Why India needs private-public partnership in healthcare

Ashok Kumar E.R | Updated on March 18, 2021

The stark reality of healthcare in India has become evident in the last few months. The Covid-19 pandemic has brought to the fore gaps in the Indian healthcare system and offers a unique opportunity to transform it.

Affordability and accessibility are two major concerns in India. To this effect, several State Governments and the Central Government have put in place various insurance schemes. In 2018, the Centre also rolled out the Pradhan Mantri Jan Arogya Yojana, a health insurance scheme that provides free access to healthcare to 50 crore economically vulnerable Indians. While these efforts are commendable, there is room for a lot more considering the sheer population of our country. The government spends a mere 1.13 per cent of GDP on healthcare, with almost 65 per cent of healthcare expenditure coming out from the pockets of citizens. This is a huge financial burden to carry and pushes millions of people further into poverty each year.

The second issue is that of accessibility. The rural and urban populations of India have diametrically opposite experiences with healthcare. About 75 per cent of healthcare infrastructure can be found in the urban areas where only 27 per cent of the Indian population resides. Furthermore, a KPMG report reveals that 74 per cent of doctors in India practice in urban areas. This essentially means that 73 per cent of the population living in rural areas lack even primary healthcare facilities.

India also has a huge shortage of doctors, nurses and paramedics. We do not meet the minimum WHO recommendation on doctor-patient ratio. While WHO recommends one doctor for every 1,000 people (1:1000), India stands at 1:1445.

Is public private partnership in healthcare the solution?

The Public Private Partnership (PPP) model in India has seen success in other areas such as infrastructure, energy, education, urban development, tourism, and more. It can be the panacea to India’s healthcare challenges as well. PPP in healthcare has the potential to resolve the issues and ensure healthcare inclusion for the Indian masses. Starting with smaller projects and driving success for the same can help build credibility and get buy-in from all stakeholders.

PPP will bring in resources the government needs to make healthcare available, as well as create a sustainable long-term model. It can improve the healthcare system by pooling in the expertise and finances of the private sector with the access and subsidies of the public sector.

Here’s how a PPP model can prove to be fruitful for the Indian healthcare sector…

Expertise: The experience and management expertise of the private sector in building and running successful organisations can be crucial in revamping medical facilities.

Finance: The private sector can bring in large monies needed to build best-in-class healthcare facilities that benefit the masses.

Affordability: PPP operates on a high volume, low margin model, which can ensure universal health coverage and provide quality care at affordable cost.

Technology: New-age innovative technology adopted by private players can make healthcare accessible to rural India. A strong case in point is tele-medicine.

Efficiency: The PPP model can help drive efficiencies and help run hospitals and clinics like well-oiled machines.

Specialist doctors: Change in government policies can help India create more specialist doctors to address immense shortage in India. Reviving of Post Graduate Diploma courses by the Centre is a great step in this direction.

Can social organisations be the catalyst for PPP in India?

Establishing synergies between the needs and expectations of both stakeholders – public and private sector – is easier said than done. While the public entity requires evidence for the mass viability of the proposed healthcare project, the private enterprise needs to see sustainable profitability for its efforts. This is where social organisations can act as a bridge between the two.

Through the funding received from various philanthropic organisations, charitable foundations or general public donations, social organisations can undertake small three to six month pilot projects that assess both the mass viability and financial sustainability of a partnership, while saving hundreds of lives in the interim period.

Social organisations can be key enablers to ensure PPPs reach completion, as well as act as independent and unbiased agencies that oversee the formation, implementation and sustained functioning of a Public Private Partnership.

PPP is the way to go to improve and uplift the Indian healthcare system, and social organisations can act as stewards of the partnership and work toward accomplishing the goals, while dedicating time, money and resources for the betterment of the community and nation at large.

The author is President, GiveIndia

Published on March 18, 2021

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