ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846
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Public Health Systems and Privatised Agendas

Abhay Shukla ( is a public health physician and health activist, while being one of the national convenors of the Jan Swasthya Abhiyan.

Examining how health policy has fared in India during the last five years shows the constriction of finances for major programmes like the National Health Mission and Reproductive and Child Health Programme that has led to under-resourced public systems. The Ayushman Bharat Pradhan Mantri Jan Arogya Yojana health insurance scheme would only end up diverting public resources towards commercial insurance companies and private hospitals, while having doubtful benefits for community health.

The findings of a major study recently published in the Lancet covering 170 countries can be expressed briefly as follows: Democracy is good for health and health systems (Bollyky et al 2019). Life expectancy was found to improve more in countries which had democratic systems, and the “democracy effect” was far stronger than any effect of gross domestic product on population health. Various mediating sociopolitical processes were responsible for this positive correlation. The converse is also mostly true: the erosion of democratic institutions and processes in any country would be harmful for the health of its people. In short, constriction of democracy is bad for people’s health.

As India enters the general election mode completing the five-year cycle, it is appropriate to take stock of where our country stands, both in terms of ensuring democracy, and regarding the functioning of health systems. Assessing how democracy has fared in India since 2014 lies far beyond the scope of this article; here we will focus on a more modest objective: examining how the incumbent Bharatiya Janata Party (BJP)-led central government performed in the health sector over the last five years in key areas. We leave it to our knowledgeable readers to trace correlations between the condition of democracy and the trajectory of public health in India during the last few years.

Choking Resources

In a shocking incident in mid-August 2017, over 70 children died within a few days at the BRD Medical College Hospital in Gorakhpur (the constituency of Yogi Adityanath, the BJP chief minister of Uttar Pradesh [UP]). The immediate cause of most deaths was interruption of hospital oxygen supply, linked with the long-standing failure of the government to pay the oxygen supplier. Yet, this shortfall of payments was the final straw in a chain of severe health budget cuts by the central and the UP state governments (both ruled by the BJP), especially concerning key components of the National Health Mission (NHM). These avoidable child deaths symbolise the consequences of the BJP government’s health financing policy, with nearly stagnant or declining budgets for public health services, in real terms.

This is substantiated by analysing trends in the NHM budgets over the past five years, which have been downsized as a proportion of total health budgets, reducing from 61% in 2014–15 to 49% in the 2019–20 interim budget. The NHM (initially launched as the National Rural Health Mission by United Progressive Alliance (UPA)-1) has been a centrally important vehicle for the union government to support public health systems in states. The NHM budgets saw significant increases during the UPA-1 and UPA-2 regimes, but this trend was reversed under the Modi-led BJP government, since the compound annual rate of growth actually turned negative at -0.5% (Figure 1).

The Reproductive and Child Health (RCH) component of the NHM, responsible for a wide range of health measures concerning women and children, has experienced major budget cuts in the last few years. During 2018–19, the budget for RCH was slashed by 30% compared to the previous year (Table 1).

Such constriction of health budgets under the current regime is correlated with the lack of expected improvements in public health services in many states, eroding care for low-income communities. While this government’s priorities have undermined public health services catering to vulnerable sections of the population, they have benefited other, more powerful constituencies.

‘The Dog that Did Not Bark’

Like Sherlock Holmes who emphasised the curious incident of “the dog that did not bark,” we must note one major policy area where the current union government spectacularly failed to act: regulation of the private medical sector. The central Clinical Establishments (Registration and Regulation) Act, 2010 was meant to regulate private hospitals, and has so far been adopted by 11 states. However, during the five years of the BJP regime, the progress on implementing this act has been close to zero. The hospital standards that are essential for full-fledged standardisation of care under this act have been displayed on the health ministry website since 2014, but have still not been legally notified by the central government! The key provision for regulation of rates in private hospitals appears to have been sidelined, since the onus for the complex task of developing standard costs has been shifted to state governments. As a result, the Clinical Establishments (Registration and Regulation) Act remains largely on paper, encouraging many corporate and large private hospitals to continue with exploitative practices.

The tragic incident of seven-year-old Adya Singh, who was treated at Fortis Hospital in Gurugram in September 2017, is a striking instance of massive overcharging by corporate hospitals. This hospital charged huge margins on consumables and medicines, and the treatment over just 15 days cost her family ₹ 16 lakh, while unfortunately the child died.

Such massive overcharging of patients in large private hospitals is not exceptional; the National Pharmaceutical Pricing Authority (NPPA) published a report in February 2018 showing that reputed private hospitals in Delhi and the National Capital Region were imposing super-profit margins up to 1,700% on drugs, consumables and diagnostics (NPPA 2018). The NPPA recommended that the government should effectively cap the profit margins that hospitals can charge on consumables, but the union government took no action against this profiteering. Instead, the chairperson of the NPPA was transferred within 10 days of the critical report being published under his leadership.

Backtracking on Medicine Access

During his first budget speech in 2014 after the BJP came to power, Finance Minister Arun Jaitley promised that their government would ensure free medicines for all. This was an extremely necessary measure, since spending on medicines constitutes around 70% of out-of-pocket expenditure on healthcare. Experiences from Tamil Nadu, Kerala, and Rajasthan show that providing free, good quality medicines to all patients in public facilities is eminently possible, provided that an autonomous, empowered, and transparent procurement and distribution system is put in place. However, during the last five years, the BJP governments at both the national and state levels have not expanded free medicine programmes. In fact, the BJP government in Rajasthan tried to downsize the successful “Chief Minister’s Free Medicine Scheme” introduced by the previous Congress government. It was only the resistance from the Jan Swasthya Abhiyan and other social movements that forced the government to continue the scheme.

Regarding the prices of medicines in the open market, since November 2016 India has experienced higher inflation of medicine prices compared to general inflation. Today, only around 10% of the medicine market is under price control (Mukhopadhyay and Sinha 2019) because fixed dose combinations (FDCs), including many banned combinations, and “me-too” analogues (more expensive, but offering no additional benefit to the patient) are out of price control, even though these form a big share of the market. Further, the Drugs (Prices Control) Order (DPCO), 2013 is based not on cost pricing, but on market-based pricing which being overall higher is beneficial to big pharma companies rather than ordinary patients. Although cost-based pricing would bring down prices of essential medicines by two to four times, the current government has avoided taking such measures.

Ayushman Bharat

Perhaps, the only notable initiative taken by the current union government in the health sector is the Ayushman Bharat Scheme, under which the Pradhan Mantri Jan Arogya Yojana (PMJAY) would provide health insurance coverage worth ₹ 5 lakh to around 10 crore poor households. However, this scheme, launched at the fag end of the government’s term, is based on a deeply flawed model, where hype far outstrips substance due to many reasons.

First, budget provision for the scheme is grossly inadequate, with allocation of ₹ 6,400 crore during 2019–20 amounting to a premium of just ₹ 640 per household, much less than the minimum requirement estimated from existing health insurance schemes. For example, the Chief Minister Health Insurance Scheme in Chhattisgarh offers cover of ₹ 50,000 (one-tenth of the PMJAY cover), yet requires a premium of ₹ 1,100 per household. Researchers from the Institute of Economic Growth estimate that the premium for a fully operational PMJAY would amount to ₹ 2,400 per family (Dutta 2019),and if fully funded, this scheme alone would gobble up 75% to 100% of the centre’s total health budget, raising a fundamental question on the scheme’s financial viability.

Second, the scheme covers less than 40% of the Indian population, while 60% Indians are left out. It only covers certain kinds of inpatient care, but does not cover outpatient and other types of healthcare spending, which amount to nearly 70% of out-of-pocket healthcare expenditure (NHSRC 2016). This scheme focuses not on promoting comprehensive health, but only on selected operations and hospitalisations, with the strong likelihood of unnecessary procedures being done.

Third, there would probably be no major reduction in out-of-pocket expenses for people, based on the evidence of existing similar schemes. A study that examined hospitalisation under government health insurance schemes found that only 3% of patients actually get cashless treatment, and 70% of beneficiaries had to spend more than ₹ 1,000 out-of-pocket (Ranjan et al 2018). Another analysis of the Rashtriya Swasthya Bima Yojana (RSBY) showed that this major health insurance scheme has not provided any significant financial protection for poor households (Karan et al 2017).

Fourth, this scheme is dependent on patients approaching the larger empanelled private hospitals, which are mostly concentred in metros and large cities, but are scarce in rural and remote areas. Even if a low-income family has the PMJAY card, this does not mean accessible healthcare since the nearest empanelled hospital may be hundreds of kilometres away, implying substantial travel expenses and loss of wages.

Fifth, some PMJAY “success stories” being publicised in the media have been treated in public hospitals, where they received care which was their due anyway. It would have been much better to adequately fund and staff these public hospitals in the first place, rather than introducing a profit-making insurance company and cumbersome reimbursement procedures through this scheme.

Finally, given the experience of similar schemes in India until now, while it is unlikely to reduce costs of care for people in any significant way, PMJAY will mostly boost profits of insurance companies and corporate hospitals. In fact, while public hospitals remain starved of essential funds, the current government is now proposing to dole out funds to the private sector for setting up hospitals in Tier 2 and Tier 3 towns.

The other component of Ayushman Bharat is the health and wellness centres (HWCs); the goal announced by the government is to convert 1.5 lakh sub-centres into HWCs. Although positive in principle, in the current interim budget, an allocation of ₹ 1,600 crore was made for setting up these centres, which is quite inadequate to achieve upgradations on the scale that have been announced. More importantly, there are no earmarked budgetary provisions for these centres, implying that any funds for HWCs might come at the cost of existing components of the NHM.

Future of Public Health

Putting everything together, the driving logic of the union government in the health sector during the last five years becomes clear: constricting funds for major programmes such as the NHM and RCH leading to under-resourcing of public systems, with negative implications for low-income populations; promoting profiteering by the private sector in both healthcare and pharmaceuticals, by refusing to implement regulations which are essential to protect public goods; and diverting already scarce public resources towards private entities through a health insurance scheme that is of doubtful benefit to health of communities, but would boost the financial health of select insurance companies and corporate hospitals.

If democracy consists of serving the interests of the vast majority of ordinary people, as opposed to the vested interests of the privileged few, then does this picture not look like the opposite of democracy? Returning to the correlation between democracy and health, with which we began this article, there is no doubt that the 2019 general elections will be a watershed for Indian democracy. Looking at the critical condition of the central government’s health policy during the past five years, it seems obvious that the results of these elections will also be decisive for the future of public health in India.


Bollyky, Thomas J et al (2019): “The Relationships between Democratic Experience, Adult Health, and Cause-specific Mortality in 170 Countries between 1980 and 2016: An Observational Analysis,” Lancet, 13 March,

CBGA (2019): “Numbers That Count: An Assessment of the Union Budgets of NDA II,” Centre for Budget and Governance Accountability, New Delhi.

Dutta, Sumi Sukanya (2019): “Independent Study on PMJAY Scheme Cost Upsets Government,” 17 February, New Indian Express,

Karan, Anup et al (2017): “Extending Health Insurance to the Poor in India: An Impact Evaluation of Rashtriya Swasthya Bima Yojana on Out of Pocket Spending for Healthcare,” Social Science & Medicine, No 181, pp 83–92.

Mukhopadhyay, Indranil and Dipa Sinha (2019): “Painting a Picture of Ill-health,” A Quantum Leap in the Wrong Direction? Hyderabad: Orient BlackSwan.

NHSRC (2016): “Household Health Expenditures in India (2013–14),” National Health Systems Resource Centre, Ministry of Health and Family Welfare, Government of India, New Delhi.

NPPA (2018): “Office Memorandum,” File No 27(2)/2017-Div-III/NPPA, 20 February, National Pharmaceutical Pricing Authority, Department of Pharmaceuticals, Ministry of Chemicals and Fertilisers, Government of India, New Delhi,

Ranjan, Alok et al (2018): “Effectiveness of Government Strategies for Financial Protection against Costs of Hospitalization Care in India,” BMC Public Health, No 18, p 501.

Updated On : 30th Apr, 2019


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