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[afro-nets] 'Direct health care by government best option' says World Bank Health Economist

As part of Oxfam’s continuing efforts to promote discussion and evidence-based 
debate on health financing and delivery in poor countries I wanted to draw your 
attention to a recent article quoting the World Bank’s Health Economist in 
India, entitled ‘Direct health care by government best option’.

My colleagues in Oxfam India were surprised to read the article in The Times of 
India this month suggesting that the World Bank – ‘the organisation that 
started the ball rolling by first promoting privatisation and then the public 
private partnership model’ – in health care, seems to have had a rethink. The 
article continues that the Bank now appears to be advocating direct provision 
of health care by the government as the best option for India, especially in 
the rural areas.

The Times article is based on a blog written by Rajeev Ahuja, Health Economist 
for the World Bank in India. Ahuja highlights continued disagreement about 
whether governments or the private sector should deliver publicly funded health 
care. He goes on to argue that it is time to put the public vs. private debate 
aside because….‘let’s face it, there isn’t any good alternative to public 
provision of health care, especially in India’s rural areas which don’t attract 
too many qualified private doctors’.

Ahuja continues…… ‘Likewise, public-private partnerships to deliver rural 
health services have only been successful where special conditions have 
prevailed - such as strong commitment and leadership on the part of both the 
public and private partners. But, since these conditions are difficult to 
replicate across the vast expanse of the country, this doesn’t look like a 
viable option, certainly not for the foreseeable future.’

The assertion by Ahuja that it is now most appropriate for the government of 
India to go ahead with renovating, up-grading and expanding government rural 
health facilities is one Oxfam and our partners in India would support. We do 
not believe that the public sector is currently a shining example of how to 
deliver decent accessible health care in India, indeed due to massive 
disinvestment over the last few decades the public health care system is 
unacceptably poor in many states. Rather, we believe that the decision to 
increase government resources in expanding government delivery of health care 
is to be applauded and used as an opportunity to dramatically improve its 
performance. Especially as the evidence suggests that Indian states that invest 
more in public health services have been more successful at reducing 
rural-urban inequalities.(1)

Interestingly Ahuja’s arguments reinforce those made by Dr Mead Over of the 
Centre for Global Development last year in relation to anti-retroviral therapy 
in India
 Dr Over stated that for some health services, including ART, low quality 
treatment may actually be worse than no treatment at all.  Dr Over went on to 
say “public sector delivery of ART can be justified not only because it 
protects poor AIDS patients from catastrophic health expenditures, but also 
because it might differentially “crowd out” the cheapest (and therefore perhaps 
the worst) of the private sector AIDS treatment. If this crowding out slows or 
postpones the development and spread of drug resistant HIV, this is an 
important reason for preferring public to private sector delivery.”

Dr Over’s theory is supported by evidence from the Indian state of Kerala. Here 
the quality of the public hospitals, whilst far from perfect, still appears to 
put an effective quality ‘floor’ under the health services provided by the 
private sector.(2) The theory would also be worth testing in the state of Tamil 
Nadu where the public health system is now widely regarded as outperforming 
that in Kerala. In many other states in India, the poor quality of the 
public-sector health services means there is no pressure on the private sector 
to offer anything better. The lack of investment in public health services then 
has a disproportionately negative impact on poor women who in India are the 
main users of unqualified shopkeepers as a source of health information and 

Against all this it seems odd for the International Finance Corporation (the 
private sector investment arm of the World Bank) to argue that development of 
health care in India has been ‘heavily underwritten by the private sector'(4), 
and to then use this as a foundation argument as to why further private sector 
growth in health care should be encouraged.(5).  In reality the proportion of 
existing care provided by the private sector tells us nothing about whether the 
‘right to health’ is being fulfilled. In India, 82 per cent of outpatient care 
is provided by the private sector. The number of first class private hospitals 
is rapidly increasing. Yet this same system denies half the mothers in India 
any medical assistance at all during childbirth. Indeed, 74 per cent of women 
who seek antenatal care in India rely on their chronically under-funded public 
health system.(6)

Rajeev Ahuja’s blog provides some refreshing but measured optimism about the 
potential future of India’s public health system. But as the Oxfam supported 
campaign ‘Wada Na Todo’ rightly argue, progress of the scale needed will never 
be achieved until the government of India reverses it’s appalling track record 
of investment in health care and increases public spending on health to at 
least 3 per cent of national income. This from an incredibly low base of just 
over 1 per cent GNI

We would like to continue to share information and evidence on this debate 
about scaling up health care delivery in poor countries with you.  We intend to 
send an email approximately once a month. If you want to sign up to receive 
these emails or to be taken off the email list please let me know at any time 
in an email to

Anna Marriott

(1): Sen,G., Lyer,A. and George, A. (2002) ‘Class, gender, and health equity: 
lessons from liberalizing India’ in Sen,G., George, A., and Ostlin, P. (eds) 
Engendering international health: the challenge of equity Cambridge: MIT Press
(2): Narayana,K. (2007) ‘The Role of the State in the privatisation and 
corporatisation of medical care in Andra Pradesh, India’ in Sen, K. (ed.) 
Restructuring Health Services: Changing Contexts and Comparative Perspectives, 
London: Zed Books
(3) Lyer,A., Sen,G., and George,A. (2007) ‘The dynamics of gender and class in 
access to health care: evidence from rural Karnataka, India’, International 
Journal of Health Services 37(3) (4) International Finance Corporation (IFC) 
(2007) ‘The business of health in Africa: partnering with the private sector to 
improve people’s lives’, Washington DC: IFC,
(5)  See Oxfam’s report ‘Blind Optimism: Challenging the myths about
private health care in poor countries’ for a fuller critique of the IFC’s 
(6) World Bank (2004), ‘World Development Report: Making Services Work for Poor 
People’, Washington DC: World Bank

Anna Marriott

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