A prescription for affordable health care

Today in India, because of poverty, about 20% of the patients stay home without taking any treatment from any doctor. About 40% do not get even essential medicines they need. Our Public Health System caters to only about 20% of the patients. The rest go to the private sector, which is replete with irrational, unnecessarily costly and exploitative services. All this can be changed and India can achieve the goal of ‘Affordable Health Care for All’. This article outlines how.

How much money will be required? Who will pay?
‘Affordable Health Care for All’ means affordable to the society at large. This is because private medical care, even if it is made much cheaper by using low-cost, scientific approach, cannot become affordable to people who are Below Poverty Line (BPL). Poverty abolition is thus quite imperative. So long poverty eradication is not achieved the poor should have access to good health service through Public Health Services (by doubling, trebling it) and through publicly funded private health services. But can government afford to fund the health care to all the poor people? Yes, it can; not only for the poor but also for majority of the Indian people.
The National Commission on Macroeconomics and Health through some detailed exercise had worked out that if wastages are avoided, the health care expenses of per capita `1184 would have been adequate in 2003/04 to provide reasonably good medical care, up to secondary level care. Taking into account inflation, today this would amount to say `1800 per capita. The government currently spends 1% of GDP on health care, (`500 per capita) as against the WHO recommendation of 5% of GDP. Most developed countries spend more than 5% of GDP on health care. In these developed countries Public Funds account for more than 80% of the total health care expenses, compared to 29% in India. If the government spends 3% of GDP, it would mean `1500 per capita; which would be more than 80% of the ` 1800 per capita required to provide health care for all. It may be noted that the Common Minimum Programme of UPA government during its first tenure in 2005 had promised to increase the government health care expenditure from 1% to 2 to 3% of GDP. Though this promise remains unfulfilled, more social-political pressure would compel the government to move in this direction. A quantum jump in the government health care expenses is an essential pre-requisite for achieving ‘Affordable Health Care for All’ in India because about 40% of the people are below poverty line and another 20% are on the border line. Every year ten million people are pushed into poverty due to hospitalisation expenses and about 40% of the admitted patients have to borrow money or sell their assets to pay for their hospital bills.
How can the Indian government mobilise funds to increase its health care expenditure to 3% of GDP? If there is a will, there is way. The tax/GDP ratio in India is a mere 14%, compared to a minimum of 25% in the developed countries. This ratio has to be increased by increasing the taxes on the rich. But the government is going in the opposite direction. It has been giving tax-concessions and exemptions to the ‘haves’ at the expense of the ‘have nots’. For example, as per table 12 of ‘Statement of Revenue Foregone’ section of the budget papers, for the year 2009-10, direct subsidies/grants to the rich/corporates increased by ` 22469 crores to ` 82513 crores compared to the previous year! In the 2010-11 budget, the tax concessions to the salaries class amounted to ` 26,000 crores! (Times of India, 1st March 2010). Thanks to these unnecessary tax exemptions, concessions, the effective tax-rate for the rich/corporates is not even half of the declared tax-rate! If the government stops giving these concessions and also increases the tax net by taxing the rich ‘agriculturalists’ also or levies even a miniscule 0.1% ‘turn over tax’ on share market transactions, the government can mobilise enough funds for Health Care for All. Share market transactions involve earning money by just clicking the mouse and this kind of money-making must be taxed more.

Avoiding unnecessary medical expenses
Additional fund mobilisation would not be of much use if the doctors continue to indulge in unnecessary tests, medication/other medical interventions and if the pharma companies continue to produce and push irrational medicines, ‘me too’ medicines or irrational drug-combinations and continue to indulge in profiteering. Some illustrative examples of scope for cost–saving:
My district-wide research in Satara district (Maharashtra) of doctors’ prescriptions revealed that 63% of the money spent by patients on medicines is wasted due to use of irrational, unnecessary medicines by doctors! A system can and should be created which would ensure that doctors would use medicines rationally.
Branded formulations are the second huge source of escalation of treatment cost. The prices of branded formulations are twice, thrice, even ten times the prices of generic formulations. This is because of the huge expenses (including expenses for directly or indirectly bribing the doctors) incurred to convince the doctor of the virtues of the specific brand. They are recovered from patients through higher prices for the branded formulations. Brand names should be abolished; doctors should prescribe medicines in generic name. Doctors may put the company’s name in the bracket – whichever company the doctor prefers for whatever reason. Patients would then know that this same medicine is priced differently by different companies. This would bring down prices by more than half!
Elimination of ‘me too drugs’ would also achieve huge cost-saving. A ‘me too drug’ is slightly different in its chemical composition compared to the older drug. Its effect; side effects are hardly different from those of the older drug. But pharma companies mislead the doctors in believing that this ‘new’ medicine is far superior to the older medicine. Hence many doctors now-a-days tend to prescribe these ‘me too’ drugs, neglecting the fact that they are twice, four times costlier. For example lisinopril, ramipril, perindopril are ‘me too’ drugs for lowering blood pressure, which physicians tend to prescribe. This is in preference to enalapril, the older, well researched, scientifically established medicine. All these four medicines belong to a class of medicines called ‘ace-inhibitors’ and there is hardly any difference amongst them as regards effects, side-effects to justify the huge price-difference between enalapril and others. Generic version of enalapril 5 mg costs ` 5 per strip of 10 tablets; its branded version costs around ` 20. Compared to the branded versions of lisinopril, ramipril and perindopril for equivalent dose cost around ` 35, around ` 70 and around `100 respectively per strip!
Similarly, unnecessary investigations, other interventions and unregulated doctors’ fees especially of the surgeons are increasing menacingly; making health care increasingly unaffordable. To stop this would mean regulation and standardisation of structures and processes in the entire private medical sector. A progressively expanding proportion of private facilities should provide standardised, rational care and should be reimbursed through public funds at defined rates. In countries like UK, Canada, Australia, Scandinavian countries as well as developing countries like Thailand and Brazil the Health Care system is largely funded through Public Funds and hence regulated through publicly organised system. We will have to follow the same path

The writer has authored books and papers on pharmaceutical and health policy issues and is the Senior Advisor of SATHI-CEHAT, the largest nationwide network of health activists in India. He is also involved with training of village health workers and primary health care issues since 1978 and has co-authored training manuals for community health workers..

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