NITI Aayog’s PPP project, an excellent slot for private players in health sector

Indian policy think-tank, the National Institution for Transforming India or NITI Aayog, has recently unveiled a grand plan to effectively privatize district hospitals in Tier-I and Tier-II cities. The new strategy is in the light of the realization that the current capacities in public facilities to manage disease conditions in cardiology, pulmonology and oncology are practically insufficient in Tier-I and Tier-II towns. Most civil hospitals in many states are not equipped to effectively address the medical requirements of many non-communicable diseases prevailing in the country. It is understood that the scheme will be initially piloted in states such as Uttar Pradesh, Madhya Pradesh, etc.

The project will be a prospective opportunity for private health service providers who wish to strike a public – private participation or PPP. In this scheme, private partners will be able to cherry-pick the most lucrative districts where patients have a higher paying capacity. Addressing the major financial concern in PPP model, the scheme will also provide an escrow account for private partners that would reduce the risk of delayed reimbursement by the government. Providers would also secure access to utilize all public facilities such as ambulance services, blood banks, mortuaries etc.

In a nut shell, the new initiative of NITI Aayog is government’s solid attempt of handing over public assets to private partners and a clear abdication of the risky duty of providing service where government capacities are totally insufficient. As Health care is primarily a state subject, state governments are expected to soon look into adopting PPP projects in association with respectable private hospitals. Given the large presence in the sector, a well-defined role in the provision of NCD care is welcome but has to be accommodated within a well-designed framework of Universal Health Coverage that integrates pre-paid primary, secondary and tertiary care through a combination of tax funding and social insurance. The proposed PPP model will not only improve the deliverance of appropriate and equitable care to the public but also will prove how the private partners can effectively intervene in reviving the health sector of India.

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