NITI Aayog Should Learn From Karnataka’s Experience With Public-Private Healthcare

Karnataka’s public-private partnership healthcare models show that regulations are often flouted and profit-making supersede patients’ needs.

Niti Aayog and the Union health ministry have put forward a public private partnership (PPP) model for the management of non-communicable diseases in tier 2 and 3 cities across the country, with the World Bank serving as a technical partner. NITI Aayog has justified its suggestion bu saying that despite there being ‘concerted efforts’ to establish services to tackle non-communicable diseases, the system remains constrained. Given the shortage of infrastructure and human resources, 72% of the rural population and 79% of those living in urban areas have sought access to healthcare in the private sector.

While there is little or no evidence of any ‘concerted efforts’, the logical solution to enact a change would be to invest in public sector infrastructure and human resources instead of pushing the entire population towards the private sector. It is also of great concern that the World Bank continues to push for the PPP model of healthcare services despite there being evidence of its failure, for instance in Karnataka.

In 2012, the Planning Commission identified two PPP models in Karnataka that “can be considered wherever appropriate for replication and upscaling” – the Rajiv Gandhi Super-Speciality hospital (RGSSH) in Raichur, Karnataka, for tertiary care; and the PPP model with NGO Karuna Trust and the state government to manage primary health centres and provide rural healthcare delivery. These two models of healthcare delivery have failed and are not a viable option in the interest of comprehensive and cost effective healthcare delivery.

The Vajpayee Arogyashree Scheme, which has empanelled private hospitals to provide healthcare from the government exchequer, is a minefield threatening to blow up even the existing public health services, while unduly benefiting the largest corporate hospitals based in Bengaluru. The recent vociferous resistance by private hospitals to any form of regulation in Karnataka only goes to show that the private medical establishments will not only refuse to be regulated, but will also continuously steer the government towards converting healthcare into a commodity that is focused on the more lucrative tertiary care, breaking down years of what has been achieved within the public healthcare sector.

Rajiv Gandhi Super-Speciality Hospital

In 1997, the Karnataka government’s department of health and family welfare undertook a project to set up the RGSSH, a super specialty healthcare facility in Raichur, on a 73 acre campus with Rs 60-crore in financial aid from the Organisation of Petroleum Exporting Companies.

A government evaluation team visited the RGSSH to review overall functioning of PPP as a model of tertiary care. The report showed that no third party evaluations had been conducted on the hospital for the decade prior by either partner (the state government and Apollo Hospitals Enterprise Limited) nor was there any baseline data to assess if there had been any change in the project performance or the quality of services. The hospital had not maintained an inventory of assets.

A total of 70 items of equipment had been procured by the hospital authorities at a total cost of Rs 3,46,47,243 and 40 items of non-medical equipment had been acquired at Rs 1,02,76,140 from the One Time Grant. In addition, 28 computers and related items worth Rs 1,00,31,033, 11 items of furniture worth Rs 46,33,331 and three vehicles at a cost of Rs. 20,85,459 had also been procured. However, the hospital had not maintained a log book for equipment, furniture or fixtures. Out of 84 of the total equipment items available in the hospital, ten had not functioned since 2007 and there has been no structured system for conducting annual stock verification in the hospital.

One of the key objectives of establishing the RGSSH was to provide quality healthcare to patients below the poverty line (BPL) in the districts of the Gulbarga division, where the BPL population has been identified by the food and civil supplies department to constitute the majority (67%) of the population. However, data on the utilisation of the hospital services reveals that not more than 25% of the in-patient services and 15% of the out-patient services has been utilised by the BPL patients over the 10-year period.

As seen in Figure 1 and 2 below, the utilisation of in-patient and out-patient services by BPL patients has not been successful in achieving its primary objective of providing services to them.

The evaluation team also found that only 154 of the total bed strength of 350 were operational. Of these, only 40 beds were available for BPL patients – only 11.4% of the total bed strength and 25.9% of total operational beds. The evaluation report states that “this sub-optimal capacity utilisation has seriously affected the sustainability of the hospital, thereby leading to serious question on the commitment towards the PPP model of functioning”.

According to a fact-finding team from Karnataka Jana Arogya Chaluvali, as early as 2007, the Karnataka Rajya Raitha Sangha had formally lodged a complaint about how hospital services were inaccessible to BPL patients and there was a sudden mushrooming of brokers and middlemen who were bringing in patients for a ‘commission’. By then, several complaints had come in from BPL card holders, as reported by a fact finding team. They reported harassment in the name of ‘card verification’. They were frequently told by the hospital administration that their card was ‘invalid’ on the pretext that their names were misspelt. Till such a time that the cards were verified, the hospital administration demanded that BPL patients pay an upfront amount of Rs 25,000, which they said they would reimburse once the card was regularised. The BPL patients were later told that their cards had been canceled while actually submitting the valid BPL card for claiming reimbursement from the government. Such large-scale fraud was exposed by the local sanghatans, which accessed 144 BPL cards along with their registration number, date of admission, treatment, bill and deposit paid.

The details were submitted to the principal secretary in Karnataka health and family welfare department. The latter instituted an enquiry into the issue, which merely directed Apollo Hospital to reimburse the deposit amount collected, but there was no disciplinary action for the fraud committed. The fact finding report stated that 2007 also marked a shift in the functioning of RGSSH. The one time grant reserves were nearly spent. Apollo had to generate its own ‘revenue’ to bear the risks of delay and problems with cash flow. However ‘revenue generation’ was poor. Salaries started getting delayed for one month initially and soon employees had to wait for three months to get their pay. This led to several doctors leaving. Importantly, Apollo, as the principal employer, had not made any provision for a provident fund or other benefits through its 10-year contract period as mandated by labour laws. On May 31, 2012, the contract with Apollo was terminated by the state government and all 285 employees on the rolls of Apollo were summarily dismissed.

Karuna Trust model of primary healthcare

Karuna Trust claims to manage 80 primary healthcare centers (PHCs) in seven states – Karnataka, Andhra Pradesh, Orissa, Arunachal Pradesh, Manipur, Meghalaya and Rajasthan. It has partnerships with different state governments, the Nuclear Power Corporation of India Limited, BOSCH Foundation, Population Foundation of India, Sightsavers, India Development Foundation, MacArthur Foundation, Karnataka Health Promotion Trust (KHPT) and the like.

According to the prototype memorandum of understanding for PPPs between states and not-for-profit organisations, signed by Karuna and all state governments, it is clear that donor contributions had to be made to the Arogya Raksha Samiti (ARS), which would take a decision on such contributions, if it is without attached conditionalities (except conditionality of proper use). If conditionalities were attached, it would be referred to the District Health Society (DHS). The ARS comprises a group of trustees who manage the affairs of the hospital and has representation from Panchayati Raj institutions, NGOs, local elected representatives and hospital staff. All contributions for civil works would be decided by the ARS if the cost were within Rs 1 lakh or referred to the DHS if higher. However, the NGO has directly signed MoUs with several donors and funding agencies without even a token involvement of members of the ARS. This is a clear violation of the terms of agreement with state governments for generating funds for PHC function. The organisation has received funds for mobile health, dental health, telemedicine, management of non-communicable diseases, traditional medicine, emergency medicine, drugs, eye care, reproductive and child health and HIV/AIDS by bypassing the ARS completely.

In December 2010, 286 inmates of the Beggars’ Home in Bangalore, died at the PHC run by Karuna Trust, with several bodies missing, raising serious concerns. The PHC had stocks of expired drugs and was managed by a doctor whose qualifications were also in doubt. The death certificates of the inmates were signed by nurses and pharmacists and there was no correlation between the death records maintained by the PHC and those maintained by the administration. An detailed inquiry was ordered by the then mission director of the National Rural Health Mission, Mr Selvakumar, “regarding unaccounted dead bodies to ascertain whether organs have been traded or dead bodies have been sold”. This doubt arose because death certificates had been issued without any record in the PHC registers.

A public hearing in V.K. Salgar, a village in Karnataka’s Gulbarga district, brought out critical failures in the PHC run by Karuna Trust. It revealed poor quality of antenatal care that had led to the deaths of mothers and infants, poor infrastructure, charging patients anywhere between Rs. 5200 -10,000 for deliveries, the lack of basic amenities like drinking water and toilets, poor documentation and management of children with acute malnutrition.

It was only in January 6, 2016 that the Karuna Trust was asked by the Karnataka government to hand over all the PPP PHCs. The government passed an order doing away with the Arogya Bandhu Scheme, under which it had partnered with NGOs, charitable trusts and private medical colleges to run 52 of its PHCs. In fact, the government decided to take back all PHCs following complaints of non-compliance of rules, misuse of funds, lack of accountability and failure to provide quality service to patients. The health minister had said at the time, “On evaluation, we have also found that there is no accountability, and some of the NGOs do not even have the required number of doctors and paramedical staff. The NGOs have employed AYUSH doctors and untrained nurses in some PHCs”.

Government health insurance schemes

The Vajpayee Arogyashree Insurance scheme in Karnataka uses empanelled private hospitals similar to the model suggested by the NITI Aayog. The scheme has complicated and fragmented clinical care provisioning to such an extent that it is nearly impossible to hold any single entity accountable. Such a system is opaque, complex and unaccountable, and characterised by exclusion at multiple levels of everyday illnesses, outpatient care and non-surgical medical conditions, with a particularly detrimental outcome for women, the marginalised and vulnerable.

While several efforts are made by state governments to appease private hospitals, the cost of this to the public healthcare system is ignored. Often, the already scarce government human resources, become agents who are made to transfer certain patients, seen as more lucrative, to private empanelled hospitals. The private sector utilises these publicly funded insurance schemes to expand its market in the rural areas at the cost of patient care, rights and lives. Several primary and secondary level public facilities across the state, including in urban Bengaluru, are largely dysfunctional, without doctors, and essential medicines and equipment, leading to unnecessary maternal/neonatal complications and deaths.

In this backdrop, the NITI Aayog’s decision to go ahead with the PPP model, taking scant note of the abysmal failure of existing models, comes as a shock. In theory, Indian policymakers may talk about evidence but in reality, all forms of evidence are pushed aside by the strong arm tactics of international agencies such as the World Bank and the corporate mafia. The failure of the PPP model in Karnataka raises a pertinent question – has anyone been held accountable for the damage caused to the public health system and people’s health?

Sylvia Karpagam is a doctor and researcher working with urban marginalised communities on the issues around access to healthcare.