Health system challenges and innovation in India
India’s health system faces some major challenges. The World Bank recently posted a series of blogs about these challenges and examples of innovation to improve access to care and quality of treatment.
India’s health system faces some major challenges. In some respects, the hill India’s health system has to climb is steeper than that facing other developing countries. The good news is that the innovation that India is famous for in other sectors, as well as in health technology, is now starting to make itself felt in the health system. Not only may these ideas benefit India’s poor; they may also provide food for thought for other countries.
In this post, we sketch out the challenges facing India’s health system. In the next two, we outline two innovative approaches—one government, one private—in the state of Andhra Pradesh.
Getting sick, getting poor
Twenty one percent of Indian households record out-of-pocket health spending in excess of 15 percent of nonfood expenditure; China records a similar ‘catastrophic’ spending figure, but elsewhere in Asia—apart from Bangladesh and Vietnam—the figure is lower.
Illness is a common reason for falling into poverty in India. The poverty headcount in India would have been 3.7 percentage points lower in the absence of out-of-pocket health payments; only Bangladesh records a higher figure. These figures may be overestimates insofar as households find ways to avoid cutting back current consumption by borrowing, drawing down savings, etc. But sooner or later, the resources have to be found, and many households experience bouts of illness period after period.
The high figures for India reflect its heavy reliance on out-of-pocket payments to finance health care: at 76 percent, India’s out-of-pocket share is second only to Pakistan’s in Asia. The relatively small amount (relative to GDP) that India’s government spends on health (currently about one percent) disproportionately benefits the better off, more so than in most other Asian countries.
Getting sick, but not getting any better
Random spot checks of government clinics have found upwards of 40 percent of health workers absent. Unsurprisingly, Indians often turn to the private sector for their ambulatory care, including unqualified practitioners. This explains in part India’s high out-of-pocket spending.
Sadly, the quality of ambulatory care in both sectors is rather poor. When presented with vignettes about hypothetical patients, qualified practitioners in both the public and private sectors demonstrate substantial knowledge gaps, asking well below half the questions they ought to ask. Worse, under observation both sets of doctors do much less than they know; so in addition to an absolute knowledge gap, there’s a “know-do” gap too. Both gaps are larger among public sector doctors. Among unqualified providers, the absolute knowledge gap is largest of all, but the “know-do” gap is zero, and under observation unqualified providers outperform qualified public sector doctors! Indians—especially poor ones—will have multiple visits per illness episode, either to the same or different providers; even after all the visits, they are often no better.
A health needs assessment was completed in Prakasam district in Andhra Pradesh a few months back. It was found that 98 percent of the households, all living below the poverty line, had someone who fell sick last year. More than 99 percent of these went to unqualified providers as a first point of care. The government has developed specific programs to improve the management of specific disease such as TB with free diagnostics and drugs. People are aware of these programs but nine of ten people with TB had been treated in the private sector. People say that they do not trust the drugs provided in the public facilities and the doctors are rarely there.
Hospital care in India, until recently at least, entailed large out-of-pocket payments. As result, India’s poor record much lower rates of hospitalization, and likely experience higher rates of premature mortality as a result. Many of the causes of death uncovered by a detailed study of deaths in rural Andhra Pradesh are—at least in principle—amenable to medical care, such as ischemic heart disease (14 percent), cerebrovascular disease (13 percent), tuberculosis (4 percent), intestinal infections (4 percent), and lower respiratory disease (3 percent). Yet barely 50 percent of those who died had been to a hospital in the period leading up to their death (those who did mostly went to a private one), and only 20 percent died in a hospital. This picture is only partial, of course; but it does suggest that raising the quality of hospital care in India, and helping Indians get hospital care when they are at risk of dying might lower rates of premature mortality.
Health System Innovation: Aarogyarsi
Initiated by the then chief minister of AP, the medical doctor YSR Reddy, the Rajiv Aarogyarsi scheme started in 2007 and is targeted at the below-poverty line (BPL) population. The scheme focuses on life-saving procedures that aren’t covered elsewhere in India’s patchwork of health programs, for which treatment protocols are available, and for which specialist doctors and equipment are required. Currently 938 tertiary care procedures are covered. The scheme revolves around five key “actors”, one unique to Aarogyarsi and all with interesting rights and responsibilities.
Aarogyarsi’s members now total about 70 million people and 85 percent of the AP population (AP pitches its poverty line quite high!). Not only do patients pay no copayments; they get free food while being treated, and cash for transportation home on discharge from hospital. Patients can go to any “empanelled” hospital they like—currently 241 private and 97 government hospitals. All patients are followed up for feedback on their experience with the treatment.
“Aarogyamithras” are in effect “hand-holders” of Aarogyarsi members. Over half of the 3,500 or so “mithras” work at help desks at public primary care centers, feeding members determined by the medical staff to be in need of inpatient care up to the hospital and checking the patient has their required follow-up medication when they return home. The remaining “mithras” work in “empanelled” hospitals, receiving the patient at the Aarogyarsi reception desk upon arrival, taking the basic information and feeding it into electronic patient records, checking on her during her stay, ensuring she gets compensation for travel costs upon discharge.
All hospitals—private and public—can apply to be “empanelled” to deliver care to Aarogyarsi patients. Applicants have to provide a substantial amount of information and must satisfy a range of requirements. Only 40 percent of the 832 applicants are currently empanelled hospitals. Nearly 250 applications were rejected, and 95 have been delisted, de-empanelled, or suspended. The private sector far outnumbers the public sector: 80 percent of Aarogyarsi admissions to date have been in private hospitals. Hospitals have to deliver the 938 procedures for free according to pre-agreed clinical guidelines. They are required to mount a “health camp” every week at a place chosen by the Trust and to provide everyone attending with a general health check and a screening for relevant health conditions; patients attending these camps account for 45 percent of Aarogyarsi admissions. Hospitals must fulfill several other conditions too, including employing an Aarogyarsi medical coordinator, providing medicines for use after discharge, providing a follow-up consultation, and making available to the Aarogyarsi reception a computer, printer, scanner, digital camera, webcam and 2 mbps connectivity.
The day-to-day running of the scheme is contracted out to a private insurance company, selected through a competitive tender. The insurer empanels hospitals under the supervision of the Trust, pre-authorizes care within 12 hours of the hospital requesting it (the Trust also signs off on the pre-authorization), verifies the care has been delivered, checks its quality, and then transmits payment to the hospital electronically within 10 days of the patient’s discharge. The insurer is also required to operate a telephone hotline 24 hours a day, 7 days a week, with a dedicated grievances department.
Governance and supervision is done by the Aarogyarsi Trust, whose board is chaired by the chief minister of the state with representatives from all relevant ministries such as finance, revenue department and health and family welfare. The Trust sets the rules of the scheme, supervises the insurer, and provides it with the sophisticated computer software the scheme has developed together with partners that include Oracle, IBM and Cisco. The huge ICT investment is seen as essential to minimizing fraud, improving accountability, and facilitating rapid pre-authorization and claims’ settlement (which has been one of the main issues with public private partnerships in other states in India)
Some incomplete answers from work to date
Aarogyarsi is quite a heady mix of “active ingredients”, involving large numbers of people, and a large amount of spending on hardware and software. Has it made a difference to financial protection and health outcomes, and has it been worth the cost? How have the various “active ingredients” helped? What—if anything—needs changing?
Mitchell, Mahal and Bossert undertook an early assessment of the financial protection afforded by Aarogyarsi: they found higher out-of-pocket spending among Aarogyarsi members than nonmembers, but the study is a simple comparison and doesn’t have confidence intervals around the point estimates (some cells are very small). Even if the scheme did cause significantly higher out-of-pocket payments, we don’t know why. Was it because the scheme raised payments per contact? It seems unlikely. If it did, it’s clearly not what was intended. Or was it because the scheme caused people to raise their utilization rates?
Rao and Shahrawat have shown that the bulk (82%) of out-of-pocket spending in India is on medicines, and suggest that schemes like Aarogyarsi will at best make only a small dent in out-of-pocket spending. Against this has to be set the fact that not all types of out-of-pocket spending have the same welfare consequences. Spending on medicines likely occurs continually and in a fairly predictable way. By contrast hospitalization is unpredictable, and spending associated with it seems more likely to lead people to dissave, borrow, and sell their assets—behaviors that were common before Aarogyarsi, and which the program aims to have reduced.
More work needed
One potential benefit of Aarogyarsi is that it reduces the uncertainty patients face about the cost of care. The scheme has fixed prices and hospitals are not allowed to charge patients for treatment or investigations; in fact, hospitals have been de-listed when this has occurred.
Improved quality and increased efficiency are two other key goals of the program. Before the program, the government had very limited information on infrastructure and resources in the private sector; it had even less information about the quality of care. The government is now assembling huge volumes of clinical data, including videos of angiograms and x-ray films. The IT platform used to collect these data is more sophisticated than those used by most insurance programs in high-income countries. Has this investment paid off in terms of better quality and increased efficiency?
The “$64,000 question”, of course, is whether whatever Aarogyarsi has achieved could have (largely) been achieved at lower cost without one or more of its “active ingredients”. This is a question other states in India would love to know the answer to as well. The AP government is currently planning reforms for cost containment and to reduce the dependence on a single insurance company. This may prove an opportunity to establish the “returns” to the various active ingredients, but the government would need to make any changes in such a way as to permit a rigorous evaluation. Let’s hope it does so. The answer’s worth a lot more than $64,000!
Health System Innovation: Public-Private Partnerships
It would be wrong to think that all India’s private providers deliver poor quality care. India’s private sector is actually home to a pool of health care entrepreneurs who have developed processes for high-quality and low-cost care. They have developed their own cadres of professionals and para-professionals to perform specific tasks after internal training. They have developed new technologies and new ways of existing technologies. These innovations and approaches have brought down cost and increased specialization. Major improvements in health outcomes as a result of these innovative practices have been documented in areas such as maternal and child health, eye care, cardiology and also primary health care.
One example is Ekjut, an organization that piggybacks on the existing networks of self-help groups in India. They work on awareness and demand-creation, and as documented in The Lancet were able – over a period of three years – to achieve a reduction in death rates among newborns of 45 percent.
Reddy to (Primary) Care
Dr. Krishna Reddy runs a chain of 12 for-profit hospitals in South India known as CARE Hospitals. The chain is committed to affordability and has worked towards low-cost care by developing indigenous technology such as stents. Reddy is convinced that improved quality of care reduces the cost of care and improves revenues – with reduction in hospital infections and medical errors. The chain has developed internal clinical audits and professional teams across the hospitals.
What caught our attention when we recently caught up with him over dinner, however, was Dr Reddy’s enthusiasm for CARE Hospitals’ sister organization, the CARE Foundation. Schemes like Aarogyasri – the subject of our last post – encourage medical (and indeed surgical) intervention and in India’s most high-tech facilities. They do nothing to encourage prevention and the management of chronic conditions. As a commentator on our first post noted, India – like most countries – badly needs innovation in primary care too.
Dr Reddy’s CARE Foundation is precisely such an initiative – in fact, it comprises multiple initiatives. The Foundation aims to bring affordable high-quality primary care to India’s rural poor. It builds on the human resources that already exist in India’s villages ensuring care is delivered where the patient lives by someone from their community. These “village health champions” are female educated paramedics. Each VHC is equipped with and trained in the use of a mini-computer that performs multiple functions. The computer can perform some basic tests such as an ECG and other tests for monitoring chronic conditions. It also houses software containing algorithms to support the VHC in arriving at an accurate diagnosis and treatment. But the device is also linked to a supervising doctor via a mobile network: the VHC can talk to the doctor; the doctor can monitor and if needs be step in and join the consultation remotely (the CARE Foundation is a champion of telemedicine); and the doctor-sanctioned prescription is printed out on the VHC’s mini-computer. The VHC issues the medicines, and the mini-computer logs the information in the database of the group’s supply chain. The device also issues a smart card for all program members, and records each consultation and transaction.
The idea is to detect disease at an early stage in the village, and then manage disease close to the patient while being backed up by a supervising doctor and with the option of referral to a hospital when needed. VHCs manage 60-70 percent of primary care treatments in the village itself. The VHC receives a base salary and a performance-based supplement, based apparently on a mix of quantity and quality indicators.
After Dr Reddy had walked us through the details of the program, we discussed what was known about its impact. The organization collects lots of data, but he admitted he didn’t know how much better it was doing than the government primary care system. We asked him whether he’d be agreeable to subjecting his program to a rigorous randomized control trial. He said he’d be delighted to.
An innovative delivery model. But who pays?
We then talked about the financing of the program. Currently it’s households who finance the program directly. In part they pay through microinsurance premiums: currently around 600 families have signed up at a cost of Rs 300 (just under $ US 7) for a family of 4. This does not cover chronic care, however: individuals with chronic conditions can be treated for Rs 50 per monthly visit with low-cost (but effective) generic drugs.
Whether such a financing model is sustainable, efficient or equitable is debatable. The history of community financing in health is a mixed one, with far fewer success stories than failures – limited resources, adverse selection, and small risk pools all work toward undermining a microinsurance approach to health financing. And it seems a little hard on people who develop chronic conditions to have to shoulder the costs of their care by themselves.
Having your cake and eating it
Is there an alternative? Different financing and delivery models can be bolted together in lots of different ways. As one us argued in an earlier post, a model that is proving popular in Asia (and indeed in the OECD) is one where the taxpayer finances an institution that sits at arm’s length from the health ministry and contracts with public and private providers.
So, we put it to Dr Reddy as we were finishing our dinner that there would be nothing to stop his innovative primary care delivery model being financed instead by the AP government on a contractual basis. After all, the Aarogyasri program does precisely that, albeit only for tertiary care – it could also contract with organizations like the CARE Foundation to ensure that the population also has access to affordable high-quality primary care, with a strong focus on prevention and the management of chronic diseases. In fact, the two parts to such an integrated program could reinforce each other. Dr Reddy’s model could improve not only the pre-hospital care but also the follow-up treatment and monitoring. Hospitals under the Aarogyasri scheme have to provide consultations and medicine for one year for many of the treatments. Patients are now traveling across the state to come back to the same hospital; the travel for these visits is not covered, and people are also losing income on trips that can take more than a day.
Dr Reddy liked the idea of his foundation contracting with the AP government to extend Aarogyasri’s reach into primary care. But on recent trends, this seems unlikely to happen. Soon after our last post went live, the AP government announced that 133 of Aarogyasri’s 938 procedures will be treated exclusively in government hospitals in 10 districts across AP. There is talk of it scaling back private-sector involvement in Aarogyasri much further (hat tip to Robert Palacios).
For the moment then Dr Reddy’s innovative primary care delivery model looks set to continue relying on microinsurance – not the first best but probably the best available option right now.
Sources:
- http://www.incanuspublicaffairs.com/sites/all/themes/fusion_cami/images/...); background-attachment: initial; background-origin: initial; background-clip: initial; background-color: initial; border-bottom-width: 1px; border-bottom-style: solid; border-bottom-color: rgb(229, 229, 229); list-style-type: none; list-style-position: initial; list-style-image: none; background-position: 0px 4px; background-repeat: no-repeat no-repeat; ">Let's Talk Development - a blog hosted by the World Bank's Chief Economist. Health System Innovation in India, Part I, Part II and Part III.