Private-for-Profit

The lack of statistical data on private-for-profit practitioners only allows estimates about their spatial distribution, qualifications and numbers. Although private providers have a larger share of hospitals and beds in rural areas (see above), hospitals and nursing homes are also more concentrated in urban areas. In rural areas private practitioners who offer ambulatory services are more common than hospitals or nursing homes. While Berman argues that private providers built an extensive health care network in rural areas (Berman 1998), other studies show different concentrations. Kumar found that locational

Growth of Private Sector Beds (in 1000)

0 50 100 150 200 250 300 350 400 450

1970 1975 1980 1985 1990 1995 2000 2005

Private Public

Source: own design; data: Misra et al. 2003: 103; Ministry of Health and Family Welfare 2003: 152

efficiency of private providers was lower than for public providers. They prefer to stay in villages with better transport facilities and in proximity to a city or town (Kumar 2004:

2060-61). Chakraborty and Frick support these findings, 90 % of doctors in their study were based in rural town centres (Chakraborty/ Frick 2002: 1583).

The distribution pattern of private providers is further influenced by their qualification. In-depth studies on private provider’s qualifications showed that a large percentage has no formal medical qualification. In Gujarat 62 % of the private doctors did not hold a medical degree (Bhat 1996: 257). Similar findings come from a study in Madhya Pradesh where 56 % of private providers were untrained (Deshpande et al. 2004: 220). Of the 40 providers studied in rural West Bengal none had received formal medical education (Chakraborty/ Frick 2002: 1583). Nevertheless, patients prefer to use these providers (see 3.2.2.3.). Private providers with limited formal training or no training are more located in rural areas and far away from sealed roads (Deshpande et al. 2004: 220). The villages with least access to public facilities due to large distances are most likely to have untrained private providers or no provider at all (Ibid.).

3.3.1.1. Acts and Regulations

Private providers with no formal education are referred to as “less-than-fully-qualified”

practitioners (Berman 1998: 1473), unqualified rural medical practitioners (Misra et al.

2003: 106) or “quacks” (Duggal 2000: 7). Allopathic practice without the qualification and registration required is not legal but was permitted until the mid-1970ies in many states (Berman 1998: 1474). Several acts exist to regulate the private sector, most prominent are the Consumer Protection Act (1986), the Indian Medical Council Act (1956), and the Nursing Home Act (see Kishore 2002: 330-333, 337-338). Although these acts are quite known, implementation and enforcement of rules and regulations have been weak (Bhat 1996: 263). The Indian Medical Council Act provides the constitution for the Medical Council of India which gives recognition to medical qualifications, maintains uniform standards in education, and defines a professional code of conduct and ethics (Ibid.: 269;

Kishore 2002: 330). The Medical Council of India and the State Medical Councils are supposed to maintain registers of providers, but a systematic database does not exist.

Furthermore, the councils lack punishment for cases of misconduct, hence, their performance as regulators is not sufficient (Bhat 1996: 270). Consumer councils established under the Consumer Protection Act promote and protect the rights of consumers who can apply to these courts free of cost (Kishore 2002: 337). The efficiency of this act received high ratings among the private providers, but lack of infrastructure and staff led to pending cases (Bhat 1996: 263-265). In addition, patients have problems in proving medical negligence as private providers do not make their diagnosis available (Ibid.). The Nursing Home Act requests the registration of all nursing homes with their local supervising authority. However, inspections by these authorities are rare and cancellations are infrequent (Ibid.: 272). No minimum standards are specified in the act.

Therefore, the act has so far not proved useful for the regulation of the private sector.

3.3.1.2. Services of the Private-for-Profit Sector

Most private practitioners in rural areas use a mix of allopathy and Indian system of medicine. The overlap between Western and Indian medicine is quite substantial (Berman 1998: 1472). Hence, the strict distinction between the different types of practice is blurred.

The services offered are advice, treatment and the prescription of drugs. Most providers use a fee-for-service reimbursement scheme. In Bhat’s study on private providers in Ahmedabad, 70 % of the private providers used fee-for-service as payment system and 30 % used a case-based system (Bhat 1999: 29). Charges for health service were mainly based upon the actual costs, but also oriented to market practice (Ibid.).

Recommendations by medical associations played only a minor role. Costs are as well affected by the location of the provider, the equipment and technology he/she uses and to a lesser extent by manpower employed, maintenance, and other infrastructure requirements. In the absence of strong regulations or rules over-prescription of drugs and over-use of diagnosis services are common among private practitioners who rely on the income generated by these activities (Ibid.). No institutional framework to review user charges exists (Peters et al. 2002: 242).

3.3.1.3. Utilization of Private Health Services

Private providers are sought after by all rural people, differences by expenditure groups, age and sex are not very significant for determining utilization (Berman 1998: 1467).

However, the use of private sector for hospitalization differs among the income quintiles, with the richest quintile using private facilities more (67 %) than the poorest quintile (39 %) (Peters et al. 2002: 214). Other factors which influence utilization have been discussed in detail above (see 3.2.2.3.), therefore, they will not be repeated here. They are as relevant for the public as for the private sector. While people slightly preferred the public system for the treatment of tuberculosis (51.6 %), the private sector was in favour for services related to malaria (81.5 %) and dysentery (81 %) (Berman 1998: 1472). Studies cited in Misra et al. indicate similar results, 60-85 % seek treatment at private providers for tuberculosis, 80 % for childhood diarrhoea, and private providers are also preferred for treatment of sexual transmitted diseases (Misra et al. 2003: 109). Thus, the private sector is largely involved in the treatment of diseases of national concern, but is not integrated into public policies targeting these diseases (see Peters et al. 2002).

3.3.1.4. Problems of the Private Health Sector

The problems of the private sector are its low technical quality and the higher price (Banerjee et al. 2004, Berman 1998, Bhat 1999, Chakraborty et al. 2000, Chakraborty/

Frick 2002, Misra et al. 2003: 108-109). The hospital charges of the private health system are much higher than for public hospitals (see Figure 3.22). The average cost per visit to a private provider is also higher than to a public provider as Banerjee et al. study has shown for rural Rajasthan (Banerjee et al. 2004: 945). In addition, another study found that the

mean cost of drugs was Rs. 74 for the private sector and Rs. 34 for the public sector (Bhatia/ Cleland 2004: 402). The per capita out-of-pocket expenditure to private facilities ranges from Rs. 500 per year for higher expenditure groups to Rs. 75 for lower expenditure groups (Misra et al. 2003: 108). Furthermore, the poorest quintile spends a higher percentage of their expenditure for private health care than the richest quintile. The percentage of Indians falling into poverty from medical costs is high, it ranges from 17 to 35 % depending on their state of residence (Peters et al. 2002: 5).

Figure 3.22: Average Hospital Charge per Inpatient Day for Private and Public Hospitals Despite higher costs, it is the quality of care by private providers which is criticised. The technical quality of care for the treatment of acute respiratory diseases of children was found to be very poor in rural West Bengal, providers obtained only a score of 8 out of 33 (Chakraborty/ Frick 2002: 1583). Lack of knowledge was held responsible for the low performance. Variation in treatment practice is an indicator for low quality, because the same level of health care should be offered for the same need (horizontal equity, see 2.2.1.1.). Significant variations in treatment practices were found in this study. They occur because of different patient load. The more patients are treated per day, the less care is taken per patient. Bhat finds that the majority of private providers in his study exceeded the optimal patient load of 25 patients per day in order to increase their profit (Bhat 1999:

28-29). Incorrect drug regimes and dosages affect the treatment and can harm the patient. Malpractice for the treatment of tuberculosis and malaria was found to be widespread among private practitioners (Misra et al. 2003: 109). Drug resistance and spread of communicable diseases are the results.

Source: Misra et al. 2003: 108 Average Hospital Charge per Inpatient Day

297 269 251 203 158 154 140 115 51

201

16 26 13

40 12 11

28 4 4

24

0 50 100 150 200 250 300 350

Tamil Nadu Maharashtra Gujarat Kerala Rajasthan Madhya Pradesh Uttar Pradesh Orissa Himachal Pradesh All India

Rupees per Day Private Public

3.3.1.5. Conclusion

Although the quality of care is low in the private sector and the prices are much higher than in the public sector, people continue to prefer private services. Studies which directly compare the quality of care in public and private facilities are rare. An exception is Bhatia and Cleland who compared public and private providers in Karnataka (Bhatia/Cleland 2004). They found that thoroughness of diagnosis and doctor-patient communication was better in the private sector, hence, they concluded that quality of care is much higher in the private sector. This view corresponds with the general opinion in India, that private sector is superior to public institutions (Misra et al. 2003: 109). People use private health providers because they can establish long-time relationships and trust, alternative modes of payment are available (credit), the providers are located closer to one’s home, and the quality of care seems to be higher (more individualised).

The discussion above shows the following picture for rural India. The rural population, especially in remote areas, relies on less qualified private providers. Qualified private providers tend to concentrate in urban areas, hence, rural population needs to travel to reach them. Higher costs of services are endured for a perceived better quality of care.

Lack of knowledge and profit orientation of private providers can jeopardise health outcomes of rural population who are not aware of standard treatment regimes.