Policy Recommendations

We feel time is ripe for the Central and State governments India to pursue a proactive policy of fully integrating the private health care institutions into the health system. Based on our understanding of the state of private health sector in India, with particular reference to Andhra Pradesh, and review of literature on the subject, we have proposed in Chapter-14 a set of policy recommendations. We reproduce the operative parts of the recommendations below.

1. Develop and adopt a set of comprehensive policy towards the private forprofit and nonprofit health care institutions.

2. Ambulatory medical care is best provided through a net work of family physicians (FP), who would usually be self employed doctors but can include ambulatory care services by other institutions as well. Steps to develop such a network will include the following.

3. In the short and medium term, private hospital and nursing home capacity should be used to increase the incidence of institutional deliveries in the country. Raising the incidence of institutional deliveries vis a vis home deliveries would help reduce maternal mortality rates. Public funding of institutional deliveries by women from poor families, in private HCIs will facilitate health sector reform by providing incentives for private HCIs to adopt standards and assure quality of maternity services, as well as build experience in public financing and private provision of healthcare services.
4. Public health authorities should explicitly define standard range of services based on local burden of diseases, and availability of costeffective of interventions to be delivered by the public health care institutions. Governments should review the job descriptions, cadre strength, recruitment systems and posting policy to improve consistent availability of predefined services through all public HCIs. This, we believe, will help in better targeting of public subsidies to the poor.
5. In the near and medium term, the public sector hospitals will have to respond to the hospitalisation needs of the poor. This would mean upgrading and expansion of first referral hospital facilities in the public sector. The First Referral Health Systems project in Andhra Pradesh and few other states have program components to upgrade and expand the first referral hospitals in the public sector. More work is needed to estimate requirement of hospital stock in view of current and future levels of disease burden and hospital service requirements.
6. Encourage development of nonprofit health care facilities in the long run. Actually this later objective is best pursued through social movements. It will be difficult to achieve sustainable growth of nonprofit health care institutions through government policy. Limited role of government policy towards nonprofit HCIs will be to provide a signal about the desirability of voluntary action. The range of nonprofit HCI promotion policies would include (a) legislative mandate for incorporation of nonprofit HCIs for different purposes related to healthcare, (b) legislative recognition of the special needs of health insurance organisations, (c) land and capital grants to nonprofit HCIs, etc.
7. Government programmes encouraging nonprofit HCIs will inevitably attract opportunistic nonprofit institution building in addition to spontaneous voluntary action. Hence the nonprofit HCI promotion policy should be accompanied by development of appropriate regulatory mechanisms for the nonprofit sector. These would include model code of transparency in governance of civil society institutions, and standards of accounting practices for nonprofit institutions. Clearly some of these policy measures require action outside the health sector. For example standards of accounting practices can be prescribed under the income tax rules that provide for registration of nonprofit institutions.
8. Substantially increase allocations for healthcare services by;

9. Establish rate setting policies and authorities to set fair rates of healthcare service charges. These rates will facilitate purchase of healthcare services by the government from private forprofit and nonprofit providers. It will well recognised that health care institutions both forprofit and nonprofit have a motivation to maximise revenue by exploiting the rate structure and payment systems. Hence, the rate setting mechanism should provide for research programmes to monitor impact of rate setting decisions and take appropriate remedial action from time to time.
10. Streamline existing state licensing mechanisms for healthcare professionals.
11. Create state licensing mechanisms for healthcare facilities of all kinds including group practices, nursing homes, hospitals, diagnostic facilities etc. Develop national network of institutions to contribute towards development of standards and specifications for different aspects of the healthcare facility licensing process. The standards development should be done by an organisation with adequate research and documentation on the subject. Standards should be developed by professional and research teams following wide ranging consultation among various stake holders. The minimum standards should be specified on the basis of size and service offering. In other words both bed size and service offering of the hospital should be taken into consideration to arrive at the minimum required facilities. Marginal modification to standards may be allowed on the basis of location features like urban, rural and remote areas. Substantial deviation on the basis of rural urban character of the hospital should not be allowed. Instead appropriate restriction in range of service may be made.
12. Encourage voluntary accreditation in addition to the state licensing mechanism.
13. Government may facilitate availability of incentives to encourage accreditation: For example social insurance schemes run by government could require accreditation as a prerequisite for empanelment. Require information on accreditation status and factor it into the decision making process while considering requests for any direct or indirect state subsidy like tax concessions etc. Where the subsidy precedes setting up and / or operation of a hospital or service, a condition may be imposed by the concerned government requiring that the beneficiary institution will obtain and maintain accreditation within a certain period of time.
14. Establish a program for development, periodic updating and dissemination of clinical practice guidelines (CPG).
15. Establish a program of research on measurement of medical outcomes which will help in the long run, use of risk rated medical outcome data for comparison of technical quality of care by health care institutions.
16. Essential clinical package definition: Immediate priority is to explicitly allocate existing cadre strength of entry level medical officers in first referral hospitals among the five commonly required specialties namely, (a) General Medicine, Obstetrics and Gynaecology, Paediatrics, General Surgery and Orthopaedics. between the Define essential clinical package of services to be delivered at the first referral hospitals. Medium term priority is to explicitly define the essential clinical package of services. Reorganise staffing in public HCIs commensurate with the essential clinical package.