Governance in Health Care -- The Way Ahead

Presented by Dr Ramakrishnan at the 21st Thinkers and writers forum On 21st September 2014 as part of the 37th SKOCH Summit 2014 “Minimum Government, Maximum Governance” 19th, 20th & 21st September, India Habitat Centre New Delhi , India

15 Pages Posted: 9 Oct 2014 Last revised: 16 Oct 2014

Date Written: October 7, 2014


Health is a basic component of human development, and Health sector is the lifeline for a nation's wellbeing. Hence our Constitution through Article 21 accorded due importance to it as a primary human right.

The Indian healthcare sector is one of the largest and rapidly expanding service sectors, in terms of revenue and employment, and has emerged as one of the most challenging sectors. India’s rapid economic growth in the last two decades has not translated into development of the country and improved living conditions for the poorest.

It is estimated that 15% of India’s population, still has no access to health care services, either due to lack of availability or economic reasons. Moreover, 75% of the qualified doctors practice in urban areas and 23% in towns, while only 2% practice in rural areas.

Analysis of available qualitative and quantitative data clearly shows extremely uneven health and development progress in various parts of the country. Often this difference is so dramatic that one can hardly believe that, they are part of the same nation and have followed the same development path for the last five decades. None of the state governments in the country have the necessary funds to invest in infrastructure development of secondary or tertiary level hospitals.

Deficiencies in the public sector health system in providing health services to the population are well documented. The inability of the public health sector has forced poor and deprived sections of the population to seek health services from the private sector.

Due to the prevailing situation in the government sector, there has been an unprecedented growth of the private sector. The private sector is not only India’s most unregulated sector but also it’s most potent and untapped sector. Contrary to commonly held views, private hospitals are relatively less urban-biased than the public hospitals.

Given the current ethical standards of the medical profession, and free market technology-driven operational principles, the private sector generally does not provide quality health care at a reasonable cost. India has one of the world s highest levels of private out-of-pocket financing (87 %). Such a mode of financing imposes debilitating effects on the poor. Recent studies indicate that private health care significantly affects both the cost and quality of health care services in India.

It is estimated that more than 40% of hospitalised people borrow money or sell assets to cover expenses, and 35% of hospitalised Indians fall below the poverty line because of hospital expenses. Out-of-pocket medical costs alone may push 2.2% of the population below poverty line in one year.

Several constraints exist in the health sector in India. The major challenges for the health sector include:

Accessibility and coverage in rural areas.

Ineffective management of existing infrastructure.

Inadequate number and quality of health care professionals.

Public-sector involvement in health care dates back to 1883, and is important to ensure fair financing and fair access. Public financing of health care is more efficient than private insurance. The health sector, with high public interaction and large societal impact affecting almost the entire population, was the second most corrupt sector in India. The prevention of corruption is a bottom-up process, beginning with people’s participation in planning, implementation, and monitoring in service delivery to overcome corruption.

Inadequate and unbalanced financial outlays, over-centralized planning, low moral values, lack of accountability and dereliction of duty by medical and nursing professionals plague the system. The National Health Policy needs to be reviewed thoroughly and a total revamping and restructuring of the health infrastructure are immediately called for. This paper would look into the various aspects of improving the health sector.

Keywords: Health Care, Governance, Indian, way ahead

Suggested Citation

Ramachandran, Ramakrishnan, Governance in Health Care -- The Way Ahead (October 7, 2014). Presented by Dr Ramakrishnan at the 21st Thinkers and writers forum On 21st September 2014 as part of the 37th SKOCH Summit 2014 “Minimum Government, Maximum Governance” 19th, 20th & 21st September, India Habitat Centre New Delhi , India. Available at SSRN:

Ramakrishnan Ramachandran (Contact Author)

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Vanagaram-Ambattur Road, Aynambakam
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