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Past Issue • Oct-Dec 2011

Growing India’s Healthcare System: A Cautionary Note

In this article, the author stresses that India must build a healthcare system that takes the needs of its entire population into account.

India faces enormous challenges as it builds its healthcare system to meet the rapidly growing needs and desires of a burgeoning middle-class that will increasingly want, expect, and ultimately demand, world-class healthcare. Great challenges bring great opportunities. Enterprising companies, individuals and government entities are rising to the challenge and doing wonderful things in India’s healthcare sector. The decision by the Indian School of Business (ISB) to develop a premier healthcare management programme responds to this exciting progress and will support and build upon it. It is a bold and ambitious undertaking. My contribution here, in addition to offering much-deserved applause for this initiative, voices a significant caution for both ISB and India. Unless adequate, ongoing attention is paid to the needs of its entire population, India may one day find itself in the unenviable position of the United States, having a stubbornly intractable healthcare underclass – a mass of people who do not have regular, assured access to a decent, satisfactory level of healthcare services. As the US healthcare-reform struggles of the past few years have demonstrated too well, the challenge of bringing the residual segment of a nation’s population “into the healthcare tent” can be daunting, maybe even impossible. Given the size of the Indian underclass, the depth of its poverty, and the immensity of its needs, the challenge India faces may be much greater.

Over the past five years, I have pondered and researched why the United States, nearly alone among the world’s major nations, has not committed itself to achieving Universal Health Care (UHC), an adequate level of care for all its citizens. As part of my study, I travelled to countries around the world – including Argentina, France, Italy, Japan and Singapore – to try to understand better the paths and factors that led these countries to commit to UHC. One of my conclusions, summarised in a recent Penn Law Review article1, is that unless a nation keeps the goal of UHC firmly in mind as it constructs its healthcare system, it may end up with a system that can never achieve this goal.

As one would expect in a capitalistic, free-market society, the healthcare system in the US evolved, over generations, principally to satisfy the needs and wants of those with the financial resources to afford health services. The problem with this is that once the advantaged group has a system that it finds satisfactory, it is extremely hard to marshal support for opening that system up to the disadvantaged. The “haves” are understandably concerned that their own healthcare may suffer when the system is stretched to include the “have-nots”. So it may well be in India. A vigorous private health insurance market and a myriad of superior private healthcare facilities will be constructed to meet the desires of more prosperous Indians for the latest and best in healthcare. That is a most natural development; it is well and good so far as it goes – but it is not sufficient. Healthcare for those less well-positioned to get their needs met must be constantly reinforced as a national priority or it will almost certainly be underserved.

 

 Unless adequate, ongoing attention is paid to the needs of its entire population, India may one day find itself in the unenviable position of the United States, having a stubbornly intractable healthcare underclass.

 

As I travelled around India this past spring, learning about the country’s healthcare system and needs, it was reassuring to hear many speak of the imperative to bring good quality healthcare to the poor, to the roughly 600 million people below the poverty line, to people in the rural areas, villages and towns. But, without meaning to question the sincerity and commitment of those who spoke about the needs of the underclasses, it will take more than lip-service and good intentions to assure adequate healthcare for the bottom tier of India’s population pyramid.

This effort will take a national public focus and commitment that is mirrored in the objectives and actions of the private sector, including thought-leading educational institutions such as ISB. Students drawn to ISB’s healthcare management programme by the enticing opportunities in the healthcare sector may well be disproportionately drawn also to the “glamour jobs,” – executive positions with industry-leading hospital chains like Max HealthCare, Apollo and Fortis, to jobs in the prosperous pharmaceutical industry and in the rapidly growing health insurance sector. Jobs with well-established, profitable companies have high visibility and substantial financial rewards and, so, will be a natural focus of students’ aspirations. To maintain a proper balance, deliberate and consistent efforts must be made to shine a positive light on the opportunities and potential satisfactions of developing and working in organisations that emphasise the provision of quality healthcare to the underclasses. This includes innovative, entrepreneurial private entities, both for-profit and non-profit, such as Vaatsalya,2 the L V Prasad Eye Institute,3 Narayana Hrudayalaya,4 and other organisations of similar character. It also includes creative public initiatives, such as the Aarogyasri health insurance programme in Andhra Pradesh.The executive offices and perks in these organisations may not be as grand as in the big pharmaceutical companies and in some of the hospital chains, but the opportunities for professional growth, social impact and deep personal satisfaction are no less strong. Moreover, focusing on the health of the less advantaged does not require foregoing prospects for a good income. Given the size of the underclasses and the immensity of their needs, there are vast markets to be developed in this sector. Working to improve healthcare for all of India offers tremendous, exciting opportunities for both financial and other rewards.

The Wharton School is proud to be part of the ISB healthcare initiative. Some may view Wharton as a temple of capitalism, a place where bright, hardworking people come to learn how to make their fortunes. But it exists as well to achieve positive social impact, to help make the world a better place. ISB is also deeply committed to this goal of contributing to all of society, as shown by its support of the Centre for Emerging Markets Solutions (CEMS) and ACCESS Health, ISB’s upcoming healthcare management programme is both a further evidence of this commitment and a most promising venue for pursuing this most valuable and commendable goal.


1 Arnold J. Rosoff, “Of Stars and Proper Alignment: Scanning the Heavens for the Future of Healthcare Reform”, 159 U. Pennsylvania L. Rev. 2085 (2011).

2 http://vaatsalya.com/, a for-profit company.

3 http://www.lvpei.org/, a non-profit.

4 http://www.narayanahospitals.com/, a for-profit venture with participation by international companies AIG and J.P. Morgan. [cross-reference other mentions of NH in this issue of Insight].

5 [Cross-reference to Cover Story 3]

 

 

 

 

ABOUT THE AUTHORS

  • risffs

    Arnold J Rosoff

    Professor Emeritus of Legal Studies and Business Ethics at the Wharton School, University of Pennsylvania.
  • srinivasan mahadevan

    Thanks for this composition. While It is a fact that India’s health insurance market is
    expanding rapidly, the lack of a regulatory body for healthcare industry is
    proving this growth, not so good for the insurers. The industry is saddled with
    very high loss ratios because of inappropriate pricing and high healthcare
    costs. This is in contrast to the profits of healthcare providers, drug
    manufacturing companies and medical instrument suppliers. The insurance
    regulator is trying to get transparency on healthcare costs addressed by way of
    data and research from insurance companies. But, with no synergy with the
    healthcare industry and providers, this exercise will be futile, and unfortunately
    the individual consumer is left with paying higher premiums every year. For, India to grow its healthcare system efficiently, there are reforms required in the healthcare industry to address issues of transparency, and punitive laws against the hospitals who make a killing by charging exorbitant rates.

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