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Evaluation of India’s Health System: Challenges and Recommendations for Improvement among Indian Rural Poor

Info: 4251 words (17 pages) Dissertation
Published: 9th Dec 2019

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Tagged: Social PolicyHealth and Social Care


CHC –      Community Health Centre

CHW–      Community Health Worker

GDP –      Gross Domestic Product

HIS –       Health Information System

MHFW–  Ministry of Health & Family Welfare

OOPE –   Out-of-pocket expenditures

PHC –      Primary Health Centre

WHO –    World Health Organization

RSBY –   Rashtriya Swasthya Bima Yojana

Health Systems in India

Health systems comprise of organizations, administrations, resource and individuals with the intent to promote, rebuild and maintain health(1, 2). It provides preventative, curative and rehabilitative interventions(2) to advance population health outcomes in an equitable manner(1). Main features of a well-functional health system are accessibility,  financial support, and effective use of available resources(1). The core components of a strong health system are built on these foundational blocks: financing, to prevent privation from high healthcare costs; trained and qualified health workforce; quality health service delivery; access to essential medicines; dependable Health Information System (HIS), for policy, reform and decision-making; and trustworthy health system governance(1, 2).

The health system in India is multidimensional, incorporating several levels of providers practicing in different systems of health within various ownership structures(3). The governance and operations of healthcare system is shared between the state government and Ministry of Health & Family Welfare(MHFW)(4).The states have primary influence on most facets of healthcare, including public health and hospitals(3, 4), funding about 80% of the public healthcare budget(3). The MHFW implements health policies and programs nationally prevents and controls communicable and non-communicable disease outbreaks and develops health systems standards(4). State budget, medical education, food security, and drug quality control are managed jointly(3-5).

Healthcare services in India are delivered using a network of public and private-sector(4, 5). The public-sector features a three-tier design of primary, secondary and tertiary facilities, with primary health services offered through sub, primary and community health centres in rural-regions(5) dependent on population size in plain and hilly/hard to reach areas(4). The sub-centres is the first-point of contact between primary and community health centres (CHC), designed to provide maternal, child health, nutrition, immunization, communicable disease and diarrhea control services(5) for a population of 3000-5000 people(4). The primary health centres (PHC) and CHCs are established and sustained by the state government. The PHCs serve a population of 20,000–30,000, bridging village communities with local medical officers(4) and health-workers(6), providing healthcare promotion, curative, and preventative services, and serving as a referral unit for sub-centres(4, 5). The CHCs offer obstetric care and specialist consultation, surgery, X-ray and lab amenities for a population of 80,000–120,000 in rural-areas(4).

The private-sector plays a vital role in India’s healthcare system(3). Understanding that limited resources prohibit effective execution of health programs, the 1982 National Health Policy, established for primary healthcare provision for all(4), encouraged states to invest in private medical practices(3). Thus, the private-sector expanded with private hospitals providing 80% of outpatient-care and 60% of inpatient-care in 1998(3, 5, 7), since then, the private-sector has not been well-regulated(5). Private medical practitioners provide health services in individual practices, private hospitals, clinics, and nursing homes, thus issuing service costs based on individual quotes and local market conditions(5). Other bodies of India’s health system governance include the Insurance Regulatory & Development Authority, which standardizes the health insurance industry and the National eHealth Authority- controls HIS(5). – 477 words

Key Challenges in Rural Poor

Health shortfalls in rural India is still a pressing issue(8). Over 700 million residents dwell in rural-areas where the allocated health expenditures are  fewer than 10% of the total health budget(8). Significant geographic inequalities in health outcomes exist, such that life expectancy in Madhya Pradesh-rural is 56years compared to 74years in Kerala-urban; a substantial decrease of 18years in the rural area(9). This disproportion results from economic, political and social conditions that impact the distribution of health within India(9). The rise of infectious and non-communicable disease creates a double-burden on the healthcare system(7), with health outcomes remaining strongly related to social-dimensions like wealth, education and geography(9), particularly among disadvantaged populations(10). The inverse care law is highly prevalent in India, where those with the highest need for healthcare have the greatest challenges accessing medical services and are likely to have unmet health needs(9). -141


Financial Resource Allocation

Effective distribution of health resources in different geographical areas is essential in safeguarding the availability of adequate healthcare services(9). In India, this approach is challenged by insufficient public spending with noticeable statewide variations in financing(9). India’s total health expenditure was approximately 4.02% of the Gross Domestic Product(GDP)(11), with public health expenditure accounting for 1.15% of the GDP from 2013-2014, less than the average in low-income countries(5). Evidence of gaps in public expenditures and health infrastructure is present across states in India(12), with health expenditure seven times higher in major states(9). Public expenditure is much lower in less-developed states; Bihar, Odisha and Jharkhand compared to developed states; Punjab and Kerala(12). This study also reported geographic concentration of lower health spending in Chhattisgarh, Odisha and all north-eastern states(12). The total government health expenditure reported from 2013-2014 in rural-local schemes was 3.20% compared to 4.02% in urban-local schemes(11). -145

Rural Availability and Access to Health Service Delivery

In addition to statewide variations, a larger proportion of resources are allocated to urban-based  higher-level services with 29% of central and state-public spending directed towards urban-allopathic services compared to 12% on rural-allopathic services(9). The imbalance in allocation is attributed to private-sector bias towards higher-level curative health services, which are often funded by market investors, and mostly centred in wealthy urban-areas(9). Thus, communities in rural-areas lack access to comparable level of healthcare as urban communities, contributing to the poor health status in rural-areas(8) and disproportionate share of the unhealthy population in India(6). Major illness in rural regions go untreated due to unavailability of medical facilities in the locality(6). In less-developed villages, 12% of major illness remain untreated in India while only 3% of the same illness go untreated in the urban-areas(6).

Physical access to curative and preventative medical services is a major barrier for India’s rural-population(9). 75% of healthcare infrastructures including medical providers are heavily condensed in urban-areas where only 27% of India’s population reside(13). The development of private-sector medical facilities in urban-areas has led to unequal geographic distribution of health services(9). The number of government hospital bed in urban-regions account for more-than double in rural regions(9). Due to the geographic isolation in north-eastern Indian states, residents are deprived of availability and accessibility of healthcare facilities(12). In 2008, 11,289 government hospitals and 494,510 beds were estimated, with statewide variations ranging from 533 persons-per-hospital bed in Arunachal Pradesh to 5,494 in Jharkhand(9). Much of India’s north and north-eastern regions lie in hilly terrains with some territories in remote islands, making health services challenging to reach(8). –263


Health Workforce and Quality of Healthcare

In 2005, the National Rural Health Mission was launched to improve health systems and status of populations in rural-areas(7). However, this did not yield significant benefit as many health facilities are short staffed and lack medications(14). For instance, PHCs are limited to certain areas and among those available, 8% lack doctors and medical staff, 18% lack pharmacists, and 39% lack lab technicians(13). The high absences among healthcare providers(9), particularly among physicians in public facilities(14), unavailability of drugs, medical supplies and limited service hours, aid in the malfunction of healthcare infrastructure in rural-areas(6, 9, 14). This is in part, due to poor physical environment(9), working conditions(14), lack of incentives and transparency in rural physician placements(14).

Furthermore, the Indian government faces difficulties in attracting and maintaining doctors in rural regions adding to the high mortality and morbidity rates(8), and impeding well-being of rural-communities(13). 75% of qualified practitioners practice in urban parts, 23% in towns and only 2% in rural-areas(8). Low-competency of public and private health providers in India has been recognized, with providers servicing poor populations, being less qualified(9). A study in rural-Rajasthan reported, most private physicians are unqualified to provide health services with less than 40% having medical degree, 20% lacking completion of secondary education(15) and 18% have no prior paramedic training(16). An estimated one million illegal practitioners account for 50-70% of primary medical consultations in the curative healthcare system in rural parts of India(14). Displeasure in the public-sector healthcare quality is thought to be the reason for the rural-poor seeking care in the private-sector(9), with 39% of the poorest quintile using private-sector hospitalization(14). But at what cost? Due to the unavailability of qualified healthcare providers, diagnostic services and medications in PHC, the rural-poor seek equally poor private facilities, spending more on health cost, most of which is out-of-pocket(6). –298

Out-of-pocket Burden

India has one of the highest percentages of household out-of-pocket expenditure (OOPE) on health(9). It single-handedly forced over 39 million Indians below the poverty line in 2005, with 31 million in ruraland 8.4 million in urban regions(9).OOPE is responsible for 11% of the total non-food expenditures, with higher proportions in rural-areas, and an estimate of 5% of household expenditures going towards health expenses(17). As a result, the rural-poor are less likely to seek health services, reporting financial burden as a key factor in foregoing care when sick(9). This still remains prevalent among poor populations in both rural and urban-areas(9). The financial burden of outpatient and inpatient-care is constantly greater among rural-households. In 2005, 14% of rural-households spent over 10% of their total health expenditure on healthcare compared to 12% in urban households(9). About 48% of the total annual expenditures go towards hospitalization costs, with more than one-third of costs, paid by borrowing money or selling assets(9).

Cost-inflation of healthcare is another key factor in the limited access of medical services and inequity in financing(9). In 2004, the OOPE per outpatient and inpatient visit in rural and urban- areas increased in both private and public-sectors, with higher increase in private health services and expenditure growth still occurring faster in rural inpatient-care(9). These financial costs exclude supplementary expenses of seeking healthcare like transportation, childcare, loss of earnings and opportunity cost from health providers(9). Sadly, corruption in the healthcare system is very common in India. A government study found that 20% of participants reported irregular admission processes and 15% indicated corruption after admission of care, among doctors (77%) and other medical staffs (67%), likely being perpetrators(9). This corruption in the medical services were in the form of bribe extortion to receive care during admission(9).  –292

Drug Cost and Access to Medicine

Drug cost is the single largest contributor of OOPE(9, 17, 18) across all consumption groups in rural and urban-areas(17), among the poor(9). It constitutes of 75% of all OOPE, accounting for 77% in rural and 70% in urban-areas(17). It accounts for 85% of OOPE on outpatient and 60% on inpatient-care expenditures(17). In 2000, the total household’s annual expenditure on drugs in India, was approximately US$5.7 billion, with US$4.1 billion in rural and US$1.6 billion in urban-areas(17). Shortfalls in the efficiency of drug price regulation in the pharmaceutical market has amplified the unequal access to affordable quality medicine in India(9). The percentage of drug price regulation has declined substantially, shifting from 90% in the 1970’s to 10% in 2011(9). Between 1996–2006, medications in a select family of drugs increased in cost by 40%, medications on the essential drug list increased by 15% while other medications not under price regulation increased by 137%(9). –152



Increased Health Funding, Expanded Health Delivery and Insurance Coverage Schemes

Restructuring the financial budget warrants implementing additional funds from the government into measurable expansions of health services in India(18), encouraging investments in rural-healthcare facilities and services(13). This is beyond spending more money, rather spending it right. As seen in Chile, Brazil and Mexico, their population healthcare coverage was successfully expanded by determining a baseline of cost-effective healthcare services relative to the nation’s health needs(18). Likewise, India could define a national health package with guidelines that prioritize health services statewide, assessing the baseline of the population needs and creating an incentive to states that work towards this objective(18), establishing a correlation between state needs and funding provided. There is also a need for pro-poor health policies, with an emphasis on financial protection for the rural-poor, especially those within and below the poverty line in India(17). Increasing public spending with a focus on preventative healthcare in rural-areas, reducing India’s geographical inequalities in access to health in poorer states(18) by reviewing resource allocation planning, health delivery, central and state financial responsibility(9), providing higher financial support in states with poor health coverage and considering lowering support in higher performing states(18), will aid in achieving equalization between states.

Investing in health schemes and improving existing health services through reinforcement of the primary care network will make health equitable in India(9). Presently, health insurance has a marginal role in India’s health system, however to address the health challenges in India, is not a matter of if health insurance will be used as it has gained major consideration by policymakers, rather if it will be applied to its highest potential to serve India’s health needs(19). Improving government health insurance schemes starting with rural-communities that benefits the poor, expands access to care, regulates cost of medications, ensures customer satisfaction, increasing better coverage of health services at low cost without the negative attributes of privatization are factors to developing effective health insurance schemes in India(19). The RSBY and National Health Protection Scheme extending health coverage to poor populations in India is a good effort in the right direction(7). –339

Improved Quality of Healthcare, Access and Affordability, Capacity Building

To ensure an improved quality of care, the productivity of current health resources should be prioritized, reorganized and restructured before implementing supplementary resources(14). Building capacity to address the management of medical facilities in India, especially in poorer states, rural-area and promoting health efficacy is essential(14). A need for educational programs addressing medical service efficiency at all levels of care, especially PHCs should be emphasized. Re-defining health-workers roles and allocating more responsibility, building capacity, integrating monitoring and evaluation systems, assessing health-workers and facilitating optimal provision of care is imperative(14). However, to support health providers in achieving a standard level of care, a standard of quality for health facilities like sanitation, adequate infrastructure, availability of nurses, health-workers, medications and supplies, should be established and regulated within current and future facilities(18). In addition, providing better living facilities for community health-workers(CHW) in underserved poor regions, maintenance of medical facilities, improved transportation, mapping accessibility of health facilities in rural-regions and mobilizing trained CHWs is needed(14). –160


Increasing Qualified Medical Professionals


To address the shortage of qualified health professionals in rural India, the government could establish accredited medical training schools in rural parts, northern and poorer states(18). Expanding medical education and increasing graduates which will aid in capacity building. Ensuring quality assurance of medical training and maintaining affordable education costs, will be vital in safeguarding a pipeline of well-trained health providers(18). In addition, medical training should include compulsory work in rural-poor communities, providing preference and opportunities for direct career pathways for physicians, with higher incentives in rural-regions(18). Creating a shorter rural medical degree with an aim to address the needs in vulnerable populations could attract new health providers(18). The Indian government has already established a 3year bachelors in community health which is proven helpful(18). As pioneered in Maharashtra, encouraging practitioners of homeopathy and other naturopathy practices to undertake bridging rural medicine or advanced nursing degrees will urge career development opportunities among those with proven committed interest in community health services(18). –159

Reduction of OOPE and Regulation of Drugs

India has the capacity to procure medications at lower subsidized unit rate compared to counter low-middle-income countries(18). However, drug affordability is a major driver of high OOPE among the rural-poor. To combat this, a need to balance affordability of new drugs among those who need it and development of new drugs and better treatment is required(14).Tamil Nadu state, administered a drug purchasing system that utilizes collective standard to lower drug prices making a wider range of drug available and Rajasthan provides free essential medications to patients using public health services(7). Performing improved medication prescription practices by actively educating health providers is essential(18). Delhi has attained 35% savings on yearly drug expenditure utilizing this approach, modelled after Australia’s National Prescribing Service(18).

Enforcing existing laws on drug sales and implementing new regulations on drug prices could drastically reduce OOPE. The responsibility of drug administration and pharmaceuticals in India is shared between the Ministry of Chemical and Fertilizers, for drug policy and MHFW, for drug standards and quality control(14). However, India should establish an independent holistic drug authority to regulate all drug functions regarding the development, import and distribution of pharmaceuticals. Instituting policies against the production of sub-standard drugs and sale of prescription of drug over the counter, ensuring fixed pricing on all medications and enforcing penalties on policy violators(14). In 2008, the Jan Aushadhi scheme launched the sale of generic high-quality medication at affordable prices(7). -233

Challenges facing the rural-poor in India are difficult but not impossible to combat. Strong engagement and commitment within the Indian government, restructuring public healthcare approach, establishing a solid health system that protects vulnerable populations, strengthen healthcare services and investing in programs that reach, support and improve health outcomes of impoverished populations are fundamental ways to address health inequities in India. However, these changes will not occur overnight, India has implemented incentives to improve its current health system and with dedicated focus, financial investment, and accountability in rural-regions, will aid and improve health in millions. –94


Total Words: 2760 (excluding cover page, references, acronym page and sub-headings)

 Word Limit: 2500 (I won’t be penalized if I go 10% (250 words) over the word limit; 2750)


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19. Anita J. Emerging Health Insurance in India – An overview Institute of Actuaries of India; 2009.

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Health and Social Care is the term used to describe care given to vulnerable people and those with medical conditions or suffering from ill health. Health and Social Care can be provided within the community, hospitals, and other related settings such as health centres.

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