Harsh Mander is a notable writer and social activist. In this piece he focuses on a dilemma that governments across the world are facing: “Paul Farmer in ‘Pathologies of Power’ speaks evocatively of the crossroads at which humankind today finds itself. Healthcare, he observes, can be considered either a “commodity to be sold” or “a basic social right”. It cannot be both at the same time. Which of these pathways we will choose, he declares, is the highly consequential choice that people of goodwill must make “in these dangerous times”. He terms this as “the great drama” of our times.
As this “great drama” plays out in the world today, what choice are policymakers making?”
In India and in several other countries, the Government is choosing to give the private sector greater play in the healthcare sector. Now, given how busy all of us are with our day jobs, why should we care about this? Mr. Mander gives us the lie of the land in India:
“India has one of the highest out-of-pocket spending levels on health in the world. Out-of-pocket spending as a proportion of total health spending is a leading cause of impoverishment in India. Thirty-seven per cent of Indians experience catastrophic health expenditures in private hospitals.
The abdication of the state in provisioning healthcare is spectacular. The Economist in 2017 observed that India’s extreme reliance on private healthcare is not ideological as much as the outcome of the reality that “government has done such a lousy job” of providing healthcare.
Over many years, India’s budgetary investment in public health has hovered from 0.8% to 1.1% of the country’s gross domestic product, among the lowest in the world. India stands fifth from the bottom in its public spending on health globally. And too little of even this paltry resource has gone into strengthening public health delivery and particularly into building primary healthcare. China invests three times this abysmal level…
Only a little over a quarter of total health expenditure in India is borne by the state; the rest is out-of-pocket private spending and capital investments by the private sector. As much as 87% of private health spending is by individuals who lack insurance cover. Official data reveals that anything between 55 to 68 million people are pushed into poverty because of private health spending.
Private health care accounts for 80% of all health transactions in India. Eighty out of 100 trained doctors in India work in the private health sector (and this is after a significant number have migrated to countries of the Global North…). India ranks 155th out of 167 countries on hospital bed availability. Seventy-two per cent of hospitals and 60% of hospital beds are in the private sector. Eighty per cent of all out-patient health services and 60% of in-patient health services are supplied by the private sector.”
Underpinning this policy stance (in favour of the private sector) in India and in many other countries are a few assumptions which Mr. Mander highlights: “Their assumption is that the private sector will bring in efficiency, choice, high-quality healthcare and by bridging the resource gaps in public health systems, it will enhance the access of excluded groups. The result of these policy choices is a retreat of the state from direct healthcare provisioning, the crumbling of even the aspiration of a welfare state and the largescale transfer of scarce public funds to the private medical sector.”
As shareholders of private sector hospital chains and private sector medical diagnostics providers, we think that Mr. Mander is barking up the right tree when he writes: “What advocates of private health provisioning willfully ignore is extensive evidence that for-profit private hospitals frequently block, bankrupt or even detain patients who cannot pay. Commercial and market-based approaches in healthcare can entrench and exacerbate the gap between rich and poor, and between women and men.
They also skew resources away from already under-funded government services while further excluding those who are excluded because they cannot pay or are socially oppressed. For-profit health providers lack incentives to prevent ill-health. Instead, the system hatches perverse incentives to misdiagnose or over-treat.”
None of this new. None of this is unique to India. One way to deal with these issues is regulation. The problem is that regulating anything properly requires the watchdog to be clean, competent and well resourced:
“Policymakers and scholars do admit to the potential for conflicts of interests between profit and care. But the solution that we repeatedly encounter…is for robust and reliable regulatory systems for holding private health care providers accountable to high professional, ethical and equity standards. The argument is that if a coherent and legally enforceable robust ecosystem of state regulation, legal mandates, legal accountability, transparency and accountability is in place, these…can ensure that private health care providers are kept aligned with right to health goals.
….However, the reality is that accountability mechanisms on the ground are frequently found to be ineffective due to many reasons, such as weak implementation, fragmentation, and power asymmetries.
Even where formal mechanisms for transparency and accountability are in place, they often fail in practice due to institutional weakness, regulatory capture, legal ambiguity, and the concentration of power among private healthcare actors. State regulators may be underfunded or politically constrained. Courts may defer to legislative silence or interpret contracts narrowly. Local governments often lack autonomy and resources. Patients and families face barriers such as legal illiteracy, fear of reprisal, and inaccessible complaint systems….”
Mr. Mander draws our attention to a briefing paper published by Oxfam on this topic (see here). He writes: “All of Oxfam’s interviews with patients and their relatives for this research laid bare the brutal reality that exploitation and extortion of patients and carers by for- profit healthcare providers are frighteningly easy…”
Many of you reading this might be thinking that all of this is commonsense. So, the question then is, why are democracies around the world turning to the private sector to provide healthcare when the conflicts of interests and the lack of regulatory oversight is so well understood. Mr. Mander hits the bullseye when he writes:
“The even more fundamental constraints may be that there is little political will to hold powerful big business in check. And this may apply not just to low- and middle-income countries, but equally to rich countries. The reality of governments worldwide is of the formidable and ever-growing power of big business in policy making – of what Oxfam describes aptly as “elite capture” of the contemporary neo-liberal state; and, indeed, growing cronyism.
Such elite capture of policy making is pervasive and increasingly normalized. When Donald Trump was sworn in as President of the United States in January 2025, prominent among those in attendance were the world’s three wealthiest people….
Public health analyst Amit Sengupta regards that the state’s active role in facilitating the dominance of the private sector in healthcare not just a techno-managerial choice, but the willful and wanton abdication by the state of its primary duties, by transferring responsibility for universal health care to the for-profit private health sector. Sengupta identifies what he calls “regulatory capture”, in which designated “experts” are drawn in by the state to assist and advise the state on the regulation of the very industries from which the “experts” are drawn.”
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