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

Privatisation of Health Care in India:A Comparative Analysis of Orissa, Karnatakaand Maharashtra StatesRama Vaidyanathan Baru*1IntroductionThe mix of private and public health care provision hasalways been a major topic of health policy debates. Thechanging trend has invited the attention of both the governmentand academia. The term privatisation refers tothe growth of the ‘for profit’ sector and its inter relationshipwith the public sector. It also includes the introductionof market principles in the public sector viz. user fees, contractingout and private insurance schemes. While the privatesector existed even at the time of Independence, ithas grown and diversified over the years. This paper exploresthe characteristics, trends and the social basis ofprivate sector growth, based on the available literature anddata from the Ministry of Health and Family Welfare. Thetrends in privatisation are analysed in terms of the increasein private institutions and beds relative to public provisioningacross rural and urban areas and states.It explores the manner in which this sector has grown duringthe nineties after the introduction of the Structural AdjustmentProgramme (SAP). This period is not onlycharacterised by the growth of the ‘for profit’ health caresector, but the public sector was also being increasinglyrestructured with the introduction of market principles likeuser fees and various forms of public-private partnerships.In several states these elements were introduced throughthe health sector reform initiatives. This trend is a result ofstates facing a fiscal crisis and therefore, opting for loansand grants from multilateral and bilateral agencies that advocatepolicies to make the public sector generate its ownresources. The net effect of such a restructuring processon the utilisation patterns for outpatient and inpatient careacross states and income groups are analysed in relation tothe structures of provisioning.*The present paper is the outcome of a detailed empirical exercise carried out by the Centre for Multi Disciplinary Development Research (CMDR),Dharwad as part of its UNDP sponsored project “Economic Reforms and Health Sector in India”. The views expressed in this paper are those of theauthors and do not necessarily reflect the views of GOI, UNDP, IIPA or the collaborating institutions. The author is grateful to Prof. Gopal Kadekodiand Prof. Panchamukhi for their support.1