Tag Archives: hospitals

Healthcare reform for the needy and poor in the richest and the most populous countries of the world. What about the largest democracy of our planet?

Posted on by
Reply
Healthcare reform to ensure access to affordable high quality healthcare services for all, is considered as an integral part of the economic progress of any country. During recent global financial meltdown, this need became visible all over the world, even more.In my last article, I wrote how the most populous country of the earth – China, unfolded the blueprints of a new healthcare reform process in April, 2009, taking an important step towards this direction.Around the same time, in the richest country of the world, after taking over as the new President of the United States of America, President Barak Obama also reiterated his election campaign pledge for a comprehensive healthcare reform process in the USA.

These measures, in both the countries, intend to ensure access to affordable, high quality health care coverage and services to every citizen of the respective nations. In America, the reform process also intends to bridge the healthcare coverage gap in their Medicare prescription drugs program for the senior citizens.

The pharmaceutical industry response to healthcare reform in the USA:

Responding to this major policy initiative of the government, very responsibly David Brennan, Chief Executive Officer of AstraZeneca and the Chairman of Pharmaceuticals Research and Manufacturers of America (PhRMA) announced recently:

“PhRMA is committed to working with the Administration and Congress to help enact comprehensive health care reform this year. We share a common goal: every American should have access to affordable, high-quality health care coverage and services. As part of that reform, one thing that we have agreed to do is support legislation that will help seniors affected by the coverage gap in the Medicare prescription drug benefit.”

For this purpose Brennan publicly announced the following:

1. America’s pharmaceutical research and biotechnology companies have agreed to provide a 50 percent discount to most beneficiaries on brand-name medicines covered by a patient’s Part D plan of Medicare, when purchased in the coverage gap.

2. The entire negotiated price of the Part D covered medicine purchased in the coverage gap would count toward the beneficiary’s out-of-pocket costs, thus lowering their total out-of-pocket spending.

American Pharmaceutical Industry pledges U.S$ 80 billion towards healthcare reform of the nation:

With the above announced commitment, it has been reported that the US Pharmaceutical and Biotech companies have offered to spend U.S$ 80 billion to help the senior citizens of America to be able to afford medicines through a proposed overhaul of the healthcare system of the country.

This is a voluntary pledge by the American pharmaceutical industry to reduce what it charges the federal government over the next 10 years.

What is the Medicare plan of America?

According to the explanation of the program given by Medicare, it is a prescription drug benefit program. Under this program, senior citizens purchase medicines from the pharmacies. The first U.S$ 295 will have to be paid by them. Thereafter, the plan covers 75 percent of the purchases of medicines till the total reaches U.S$ 2,700. Then after paying all costs towards medicines ‘out of pocket’ till it reaches U.S $ 4,350, patients make a small co-payment for each drug until the end of the year.

American citizens’ support on the new healthcare reform of President Barak Obama:

A leading American daily reports that American citizens overwhelmingly support substantial changes to the country’s healthcare system and are strongly behind a government run insurance plan to compete with private insurers.

According to the latest New York Times/CBS News poll most Americans would be willing to pay higher taxes, so that every individual could have health insurance. Unlike in India, Americans feel that the government could do a better job of holding down healthcare costs than the private sector.

Current American healthcare: High quality – high cost

85 percent of respondents in this survey said the country’s healthcare system should be completely overhauled and rebuilt. The survey also highlighted that American citizens are far more unsatisfied with the cost of healthcare rather than its quality.

President Obama has been repeatedly emphasizing the need to reduce costs of healthcare and believes that the health care legislation is absolutely vital to American economic recovery. 86 percent of those polled in the survey opined that the rising costs of healthcare pose a serious economic threat.

An interesting recent study from the George Washington University School of Public Health and Health Services:

A recent study conducted by the George Washington University School of Public Health and Health Services reports that as a part of the new healthcare reform initiative in the US, if the health centers are expanded from the current 19 million to 20 million patients, the country can save U.S$ 212 billion from 2010 to 2019 against a cost of U.S$ 38.8 billion that the government would have incurred to build the centers. This is happening because of lower overall medical expenses for these patients.

Last year the health centers already generated health system savings of U.S$ 24 billion.

What then is happening in the largest democracy of the planet – our own India, towards such healthcare reform?

India in its 1983 National Healthcare Policy committed ‘healthcare to all by the year 2000′. However, the fact is, in 2009, only 35 percent of Indian population is having access to affordable modern medicines. So many commendable policy announcements have been made by the government thereafter. Due to poor governance, nothing seems to work effectively in our country.

Conclusion:

People with access to the corridors of power appear to believe that when the country will clock the magic number of GDP growth of 9 percent, India will have adequate resources to invest in healthcare. Till then frugal healthcare initiatives will continue at the abysmal level of speed of execution, denying access to affordable modern medicines to 65 percent of population of the country.

If and when the healthcare reform plans will be unfolded in India, hopefully like in the USA, all stakeholders will come forward with their own slice of contribution to ensure access to affordable high quality healthcare to all the citizens of our nation.

When the world believes that healthcare reform measures to cover the entire population of the country to provide access to affordable, high quality healthcare services is fundamental to economic progress of a country, the government of India seems to nurture a diametrically opposite view in this regard. The policy makers appear to sincerely believe that 9 percent economic growth is essentiall to provide access to affordable high quality healthcare to all.

Are we engaged in the well known “Catch 22” debate at the cost of health to all?

By Tapan Ray

Disclaimer: The views/opinions expressed in this article are entirely my own, written in my individual and personal capacity. I do not represent any other person or organization for this opinion.

China has recently unfolded the blueprints of its new healthcare reform measures, when will India do so?

Posted on by
Reply
Early April, 2009, China, a country with 1.3 billion people, unfolded a plan for a new healthcare reform process for the next decade to provide safe, effective, convenient and affordable healthcare services to all its citizens. A budgetary allocation of U.S $124 billion has been made for the next three years towards this purpose.
China’s last healthcare reform was in 1997:

China in 1997 took its first reform measure to correct the earlier practice, when the medical services used to be considered just like any other commercial product, as it were. Very steep healthcare expenses made the medical services unaffordable and difficult to access to a vast majority of the Chinese population.

Out of pocket expenditure towards healthcare services also increased in China…but…:

The data from the Ministry of Health of China indicate that out of pocketl spending on healthcare services had doubled from 21.2 percent in 1980 to 45.2 percent in 2007. At the same time the government funding towards healthcare services came down from 36.2 percent in 1980 to 20.3 percent in the same period.

A series of healthcare reforms was effectively implemented since then like, new cooperative medical scheme for the farmers and medical insurance for urban employees, to address this situation.

The core principle of the new phase of healthcare reform in China:

The core principle of the new phase of reform is to provide basic health care as a “public service” to all its citizens. This is the pivotal core principle of the new wave healthcare reform process in China where more government funding and supervision will now play a critical role.

The new healthcare reform process in China will, therefore, ensure basic systems of public health, medical services, medical insurance and medicine supply to the entire population of China. Priority will be given for the development of grass-root level hospitals in smaller cities and rural China and the general population will be encouraged to use these facilities for better access to affordable healthcare services. However, public, non-profit hospitals will continue to be one of the important providers of medical services in the country.

Medical Insurance and access to affordable medicines:

Chinese government plans to set up diversified medical insurance systems. The coverage of the basic medical insurance is expected to exceed 90 percent of the population by 2011. At the same time the new healthcare reform measures will ensure better health care delivery systems of affordable essential medicines at all public hospitals.

Careful monitoring of the healthcare system by the Chinese Government:

Chinese government will monitor the effective management and supervision of the healthcare operations of not only the medical institutions, but also the planning of health services development, and the basic medical insurance system, with greater care.

It has been reported that though the public hospitals will receive more government funding and be allowed to charge higher fees for quality treatment, however, they will not be allowed to make profits through expensive medicines and treatment, which is a common practice in China at present.

Drug price regulation and supervision:

The new healthcare reform measures will include regulation of prices of medicines and medical services, together with strengthening of supervision of health insurance providers, pharmaceutical companies and retailers.

As the saying goes, ‘proof of the pudding is in its eating’, the success of the new healthcare reform measures in China will depend on how effectively these are implemented across the country.

Healthcare scenario in India:

Per capita public expenditure towards healthcare in India is much lower than China and well below other emerging countries like, Brazil, Russia, China, Korea, Turkey and Mexico.

Although spending on healthcare by the government gradually increased in the 80’s, overall spending as a percentage of GDP has remained quite the same or marginally decreased over last several years. However, during this period private sector healthcare spend was about 1.5 times of that of the government.

It appears, the government of India is gradually changing its role from the ‘healthcare provider’ to the ‘healthcare enabler’.

High ‘out of pocket’ expenditure towards healthcare in India:

According to a study conducted by the World Bank, per capita healthcare spending in India is around Rs. 32,000 per year and as follows:

- 75 per cent by private household (out of pocket) expenditure
- 15.2 per cent by the state governments
- 5.2 per cent by the central government
- 3.3 percent medical insurance
- 1.3 percent local government and foreign donation

Out of this expenditure, besides small proportion of non-service costs, 58.7 percent is spent towards primary healthcare and 38.8% on secondary and tertiary inpatient care.

Role of the government:

Unlike, recent focus on the specific key areas of healthcare in China, in India the national health policy falls short of specific and well defined measures.

Health being a state subject in India, poor coordination between the centre and the state governments and failure to align healthcare services with broader socio-economic developmental measures, throw a great challenge in bringing adequate reform measures in this critical area of the country.

Healthcare reform measures in India are governed by the five-year plans of the country. Although the National Health Policy, 1983 promised healthcare services to all by the year 2000, it fell far short of its promise.

Underutilization of funds:

It is indeed unfortunate that at the end of most of the financial years, almost as a routine, the government authorities surrender their unutilized or underutilized budgetary allocation towards healthcare. This stems mainly from inequitable budgetary allocation to the states and lack of good governance at the public sector healthcare delivery systems.

Health insurance in India:

As I indicated above, due to unusually high (75 per cent) ‘out of pocket expenses’ towards healthcare services in India, a large majority of its population do not have access to such quality, high cost private healthcare services, when public healthcare machineries fail to deliver.

In this situation an appropriate healthcare financing model, if carefully worked out under ‘public – private partnership initiatives’, is expected to address these pressing healthcare access and affordability issues effectively, especially when it comes to the private high cost and high quality healthcare providers.

Although the opportunity is very significant, due to absence of any robust model of health insurance, just above 3 percent of the Indian population is covered by the organised health insurance in India. Effective penetration of innovative health insurance scheme, looking at the needs of all strata of Indian society will be able to address the critical healthcare financing issue of the country. However, such schemes should be able to address both domestic and hospitalization costs of ailments, broadly in line with the health insurance model working in the USA.

The Government of India at the same time will require bringing in some financial reform measures for the health insurance sector to enable the health insurance companies to increase penetration of affordable health insurance schemes across the length and the breadth of the country.

Conclusion:

It is an irony that on one side of the spectrum we see a healthcare revolution affecting over 33 percent population of the world. However, just on the other side of it where around 2.4 billion people (about 37 percent of the world population) reside in two most populous countries of the world – India and china, get incredibly lesser public healthcare support and are per forced to go for, more frequently, ‘pay from pocket’ pocket type expensive private healthcare options, which many cannot afford or just have no access to.

In both the countries, expensive ‘pay from pocket’ healthcare service facilities are increasing at a greater pace, whereas public healthcare services are not only inadequately funded, but are not properly managed either. Implementation level of various excellent though much hyped government sponsored healthcare schemes is indeed very poor.

Moreover, despite various similarities, there is a sharp difference between India and China at least in one area of the healthcare delivery system. The Chinese Government at least guarantees a basic level of publicly funded and managed healthcare services to all its citizens. Unfortunately, the situation is not the same in India, because of various reasons.

Over a period of time, along with significant growth in the respective economies of both the countries, with China being slightly ahead of India for many reasons, life expectancy in both India and China has also increased significantly, which consequently has lead to increase in the elderly population of these countries. The disease pattern also has undergone a shift in both the countries, mainly because of this reason, from infectious to non-infectious chronic illnesses like, hypertension, diabetes, arthritis etc. further increasing the overall burden of disease.

High economic growth in both the countries has also lead to inequitable distribution of wealth, making many poor even poorer and the rich richer, further complicating the basic healthcare issues involving a vast majority of poor population of India.

A recently published report indicates that increasing healthcare expenditure burden is hitting the poor population of both the countries very hard. The report further says that considering ‘below the poverty line’ (BPL) at U.S$ 1.08 per day, out of pocket healthcare expenditure has increased the poverty rate from 31.1 percent to 34.8 percent in India and from 13.7 percent to 16.7 percent in China.

To effectively address this serious situation, the Chinese Government has announced its blueprint for a new healthcare reform measures for the coming decade. How will the Government of India respond to this situation? It will indeed be interesting to watch.

By Tapan Ray

Disclaimer: The views/opinions expressed in this article are entirely my own, written in my individual and personal capacity. I do not represent any other person or organization for this opinion.