Business Today

A leader for a healthy India: Rajat K. Gupta

Over the last four years of historic economic growth, leaders in India have realised that to emerge as a global economic superpower, it is imperative to make investments in building the country's social fabric-in particular education and healthcare.

Rajat K. Gupta | Print Edition: January 13, 2008

Rajat K. Gupta Senior Partner Emeritus, McKinsey & Co.
Rajat K. Gupta
Over the last four years of historic economic growth, leaders in India have realised that to emerge as a global economic superpower, it is imperative to make investments in building the country's social fabric-in particular education and healthcare.

More so, as India is expected to become the world's most populous country by 2035, and is already the youngest-it's home to 20 per cent of the world's under-24-yearolds. Without doubt, this realisation is a big step forward. But it is simply not enough.

India needs to think of innovative approaches that will enable leaders across all walks of society- business, government and civil society-to contribute towards building an educated workforce and a healthy India.

I have spent much of my life in a dialogue between business, government and civil society and truly believe that when the three factions of society work in partnership, such intractable issues are better addressed and benefit all.

The Public Health Foundation of India (PHFI) that I helped set up is illustrative of the effectiveness of this collaborative approach.

India is uniquely positioned to tackle its healthcare challenges due to two fundamental reasons. First, the nation has the privilege to learn from and avoid the costly errors of the advanced economies.

Second, it has the opportunity to create new models that draw on the best resources from every sector of society: the organisational agility of business in mobilising resources and delivering services; the philanthropic character of the non-profit sector in caring for India's needy millions; and the legitimising role of government in balancing society's egalitarian impulse with the economy's demand for effective delivery of services.

Poor health infrastructure
Poor health infrastructure
Unquestionably, designing ways to strengthen the healthcare system will challenge the ingenuity of India's government officials, business executives, academicians, and non-profit leaders. The task will require leadership skills that can mobilise all Indians behind a grand national purpose.

I strongly believe that an India ready for leadership must design an approach adapted to its social structures that promotes a combination of three factors: availability of quality care, access to affordable healthcare services, and more importantly creating awareness of the benefits of preventive measures.

Concerted efforts in this direction should be the cornerstones of India's healthcare reform. By focussing on these three factors, India can overcome a significant portion of its enormous health burdens: a high rate of infant mortality; low overall life-expectancy rate; malnutrition; chronic outbreaks of preventable diseases such as diarrhoea, pneumonia, cholera, malaria and tuberculosis; the growing incidence of diabetes, cardiovascular disease and cancer; an HIV/AIDS epidemic that has afflicted over 5 million people; and the limited availability of clean water and basic sanitation.

As the foundation of its effort, India needs to significantly augment its health infrastructure. A scan of India's provider landscape reveals a chronic shortfall.

India has only 1.5 beds per 1,000 people, much lower than the average of 3 to 4 per 1,000 in developing economies like China, Brazil, Thailand and South Africa and way behind developed countries like the US and West Europe that have 4 to 8 beds per 1,000.

Moreover, India performs poorly against world averages for allopathic doctors, i.e., 0.6 versus 1.2 per 1,000 people and nurses i.e., 0.8 versus 2.6 per 1,000 people, according to a recent World Health Organisation report.

In a country where 70 per cent of the population resides in rural areas and the poor rely on the public system for preventive and inpatient care, such shortages pose significant challenges: 93 per cent of immunisations, 74 per cent of antenatal care, 66 per cent of inpatient bed days and 63 per cent of delivery-related inpatient bed days are covered through public institutions.

Such challenges are worrisome because, according to current estimates, government spending on hospital infrastructure is likely to increase at a rate of only 2 per cent per year over the next decade-lagging far behind society's needs.

In addition, several measures should be undertaken to augment the pool of medical professionals and trained workers. The system needs stewardship at all levels.

Abysmal patient-doctor ratio
Abysmal patient-doctor ratio
It requires strong policies and institutions that foster public-private partnerships, encourage investments by the private sector in rural areas, and strengthen the resource pool to help the successful execution of flagship programmes like the National Rural Health Mission and more.

In particular, policy reforms that address both talent shortages and establishment of institutional providers must be executed to meet at least the nation's basic infrastructure needs.

Equally important is the access to affordable healthcare services. The result of a virtuous cycle, this aspect is widely recognised and has been thoroughly debated in recent years, but where no adequate reforms have yet been implemented.

India spends scarcely 1 per cent of GDP-less than a quarter of that sum on actual programme delivery. So, it's little surprise that about 80 per cent of the healthcare expenses are funded out of pocket by individuals; and a mere 1-2 per cent is covered by private insurance, which is predominantly employer-funded.

It is unfortunate that even today people have to borrow money or sell assets to afford inpatient care and as a result often postpone or do not avail of care.

Action on three fronts, amongst others, is vital. First, a series of policy reforms is needed to facilitate the provision of subsidised health insurance for the country's poorest citizens.

We need campaigns
We need campaigns
A successful approach could be one that leverages the nation's institutions, such as large cooperatives and self-help groups, to broaden reach, draws participation from the NGOs and the private sector to provision services, and promotes a central data institution that enables systematic health economics and publicises such information for continuous improvement.

In addition, efforts to encourage competition in the provisioning of health insurance services and to extend services to lower income citizens would be beneficial.

Second, product innovation is essential. Today, most of the products offer limited services and/or reimbursements and do not cover pre-existing conditions and outpatient expenses.

In order to extend coverage to a larger number of people, insurance firms need to design products that cater to several income classes and age groups, cover alternative therapies and provide more comprehensive coverage.

Third, a regulatory environment that recognises health insurance as distinct from other lines of business is necessary to boost the sector's growth.

For a nation that has been largely dependent on reactive measures to manage disease control, promoting awareness may be one of the most critical components of reform.

Most people do not understand the importance of preventive or wellness measures, critical to avoid lifestyle diseases, the incidence of which increases significantly as economies become richer.

Consumer spending on healthcare is likely to grow by more than 8 per cent annually till 2025, particularly on medical services, equipment and pharmaceuticals.

Prevention is vital for healthcare
Prevention is vital for healthcare
Initiatives like education campaigns, which can result in a shift of spending to preventive measures, are vital given that the majority of the population is illiterate and thus difficult to educate about health priorities.

Campaigns to improve awareness of disease prevention and the early treatment of illnesses will require a well-organised deployment of large networks of public health workers who can underscore the dangers of unhealthy behaviours (such as the abuse of tobacco and alcohol, unhealthy diets and negligent environmental pollution).

But unfortunately, India does not fully recognise public health as a discipline-it produces about 500 public health professionals a year, similar to those churned out by a public health school in the developed world.

Such a lack of formal structures was one of the key reasons for setting up the PHFI that aspires to create institutions that will impart quality education in the field of public health, establish accreditation standards in public health education and conduct policy-shaping research, all governed by the underlying objective of improving public health in India.

Similar efforts to inform people of ways to gain access to healthcare services should be embarked upon, since the nation as a whole is significantly under-insured.

I would like to reiterate that addressing these three essential priorities-availability of care, access to affordable care and awareness of healthy behaviours and healthcare resources-can only be pursued effectively if all sectors of society work together.

All too often, government planners, business executives and non-profit organisations have operated at crosspurposes, and failed to coordinate their efforts in ways that would achieve their shared goals.

Public-private cooperation to confront an array of challenges, including the need for better insurance coverage, more widespread health education and better disease prevention, can help advance long-term improvements in the state of India's health.

Sustainable economic development in India will require more than just a growing economy: It also requires a healthy workforce, nurtured by a society that invests adequately in broad-scale health initiatives. Investment in human capital-and in keeping society, as a whole, safe from potentially large-scale health threats-will help India maximise the potential of its most productive resource: the ingenuity and creativity of its people.

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