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FEATURE STORY

World Bank Support to the Health Sector in India

April 6, 2010

India’s health indicators have continued to improve. However, progress has not matched the country’s economic growth during the last decade. While there is no single metric to measure the performance of the health system, India compares poorly with countries at similar levels of development.

Fertility rates outstrip those in most Asian countries, and maternal and infant mortality is one of the highest in Asia. Of particular concern is the health of India’s children, whose well being will determine the extent of India’s much-awaited demographic dividend.

The country faces an unfinished agenda of tackling childhood and infectious diseases as well as an emerging burden of non-communicable diseases (NCDs). The high financial burden of both catastrophic and routine health care makes the poor highly vulnerable to health shocks, with medical expenses contributing to household poverty and compromising any effort to improve health outcomes.

Recent Health Improvements

Certain key health indicators (based on recent Household Survey Data) show continuing, albeit slow, decline:

Maternal Mortality Rate: from 301 per 10,000 live births in 2001-03 to 254 in 2004-06

Infant Mortality Rate: from 58 per 1000 live births in 2005 to 53 in 2008

Total Fertility Rate: from 2.9 births per woman in 2005 to 2.7 in 2007

Institutional births, a main focus of the National Rural Health Mission, have increased from 41% in 2004 to 47% in 2008. Nevertheless, meeting the Millennium Development Goal (MDG) for infant mortality of 27 per 1000 live births by 2015 represents a formidable challenge.

Prevalence rates of HIV, TB and malaria are in sustained decline. The national AIDS program is well on track in achieving its coverage targets. The government's TB program exhibits adequate implementation of DOTS activities across the country, with good outcomes in case detection and cure rates at the national level.

Key Challenges

Despite these gains, a high proportion of the population continues to suffer and die from easily preventable diseases, lack of access to affordable and quality care, and malnutrition.  Women and children from low-income households are the most vulnerable. Problem areas include:

Maternal and child health: Only about half of pregnant women receive adequate antenatal coverage - at least three visits during one pregnancy. This percentage remains low and stagnant. While the percentage of children between 12-23 months of age that are fully immunized rose from 46% in 2004 to 54% in 2008, these levels remain unacceptably low. Infant and maternal mortality rates are decreasing, but slowly. At the current rate of progress, India will not be able to achieve the Millennium Development Goals for health.

Childhood nutrition: Despite the largest child-nutrition program in the world, rates of childhood malnutrition have remained unchanged for nearly two decades: 48% of children under the age of five are stunted (low height for age), 43% are underweight (low weight for age), and 20% are wasted (low weight for height).

New diseases on the rise: At the same time, new health challenges are emerging. The rise in chronic adult diseases and injuries is stretching the system’s capacity to respond.  Non-communicable diseases and injuries already account for about 60% of India’s disease burden, led by cardiovascular disease, mental health, injuries, cancer, and diabetes.

Unfinished agenda of communicable diseases: Although the prevalence of HIV has recently been lowered to an estimated 0.41% of the adult population, or approximately 2.5 million individuals, this still poses a very significant burden and requires continued efforts to avoid a devastating, more generalized epidemic. Tuberculosis, malaria, polio, and dengue fever still remain serious threats in a number of states.

Financial burden:  At over 70% of all health spending, out-of-pocket expenditures are by far the main financing mechanism for health care in India. This poses considerable financial burden on households.  Based on the National Sample Survey (60th round), in 2004, 63 million individuals or 12 million households fell into poverty due to health expenditures (6.2% of all households). The majority of these households (79%) became impoverished due to spending on outpatient care, including drugs, and the remainder (21%) fell into poverty due to hospital care. In some states, such as Uttar Pradesh, Maharashtra and West Bengal, over 8% of households were impoverished as a result of health expenditures.

Government Initiatives

The Central Government has focused new energy and attention on the health sector recently. National health budgets have increased significantly in the past two years and additional resources have been promised. The Government proposes to increase health spending from the current level of a little more than 1% of GDP to 2-3%. New measures recently launched include:

National Rural Health Mission (NRHM): This was launched in April 2005, and government departments have been reorganized at the national as well as the state level. Efforts are on to address systemic problems in states with the poorest performance. The NRHM supports a number of novel approaches to improve health outcomes, together with more traditional approaches to strengthen government service delivery. However, much will depend on the effectiveness of efforts to improve human capacities and functioning at the state and local levels.

Rashtriya Swasthiya Bima Yojana (RBSY):  Launched in 2008, this social insurance scheme aims to provide financial protection to BPL families against expenses related to hospitalization. Co-financed by the federal and state governments, this cashless scheme employs a public-private partnership in which state governments contract with insurance companies which in turn contract with public and private hospitals. As of March 2010, over 13 million BPL households have enrolled in RBSY.

The Government of India aims to cover 60 million such households over the next several years. However, while the scheme focuses on providing cover for inpatient care, it is outpatient care that is the main financial burden for most families. Expanding the benefits to cover out-patient services will help reduce the financial burden on poor families.

Systemic Constraints

Despite the Central Government’s focus on health issues, a major challenge is to carry the momentum to the states. Increased funding will need to translate into greater access to health care and more effective delivery of health services. The following systemic constraints will need to be overcome to achieve the MDGs for health:

Low effectiveness of public health spending due to: (i) general absence of accountability arrangements and incentives for performance; (ii) ineffective targeting and inadequate emphasis on core public health functions; (iii) very weak information environment, including deficient monitoring and near absence of impact evaluations; (iv) insufficient engagement with non-government sector and absence of a “whole system” perspective; (v) inadequate human resources in both numbers and quality; (vi) insufficient capacity in the states,(vii) little attention to or assessment of quality of care; and (vi) variable political priority for health across states.

Unregulated private provision: 80% of Indians seek private provision when faced with an illness.  However, only half of these visits are to doctors trained and licensed in modern medicine. Many facilities remain unlicensed or are rarely inspected. The private medical market is unregulated with little concern for effectiveness, quality, costs and consumer safety. Accreditation is still in its infancy.

While the government recognizes the potential for public-private partnerships to improve basic health care, many ongoing initiatives appear ad hoc. Innovative partnerships with NGOs and private providers need to be monitored and evaluated to improve the delivery of priority health services.

Lack of Adequate Health Insurance: Only about 20% of Indians have any form of health insurance, and much of it is inadequate. Nearly all private health service providers require families to spend out-of-pocket at the point of service. This leaves people, especially the poor, highly vulnerable. While the recently implemented RSBY seeks to expand hospitalization insurance coverage to the BPL population, but there is still a long way to go before a sizeable proportion of the Indian population has adequate financial protection against health related events.

Little emphasis on communication to improve health and create demand for health services: India’s health system is unprepared to deal with non-communicable diseases. To address them, much more effort is required to expand health promotion and prevention. Addressing malnutrition involves refocusing efforts on behavior change around key issues such as feeding practices for infants and young children. The Government of India and the states are experimenting with vouchers to improve access but little is known about the impact of these initiatives.

World Bank Support

The World Bank has been lending for health and nutrition in India since the early 1990s. Its priority is to help India to achieve the health MDGs and to reduce the impact of disease on poverty. 

The Bank's lending portfolio is large and diverse. All World Bank loans to the health sector are on concessional terms from the Bank’s soft lending arm – IDA. Repayment is to be made over 35 years with a 10-year grace period. Interest charges are well below 1 percent per annum; these decline as the loan is repaid.

Future Plans

The Bank’s new strategy focuses on an interlocking set of measures to alter processes, incentives, and accountabilities to improve coverage, quality, effectiveness, and efficiency of service delivery and public health interventions, or in short, make services work for the poor.

Preparation is underway for lending to support: (i) health system development in Uttar Pradesh; and (ii) programs to improve childhood nutrition nation-wide.


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