Why is the National Health Authority so focused on the for-profit medical sector?

    HealthWhy is the National Health Authority so focused on...
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    Why is the National Health Authority so focused on the for-profit medical sector?

    India’s health system needs transformative reforms. An institutional arrangement like the NHA legitimises the role of the “for-profit” private sector in government. Commercial or market-based health services are contradictory to the idea of health as a public good and a right.

    By Sulakshana Nandi

    Constituted as an autonomous entity through a decision of the union cabinet, the National Health Authority (NHA) was set up to implement Ayushman Bharat-Pradhan Mantri Jan ArogyaYojana (PMJAY) the publicly funded health insurance scheme. NHA is currently also the implementing agency for the Ayushman Bharat Digital Health Mission.

    Serious questions have emerged regarding the legitimacy and extent of public oversight of the NHA. NHA’s legality remains questionable since it was not passed by an Act of Parliament but through a cabinet decision. This institutional arrangement has enabled direct participation and influence of the healthcare industry and for-profit private players in various roles.

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    All major health schemes and programmes in our country are implemented by the Ministry of Health and Family Welfare. Strangely, however, the NHA was set up as an implementer and regulatory arrangement for PMJAY bypassing the Health Ministry. It answers to a board which includes private (corporate) sector players.

    The involvement of for-profit private players such as hospitals, insurance companies, third party administrators or TPAs, software and IT companies etc. has increased manifold under the NHA. The NHA even outsources its own functions such as monitoring (medical audits), grievance redressal (Aarogya Mitra) and research and technical support to private agencies, multinational consultancies and the World Bank. Private players, therefore, have a vested interest in the continuation of the NHA.

    Public funds diverted to the private sector

    A defining feature of NHA is the lack of transparency and public accountability. Though PMJAY runs on public money, the data generated is treated as NHA’s private property and there is hardly any public disclosure of information. Despite a significant emphasis on and showcasing of IT systems, the public data on PMJAY available on the NHA website is extremely limited and difficult to access. However this data has been made available to select institutions like the World Bank to write policy briefs on behalf of the NHA.

    The involvement of the for-profit private players in the scheme (PMJAY) itself has led to negative consequences for people and the government health system. PMJAY is considered the government’s largest ever public private partnerships (PPP) in healthcare. Studies and reports show that PMJAY has not been able to ensure cashless health services in the private sector to all those who are eligible. A large proportion of eligible patients accessing private sector hospitals empaneled with PMJAY are forced to pay additional money out of pocket, incurring catastrophic health expenditure.

    Through PMJAY, public funds that should have gone into strengthening government hospitals are instead being diverted to the private sector. On the other hand, critical health programmes under the health ministry remain under-funded. The public sector and government hospitals cater to the more vulnerable groups, such as the poor, rural communities, tribal communities, women and other marginalized groups. The private sector on the other hand is concentrated in the urban areas and there have been several reports of unethical practices. Therefore, under-funding and neglect of the government health system has serious consequences for people’s health and their access to health services.

    Profiteering in times of COVID-19

    PMJAY and private players failed to provide the much needed support even during the COVID-19 pandemic. Government hospitals provided the major portion of free healthcare and free testing for COVID-19.Very few for-profit private players came forward to provide free services for COVID-19 patients needing hospitalisation, though it was widely publicised that testing and treatment would be free even in the private sector for those eligible under PMJAY.

    Hospitals that came forward also forced patients to pay additional money. Excessive billing, extortion and flouting of price ceilings by the private players increased the misery of people being treated for COVID-19 and pushed many families into poverty. During the vaccination drive too, the private sector flouted price regulations and also failed to deliver the number of vaccinations expected of them.

    The Digital Health Mission similarly opens the possibility for enhancing corporate profits from government coffers as its main beneficiaries would be IT companies, digital healthcare companies, insurance companies and other private players. In the absence of adequate data protection and consent procedures, private players can greatly benefit from data mining and commercialization of personal and aggregate health data, while the lack of public accountability and oversight continues. Moreover, mandating a digital health identity for being eligible to receive health services will lead to exclusion of the most vulnerable groups who need public healthcare the most.

    Need regulate private sector

    There is a clear need for transformative reforms in India’s health system. An institutional arrangement such as the NHA legitimises the role of the “for-profit” private sector in government, from decision-making to implementation to monitoring. This creates a possibility for conflict of interest and raises concerns whether public interest or interests of the healthcare industry will be the primary guiding force.

    The NITI Aayog that is responsible for conceptualising and operationalising the NHA has also been promoting a plethora of initiatives for healthcare privatization. Commercial or market-based health services are contradictory to the idea of health as a public good and a right.

    Therefore instead of diverting public funds to private players through NHA and PMJAY, the public sector must be strengthened to provide primary, secondary and tertiary level health services. The government must recruit adequate health workforce, expand public health infrastructure, and improve availability of medicines and diagnostics in the public sector. Regulation of the private sector in healthcare needs to be strengthened. Transparency of data, public accountability and public scrutiny of all health programmes must be improved. Experiences of states like Kerala and Tamil Nadu that have improved government health system and public hospitals must be replicated.


    Sulakshana Nandi is a public health researcher and National Joint-Convener of Jan Swasthya Abhiyan

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