Flogging a Lie to Undermine Public Healthcare

Amit Sengupta

THREE seemingly unconnected developments in the past weeks are emblematic of the current approach to public services in general and healthcare services in particular.

The first development pertains to the Institute for Liver and Biliary Services (ILBS), in Delhi, where workers, including nursing staff have been on agitation for better working conditions. Recently one of the leaders of the agitating workers has been handed a termination letter, and workers were forced to go on hunger strike. The second development is the announcement by the Delhi government that patients can now be referred to empanelled private hospitals, from public hospitals. The third is a proposal by the Rajasthan government that private providers of healthcare will be contracted to run urban primary health centres.


The Institute of Liver and Biliary Sciences (ILBS) is classic public partnership. A super-specialty hospital for liver and biliary diseases in Delhi, the hospital was built through public funds by the Delhi government. Inaugurated in 2011, the hospital is run by a private administration and is registered under the Societies Act. While nominally the governing council has several nominees of the Delhi government and the chair is the chief secretary of the Delhi government, in practice the hospital functions like a private institution. While the institute runs a free OPD twice a week, almost all services are charged at rates that are comparable to private institutions. When the hospital was commissioned it was criticised for changing rates that were 10 times that of AIIMS but this was justified by the then Delhi government as being necessary because “it was like a corporate hospital”. A liver transplant operation in ILBS, for example, costs around 15 lakhs, similar to what is charged in private hospitals in Delhi. Employees in the institute have been actively prevented from forming unions, leading to the recent face off. 600 workers of the hospital are all either on fixed term contracts, or hired through contractors, in both cases without security of tenure.


Now let us turn to the second development, again in Delhi, where patients are being offered treatment in private hospitals at public cost. The Delhi government has tied up with 41 private hospitals, where patients can be referred for 30 surgical procedures (the number of hospitals and the procedures covered vary in different news reports, but are in the same range as indicated). The private hospitals will be reimbursed by the government at Central Government Health Services (CGHS) rates. Procedures covered range from relatively minor surgeries such as for hemorrhoids to more complex cardiac surgeries. The scheme, reportedly, applies to patients who are unable to get an appointment in a public hospital for a surgical procedure within one month

The third development is in Rajasthan, where the government has sought expression of interest from private providers to manage 50 urban primary health centres. This is part of a growing trend in many states where, both rural and urban centres are being outsourced to private providers. These would be run as public-private partnerships. This comes on the heels of an earlier initiative of the Rajasthan government to outsource the running of rural primary health centres (PHCs). Over 200 PHCs had been targeted for outsourcing but bids came in for only around 40, which have been sub-contracted to private providers. 19 of this have been contracted out to the ‘WISH Foundation’. Interestingly WISH foundation, on its website, declares itself as the ‘knowledge partner’ of the ‘mohalla clinic’ initiative of the Delhi government – again a public private partnership where private doctors have been contracted to run clinics in Delhi that is paid for by the government.


All these, seemingly unconnected developments have several common threads. All of them involve initiatives where the government uses public money to fund private provision of healthcare services. Further, all of them are justified by the logic that outsourcing of healthcare to private providers will benefit poor patients. Moreover, there is no evidence that in any of the cases mentioned, the government attempted to provide better care through its own resources.

The first question that needs to be asked is why are governments in India – central and state – unable to provide healthcare through its own infrastructure of primary and community health centres, sub-district and district hospitals and super-specialty hospitals?

The answer is obvious but still merits repeating. India invests too little on public health services and is among the 10 worst performing countries in the world in this regard – calculated as per cent of GDP that is spent on healthcare. Sub-optimal resourcing of public services has several consequences. Infrastructure is in shambles – many PHCs, for example, run in rented premises. Most public facilities lack basic facilities and face perennial shortages of consumables, most importantly of medicines. Health workers – ranging from ASHA workers to doctors – are overworked and generally lack benefits and often are not paid fair wages. Almost the entire workforce appointed through the National Rural Health Mission (NRHM – now the National Health Mission) in the past, almost, decade and a half have been taken on one year (sometime renewable) contracts. Even doctors, working under such contracts, are paid about half of what they would be paid in permanent positions.

But the common refrain is that public facilities are inefficient and do not provide good care. This is a lie through and through, which many people have started believing because it has been repeated so often and by so many influential people. Even in India, there are instances, where the overworked and underpaid health workers, provide better care than private providers. Yet the lie becomes the logic to outsource functions to the private sector.

The second question that may be asked is: how does it matter to patients who will be able to get good care in private facilities, if the government is paying for it? It matters in several ways. In the short term it matters because of the difference in the ‘public logic’ of healthcare and the ‘private logic’ of healthcare.  The public logic is that ‘efficiency’ means using available resources to provide services to the maximum number of people. The private logic is that ‘efficiency’ means extracting as much of surplus (as profits) as possible from available resources. So, two things can happen when services are outsourced. Either it means that for the same amount of resources services provided by a private provider will be less than earlier, as they also need to extract profit. Or, it can mean, that the cost to the public will rise over time, as the private sector keeps demanding higher and higher rates.

The story does not end there. Private providers also use the opportunity provided to access a large number of patients, to entice them to access ‘top ups’, ie, services that are not reimbursed but for which patients have to pay. This relates to the big issue in provision of care through private providers who are largely unregulated (as they are in India). Patients are almost never able to judge themselves what is necessary care and what is care that is offered in order for the private provider to earn more profits – including unnecessary diagnostic procedures, unnecessary and expensive medicines and unnecessary surgeries.

Further, as the ILBS story shows, health workers are uniformly treated much worse in the private sector, as compared to the public sector, except for a few well paid ‘consultants’. Employees are ill paid and are denied the right to organise for their rights.


In the medium and long term the consequences can be even worse. When, through support from public policy, services are shifted to the private sector, they draw away more and more resources form the public sector. So public hospitals see a migration away by medical personnel, are forced to make do with outdated and ill maintained equipment and face shortages of drugs and other consumables. This is the slippery slope on which public health services stand.

It is important that the flawed logic of privatisation of health care services is squarely nailed as a blatant fraud, deliberately created to allow extraction of profit from the healthcare sector. Public health can never be seen as a profit making enterprise, because the profit motive runs contrary to the key tenet of the Hippocratic oath – ‘first, do no harm’ (Primum non nocere)

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