Indian healthcare at crossroads

July 16, 2018 0 By CH Unnikrishnan

The need of the hour is to reinvent the model, methods and measures for best possible efficiencies with patient-centricity at its core

Indian healthcare is at a peculiar crossroads characterized by the righteous indignation exhibited by the principal stakeholders–the patients, the government and the private sector providers.

The indignation is largely a result of a skewed perception caused by “bounded rationality”, with the provider being the most affected, and consequently the least trusted.

The government is solely responsible for the unpardonable neglect of a key social sector like healthcare for decades, despite following a socialist model of governance. This neglect was leveraged by private providers to build a growing business that serves more than 60 percent of the healthcare needs of the population. At the same time, the approach taken by the private sector was largely opportunistic and lacked the character and governance standards needed for a sensitive sector like “for profit” healthcare.

Though the private sector has served the very critical need of providing care where the government failed to a large extent, the cost of such care has been prohibitive for a substantial part of the population characterised as poor to very poor. This has led to a situation of public ire fuelled by the perception that the private sector is profiteering. The government finds it most convenient to play to the gallery and add fuel to this ire, lest the public anger turn against it, which should have been the case long back and is the fundamental cause of the current crisis.

Any sincere analysis of private hospital chains’ performance will reveal poor financial health with unsustainable ROCE (Return on Capital Employed). However, private providers suffer from insufficient moral authority to defend their costs as, in their unbridled pursuit of growth, cost and efficiency have been a casualty. To make matters worse, the non-transparent, unscientific and at times opportunistic commercial practices of private providers have compounded the problem with a yawning trust deficit between them on the one hand and the public and the government on the other.

Hence, the truth is that none of them can claim a moral high ground even as they remain a victim of the situation. Therefore, it will not be wise to defend the status quo, or to look for historical reasons for the ills. What is required is to have an objective assessment of the situation and the future needs, and to commit to evolving a framework that is the best for all stakeholders. The most important element of such a framework will be to have the “patient” at the center in the true sense and not just in speech, which has been the case all along.

Some key imperatives for the key stakeholders are as follows :-

Government :

I. Focus on healthcare, not just on taking care of the sick–the key reason why global health systems are in the doldrums today.

II. State funding for the healthcare expenses of the underprivileged is the right way to go, and in the Indian context, will cover at least 70 percent of the population.

III. Do not succumb to populist pressures: Avoid a knee-jerk policy response to a complex issue like affordable health care based purely on perception and devoid of expert scientific diligence. Doing so can disincentivize conscientious players and compromise patient safety and the cost agenda in the long run.

IV. Institute and enforce a robust regulatory regime to ensure minimum care standards, without which the affordable care agenda can be detrimental to patient interest.

V. Develop a mechanism to discover the true cost of delivering quality care before fixing prices.

VI. Substantially increase consumption of public healthcare services and the supply of human resources to provide an effective alternative to private care, without which all attempts to regulate private care will be empty rhetoric.

Private providers : For private providers, especially high-end tertiary care players, it is imperative to understand that given the very nature of healthcare as a sector, characterised by social obligation and inherent risk of market failure, the economics of the business will always lend itself to high scrutiny and sceptic enquiries. Consequently, “perception” is of paramount significance. At the same time, the business of healthcare has the right to reasonable profit, and there will be a cost to deliver quality and experience needs of different segments. Hence, the need of the hour is not to be defensive, but to be proactive in reinventing the model, methods and measures for best possible efficiencies across enterprise activities for a desired level of service, to be transparent with stakeholders on commercial aspects and to ensure “correct behavior” collectively from all providers.

Clinicians : Modern medicine has very little understanding of the science of health and a limited understanding of the science of sickness. Hence, trust is the very bedrock of the relationship between the clinician and the patient, and clinicians will do well to remember the dictum: “Morality is evolved self-interest”. A large part of the clinician community is clean, but they are guilty of being silent when their colleagues indulge in rampant unethical conduct.

Entrepreneurs (Startups): It is technology that will unleash unprecedented innovations to solve the challenges of healthcare to all, through its effective interventions across the continuum, be it prevention, promotion, diagnosis, care delivery, compliance management and patient feedback. It is the start ups that are most suited to ride this opportunity for innovation rather than the big companies.


I. Ensure that affordable healthcare stays a politically potent issue by holding the government accountable for it.

II. Do not be tricked by the aura of “star clinician”. Barring the very few genuinely gifted, much of the so-called stars are differentiated only by their ambition, commercial greed and marketing muscle, and not by their technical skills. Always take multiple opinions for serious care and follow your gut instinct to decide who is right for you.

III. Actively contribute to patient portals and share experiences to facilitate true perceptions bereft of all marketing sounds and motivated advice.

IV. Last but not the least, be accountable for your health and minimize sickness as sick care will never be cheap.


Muralidharan Nair

The author is Partner, Healthcare Practices,

Ernst & Young India. The views expressed are personal.