Too Much Care

In the context of India where public expenditure on healthcare is low, the private sector plays an important role in delivering healthcare during childbirth. An analysis of the latest round of National Family Health Survey data to estimate the differential probability of caesarean sections in private medical facilities relative to government facilities, and focusing on unplanned C-sections, reveals that the probability of an unplanned C-section is 13.5–14 percentage points higher in the private sector. These results call for a critical assessment of the role of private sector in healthcare in the context of inadequate public provision, expanding private provision and weak governance structures.

The authors thank the Demographic and Health Surveys Programme, which made the raw data of the fourth round of National Family Health Survey available online for free download. The authors are also thankful to Rajesh Chandwani, Pritha Dev, Harsh Mittal and Ankur Sarin, and all at Indian Institute of Management, Ahmedabad and participants of the workshop on NFHS-4 organised by Brookings India (New Delhi), and the National Institution for Transforming India Aayog, Government of India for their insightful comments.

The private sector plays a major role in healthcare provisioning in India. It provides nearly 70% of outpatient and 60% of inpatient care in the country (NSSO 2016). High absenteeism, inadequate infrastructure, unavailability of medicines, overcrowding, long waiting times and lack of respectful behaviour, combined with little effort on the part of doctors in the public sector have made private providers a preferred option, despite them charging (higher) fees for their services as compared to the public sector (Banerjee et al 2004; Gill 2009; GoI 2011; NSSO 2016). Even though private providers might be more responsive to patients and exert more effort, they are also more likely to provide over-intensive treatments either as a response to demand from patients (Das and Hammer 2007; Das et al 2008) or due to financial incentives (Arrieta 2011; Papanicolas and McGuire 2015; Johnson and Rehavi 2016; Chalkley and Listl 2018).

Private healthcare providers are set to play an even greater role in India with the National Health Policy, 2017 envisioning a tax-financed healthcare system with “strategic purchasing” from the private sector (GoI 2017), and the announcement of Pradhan Mantri Jan Arogya Yojana (loosely translated as Prime Minister’s scheme towards health for all), which provides a cover of `5 lakh for poor households to seek secondary or tertiary care in any government or empanelled private hospital. The scheme aims to cover 40% of India’s population (roughly 50 crore), and is touted as the world’s largest health programme. Therefore, it is important to evaluate whether the private sector can be an effective partner in this endeavour.