2. Healthcare System
 The term healthcare system refers to a country’s
system of delivering services for the prevention and
treatment of diseases and for the promotion of
physical and mental well being

3.  The Indian healthcare sector can be
viewed as a glass half empty or a glass half
full.
 The challenges the sector faces are
substantial, from the need to improve
physical infrastructure to the necessity of
providing health insurance and ensuring
the availability of trained medical
personnel with the opportunities available
equally.

4. The healthcare sector comprises:
Medical
Insurance
Pharmaceutical
Medical tourism
Hospitals
Diagnostics
Equipment and
supplies

5. Private sector in healthcare
 It is conventional to define “private sector” as that
which falls outside the direct control of government.
 Informal Private Sector – 45% (usually small-scale
providers including drug shops)
* Unlicensed and unregulated
 Formal Private Sector – 35% (multinational, national
enterprises, private qualified individuals)
* Legally registered and recognized by the government

6. Why the Private Sector Matters?
 Scaling up the delivery of essential interventions to achieve
international health targets is dependent on working with it.
 The “private health sector” includes an enormous diversity of actors,
including providers, funders, and suppliers of physical and knowledge
inputs for the health sector.
 The effectiveness of health care delivery can be enhanced with use of
innovative and flexible models and performance-based provider
remuneration.

7. EVOLUTION

8. Merchants
Company started
hiring doctors

9. Which required trained
health care personal
British spread the
Medical services
all over India
But many colleges also
admitted
private students
As early as 1880's these private students
were competing with European doctors
for private market

10. Our pillars to the
Construction of health
care sector is Bhore and
Sokhey committee
In mid 1970’s no. Of
private institutions
become more
Concentrating
Before the independence of Independence
more on
India, the spread of infectious 1947
preventive pgms
diseases was very high
1970's
We have less info.
Regarding this
In the mean
Time govt.
.
Many committees were
formed by the govt. to
review the health care
sector

11. 1961's
MUDALIAR
COMMITEE
1940's
BHORE COMMITEE
1967's
JUNGALWALLA
COMMITEE

12. The primary responsibility
for health care in the
Indian constitution
rests with state
Resulting in increasing the
no. of private institutions
( private sector growth
with the supporting hand
of the govt.)
NRI
INVESTMENT
1974 to 1982 grants from central to the state
govt. comprised of 20%
Following liberalization (1982-89) fell to 6%
In (1992-93) further fell to 3.3%
Policies Liberalization
in 1990’s
&
national health policy
2002
BOOST
to the private sector
Finally it became just
like the story of Arab
and camel( camel
which pushed the Arab
out of tent)

18. PRIVATE PRACTICE
BY
GOVT. DOCTORS
NEGLIGENCE
AND
POOR QUALITY IN
GOVT. HEALTH CARE
SECTOR
FINANCIAL CONCESSIONS
GIVEN BY GOVT.
STEROTYPES
User fees
Potential market
UNAFFORDABILITY
OF
GOVT.
PRIVATE SECTOR
GROWTH
IN
HEALTH CARE
Lack of proper monitoring
sytem
Disguise hand of private secto
REDUCTION
IN
FUNDINGS
BY
CENTRAL &STATE
GOVT.

21. Hospitals
PRIVATE hospitals in different cities of India
Source: Business Monitor Report,
WHO World Health Statistics 2011,
Aranca Research

22. Ref: IJTBM : 2013 VOL no 2, issue no 3: ISSN: 2231-6868

23. FAVOUR
AGAINST
FACTORS INFLUENCING PRIVATISATION

24. Medical tourism- medical travel value
Medical tourism market is expected to expand at a
CAGR of 27 per cent to reach USD3.9 billion in 2014
from USD1.9 billion in 2011
• Cost of surgery in India is
nearly 1/10 th of the cost
in developed countries
• Presence of world-class
hospitals and skilled
medical professionals

25. Factors leading to an increase in the
popularity of medical travel include:
High Cost
Long Wait Time
EASE AND AFFORDABILITY
IMPROVED TECHNOLOGY
AND STANDARDS OF CARE

26.  Market size : USD 600 million, 20 % annual growth
Growth Drivers
 Steady rise in healthcare spending
 Increased consumerism
 Dynamic healthcare scenario in the country
-Increasing incidence of lifestyle diseases
-Greater health related concerns
-Growth of Medical Tourism
-Increasing penetration of Health Insurance

27. LACK OF REGULATION
HIGHLY FRAGMENTED
DIAGNOSTICS SECTOR
HUGE DISPARITY IN QUALITY
OF CARE

28. 
Expansion through hub and spoke model.
Alternatives- modifications of Hub and Spoke model.
 Acquisitions of small labs by large players.
 Telemedicine

29. Private health insurance
•
•
•
•
•
An alternative mechanism for financing health
care.
Liberalization since 1991 paved the way for
privatization of insurance sector.
Private and foreign entrepreneurs were allowed to
enter the market with the enactment of IRDA in
1999.
Penetration - 3% to 5% of population.
Market share - 1% of the total health spending in
the country.

30. Opportunities in India
 Total health expenditure in India, Rs 3 00000
crore, the spending on hospitalization accounts for
Rs 100000 crore.
 The existing level of health insurance premium was
worth only Rs 10,000 crore, which means that a
majority section of the Indian populace does not have
an insurance cover.
 According to World Bank Report, 99% of Indians will
face financial crunch in case of any critical illness.
Hence is the need for Health Insurance.

32. Medical Technology
TURN
OVER
GLOBALLY
Indian Market
USD$ 273.3 billion
(2011)
USD 4.8 billion
(2011)
Regulation body and policy: No specific body or policy( right now it's covering
under CDSCO, central drug standard control organization.)
Most of the market in India of medical technology covers by the MNC's
companies the role of govt. And domestic private sector is minuscule.

33. Why govt. Or domestic private sector failed to grasp
the market of medical technology?
Competition from
MNC's
Lack of financial
incentives
High capital
investment
challenges
Customer
relationship
management
Adverse regulatory
policies
Trained
man power
shortage

34. Keep watching……….

35. Foreign Direct Investment

36. SOURCES
• India – 2nd most important FDI
destination (after China))
• Eight fold increase in its FDI (<
$1 B in 1990- to March 2012).
UAE
01
France
02
• fast-growing service sectors in
India ( 12% per annum ) contributing 6% of GDP 0.78% of the total FDI
04
Germany
06
Japan & U.K
11
Singapore
17
Mauritius
34
0
10
20
30
40

37. DISTRIBUTION
other sectors
chemicals
hotel &tourism
Mis.eng. Indust.
Misc. mech.
power sect.
Metallurgical
Construction
Telecommunications
Drugs & pharma.,
service sect. (financial…
0%
30%
3%
3%
5%
5%
6%
6%
7%
8%
13%
19%
20%
40%

38. REGULATIONS
singlebrand
, 100%
aviation, 4
9%
Broadcast
sector, 74%
multibrand
retail , 51%
2012-GOI
•Before 2000-through FIPB
•2000 onwards ,FDI –- through automatic
route
•Now also through ADRs and GDRs

39. PREFERENCES
Series 1
Rural, 5
Semiurban
area , 20
urban
area , 75
60
50
40
30
20
10
0
The huge benefits and concessions granted by the
government is the major factor for the flow of FDI in
healthcare than Steady economic growth of Indian
economy and availability of raw materials, like in
other sectors.
Series 1

40. IMPACT
• Hospital- improved Infrastructure, quality of cares
(more specialized care), advanced diagnostic &
treatment equipments, No.of private players
• Medical tourism- has grown from $350Million in
2006 to $3 Billion-2012
• Govt. Started encouraging this by incentives like
lower import duties, higher depreciation on medical
equipments and expedited visa for patients

41. IMPACT
• IT sector -more growth in health & hospital sectors
• Tele -medicine has improved & became as a solution
for the difficulties in hospital acceptance (time, place
&money ).
• Tele -radiology has emerged and many foreign
hospitals are active in it .
• Bio-medical equipment manufacturing sector-has also
improved.

42. CHALLENGES
EXTERNAL
 The number of potential
overseas institutions are low.
 Entry as an independent
overseas institution is very
difficult
 Problems in
partnerships, financial control
, expectations , management
styles etc.
 Political and foreign
exchange risks
DOMESTIC
 Lack of proper infrastructure
and set-ups
 Corruption, red tape, social
and political issues
 Govt. - non transparency
and uncertainty in
policies, lacking clear vision,
 lacking investment&
business friendly
environments

43. P.P.P

44. PRIVATE-PUBLIC PARTNERSHIP
fundamental themes
Relative sense of equality between the partners;
2. there is mutual commitment to agreed objectives;
3. there is mutual benefit for the stakeholders involved
in the partnership
1.

45. COLLABORATING WITH THE PRIVATE SECTOR IN HEALTH
(Source: Adopted
from World Bank
2004)
INFORMAL
NOT FOR PROFIT
FOR PROFIT
PROS
CONS
Accessible
Client-oriented
Low cost
Poor quality care
Difficult to mainstream
Poorly educated
High quality
Targeted to the poor
Low cost
Involves the community
Small coverage
Lack of resources
Cannot be scaled-up
Ad hoc interventions
High quality (in select
disciplines)
Huge outreach / coverage
Innovative
Efficient
High Management Standards
Ad hoc interventions
High Cost
Variable quality
Clustered in cities
Less concern towards public
goal.

46. PPP…
 Contracting out and Contracting in, is the
predominant model of private partnership.
 In almost all partnerships, the principal public partner
is the department of health and family
welfare, either directly or through health facility level
committees.

47.  In terms of monetary value, the least valued
contract provided dietary services at a rate of Rs 27
per meal for about 30 meals in a day(Bhagajatin
Hospital, Kolkata);
 The most expensive engaged a corporate hospital to
run a government-built super-speciality hospital in
Raichur, Karnataka (over Rs 600 million).
 The oldest partnership (since 1996) is the Karuna
Trust that adopted and manages primary health
centres in Karnataka.

50. Evolving state-NGO relationships
Nature of activities and
programmes undertaken
Formation of NGOs by
political parties, retired
bureaucrats & BM
- supporting
- antagonising or empowerment
-well connected members
-entry of young professionals
Autonomy of NGOs through
foreign funding
Policies emphasizing greater
control over NGO sector
- control of foreign funds by
introducing registration or
permission
-well-defined role
--provision of services & service
delivery

51. Donor influences on NGOs
Highly
formalized
and
bureaucratic
structures
Cost
effectiveness
& efficiency
Working
env creates
inequality &
brain drain
Short term targets
and specific goals
neglect overall
functioning of the
healthcare system
Altering
ngo- client
relationshi
ps
Dependenc
y on donors
who seek
value for
money

52. What should be done to achieve
better health?
● Cooperation with the state- long-term plan of a national health
care system; making the government the main responsible party
● Nationalised institution for channeling aiddivision without being stuck to short-term direct measurable goals.
● Training and employment of locals- preference over
expatriates; providing the same salary as the national health care system
does.
● Increasing donor confidence by eradicating
corruption- ensure more involvement of such agencies with the state
than with the international and local NGOs.

54. Influence of Globalization and
Trade
WORLD TRADE ORGANISATION (WTO) 1995
GATT * - Goods
• Medicines, Vaccines
GATS - Services
• Health professionals; Patients; health related investments
TRIPS - Intellectual Property
• Patents; Trademarks; copyrights

55. NATIONAL HEALTH POLICY
DECENTRALISATI
ON
PRIVATE
SECTOR
NHP
1983 >2002
INFRASTRUCTURAL
STRENGTHENING
HUMAN
RESOURCE

56. MoHFW
Central Drugs Standard
Control Organization
(Medical Equipments)
Food And Drug
Administration
Departments of Health in
individual states
Indian Medical
Association
The Indian Medical
Council

57. Income tax exemption for a period of five years, for newly
established hospitals (Finance Act, 2008).
Foreign Direct Investment (FDI) in the hospital sector
(100% )
Long term capital and Cheaper loans to PHI ( ITA 1961)
Land allocation on subsidized rates, partial or complete
wavier on stamp duty, electricity duty etc.

58. Medical Visa (M Visa) and Attendant Visa (MX Visa) mid
2005
Import duty on Medical equipment and technology
Reduced the customs duty on Medical devices
Insurance companies, Post liberalization (IRDA
Regulation, 2001) Rastriya Swasth Bima Yojana, 2008
Relaxed the procedures to attract Non Resident Indian
doctors .

59. Regulation
 Information Technology Act, 2000
 Bio-medical Waste (Management And Handling) Rules





1998
The Companies Act, 1956
The Clinical Establishment (Registrations & Regulations)
Act, 2007
Consumer Protection Act, 1986
Pre-natal Diagnostic Techniques (Regulation And
Prevention Of Misuse) Amendment Rules, 2003
Medical Termination Of Pregnancy Act, 1971 And
(Amendment) Act, 2002

60. FOOD SAFETY AND STANDARDS ACT, 2006
THE TRANSPLANTATION OF HUMAN ORGANS ACT, 1994 (RULES
AMENDMENT 2008)
BIOMEDICAL WASTE MANAGEMENT AND HANDLING
RULES, 1998, AMENDED IN 2000
THE DRUGS (PRICE CONTROL) ORDER, 1987
INCOME TAX ACT, 1961
FINANCE ACT, 2008
SERVICE TAX OF INDIA, 1994
ENVIRONMENT (PROTECTION) ACT, 1987

63. GUIDELINES FOR CORPORATE SECTOR
 Companies included- Which are worth 500 crores or
above / which have a turnover of 1000 crore/profit of 5
crore.
 2% of company’s 3 year average income initially
followed by 2% on company’s profit annually.
SIGNIFICANCE IN HEALTH SECTOR
• CSR funds are being utilised in MDG programmes
- Health programmes for Maternal and Child
health, Malaria ,HIV etc.

64. Salient features of the Company
Bill, 2012
 Company should have dedicated CSR division with




experts from fields of social work and public health .
Government should play as a facilitator rather than a
director.
Transparency
Companies should present an annual report relating to
CSR.
There should be an accountable authority to monitor
CSR fund utilisation.

65. HETEROGENEITY AND IT’S
IMPACT

66. Heterogeneity refers to the diverse nature of
healthcare systems and services provided to
the society

67. HETEROGENEITY IN HEALTHCARE
TYPE OF SETUP
NGOs
CHARITABLE TRUST
CORPORATE SETUP.
NURSING HOME
AND CLINICS.
MEDICAL COLLEGES
WITH HOSPITAL.
HOME BASED CARE
QUACKS
SYSTEM
ALLOPATHIC
HOMEOPATHY
AYURVEDIC
UNANI
SIDDHA
YOGA.
TRADITIONAL
HEALING SYSTEMS

68. EFFECTS OF HETEROGENEITY
 Provides ‘Last Mile Connectivity’.
 Improves the Health System by increasing
competition.
 Greater compatibility for all socio-economic strata.
 Inclusion of indigenous systems of medicine into the
mainstream.
 Greater freedom of choice from the beneficiary
perspective.

69. Impact

70. WHAT?
The differences in the utilization of healthcare services
arising out of the contrasts in the quality and
accessibility of healthcare service providers.

71. UTILISATION DIFFERENCES
Rural
Urban

72. WHY ?
Determinants
 Government Stance
 Policy Drawbacks
 Economic Reform
 Low Insurance Penetration
 Regulatory Failure

73. HOW?
GOVERNMENT
ECONOMIC
REFORM
STANCE
LOW INSURANCE
PENETRATION
RURAL –URBAN
DIVIDE
POLICY DRAWBACKS
REGULATORY
FAILURE.
HIGH COST
OF QUALITY
SERVICE
RICH-POOR DIVIDE
QUALITY
SEGMENTATIO
N&
MALPRACTICE