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

Privatisation of Health Care in Indiaglobalised middle class of professionals, who had bothurban and rural roots, was beginning to emerge. The aspirationsof this class were clearly different from the largesection of the poor. Typically the ‘new middle class’ foundthe public system inadequate to meet their needs and inthose states where there was a vibrant private sector theystarted moving out of the public sector. This is seen in thecase of health service utilisation during the mid-eightieswherein the urban and rural middle-income groups utilisedprivate health services depending on their ability to pay.Here it is important to underscore the fact that there areregional variations and this trend is seen in the richer statesas compared to the poorer ones (Baru, 1998). The movingout of upper and middle sections of the populationfrom public provisioning had serious consequences for financing,provisioning and quality of services. These sectionsreally provide the constituents for the support ofhealth sector reforms and support the neo liberal position thatpublic services are for the poor and those who can afford topay should use private services. With the middle class giving upownership of the public sector there is a further weakening ofthe state’s commitment towards public provisioning.India, with its fairly significant middle class provides a goodmarket for multinationals 2 . Computer software industrytie-ups with the medical sector and American insurancecompanies looking for tie-ups will further consolidate theposition of global capital in the private health sector. Thiswould definitely redefine and alter the spaces for the statesto plan their health services. These trends are not restrictedto the private sector, but with the restructuring of the publichospitals under the health sector reforms, the interests ofsome of these industries, especially, the medical equipmentindustry would grow.2McKinlay (1980) has observed that for any substantive analysis of privatisation of health services there needs to be recognition of the role played bylarge finance capital in the health sector. Large finance capital was largely confined to the pharmaceutical, medical equipment and insuranceindustries and these operated globally. The impact of these industries was very visible in the Indian case during the late eighties and nineties whenthere was a sharp increase in the import of medical equipment. The real peak was seen during the mid to late nineties with the government offeringreduced import duties for medical equipment (Baru, 1998). Apart from imports, many multinational equipment companies like Siemens, Philips,Becaton and Dickinson and General Electric started setting up assembling plants in the central and southern parts of India. As an executive of PhilipsInternational remarked “The health care business is a $3000 billion industry worldwide. If even we attract one percent of the market in India, thepotential for the medical equipment industry is tremendous” (Baru,1998).10