NEW DELHI: Indias healthcare system can be best described as a mixed economy consisting of an underfunded public sector and a large, unregulated private sector.

The mixed economy with its various anomalies has produced disparities and inequities in availability, accessibility and affordability to health services in rural and urban areas, across states and social groups.



Over the last few decades it is clear that the dependence on the private sector has increased for both outpatient and inpatient care.

This has serious negative consequences in terms of rising out of pocket household expenditures for a large section of the Indian population since India does not have comprehensive universal healthcare coverage.

On one hand, the poorest income quintiles bear a disproportionate burden of expenditure since they are unlikely to have any medical insurance coverage- public or private. Further, the lower and middle income quintiles also tend to have worse health and therefore end up incurring more healthcare costs.

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Thus a large percentage of the Indian population pay for care with a major episode of illness being able to drive households into poverty and distress.

This is captured by the high catastrophic private healthcare expenditures in both rural and urban areas.


The high out of pocket payments incurred for treatment is a reflection of the historical fault lines in poor governmental financing and provisioning of health services in the public sector.

These fault lines are further exacerbated due to the lack of a universal and comprehensive insurance scheme, unlike many Asian and Southeast Asian countries, with Indias national health insurance coverage being a fragmented and piece-meal one.

The major public health insurance schemes can be broadly classified into those financed by the central and state governments.

The central government health insurance schemes include the Central Government Health Scheme (CGHS) that covers government employees, which form around 7 per cent of the Indian population.

The Employees State Insurance Scheme (ESIS) covers organised workers that constitute 17 per cent of the population.

Indian nationals, who were stranded in Singapore due to the coronavirus disease (COVID-19) outbreak, are screened by medics wearing personal protective equipment (PPE) at the airport upon their arrival in New Delhi, India, May 8, 2020. (Photo: Reuters/Anushree Fadnavis)

Apart from these, the most recent central government sponsored medical care insurance is the Pradhan Mantri Jana Arogya Yojana (PMJAY) that covers around 40 per cent of the population below poverty line.

Given the fact that health is also a policy concern of the individual Indian states, several of their governments have introduced public insurance schemes for the poor.

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The important and long-running ones were implemented in Maharashtra, Andhra Pradesh, Karnataka, Kerala and Tamil Nadu.

It is estimated that these state-level health insurance schemes cover around 33 per cent of the population. The PMJAY has now partnered with the individual state insurance programmes although there is variation in its implementation across the states.


Private insurance coverage is mainly limited to the upper-middle and upper classes constituting about 25 per cent of the population.

According to an estimate based on the 71st National Sample Survey, over half of hospitalisations in India -51.9 per cent in rural areas and 61.4 per cent in urban areas – are in private hospitals.

The average medical expenditure per hospitalisation in a private facility is almost seven times that of a government hospital.

Given the high cost of care in private hospitals, it is the rich and middle-income quintiles that access them. The poor is left to either go without care or use public hospitals.

According to a 2018 paper published in Indias Journal of Family Medicine and Primary Care, a study of the rural populations access to healthcare in the state of Punjab showed that participants had to still use private healthcare facilities for accidents and non-communicable diseases as the provision of these services in public hospitals was inadequate.

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In doing so, 7 per cent of the households incurred catastrophic expenditure in seeking outpatient care while 53 per cent who sought inpatient care faced similar experiences.

To pay for their outpatient and inpatient care expenditure, 23.3 per cent and 61.5 per cent of the participants respectively had to borrow money or sell their assets.


The inequities in availability, accessibility, affordability and quality of health services in the public and private sectors have been heightened and highlighted during the time of the COVID-19 epidemic.

A police officer asks citizens to respect social distancing outside a wine shop during an extended nationwide lockdown to slow the spread of COVID-19, in New Delhi, India, on May 4, 2020. (Photo: REUTERS/Adnan Abidi)

In the public sector, the weakest links in the preparedness plan for the epidemic were the availability of health services, health workers, personal protective equipment (PPE), testing kits and ventilators in intensive-care units (ICUs).

The availability and preparedness at the secondary and tertiary hospitals varied across states, exposing healthcare workers to the risk of infection due to a shortage of PPEs.

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Despite all its shortages and constraints, the public sector has had to step up to play the main role of addressing healthcare needs during this pandemic as the private hospitals, for all its resources, have responded inadequately to the crisis.

To illustrate this point, private hospitals, which make up for two-thirds of hospital beds in India, and almost 80 per cent of available ventilators, are handling less than 10 per cent of the critical load of COVID-19 patients, according to media reports.

Many are not even offering non-COVID-19 related healthcare services, thus leaving the burden of providing healthcare squarely on the shoulders of public health sector, which is already strained.

Even internationally-accredited private hospitals in the Indian cities, like the Wockhardt Hospital in Mumbai for example, have shut down.

The reasons for their closure have included lockdown restrictions, an unpreparedness to handle the COVID-19 pandemic including a lack of internal protocols, the fear of their own dRead More – Source