In late September 2016, the government of Uttar Pradesh (UP) held a rather unusual meeting in Lucknow. A motley combination of doctors and entrepreneurs from nonprofits, hospitals and venture capital funded-startups had gathered for what looked like an interesting experiment in outsourcing. A word that rings a bell in tech but not in healthcare. That the world’s largest and richest charity, Bill & Melinda Gates Foundation, was involved, added a sincere and reassuring flavour to a state government invitation. And it was about outsourcing primary healthcare in 11 centres.

People were called to thrash out the nitty-gritty of a proposal for international competitive bidding that would be officially floated. And it was, in December 2016. It’s the first time that a state government is outsourcing primary care not with an aim to reduce its own expenditure but to improve quality.

Quality Primary Healthcare

It’s the first time that a state government is outsourcing primary care not with an aim to reduce its own expenditure but to improve quality

Traditionally the responsibility of the state, primary healthcare delivery has been rolling downhill. From over 25,000 Primary Healthcare Centres (PHCs) set up across the country, only about 5,000 meet the government’s own public health standards, a third do not have labour rooms and about two-thirds do not have operation theatres.

The poor state of the PHCs is not unknown to the government and industry. The problem here isn’t a lack of funds, nearly three-fourths of the country’s health budget goes into addressing primary care. India spent close to Rs 21,000 crore in 2012-13 alone through the rural health mission. Now, the government has committed to a health budget of Rs 48,878 crore for the current fiscal year, out of which the national health policy stipulates that 70% would be spent on primary healthcare. It amounts to around Rs 34,214 crore. Not enough for the whole country, but big enough to attract private companies.

So the question entrepreneurs asked at the meeting was: Is this an opportunity? It’s a question the government—both at the Centre and in the states—has been asking itself over and over again. If the UP government’s proposal, floated with the help of the Gates Foundation—which has been working in the state since 2012—works out, it could crack open a massive opportunity, which private healthcare providers have been wary of wading into.

Quality over quantity

Primary healthcare is the state’s responsibility for a reason—it does not generate a revenue stream for private providers. Dr Hanumappa Sudarshan, founder of Karuna Trust, which operates such centres in the remote parts of Karnataka, says that a profit motive alone cannot drive a PHC because its key role is preventive healthcare, including immunisation.

AUTHOR

Ruhi Kandhari

Ruhi writes on the impact of healthcare policies, trends in the healthcare sector and developments on the implementation of Electronic Health Records in India. She has an M. Sc. in Development Studies from the London School of Economics.

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