The supply side

The National Digital Health Mission, launched on Independence Day, is a step in the right direction because a medical ID and digitisation of medical records pave the way for improving access to health care for a large number of citizens. However, such initiatives would have the desired impact only when the issues in the sector are addressed. In terms of policy, there is a marked divergence in approaches to the national medical insurance programme and the government’s response to Covid-19. The first focuses on creating demand for medical services by offering free insurance, at a time when the capacity is manifestly limited. On the other hand, the response to Covid-19 has been to focus on increasing the supply of things such as hospital beds, oxygen, and personal protective equipment. It is not clear why the second approach, focusing on supply, does not inform the health insurance policy as well since supply is a constraint.

All government hospitals are overcrowded, often with more than one patient to a bed. According to the Organisation for Economic Co-operation and Development, India has just about 0.53 hospital beds per 1,000 people. The comparable number for China is 4.31. Further, India has one doctor for every 1,457 inhabitants compared with the World Health Organization norm of one doctor for 1,000 people. The number of people dependent on government doctors is much higher. The shortage is indisputable. The implicit assumption guiding the government’s programme is that boosting demand by offering free insurance will create its own supply, especially more private hospitals. 

But the Covid experience has shown how private hospitals have fallen short in the quality of their response. In any case, Say’s law is that supply creates its own demand, not the other way round. So private hospital beds have grown in number, but there is a shortage, impacting the poor and those in under-served districts and states more than others, because the government has not responded to a felt need. Also, private heath care is expensive and unavailable for many poor households in India, which leaves public facilities as the only available option for them. At least 12 of the poorer states have significantly lower numbers in terms of hospital beds and doctors compared with the national average, which itself is low. For example, Bihar has just 0.11 beds per 1,000 people. India has a shortage of an estimated 600,000 doctors and two million nurses.

The under-investment in medical infrastructure has long been a problem, leading to poor health indicators. India’s overall tepid response to Covid-19 also highlights the limitation. India spends just a little over 1 per cent of gross domestic product on health. This problem needs to be addressed even as the new medical ID programme and the health insurance programme are being rolled out. The only way out is more government investment in this sector, both in terms of improving infrastructure and addressing the shortage of medical personnel.




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