Privatisation of Health Care in India - Indian Institute of Public ...

Globalisation and Health Services: An Overviewincreased importance given to the growth of the ‘for-profit’health care sector.2.1. International Experience withMarketisation of Health CareThe trend towards the commercialisation and marketisationof health care during the last three decades cuts acrossboth developed and developing countries. While the UnitedStates has been a leader of the ‘market model’, the phenomenonis spreading even to “socialist” societies. Marketforces have largely controlled financing, provisioning andresearch in the health care sector in the U.S. Financing hasbeen largely managed through insurance companies, provisioningby large hospital corporations and research bypharmaceutical and medical equipment companies. Thegovernment’s role has been minimal and includes providingpublic insurance to the elderly and poor, drawing upregulatory guidelines for the private sector and giving subsidiesfor private medical care (Brown, 1984). Themarketised model of American medical care came undersevere criticism during the eighties. Criticism essentially focussedon the rising costs of medical care, excessive emphasison curative and high technology care, the dominanceof medical technology and pharmaceutical industriesin medical care. The critics further argued that thesetrends marginalised sections of the middle and workingclasses from access to health care. This was corroboratedby the increase in both the uninsured and under-insuredpersons during the eighties and the nineties. The uninsuredconsumers of health services were largely drawn from theworking class and some sections of the middle class.(Carrasquillo et al, 1999) Given the high cost of medicalcare, the uninsured were effectively denied access to healthcare. However, efforts to introduce universal public insuranceand other progressive reforms were resisted both bythe pharmaceutical companies and the ‘for profit’ healthcare providers.Despite the problems faced by the US health care system,most countries have been moving towards the Americanmodel of care where the private sector plays a dominantrole. This undoubtedly is a consequence of globalisationand the influence of the U.S. experience on other countries,an influence which has been partly communicatedthrough the media and public perceptions of what is acceptableand partly imposed by multilateral lending agencieslike the World Bank. These agencies have strongly advocatedprivatisation measures in health care as part of thestructural adjustment programmes. This position was wellarticulated in the World Development Report 1998, thatwas entitled, ‘Investing in Health’ (Rao, 1999).Countries in Europe, Africa, Latin America and Asia thathad built state-supported health services during the sixtiesand seventies, have now encouraged privatisation both asa response to the fiscal crisis of the public sector and tofulfil conditionalities linked to multilateral lendingprogrammes ( Jimenez & Bossert, 1995). The erstwhileSoviet Union and several central and eastern Europeancountries have gone through a process of marketisationwith a subsequent weakening, and in some cases even dismantling,of state services. Similarly, China has also beenmarketising its health services and is encouraging MNCsto enter the health care market. Studies show that increasingmarketisation of health care has pushed up the cost ofmedical care and has contributed to increased inequality inaccess to services across regions and classes in China(Acharya et al, 2001).Similar trends are visible in the UK, several West Europeancountries and in East Asia. In the UK, several Americanhospitals and insurance companies entered the market duringthe eighties. During the same period, efforts were madeto restructure the National Health Service in order to reducegovernment spending. Several other countries in Africaand Asia have followed similar paths, with reduction ingovernment spending on health care and an increased pushfor privatisation. This has meant the shifting of responsibilityto individual households to pay for health care (Price,1989). The consequences of marketisation have been welldocumented for Latin America and Africa, as also for someAsian countries. These studies show that access to care hasbeen reduced for the poor, costs of drugs are high, and theprivate sector serves only those who can pay.3