restored- 1° t^ls> ensuring a basic minimum quality of
Ltandards will enhance equity. The impact upon reducing pers<>i)aj health
expenditures and lost wages ought to quickly become significant
As a second phase, the priority would become:
8.29
(a)
Widening of primary health care services geographu a|jy
Extending social outreach to the most deprived arra»4 would be
important. These could be established by interpretahon of
to give health status rankings.
Data upon which to baselhis outreach are increasingly available
and highlight the inferior and more expensive curative
preventive services available to the more remote tn|M|
other
scheduled populations
(b)
Widening the menu of PHC services. As a secondl y priority,
once PHCs operate more effectively, extended invriiniCn^
together with training, can facilitate making availah|r ,, wider
ranges of.services.
1
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Assistance to Hospitals: A Catalytic Role for the Bank
Hospitals are today unnecessarily and uneconomical I v overloaded
8.30
through inefficient and unnecessary referrals, which aggravate i|lr impact of
insufficient and ill-structured budgets and a strongly* circumscnbr(|
for
cost recovery.
8.31
Yet the transformation of the hospital services into l( |cvel of
- health care that can proviac an effective service, to the poor as well as
groups with more ability to pay for private sector service, is an important
element of integrated health care system.
8.32
The policy thrust through the report is enhanced heal|h care
available to all on an equitable basis. Primary health care is the rlrst
priority. Isolation of hospitals from the primary health care bu<|gct
placing it under another directorate is one means of protecting pubficlvfunded primary health provision from escalating hospital costs.
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This isolation of the hospital budget would be characterized by
jchievement of regulated but genuine independence of hospitals. Their
success would be an integral component of the restructuring of the overall
health system aiming ^at enhanced primary health provision. An effective.
inierlocking and efficient hospital system is imperative and important to the
nation in balanced provision of health care. One examptejnight be the Safe
Motherhood Initiative, the success of which clearly depends an improved 5
hospital services.
'
8.34
Assistance in this area would also be a priority from the Bank’s
perspective.
.3.35
The combination of independent hospitals with the public primary
health care system should be seen as another manifestation and scale of lending. The aim, at hospitals, would again be to provide an effective and
cost efficient service, and to protect the equity of access of the poor to this
service.
d.36
This independence of hospitals is advocated as the best means of
protecting the primary health care system budget from resource demands and
spiralling fiscal impact of the demands of hospital care. Despite laudable
government claims about priorities, the effective doctors’lobby has th.e
potential of damaging or even swallowing primary health care resources.
This fuels the tendency to allot present public current expenditures to
hospitals to raise a return from sunk costs.
8.37
The independence of hospitals is also a .neans of financing
hospitals effectively, while managingrthem more efficiently. The
. - independence of hospitals to raise (and keep) resources through cost recovery
of measured, policy prescribed dimensions) itself contributes to equity and
frees money to enhance the minimum standard of primary health care. Nontunctioning public hospitals, crippled by overload through inefficient referrals
and rigidly structured inadequate budgets provide little service to the poor
and use resources of high opportunity cost to very low return17
In »ine c*ae«. nuMiiocated budgeting of insufficient funds results in hospitals becoming utterly ineffective to the
point of collapse. Even while functioning to provide poor quality care, transaction costs that have to be met by patienu’
private funds mean that access is difficult for the poor. And the scarce resources for .health delivery* encocrsge
exploitation of privilege. Without transformation of management, under present budgetary constraints, the problem is
like!) to become worse, not better.
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8.3^
The Provision of a public'hospital service, available to the poor,
dependent upon the transformation of public hospitals’ status. Hospitals
must ieave behind their present inappropriately, ineffectively funded and
dependent status. Cost recovery has a major role to play - within a
spectrum ot pnees developed to ensure protection for the poor.
The Bank could promote a package of assistance for hospitals,
8.39
perhaps other donors could take this as a higher priority in view of its
complementarity with primary health care and high visibility. A package to
establish the hospital transformation might include.*
K” ■ •
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fa)
Finance and assistance to the new over-arching a<-ministration for
independent hospitals. Administrative arrangements within the
OH must be.made for a body of overall authority that disburses
the grants for and monitors quality in independently managed
hospitals. Assistance would be for institution building and
operations research. Staffing and training would be important.
A management information system, monitoring evaluation and
health outcomes linked to the health economic unit in the
DHMW could be important.
Regulation of service-provision in hospitals, including a range of
suggested norms to ensure access of the poor, and for some'
stacked level ot charges (and including free treatment) would
emanate from this body. Implementation would be through the
state governments.
Its regulatory role would encompass standards in the private
sector too, for registered and unregistered doctors, and through
links to the existing homeopathic councils, to the Indian System
' of Medicine.
Li
Restructuring pf medical education A health manpower project
should be initiated to assist the Medical Education Council, with
appropriate links to the Health Departments at center and state
but also to the Ministry of Higher Education, the University
Grants Commission, and for.technician level manpower, the All
Indian Council for Technical Education.
The Medical Education Council would bean independent body
standing in its own right, like the University Grants Commission
or the All India Council lor Technical Education
if
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The package to restructure.medical education would include: (a)
emphasis upon in-service and on the job training and upgrading
of already trained medical staff (of all levels); (b) revisions of
curriculum for MD training to ensure appropriate social content
and rural and primary' care emphasis; (c) increased outturn of
nurses and paramedical stafftjf appropriate specialty.
' Cost recovery would be important to give*the Council some
independence of policy through self generated flexible resources.
Cost recovery would be associated with scholarships packages,
and incentives (for example, such as those which off set
scholarships against preparedness to work in rural areas,
necessarily interwoven with reservations policy.
Equity of access and quality of learning and training would be
the hall marks of the council.
i
i
Medical management of all levels of facility and of logistics
streams would be stressed, with enhanced resource awareness.
Paramedical training, and that of specialties such as ANMs
would be revamped together with new job descriptions ensuring
national standards, but allowing for local, flexibility.
(c)
A hospital specific senes of programmed packages. These would
be administered through the states and available on a phased
basis and according to local conditions of technical and political
readiness to assist in the independent management of hospitals.
These would need assistance for: (i) institution building; (ii)
particularly personnel management, motivation and positive
management styles, with development of incentives that reflect
real quality of care delivery. Training would be linked to
incentives and used as past of he active functioning of the
hospital; (iii) financial management with stress upon cost
recovery evaluation and mechanisms; (iv) appropriate
maintenance functions and strategies for equipment and buildings.
.-.
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- 105 ^gnrrfination between DoH and DoEW
9.
$40
The two departments within the MoHFW must improve
coordination of their activities. Both have stakes irr the successful operation
of (he PHG system, but they are currently competitors for resources within
that program. In areas such as maternal and child health and communicable
disease controT,*greater coordination of effons and budgets would increase
the effectiveness of the programs. The Bank encourages and will suppon
initiatives that tap the benefits these two departments can produce for each
other.
[I A Partnership to Enhance Equity and Quality of Health Care
<41
The GOI has achieved considerable progress in health provision
tor the 860 million people it governs. Although the practicalities of health
provision have fallen shon of the constitutional aims, the health status of the
Indian population is much improved from that of 40 years ago.
■■■
It
<42
To continue tp make improvements in health provision GO! has
:o set out difficult prionties, target with increasing refinement, secure more'
efficient practices and operations, seek greater assistance from externalities
:hat denve from investments in other sectors, and couple health provision and
communicable disease programs closely to the effort to eradicate povertv In
:his the Bank and the GOI perceive closely similar directions for health care
,’revision. In precipitating action to set such trends adjustment rs an
opportunity not to be missed.
rf
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