The document discusses health sector reforms in India. It provides context on the need for reforms due to fiscal constraints and poor social indicators. Key reforms introduced include decentralization, increasing human resources, financial reforms, reorganizing the existing health system, improving health management information systems, increasing community involvement, and ensuring quality. National initiatives like the National Rural Health Mission aim to promote equity, efficiency, quality and accountability in primary healthcare. The overall goal of health sector reforms is to improve access to healthcare and ultimately population health outcomes.

1. Presenter Moderator
Dr M A Bashar Dr Tarundeep
Junior Resident Assistant Professor

2. Reforms
o ‘Fundamental rather than an incremental
change, which is sustained rather than one off,
and also purposive’
(Cassels1997)
19-04-2015 2/49

3. Health System
• Health system means the "combination of resources,
organization, financing, and management that culminates in the
delivery of health services to the population"
(Roemer 1991)
• The key institutional components of the health system are:
– State or government institutions
– Health care providers
– Resource institutions
– Purchasers of health care such as insurance agencies
– Other sectoral agencies e.g., education, water supply, sanitation
– Consumers or population at large

4. Background
• Health sector reforms have generated much debate in India,
especially in the context of economic liberalization.
• The World Bank intensified this debate in 1993 when it tried
to redefine the role of the public and private sectors in
healthcare.
• There is no consistent and universally accepted definition of
what constitutes Health Sector reforms thereby leading to
varied meaning and connotations.

5. Definition
• “Sustained purposeful change to improve the efficiency,
equity and effectiveness of the health sector”
– Peter Berman (1995)
• “Defining priorities, refining policies and reforming the
institutions through which those policies are implemented”
– Cassels (1997)

6. Definition
• Health sector reforms is a sustained process of
fundamental change in policy and institutional
arrangements, guided by government and designed to
improve the functioning and performance of health
sector and ultimately the health status of the
population.
-WHO

7. Introduction
o Changes that affect at least two of these
elements:
o health financing
o Expenditure
o Organization regulation
o Consumer behavior.
• If we change only health financing its not health
sector reform
(William Hsiao)

8. Introduction
• In recent years, economic pressures on the government and
specifically on the health sector have forced the
governments of developing countries to initiate health sector
reforms.
• This thrust is made to ensure that an appropriate share of
public funds is spent on health care, especially at local
levels (allocative efficiency).
• It is designed to improve the organization and management
of health systems and ultimately to achieve overall health
policy objectives.

9. Introduction
• The users should also be satisfied with the form and content
of health services offered (improved health status and client
satisfaction), and that the benefits of publicly-funded health
care are equitably distributed (improved equity of access to
care).
• These health sector reforms varied in social, economic and
political environments, as well as in development stages of
health care systems.

10. HSR Components
• HSR deals with
– Equity
– Effectiveness
– Efficiency
– Quality
– Sustainability
– Defining priorities
– Refining the policies
– Reforming institutions for policy implementations.

11. Types of Reforms
o Changes in financing methods
o Changes in health system organization and
Management
o Public sector reforms
(Reforms Thomason Jane A, Health Sector Reform in Developing Countries :A Reality Check
http://www.sph.uq.edu.au/acithn/conf97/papers97/thomason.htm Site last assessed on September 25,
2014)

12. Problem
Definition
Diagnosis
Implementation
Policy
Development
Political
Decision
Evaluation
Health-Reform Cycle
POLITICS
ETHICS
(Getting Health Reform Right.
Roberts, Hsiao, Berman, Reich,2004)

13. Challenges to reforms
• Unclear who has the power and responsibility.
• The minister for health?
• The medical association?
• The health insurers?
• The citizens?
• Power divided among groups - interests ?
• Doctors want more freedom and more resources
• Health insurers want more control and less spending
• Ministers want quick changes
• Public health specialists’ focus is health promotion

14. Health Sector Reforms In
Developing Countries

15. HSR in China
• Economic changes began in 1978
• Rapidly dismantled the socialized mechanism
of financing the healthcare
• Sudden introduction of market forces in
previously state organized system
• Primary level services lost their collective
funding base in much of rural china
• State budget were inadequate to support
urban hospitals

16. HSR in China
• These changes unleashed a variety of
subsequent changes. They were
Privatization of village doctor practices
Introduction of financial autonomy for
hospitals
Cost escalation, as prices were liberalized and
providers were free to increase revenues.

17. HSR in Africa
• African countries faced major financial crisis in
1980s and early 1990s
• Major programs of structural adjustments led
by international financial institutions i.e.
World Bank And IMF included
Allowing local currencies to be devaluated
Reducing govt expenditures(including social
expenditure) and debt
Cutting back on civil service

18. HSR in Africa
• Zambian reforms initiated in 1991-92 included an
innovative institutional restructuring of govt health
care
• Created a Central Board of Health to oversee health
care delivery matters external to Ministry of Health
• Also involved significant decentralization to district
health management teams and health boards
• Introduction of user fees
• Development of nationally defined benefit packages

19. Origin of Reforms in India

20. Need for Reforms
Fiscal Constraints Poor social indicators
Need for reforms
Òil Shock
Economic crisis
of 70s and 80s
‘Investing in
Health’
WDR, 1993
‘Financing Health Services in
Developing Countries’
WB, 1987
(Health Sector Reforms in India, Initiatives from nine states. GOI. Vol 1. Aug 2004)

21. Fiscal Constraints
Economy
committed
to socialism
• Planned economic development
• Strong import substitution
Economic
crisis
• No Balance of Payment Crisis
• Slack in foreign exchange flow
Oil Crisis
• Import dependent growth strategy
• BOP crisis post gulf war
19-04-2015
Fiscal deficit – Had to go for WB loan under the
Structural Adjustment Programme
(www.idrc.ca/en/ev-118491-201-1-DO_TOPIC.html)

22. Need for Reforms
o Financing Health Services in Developing
Countries, World Bank, 1987
o User fee
o Insurance or other risk coverage
o Effective use of non government resources
o Decentralization
o Investing in Health, WDR, 1993
o Fostering an ideal environment
o Increased Govt. spending
o Promoting diversity and competition
(Health Sector Reforms in India, Initiatives from nine states. GOI. Vol 1. Aug 2004)

23. Privatization
• Regulating Private Health Care in India
•
• - COPRA 1986 - Pharmacy Act
• - IMC Act - Nursing Home Act
• - Code of ethics - Bureau of Indian Standard
• - Drugs & Cosmetic Act - Public Nuances Act
• - Dangerous Drug Act
• - Drug Price Control Act
Regulating the private health care sector: the case of the Indian Consumer Protection Act
Health policy and planning; 11(3): 265-279
19-04-2015 23/49

24. Financing of Healthcare

25. Financing of Health Care
17
19
88
122
207
40
81
101
193
116
0 100 200 300 400
Bangladesh
India
Sri Lanka
China
Thailand
Public Spending
Private Spending
Per Person Total Expenditure in Health, PPP $(2005)
Financing health care for all: challenges and opportunities A K Shiva Kumar, Lincoln C Chen, Mita Choudhury, Shiban
Ganju, Vijay Mahajan, Amarjeet Sinha, Abhijit Sen. The Lancet 2011
19-04-2015 25

26. Financing of Health Care
o 10 % of households – medical insurance 1
o Ailments that went untreated
o Rural 28%
o Urban 20%
o Slow increase in insurance
• ( National Commission for Enterprises in the Unorganized Sector )
o 93% population in unorganized sector
o 77% population - poor and vulnerable
o CBHI – very few studies, little information on impact 2
Financial Protection
1. NFHS 3
2. The landscape of community health insurance in India: An overview based on 10 case studies.
Devadasanad et al Volume 78, Issue 2, Pages 224-234 (October 2006)

27. Financing of Health Care
S.no Efficiency of Health Spending Rural (%) Urban (%)
1 Not satisfied by govt doctor or facility 41 45
2 Large distance 21 14
3 Non availibility of services / facilities 30 26
4 Private providers for OPD care 78 81
5 Private providers for in patient care 58 62
• Proportion of Respondents Quoting Poor Efficiency
• High cost of care
Financing health care for all: challenges and opportunities A K Shiva Kumar, Lincoln C Chen, Mita Choudhury, Shiban
Ganju, Vijay Mahajan, Amarjeet Sinha, Abhijit Sen. The Lancet 2011
19-04-2015

28. Demise of Alma Ata Declaration
Failure of PHC 1
Replaced by HSR 1
Poverty trap2
• Cut in soft sector budget
• Inefficient allocation
• based on market forces
• Most OOP in India for
primary care through pvt
Health inequity
1. Health for all beyond 2000: the demise of the Alma-Ata Declaration and primary health care in developing
countries John J Hall and Richard Taylor
2. Equity and health sector reforms: can low-income countries escape the medical poverty trap?
Margaret Whitehead, Göran Dahlgren, Timothy Evans
19-04-2015 28/49

29. The Poverty Trap
Characteristics
of the poor
Poor utilization
Unhealthy
practices
Poor health
outcomes
Ill health
Malnutrition
High fertility
Diminished
income
Loss of wages
Catastrophic OOP
Poor health provision
Lack of income knowledge
Excluded from health finance system
Bad environment
(Poverty and health sector inequalities. Adam Wagstaff )19-04-2015 29

30. Health Sector Reforms in India

31. HSR IN INDIA
• Health sector reforms have come center stage since 1980s essentially
from frustration of the citizens in receiving any semblance of health
care from the public system. By 1990s the process had taken concrete
shape.
• In India, the health sector reforms broadly cover the following areas :
– Re organisation and restructuring of existing health care system
– Involving Community in health service delivery
– Health Management Information System
– Quality of care
All aspects of the sector from manpower to infrastructure to logistics to
monitoring to participation of stakeholders are subject matter of this process

32. EIGHTH FIVE YEAR PLAN (1992-97)
• Concept of free medical care was revoked
• Levying user charges for people above poverty line for
diagnostic and curative services.
• Ensured commitment for free / highly subsidized care for the
needy / BPL population.
• Promote social welfare measures like improved healthcare,
sanitation
• Check the population growth by creating mass awareness
programs
• Private sector promotion

33. NINTH FIVE YEAR PLAN (1997 - 02)
• Convergence and increase involvement of public, private
and voluntary health care providers.
• Enabling Panchayat Raj Institutions (PRI) in planning and
monitoring health programmes.
• Emphasis on basic infrastructural facilities including safe
drinking water and primary health care.
• Inter-sectoral coordination and utilization of local &
community resources.
• Greater emphasis on accountability

34. TENTH FIVE YEAR PLAN (2002 - 07)
• Reforms focused on primary, secondary & tertiary health
care level.
• Emphasis was on equity and financing health care
• Social Health Insurance for BPL population – Universal
Health Insurance Scheme.
• Human resource development
• Capacity building
• Quality assurance
• PRI empowerment
• Focus on public private partnership

35. Policy Shifts in Five Year Plans
8th
• Free medical care revoked
• Encouraged initiatives with private sector
9th
• Profit/non-profit NGO in health care
• Inter sectoral coordination of health programmes
• PRI in planning and monitoring
10th
• Address issue of equity
(Adjustment and Health Sector Reforms: the Solution to Low Public Spending on Health Care in India?
DelampadyNarayanawww.idrc.ca/en/ev-118491-201-1-DO_TOPIC.html)

36. NATIONAL RURAL HEALTH MISSION
• Health care is now one of the thrust areas for the
Government of India.
• The Government mandates an increase in expenditure in
health sector, with main focus on Primary Health Care from
current level of 0.9% of GDP to 2-3% of GDP over the next
five years.
• The National Rural Health Mission (NRHM) which is the
main vehicle for giving effect to the above mandate was
launched in April 2005.

37. NATIONAL RURAL HEALTH MISSION
• NRHM is an overarching umbrella initiative which
subsumes the existing programmes of Health and Family
Welfare and seeks to be the omnibus vehicle for sector wide
reforms in India.
• The NRHM (2005-2012) in recognition of the needs of the
urban poor population has constituted a task force on urban
health to recommend strategies for improving health of the
urban poor.
The National Urban Renewal Mission (NURM) launched by the
Government of India in 2005 has a sub-mission on basic services
for the urban poor covering sixty cities in India.

38. NATIONAL RURAL HEALTH MISSION
• Architectural corrections in delivery systems in reforms
agenda
– Promote equity, efficiency, quality and accountability
– Enhance community based approaches to health
– Ensure public health focus
– Promote new innovations, methods & new approaches
– Decentralize and involve local governing bodies
• District health societies
• NGO involvement
• Integration of ISM (AYUSH)

39. ELEVENTH FIVE YEAR PLAN (2007-12)
• To achieve good health for people, especially for the poor
and the underprivileged
• Time-Bound Goals for the Eleventh Five Year Plan
– Reducing MMR to 100 per 100,000 live births.
– Reducing IMR to 28 per 1000 live births.
– Reducing Total Fertility Rate (TFR) to 2.1.
– Providing clean drinking water for all by 2009 and ensuring no
slip-backs.
– Reducing malnutrition among children of age group 0–3 to half
– Reducing anaemia among women and girls by 50%.
– Raising the sex ratio for age group 0–6 to 935 by 2011–12 and 950
by 2016–17.

40. HSR: AREAS
• Decentralization
• Human Resources
• Financial reforms
• Reorganization and restructuring of the existing health system
• Health Management Information Systems
• Communitization
• Quality assurance
• Convergence
• Public Private Partnership

41. DECENTRALIZATION
• Devolution of authority and responsibility
• Delegation of responsibility and functions
• Shifting power from the central offices to peripheral offices
• Merger & formation of Societies, VHSC, RKS
• Decentralization of Planning Process
• Decentralization of Financing mechanism
• NGO participation in National Health Programs

42. HUMAN RESOURCES
• IPHS norms
– 2 ANMs/sub-center and 1 male MPW.
– 3 nurses/ANMs per PHC, 2 MO
– 9 nurses/CHC plus 5 specialists & 3 to 4 MO
– AYUSH staff
• Expanding available skilled human resource
• More medical UG & PG seats in govt. & private medical
colleges
• Reviving ANM and MPW training centers

43. HUMAN RESOURCES
• Compulsory rural postings
• Contractual appointments
• Incentives for difficult areas
• ‘Pooling’ of medical officers
• Multi skilling option for existing staffs

44. FINANCIAL REFORMS
• “We are now aspiring to taking the total allocation for the
health sector to 2-3 per cent of our GDP in the 12th (Five
Year) Plan period” : Mr. Ghulam Nabi Azad (union Health
and Family Welfare Minister) at Pune (8th May 2011)
• New financing mechanisms of untied funds, breaking the
traditional Treasury route
• Untied grants to village, subcenters, PHC, block, district

45. FINANCIAL REFORMS
• Alternative financing of health care, such as
– user fees/charges,
– community finance,
– health cards or voucher systems,
– contracting services,
– social insurance schemes and
– private insurance

46. FINANCIAL REFORMS
• Demand side financing through Insurance (RSBY)
• Conditional cash transfers (JSY)
• Flexible financial resources to ensure service
guarantees
• State Government’s increase their allocation by
10 % every year and also contribute 15% to NRHM.

47. STRUCTURAL RE-ORGANIZATION
• Creation of Societies- bypass regular government
Procedure
• National/ State level technical support organization
like– NIHFW, SIHFW, NHSRC, SHSRC (State
Health Systems Resource Centre)
• Emergency response systems- 108 or 102
• Emergency Management and Research Institute
(EMRI)

48. STRUCTURAL RE-ORGANIZATION
• Procurement initiatives – TNMSC (Tamil Nadu
Medical Services Corporation ), KMSC, PHSC
(Punjab Health Systems Corporation) etc.
• National HMIS
• Meaningful partnerships with the non-governmental
providers for reaching quality health care
• Co location of AYUSH in PHCs/CHCs/District
Hospitals

49. COMMUNITIZATION
• Community accountability through RKS/ RMRS
(Rajasthan Medicare Relief Societies)
• monitoring process by community stakeholders
• Community Health volunteer – ASHA
• PRI involvement in health care
• Village health & nutrition days (VHND)

50. Quality Assurance
• New standards for government facilities
• IPHS
• NABH standards (National Accreditation Board for
Hospitals & Health care providers) &
• NABL standards (National Accreditation Board for Testing
and Calibration Laboratories)
• Focus on service guarantees

51. CONVERGENCE
• Envisaged horizontal and vertical linkages within
Health sector
• Intrasectoral and Intersectoral integration
• Mainstreaming of AYUSH

52. PUBLIC PRIVATE PARTNERSHIP
• Involving the private sector in service provision
• Private sector should be seen as a national asset and
alternate service delivery systems e.g. social franchising
should be considered.
• Outsourcing of services
• Contracting-in options –
– Specialists (Haryana, MP, Rajasthan etc.)
• Contracting-out options –
– Karuna trust in Karnataka, Punjab (village level
dispensaries)

53. Newer High-Potential HSR Initiatives
Government
initiatives
Purpose Issue(s) addressed
Telemedindia Combines information and
communication technologies(ICT)
with Medical Science for clinical
records, diagnostic tests, video
consultations and medical
education(several govt and private
healthcare network established)
To increase healthcare
services and education to
rural(and remote) parts or
under emergency
conditions
Compulsory
licensing
Grant non- patent holder(s)
permission to manufacture
patented drugs not available at an
affordable price (first grant to
cancer drug Nexavar in March
2012)
To increase accessIbility to
medications
Bachelor of Rural
Health
Care(BRHC)
A 3 &1/2 year rural health care
course( proposed inn Rajya
Sabha)
To increase rural
healthcare professionals

54. Newer High Potential HSR Initiatives
Govt initiative Purpose Issue(s) addressed
National Programme for
Healthcare of the
Elderly(NPHCE)
To be test –launched in 100
districts of the country in
2012-17
To reduce the incidence of
non-communicable diseases
(NCDs)in elderly
National programme for
Prevention and Control of
Cancer, Diabetes,
Cardiovascular Diseases
and Stroke(NPCDCS)
To be test-launched in 100
districts of the country in
2012-17
To reduce the incidence of
major non-communicable
diseases through lifestyle
modifications
Free Medicines for All Rs 28,560 crore plan to
provide 348 medicines for all
and must-prescribe generic
drugs mandate to doctors
(proposed 2012-2017
To increase accessibility to
medications
Healthcare for All by 2020 All residents will have
healthcare coverage via a
combination of public,
employer and private sources
To uphold the fundamental
right of all citizens to
adequate health care

55. WHO'S ROLE
• The World Health Organization, through its various
collaborative programmes at all levels, is involved in
capacity building in the member Countries to take care of
the evolving reforms in the health sector, mainly in the areas
of planning and human resources.
• To support the reforms processes in countries, a series of
publications, both at regional and global levels, have been
issued.

56. WHO'S ROLE
• An international "Forum on health sector reforms" has been
established to share and disseminate information on the
scope and nature of WHO's current and planned activities in
support of health sector reforms and in identifying priority
issues, reviewing country experiences and also the
approaches of different agencies in the field.
• WHO is also supporting institutional strengthening to
promote expertise in the developing countries.

57. Way Forward for effective HSR
Effective
HSR
Incentive
system to
states
Taxation
Regulation
of pvt
sector
Risk
pooling
Strengthening of HMIS,
Social audits, Community
monitoring, Capacity
building, Prioritization,
Cost effective policy
Increased
public
spending
on health
Financing health care for all: challenges and opportunities A K Shiva Kumar, Lincoln C Chen, Mita Choudhury, Shiban
Ganju, Vijay Mahajan, Amarjeet Sinha, Abhijit Sen. The Lancet 2011
57/49

58. CONCLUSION AND POINTS FOR
CONSIDERATION
• Reforms encompass a range of purposeful efforts to change
the system for improving its performance
• You should make deliberate efforts, and conscious choices
so that the changes in the system would lead to the
improved performance in line with the desired goals.
• reforms have to be rational, logical and specific.

59. CONCLUSION AND POINTS FOR
CONSIDERATION
• Health sector reforms is a political process.
• Radical reforms is impossible without robust political
leadership, informed by sound technical advice.
• reforms should take place as a sustained process of
fundamental change in health policy and health institutional
arrangements.

60. CONCLUSION AND POINTS FOR
CONSIDERATION
• Improvements in the functioning of the public sector and
civil service systems in general will occur in parallel with,
and sometimes in response to, other aspects of institutional
reforms, such as increasing privatization.
• Sustained information and education are needed to generate
wider political and public understanding and support.
• Health system research and other forms of research studies
will provide evidences to strengthen the processes and
mechanisms for health sector reforms.

61. CONCLUSION AND POINTS FOR
CONSIDERATION
• Health sector reforms demand an explicit link between
researchers, planners and decision-makers for the optimal
use of research findings.
• While every reforms experience is country specific, there are
always important lessons to learn from comparing options,
identifying common issues addressed and the tools used, and
evaluating effects of various reforms initiatives.