Will a Wealthier India be a
Healthier India?
Jishnu Das, Shanta Devarajan,
Jeff Hammer, Lant Pritchett
2000
1999
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1960
India has been growing rapidly
since the 1980s…
Chart 1. Economic Performance in India 1960-2000
(log scale, 1960=1)
2.5
GDP/capita
GDP/worker
TFP
2
1.5
1
0.5
And increases in income have translated
into
Higher life-expectancy (population
sized circles, India is big blue, China
big red
Lower child-mortality
And lower fertility
And yet…
There are three good reasons to
worry
Reason 1: Improving health outcomes further may
require substantially higher investments in public
health services…
Trend of IMR by Selected States in India
100
IMR per 1000 live births
90
80
70
60
50
40
30
20
10
0
1994
1995
1996
1997
1998
1999
2000
2001
2002
Year
Karnataka
Tamil Nadu
Overall India
Kerala
Utter Pradesh
Rajasthan
West Bengal
where our performance is not
stellar (not even lunar)…
Measles Immunization: 12-23 Months
% Immunized
90
85
80
75
70
65
Bolivia
China
India
Indonesia
Kenya
60
55
50
2000
2001
2002
Year
Source: WDI Indicators Database
2003
2004
Reason 2: Morbidity is taking a toll
on India’s productive capabilities
Labor and Health in Delhi
Women
4.8
2.2
Men
2.1
50th %tile
4.4
2
90th %tile
1.9
50th %tile
75th %tile
Days Worked per Week
4.6
90th %tile
1.8
75th %tile
25th %tile
0
.2
.4
.6
.8
% W eeks Sick with an Acute Illness
1.7
4.2
25th %tile
1
Source: Author's Calculations based on ISERDD Data
0
.2
.4
.6
.8
% Weeks Sic k with an Acute Illness
1
Reason 3: and the poorest 20% are
not doing that well at all (worse
than BGD)…
Vietnam
(poorest
20%)
Bangladesh
(poorest
20%)
India
(poorest
20%)
But we have known this for 60
years
• “If it were possible to evaluate the loss, which this
country annually suffers through the avoidable waste of
valuable human material and the lowering of human
efficiency through malnutrition and preventable
morbidity, we feel that the results would be so startling
that the whole country would be aroused and would not
rest until a radical change has been brought about.”
• Bhore Committee Report 1946
A Roadmap
• Three things you should know about the
Indian health system (and are fairly well
known by now)
• Four more things you should know about
the Indian health system (and are fairly
new)
• What doesn’t work (but is often done)
• What might work
The Indian health system according to “The
Mindset” (at least on record)
Basic Care is
universally given
by the state
• Most people use public facilities
• The private sector is just
“quackery and crookery”
The system is
“Pyramidal”
•Sub center for every 5,000 people
• PHC for every 30,000 people etc.
etc.
• Integrated referral chain
Mindset (at least on record)
Poor people rely
on the public
system & the
benefits of
public care
mostly accrue to
them
In Reality
(and this is well known)
Fact #1: Most spending is private; the
fraction on genuine public goods is tiny
IF we spend the equivalent of one box on
Population based public health….
We spend 3 on Preventive
Health care
8 on PHC’s
Public Curative
Care is 20
boxes
12 on Hospitals
PHC’s
Hospitals
And….
Private Care
“Public health”
is 4 boxes
Population based
public health
Preventive/Promotive
Public Health
75 Boxes on Private
Care!
In fact…India is one of the most private
systems of health care in the world
The Heartless
Capitalists
Public Health Spending (% of Total)
60
Percentage
50
Chile
40
India
30
China
20
United States
10
0
2000
Source: WDI Database
2001
2002
2003
Year
People Power
And its becoming even more
private
• The public share of institutional deliveries (of
babies) fell from 57.3 to 48.2% between 1992
and 1998 (NFHS I, II)
• The public share of all deliveries fell between
1998 and 2001 (RCH I, II) as the private
sector’s share rose from 9.4 to 21.5%
• Recall: Pay commission raises of 1997 makes
this unlikely to be due to lack of money – health
ministries are very labor intensive
Fact #2: The poor use private care as much
as the rich
Share of the private sector in number of visits for
primary care services - rural areas
100
poorest
80
2
60
3
40
4
20
richest
0
Karnataka
Kerala
Rajasthan
West
Bengal
All India
Fact #3: More public money on
health goes to the rich than the
poor (because hospital use is
regressive)
35
30
25
Hospitals
20
Primary Health
Centers
15
10
5
0
Poorest
II
III
IV
Richest
One Reason that is often given to
explain why the poor have worse
health outcomes
Poor people
don’t use
doctors and
health
facilities…that’s
why they have
worse health
outcomes
But this perceived wisdom is
wrong
Recent data show that…
• Households in Rajasthan visit doctors
more than in the U.S.
– And the differences between rich and poor in
visits to health providers is small
• In Delhi, the poor go to doctors more than
the rich
•
Click here to see a table looking at doctor visits from Delhi
Despite the frequent use of health
care providers
• There is no relationship
between the presence of
health facilities and health
outcomes
45
40
35
30
25
20
15
10
5
0
Significant, right
sign
Not Significant,
right sign
Not significant,
wrong sign
Significant,
wrong sign
Distribution of t-tests of the variable “any public
facility in village” on rural infant and child
mortality. All states, various specifications,
NFHS 1998 (propensity score matching*)
One important question…
Why don’t the poor use public
health facilities more?
4 Reasons based on 4 lesser
known facts
Reason 1: Public Doctors in India are
among the most absent in the world
Absenteeism among health workers
45
40
35
30
25
20
15
10
5
0
Pe
ru
es
on
ia
d
In
d
In
es
ia
d
la
da
g
an
n
ga
B
U
h
Jh Bih
ar ar
kh
an
d
O
r
U
tta iss
a
r
U
tta an
r P cha
ra l
de
s
A h
s
R sam
M
ad aja
hy s t
h
a
Pr an
C ad
hh es
h
a
W tis
g
A est ar
nd
B h
hr e n
a
g
Pr al
ad
e
K
ar sh
n
Ta ata
m ka
M il N
ah
a
ar du
as
ht
r
G a
uj
a
H rat
ar
ya
n
Pu a
nj
ab
Reason 1 (cont): Absences are never below
30 percent!
Absenteeism amongst doctors by state & reasons for absence
80
70
60
50
40
Official Duty
30
20
10
0
Leave
No reason
Reason 2: When public doctors do show up
for work, the exert very little effort
Competence and Effort
Poor
Locality-Income and Institution
Private
PHC's
Hospitals
Middle
Private
What they
do
PHC's
“Effort deficit”
Hospitals
Rich
What they know
Private
PHC's
Hospitals
-2
-1.5
-1
Clinical Competence
-.5
0
Effort-in-Practice
.5
What does “very little effort” mean? 2, 1, 0
7
6
5
4
low effort
medium
high
3
2
1
0
time
Less than 2 minutes
questions
exams
Just one question
Almost none!
Fact #3: And public doctors in PHCs are not
particularly competent to begin with
Reason 4: And you still have to bribe public
doctors to do their work
Money value of “donation” payments
Ration Shops
4%
Health
27%
Education
12%
Taxation& Land
Admn. 17%
Police & Judiciary
15%
Telecom & Rail 5%
Power 20%
A summary of why poor people
may not be using the PHC system
• The doctors are low on competence
• They don’t show up for work
• When they do show up, they don’t work to
the level of their knowledge
• And patients have to pay bribes anyway
One oft-advocated solution
• That probably does not work
• Training Doctors
Training and the Invisible Hand
• With public doctors, problem is NOT that
they don’t know what to do, its that they
don’t do it!
• No public doctor needs training to know
that he/she should come to work!
• Yet…
Training and the invisible hand (II)
• The percentage of essential care given by
a doctor with 6 months training in the
private sector = the percentage of
essential care given by a doctor with 5
years training in the public sector…
What They Know
0
.1
.2
.3
.4
...And What They Do
Private MBBS
Private, No MBBS
% Asked (DCO)
Public
% Asked (Vignettes)
The losses from low effort
.6
.4
Lost Training:
Private
.2
Additional Lost Training: Public
0
What they Do
.8
1
Rotating The Curve
0
.2
.4
.6
What they said they would do
What they know
What they do: Public
.8
W hat they Do: Private
1
Training and the invisible hand (III)
• If we train doctors in the private sector,
what guarantees that they will practice in
ways commensurate with their training?
Practitioner Qualifications and Drug Use
2.7
ai
ni
ng
0.7
R
M
P/
No
Tr
0.1
2.5
BH
M
S
0.5
M
S/
BU
M
S/
0.5
S
0.5
M
BB
BI
M
S/
BA
2.6
0.0
0
1
Medicines per patient
Alternative Medicines per patient
2
3
Antibiotics per patient
Approaches to a solution
India’s public health system bundles five
potentially separate components:
• Hospital-based curative care
• Ambulatory curative care
• Prevention and health promotion
• Health-sector-based public health (disease
surveillance, etc.)
• Non-health-sector based public health
(safe water, sanitation)
Each of these is subject to a
different market failure
Sub-system
Market failure
Hospital-based curative care Insurance-market failure
Ambulatory curative care
Prevention and health
promotion
Health-sector based public
health
Merit goods, some
externality
Pure public goods
Non-health-sector based
public health
Externalities
…and to a different government
failure
Sub-system
Government failure
Hospital-based curative care Political capture by elites
Ambulatory curative care
Monitoring of effort/quality,
asymmetric information
Prevention and health
promotion
Health-sector based public
health
Monitoring of effort/quality,
logistics
Non-health-sector based
public health
No middle-class support for
reforms
Matching the sub-system to the
market and government failure
Sub-system
Institutional arrangement
Hospital-based curative care Health insurance with
autonomous hospitals
Ambulatory curative care
“Money follows the patient”
Prevention and health
promotion
Health-sector based public
health
Non-health-sector based
public health
Devolve to local
governments
“The solution” is the problem
• The “mindset” of universal, hierarchical,
poor oriented public production of health
care is now only the planner’s fantasy
• “Deer in the headlights” of reform
• “System” reform cannot work as there is
no coherent system
• Must be broken to be reset.