ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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Investing in Health

Healthcare Industry in India

The publication of “Investing in Health,” the World Bank’s highly influential 1993 World Development Report, has guided structural adjustment policies and health sector reforms in many developing countries. This study looks at how investment in health has since taken place in India with the withdrawal of the state from healthcare, transformation of healthcare into a commodity, and promotion of the private healthcare sector by the state. This has led to an unregulated industry that is aggressively seeking expansion and profits from the provision of healthcare, and attracting investments by global finance capital.

Annexures to this paper are available on the EPW website.The authors acknowledge the comments of an anonymous reviewer. The usual disclaimers hold.

It is well known that since the mid-1980s, the Government of India has actively encouraged the formal private healthcare sector through direct and indirect concessions and policy measures. The poor performance of the public healthcare sector, arising from prolonged inadequate funding and deliberate neglect, is conveniently used by the private sector as well as policymakers to increase private sector participation. Private sector healthcare in India is known to be a heterogeneous mix of informal and formal providers, with the formal providers belonging to either not-for-profit or for-profit categories. Further, formal providers range from individual practitioners to formally registered small-to-medium private hospitals, and the corporate commercial hospital sector. While there is a large unorganised sector comprising own account/individual-run enterprises, however, the National Sample Survey (NSS) data points to a declining trend in such individual-run enterprises in private health sector and an increasing trend towards small-, medium- and large-sized enterprises, with large-sized enterprises increasing at a much faster rate as compared to medium- and- small ones, between 2001–02 and 2010–11 (Hooda 2015). The IMS census conducted in 62 major cities of the country showed that there were around 13,413 private hospitals contributing to almost 95% of the total hospital facilities in these cities (Mukhopadhyay et al 2015).

The National Health Policy (NHP) 2017, in its opening paragraph, refers to the presence of a “robust” healthcare industry and its double digit growth, and notes that it brings in revenues and employment (GoI 2017a). Further, the NHP refers to “ongoing efforts by the Government to streamline the own-account-enterprises (OAEs) within the corporate sector and to regulate them” (GoI 2017b: 10). It calls for engaging with the private sector through measures such as strategic purchasing of services from different providers, including for-profit ones, and for encouraging “the private sector to invest—which implies an adequate return on investment that is, on commercial terms which may entail contracting, strategic purchasing, etc” (GoI 2017a: 19).

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Updated On : 24th Jun, 2020
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