There is currently a poor utilisation of facilities at the primary level and overcrowding in the secondary and tertiary level. This is primarily due to ineffective utilisation of a referral system. The other major reason is due to the fact that there is a large skew in favour of the urban centres in terms of availability of medical equipment, supplies and personnel.

A proper referral system has to be enforced, wherein for treatment at the secondary level, a referral from the primary level has to be made. In case there is no referral from the primary health centre at either the secondary or the tertiary centre, the patient may be charged a higher fee. However, it must be noted that no patient should be turned away from any medical facility.

6.2 Decentralised Health Delivery System

The health delivery system should be designed in such a manner that the primary health facility is available at a pre-defined distance radius (say 3 km.) catering to a maximum of 10,000 people.

The health facility delivery system should be decentralised to the taluka level, supported by the community. A health association, which is accountable and responsible to the panchayat samiti, should be formed. The key responsibilities of the health association would include monitoring health status at village level, effective inter-sectoral coordination and mobilising community involvement. The health associations may be formed at a village level in case of villages having a population above a certain threshold or at the level of a panchayat samiti.

A healthcare federation of the health association in the district should be formed at the district level. This body should be accountable to the zilla parishad. The key responsibilities of this federation would include monitoring the overall health status of the district, effective management of the referral network between community health centres and district hospitals, inter-sectoral planning with the departments of education, sanitation, sewage and water (all key factors affecting health) for focussed and co-ordinated action plans.

6.3 User Pays Principle

The current system, of everyone irrespective of their economic situation utilising free health care, places a huge burden on the government resources. Different segments of the population should contribute to the cost of healthcare, according to their ability to pay. The free healthcare and government expenditure should be used for the indigent group and for priority public health services such as communicable disease control, immunisation and family welfare.

Currently there are no penalties or rewards based on performance of health care facilities in the government sector. In the private sector, one can argue that the market forces do, to some extent, provide some system of penalties or rewards.

There is an urgent need to establish benchmarks of all health facilities. There should be rewards and penalties of the government health care facilities linked to their performance. The benchmark exercise should be undertaken annually by independent agencies.

6.5 Develop Inter-sectoral Linkages, Especially in Promotive and Preventive Services

There are several factors, which impact on the health of a community such as water, sanitation and sewage disposal. There are several agencies operating at different levels from the central government to the panchayat, operating individually on addressing these issues. There has to be a co-ordinated effort from all the agencies at the village level to address the issues collectively.

There are three broad categories of regulations that cover health care, viz. drug related regulations, practice related regulations and facility related regulations. However, these are not applicable throughout the country. Critical service related regulations such as accreditation and mandatory quality assurance systems are absent. The regulatory mechanism is extremely weak. An effort to decentralise the regulatory mechanism to the state level has to be made immediately. However, the centre should set the regulations, which will be applicable all over the country.

There are several private facilities that have grown in a fragmented manner with services being delivered from a vast number of small clinics, nursing homes and hospitals (with average number of beds less than 20). In addition, there are several other small and unregistered private facilities operating unobstrusively. The quality variance is extremely severe. There is a need to have a regulatory framework for establishment of these facilities.

The government should enlist private providers to deliver preventive care through local delivery channels for specific preventive and promotive services. This would enhance the reach of the health delivery system and also reduce the need for extensive infrastructure to be established by the government. Andhra Pradesh has already adopted this model successfully for its tuberculosis prevention programme.

Several emerging economies and transition economies have realised the need to augment expenditure in the area of health care. They have initiated schemes to encourage private sources of finance to augment constrained government spending.

India, considering its diversity, cannot have a single solution across the country. Our country would need a host of financing mechanisms to improve our health infrastructure. Private sector and NGO initiatives in health care must be encouraged through appropriate tax breaks and incentives.

6.9 Multiple Financing Options to Provide for Health Care

The current system of individual spending should migrate to collective spending on health care. The government should facilitate this migrate though introducing multiple healthcare financing schemes targeted at different socio-economic segments of the population. This should be through a mix of private and public sources.

The organised sector should be mandatorily covered though social insurance. The existing schemes (such as CGHS & ESIS) should be consolidated at the state level insurance schemes.

A safety net, fully sponsored by the government, should be available for the poor and the vulnerable sections of the society. The rural population should be covered through community insurance operated at the panchayat samiti levels. Voluntary social insurance should be encouraged for people employed in the unorganised sector. In addition, private insurance for people who can afford and want better facilities should be available. There should be provision for selective user charges in government funded schemes to prevent misuse.

Select Government hospitals should be allowed autonomy and self-determination. This can be achieved through the route of corporatisation. Several countries have successfully implemented this measure to improve the productivity and innovation. Other measures that can be introduced could include permitting the user charges to be retained by the hospital for funding hospital improvement.

The government plays the roles of financier, purchaser and provider. These functions should be separated and the government should allow private providers to compete with the government agencies in providing service. The role of the Ministry of Health should be redefined to include:

purchasing the agreed range of health services at optimal prices from a range of providers. The quality should not be compromised on any count.

monitoring all providers for performance under contractual arrangements and benchmarking providers against best practices and each other.

enforcing relevant legislation and licensing Acts

planning to address issues regarding equity of access and services to the indigent.

6.12 Refocus Government Expenditure

The Government expenditure should cover both health care for the poor and health promotion and disease prevention for all. There should be a shift from the current emphasis on curative, advanced and urban services to increase funding for preventive services and better services in the rural areas. The Government funded health care services should be channelled to the indigent.

6.13 Quality of Health Care

The quality of health care, which is a major focus in the developed world, is not an issue in India. For instance, the quality of medical services offered by the private sector is uneven and unmonitored. Few health care facilities in India have formal quality assurance systems. A mechanism to monitor the clinical effectiveness of quality of services offered at both public and private facilities has to be instituted.

6.14 Government Focus on Preventive and Primary Health Care

The Government should focus more on preventive and primary health care and reduce its direct intervention in the secondary and tertiary levels. However, it should ensure provision of free medical attention to the indigent and needy. This would reduce the government burden on secondary and tertiary levels, thus reducing the health care cost on these segments. The resulting reduction in the expenditure should be utilised for meeting the additional investments in a safety net.

In addition, due to the principle of user pays, additional income would be generated which should be ploughed back into the system to continuously upgrade health care.

The Government should provide regulations and framework, quality standards in the secondary and tertiary sectors. The monitoring mechanisms should be decentralised to the states.

6.15 Competition

Private sector should be encouraged to participate in the secondary and tertiary sectors through infrastructure creation. This could be in the form of tax breaks and incentives. The incentives should be structured to avoid any skew or overcrowding in certain areas.

Typically, competition between private and public sector would stimulate innovation, efficiency and greater productivity. However, the underlying assumption is that both of them enjoy the same freedom and autonomy.

6.16 Use of Technology

Certain technological innovations make it possible for delivery of health care facilities at cheaper cost. A detailed plan for use of information technology in health care delivery, referral, training and administration should be made and implemented.

There should be defined norms for new technology investments to account for needs and morbidity, both current and future. The centre should define such norms. These norms should also contain regulations to prevent unethical use of medical technology.

6.17 Quality Rating

An independent agency must be mandated to regularly assess quality of health care in the public and private sector and appropriate incentives and disincentives built in.

6.18 Insurance

The organised sector should be mandatorily covered though social insurance. The existing schemes (such as CGHS & ESIS) should be consolidated at the state level insurance schemes.

The rural population should be covered through community insurance operated at the panchayat levels. Voluntary social insurance should be encouraged for people employed in the unorganised sector. In addition, private insurance for people who can afford and want better facilities should be available. There should be provision for selective user charges in government funded schemes to prevent misuse.

6.19 Safety Net

A safety net, fully sponsored by the government, should be available for the poor and the vulnerable sections of the society.

6.20 Tax on Tobacco and Liquor