Health and the freedom of choice

People talk a lot about “freedom” these days.  Be it freedom from colonial rule or the freedom of expression, the freedom of the Internet, the freedom to watch porn, to have consensual sex in beach-side resorts or the freedom to marry irrespective of faith. At the root of each of these passionate beliefs is the resentment of the State intervening in the freedom of personal choice. Why then, does this resentment dissolve when we think of health and health care?

Health and health care is as much a subject of personal choice as is the right to choose what you want to watch on the internet or do in your free time. Would you like it if the State told you to consult this doctor and not that one? Or if they told you which hospital you could be treated in or to what cost your treatment should be limited to? And yet, that is exactly what a pharmaceutical industry lobby in India, demanded that the government should do!

At a recent event, the Organization of Pharmaceutical Producers of India (OPPI) asked the government to increase public spending in the health sector. This would include subsidizing health insurance and providing universal health care. This sounds perfectly reasonable, doesn’t it? After all, shouldn’t everyone be able to access free healthcare?  It isn’t really very reasonable, if you think about how it would actually be done.

The first thing the government would look for is the money to fund this mammoth task. And that money would obviously come from the taxes that we pay!  Just as the industry should choose to resist a move by the government to fund universal health care through an increase in corporate taxes, ordinary citizens should also have the choice to pay lower taxes from hard-earned salaries.

As if in preemption, the National Health Policy recommended a ‘sin-tax’ – a tax on fast food, tobacco, alcohol, aerated drinks and other such – to fund healthcare. Do you think companies who sell these products will pay that money – or will you? And do you think the money collected through an indirect tax is enough to fund free healthcare for 1.25 billion people and more? The next step is prioritization. Should money be spent to build new medical colleges, or hospitals, or primary health centers? Isn’t it more important to give away free medicines? Maybe health insurance for everyone is an urgent need too. See the confusion? There are just too many things to do, and the money is too little. Even the NITI Aayog – that advises the government on policy matters – doesn’t think this to be a good option.

I believe the OPPI – as a powerful industry body – should focus on getting the government to simplify if not simply to do away with healthcare laws in their present form. For example, if the laws that require licenses to set up hospitals and medical colleges are simplified, they could attract many more players to the health sector. The result will be more colleges and better trained doctors and paramedics.

Today, despite the attractiveness, even the biggest home bred industrialists running multi-sector conglomerates, fear to tread into this space because of over-regulation.  Yet, CEOs of pharma companies have rarely – if ever – called for a simplification of or doing away with the law.

Simple economics tells us that markets immediately respond to increasing demand. The healthcare space in India is bursting at its seams with demand. Why then is supply still regulated by the government? Open it up! Allow anyone who wants to enter the space to come in and set up shop. This will reduce an enormous amount of workload on the government and pressure on the health budget as private capital is infused into the sector. The increased competition will also drop prices, improve quality and allow consumers the freedom to choose instead of being told what to do.

To be sure, a lesser regulated sector will definitely attract the greedy.  This is why I do not advocate for public-private partnerships (PPP). PPPs are as full of cronies as any crony organization is, and is as full of opportunists as the government is. PPPs often have a low probability of working efficiently since the government controls private capital and promote “profiteering” over “profit”. Distinguishing “profit” from “profiteering” is an important task the OPPI must undertake. To ensure that players understand the differentiation and stay fair, we need a less-burdened government to run an efficient justice system.

As a representative of the industry, the OPPI must remind the government of what it’s Chief Executive promised India’s people – minimum government, maximum governance. If the government focuses only on governance, we might have a more efficient justice system in India and with it, more providers of service.  In such a situation, power moves to the consumer and he is free to reject cronies and cartels and opt for those who serve him well. That is the power of choice.

In a country driven by electoral politics and vote-banks, the most dangerous part of large-scale welfare is that it cannot be rolled back. Look at the newspapers to see how many countries with welfare went belly-up. To continue funding such welfare, the government slowly but surely will begin to control everything else.  Is there any part of the state-controlled apparatus that you like? Why should you expect healthcare to be any different then?

State provided insurance will probably be worse. The sums for which you are insured are ridiculously low and rarely keep up with evolving prices. Look up the fines that convicted criminals have to pay! If we still follow a penal code made in 1860, what are the chances of the health policy keeping pace with escalating health costs in the future?

When the insurance sector opens up to competition, the few players who have formed powerful cartels will be forced to break them, resulting in cheaper and better insurance schemes. Also with lesser taxes and benefits to pay, you have more money in your pocket to decide how to use it. Think of it as a 50% increment every year!

With efficient courts, cronyism and cartels will reduce. Pricing mechanisms that are “set-up” or “rigged” will be set free to respond to market realities. More hospitals, more doctors, paramedics and lower medicine prices; health insurance that does not ditch you when you need it the most – isn’t this the stuff patients’ dreams are made of? Why does the OPPI not think of this approach to improve access to healthcare?

The OPPI’s appeal probably reflects a point of view that it is the role of the government to provide healthcare. Not so! It should be the role of anyone capable, to provide it. Instead of asking for access to free healthcare, the OPPI should instead ask for free access to healthcare. The government’s presence hinders that. I would resent having to entrust my healthcare to it, if I had the freedom of choice.

Published in the September 2015 edition of MedicinMan

The Swift-Apple standoff – Lessons in the UCPMP era

Every single time you hear a doctor or a medical association trying to pass on its costs (travel, conference or anything else) to you, remember the Taylor Swift – Apple episode.

For those who aren’t very familiar with the episode here is a little primer. When Apple announced a promotional idea of offering a 3-month free trial period for Apple Music, it also decided to leverage its clout a little by not paying the artistes whose music it would distribute. In effect, what Apple did was ask music artistes to bear the cost of promoting Apple music! Being a company worth $700 billion, it figured it could pull it off.  What it didn’t expect was a push-back from one single artiste.

Taylor Swift, a gutsy 25-year old music star announced yesterday, via a blog-post, that she would not allow Apple to distribute her music. I am sure most people who read the post brushed it off as an arrogant attempt to take on a technology giant. Yet, late last night Apple announced that it would reverse its payment policy and not ask music artistes to bear the cost of its promotional campaign.

This episode struck me as familiar. It is strikingly similar to something pharma routinely gets from medical associations – to bear the cost of their conferences. However, Taylor Swift’s reaction to Apple’s initial proposal and Apple’s response to her fascinated me.  How it unfolded has a lot to do with bargaining power and its amplification through social media. It also is about taking a stand. I learnt some valuable lessons from this episode and could not resist comparing it to the industry I work for. A few from the top of my head are listed here – I am sure there are many more.

  • No organization can take its size for granted
  • Alternate media can amplify power and speed of outcome
  • Taking a stand is important
  • Fighting for the underdog gets you support
  • A win of this size can catapult popularity

Taylor Swift is an artist with five albums out. Sure she is popular, but contrast it with the organization she stood up to. Apple is a single company valued at almost 3/4th the sales of the entire pharmaceutical industry, an industry that allegedly ‘shapes’ the agendas of governments around the world.  A company so large and powerful took 17 hours to reverse its payment policy to music artistes. In comparison, how important and powerful do you think the doctor associations that pressurize you are?

We don’t ask you for free iPhones. Please don’t ask us to provide you with our music for no compensation” wrote Swift in her blog-post addressed to Apple. There is obviously a quid-pro-quo in the Swift- Apple relationship. But it is one between peers. Neither Swift nor Apple demeans each other. They are peers in the relationship.

Why can’t pharma have a similar relationship with doctors? Quid-pro-quo is a bad word you say? Not if it is stated upfront, it’s not. Pharma and doctors need each other – there is nothing illegal about that. Using unfair trade practices is illegal. In this example, an unfair practice would be if Swift leveraged her clout and popularity to strike a deal with Apple that promoted her music over others. She did not. She spoke for the music industry at large. The pharmaceutical industry acutely lacks this foresight and broad mindedness which explains its half-baked attempts at anything constructive.

From the point of view of enforcing this change, I doubt this would have happened if Taylor Swift had sent in a nicely typed-out letter on her letter-head (does she have one?) either directly or through her lawyers.  A simple social media broadcast immediately got her the support of millions of her fans – who incidentally are Apple’s consumers too! The transparency, the openness and the willingness to share her actions with her fans won their hearts. What is pharma so scared of? Why does it not share the same transparency, openness and willingness to share? Why the hesitation with voluntarily accepting the UCPMP to win some hearts?

Taylor Swift probably won more support for also speaking out for the underdog. “These are not the complaints of a spoiled, petulant child. These are the echoed sentiments of every artist, writer and producer in my social circles who are afraid to speak up publicly because we admire and respect Apple so much. We simply do not respect this particular call.” Very rarely does someone this popular and widely admired speak out for the underdog. Rarely does one put another person’s agenda over their own for the larger good. Where are the pharma leaders who have this popularity and credibility? Where do they stand on the UCPMP issue? Why do they not speak out in one voice to an industry that is so starved of leadership and direction?

How much do you think Taylor Swift’s popularity has grown since yesterday? And how much do you think Apple’s has by responding in the way it did? I would wager that Apple will gain a lot more from this for showing the flexibility, urgency and for respecting the sentiments of its consumers whose collective expression Taylor Swift seemed to represent. Why can the industry not engage with doctor associations to show them how much they can gain by regaining lost reputation?

Taylor Swift won praise for taking a stand. Apple won praise for showing that it cares. When will doctors and pharma do either or both?

NB: Correction: She (Taylor Swift) wasn’t the only one  (courtesy @rushwrites)

I Find…

I find myself thinking.

I find myself wondering about the world

I find the world doing better economically

I find that a wealthier world is an unhealthier world

I find the global disease burden increasing

I find governments trying to control health care costs

I find governments unwilling to renounce patents and embrace free markets

I find the industry insisting that patents fuel innovation

I find the industry R&D pipelines are still relatively dry

I find the US-FDA approving many new medicines that are more or less like the old

I find the prices of those medicines increasing

I find the industry still complaining of pricing pressure

I find the industry cajoling governments to negotiate unfair trade deals

I find that those trade deals can further drive up medicine prices

I find the same governments who speak of alleviating poverty around the world, negotiating those deals

I find the industry worried about future growth

I find industry leaders looking for growth in the same place

I find companies acquiring and merging for quick but largely unsustainable wins

I find companies struggling to grow but resistant to change

I find the industry focused more on Wall Street than on patients

I find health systems encouraging disease than prevention

I find patients and caregivers increasingly dissatisfied with medical care

I find patients and caregivers more willing to empower themselves with information

I find the industry doing too little too late to empower them

I find the industry wide open for non-traditional competition to pave the rules of the future

I find a large majority unwilling to live healthy and reduce dependence on those faulty health systems

I find them asking what the alternative is

I find them largely unable to think or decide

I find myself wondering about the world

I find myself thinking.

Vision = Strategy?


A recent Facebook post by a friend that praised her CEO’s ‘vision’ caught my attention. Curious on why a CEO would discuss his vision for the company in a media interview, I decided to read on. Turns out, what the CEO described was not his vision. It was not even the company’s strategy. It was, at best, the company’s medium-term tactical plan for India. Being a hands-on CEO, he was probably briefed about it earlier in the day by the executive team.

My friend does not lack experience. She is a senior member of the marketing team with a proven track record. Why then does she (and many others like her) get confused between vision and tactics? Are the two concepts that close to warrant confusion?

Vision  – the raison d’etre

In the context of a company, its vision – decided by the CEO and agreed upon by the Board – is an ultimate stretch goal. It is not a milestone but the raison d’etre of the company – its reason to exist. And because the vision is the most important reason or purpose for the company’s (and its employees) existence, it often seems ethereal and far-reaching. That’s the way it has to be; the elusive end of the rainbow where the pot of gold lies. Only that can keep the vision stable and unchanging.

Consider the vision statements of some of the world’s most successful companies. I have edited it to glean out its essence, but feel free to look up the full statement on the company’s website.

“ be one of the world’s leading producers and providers of entertainment and information…” – Walt Disney Company

…to continually improve all aspects of the world in which we operate – environmental, social, economic – creating a better tomorrow than today.” – PepsiCo

“…to organize the world’s information and make it universally accessible and useful” – Google Inc. This statement merges both the vision and mission of Google’s founders.

 “Our vision is to be earth’s most customer centric company; to build a place where people can come to find and discover anything they might want to buy online.” – Amazon

And the best for last….

“Better.” – Apple

As you see, the vision statement is the North Star for a company. It is meant to guide and provide direction to those at its helm. It energizes constantly by describing the company’s purpose and outlining the values that drive it. The vision of the company is linked to but very different from its strategy.

Strategy – what achieves advantage

Strategy is about being different. It is choosing to differentiate a company from competition and create an advantage for its products and services so that the customer sees more value in choosing and paying for them. It is in short, a plan to beat the competition.

Let’s use the example of Walt Disney Company to see how their vision statements translated to strategy:

To realize its vision “ be one of the world’s leading producers and providers of entertainment and information…” the company’s strategy is to create and distribute entertainment through its own media networks (Disney Channel & Movies), parks (Disneyland) and studios. To further increase business they also have consumer products (clothes, gifts, souvenirs) and interactive media (DVDs, games etc).

It doesn’t end at just creating successful franchises like Mickey Mouse, Toy Story, Cars and its latest blockbuster Frozen. (Did you know that Frozen is a bigger sensation than Harry Potter and Star Wars?). It encompasses an ecosystem (content created and distributed across channels) that successfully differentiates it from Universal Studios, SeaWorld, and other merchandising companies. In the words of Chief Financial Officer, Jay Rasulo: “… unlike other media companies, we really do have a very clear strategy of an ecosystem in which we both own the franchises and own the means of distribution to get those franchises out across almost all consumer touch points.”

Clearly, setting up this ecosystem was very important for Disney to roll out its tactical plan – which is the next step.  As with the vision, its strategy is linked to but very different from its tactical plan.

Strategy, not Tactics

Often, I hear colleagues talk about “strategies”.  I assume they mean ‘tactics’ – or the set of specific actions that are taken to implement the strategy. It is the part of the plan that explains how you are going to do it.

A successful vision, strategy and the tactical plan link into each other. For Disney to be a world-leading producer of entertainment and information, its strategy is to not just create world-class content franchises, but to also own its distribution. This leads to its tactical plan of creating the different channels of distribution (media/movies/studios, amusement parks, retail & merchandise and interactive media). The company allocates resources to these tactical arms and monitors appropriate business metrics for each channel.

I am sure you can easily superimpose this example on the pharmaceutical industry.

So in the interview that my friend read, the CEO of her company spoke of India presenting growth opportunities for his company, because of an ‘under-performing health care sector’. My friend probably mistook the suit-speak to depict something very ethereal, hence his vision. What the CEO might have meant instead, was how his company could use the opportunity to build newer products and convince more people to buy them through effective pricing. Was that his vision?

Has India really forgotten about “Health for All”?

A little bit of reading leads me to understand that the government decided not to offer a central scheme for drugs and diagnostics, as it had promised earlier, but to incentivize state governments to initiate and run these schemes within their ambit. It is relevant to mention here that the Constitution of India decrees health care as a state subject. The Centre also announced a token incentive of 5% of its allocated budget under the National Health Mission, if checks and balances such as quality assurance, prescription audits etc. are initiated. If the number appears paltry, remember it is but an incentive.

On the face of it, this seems relatively sensible going by the successes touted in states such as Tamil Nadu and Rajasthan and to a certain extent in undivided Andhra Pradesh and Karnataka. However another news item also caught my attention about the Rajasthan govt’s plan to “downsize” its successful free medicine scheme. Aha! So are the state govt run health programs not really as great as they’re touted to be?

It appears that the Rajasthan govt identified that nearly one in five people who avail the benefit of the free-medicine scheme do not belong to the state. These free-riders add significant weight on the state’s already overburdened public health infrastructure. In this context, Chief Minister Raje’s comments also explain that the state seeks to slow down and make the scheme more efficient. Is this really such a bad thing?

Both these developments bring to the fore two important challenges plaguing health care in India. One, the public health system is in shambles and just cannot be relied upon to provide health care of equitable quality across the citizenry. Two, given the pathetic state of the public health care system, governments (state or central) pursuing free health care for its citizens is a mere pipe-dream.

So what is a practical alternative? Common sense tells us that any measure which seeks to bridge the gap between the yawning demand for affordable health care and its lackadaisical supply is a practical alternative. It is clear that the government cannot meet this gap. The only other alternative is the market, which the govt does not allow to function properly through misdirected and disproportionate regulations.

Activists and other “pro-poor” observers accuse the govt of ‘withdrawing from the public health space’ and call this “anti-poor”. What then is the current public health system with its pathetic infrastructure, long queues of patients, lack of medicines, absent doctors and horror stories of patients dying unattended in corridors and on the pavements outside the hospitals , if not anti-poor?

Today, the poor victims of these horror stories have nowhere else to go as the private sector keeps prices very high. This can be easily solved by relaxing entry norms into the sector to allow a glut of service providers. The resultant competition will lower prices much more effectively than any govt mandate.

Chief Minister Raje seems to have understood this well and may work to shift the burden to the private sector while assuring health care through govt sponsored insurance cover. Even this, at best, can be a temporary measure. Simply assuring health care does not absolve the govt of its duty. Ensuring an open market that brings in lots of players and a fair system that players cannot game must still be its prime responsibility. Generally, a hyper-competitive market that is reasonably fair, drives prices down and greatly benefits the consumers. How can something like this be anti-poor?

A good thing for the government to do would be to stop all its unproductive subsidies in the sector, including free medicines that might require a whopping $5+ billion. A temporary re-routing of this money directly to citizens through cash transfers could definitely be more effective. The JAM trinity – Jan Dhan Yojana, Aadhar and Mobile – creates such an ecosystem effectively.

With money in hand through direct benefit transfers and a plethora of affordable service providers, the common man is free to choose health care solutions that best suits his need. Pro-poor crusaders must actually push for these subsidies to halt after a certain period as this can lull the population into the ‘entitlement siesta’. Instead they seem to want exactly the opposite! A truly pro-poor stand would be to push the govt to create millions of jobs, increase household incomes and then provide households the freedom to decide the best health care solution for themselves.

Instead of throwing good money after bad, a radically different approach may be required to solve India’s health care challenges. A senior health official in Rajasthan said it best when he said, “increasing the budget doesn’t guarantee its error free implementation.” So-called ‘pro-poor’ activists accused the govt of withdrawing from the public health sector to create opportunities for the private sector and called out the stand to be the govt’s idea of promoting the private sector. For the sake of the health and welfare of the poor, it is fervently hoped that they are right.

Patient Centricity and Pharma

“Patient centricity is something you see in CEO messages but rarely in action”. I thought I had stuck my head into a beehive at a recent event, but surprisingly, I was stung not by bees but by the fact that the audience agreed with my statement. A thought that was intended to provoke thinking and challenge, was accepted as a matter-of-fact by the assembled group of industry executives and students of the college. Is pharma really not patient-centric or do we confuse patient centricity with something else?

Patient centricity is empowering the patient to choose as (s)he desires

Patient centricity is not about how you can take your brand to the patient. It’s neither about engaging the patient, nor about compliance. Generally these are the three angles on which pharma thinks. Hence we see a slew of patient awareness leaflets, patient engagement/assistance programs and compliance enhancers and tips from pharma companies. I’m not saying that these tactics are unimportant. I’m just saying it’s not patient centric.

Patient centricity is often easily confused with engagement and compliance. Engagement is defined as “actions individuals must take to obtain the greatest benefit from the health care services available to them.” Compliance is following the orders of your doctor diligently. This makes engagement and compliance patient oriented but not patient centric.

Patient centricity is slightly different and has been defined as ’a dynamic process through which the patient regulates the flow of information to and from him/her via multiple pathways to exercise choices consistent with his/her preferences, values, and beliefs. This fundamentally transformative concept affects how health care decisions are made and who has the authority to make them.’

To me, patient centricity is as fascinating a concept as it is contradictory. It is fascinating because it puts power into the hands of the patient. And it is contradictory because pharma does not like giving away power over its messages or processes. Pharma has traditionally never enjoyed interaction and has depended on ‘pushing’ messages across rather than having ‘conversations’. It probably also explains why we make do with medical reps who are not the sharpest knives in the drawer and scarcely invest in sharpening them.

Asymmetry of information is a barrier to becoming patient centric

Healthcare is an industry characterized by an asymmetry of information, which means that the seller knows a lot more about the product than the buyer. While this is often used as a statement to instill a sense of pride in sales reps (“no one knows as much about your product as you do”), it can also mean that the consumer does not have enough information to make an informed decision. And when he doesn’t, he decides on the only thing that he can use to compare, which is the price of one product versus another.

This can dramatically change in the information age when the internet allows access to information to almost anyone. Availability of information suddenly allows patients (consumers) to participate in decisions about their health. Can you imagine how valuable this can be in a self-pay market? If price sensitivity of consumers is pharma’s greatest challenge, why can’t pharma think seriously about patient centricity which can create transparency and trust in a consumer about a company and its products and services? Won’t services that create such trust in consumers empower them more? Won’t such empowerment make them advocates of pharma’s products?

The issue is that pharma rarely thinks beyond the doctor. We route every single piece of information through the doctor. At the conference as I spoke about how the ubiquitous internet allows us to make information available directly to consumers, I realized that the word DTC is taboo. It is so because pharma only thinks of pushing brand messages to everyone it addresses. This, while study after study shows that consumers trust branded messages lesser than credible third-party alternatives. It would be funny if it wasn’t ironical that pharma seems blissfully unaware that it ranks somewhere between Big Arms (weapons manufacturers) and Big Tobacco (cigarette manufacturers) on trust and credibility! Despite this, we continue to talk about creating trust and transparency for our stakeholders.

Opportunities for services to build trust and loyalty

How about putting our money where our mouth is for a change? How about telling consumers exactly what they want to know. How about listening and conversing with them and not merely pushing our products? How about building long-lasting relationships through services that they value rather than through branded messages which they don’t? In the connected world where every person and thing is connected to the Net, consumers tell us so much about themselves every single day. What they’re doing and eating. Where they’re visiting? When and how well they’re sleeping. What issues they have with raising children. What stress they go through. Etc. Etc. How about active social listening? That would not break any privacy data laws. Over years and through assiduous collation of such data from the public domain, trends begin to emerge. That is when health becomes predictable.

If health could become predictable through Big Data tools and analytics and we have a consumer group that considers participating in health care as very important, isn’t it a perfect match? Pharma would probably not consider it important since it wouldn’t relate to immediate product sales. But isn’t a sustained relationship with a trusting and loyal consumer group what every company in the world seeks? Why then do we concern ourselves with only selling our products? Why are relationships with consumers unimportant to us? I speak about patients who are the end consumers of our products. Sending discount coupons or the occasional disease awareness leaflet to an aware and empowered consumer is more an insult to their intelligence than a service.

Building sustainable relationships with them is definitely possible. But not when we only view them as buyers of our products. It can only happen when we consider our product sales as a by-product of our relationship and not its objective. Our objective must be to serve as a ‘go-to destination’ for their health needs. Until then, we will only see patient-centricity as an ethereal, futuristic and impractical inclusion in CEO speeches, but rarely in action.

The Right to Health or the Right to stay Unhealthy?

After the Right to Work, the Right to Food and the Right to Education were introduced by the earlier govt, they were duly criticized by a section of the polity as encouraging govt spending at a time of a burgeoning fiscal deficit. The new government – which consists of many of those critics – now thinks that the time has come for a Right to Health. The argument is that given the poor state of public healthcare infrastructure in this country, what are the poor and the disenfranchised to do?

 Some people argue that the government should deliver healthcare directly to the poor. Others favor cash transfers. Just to be sure this piece assumes that the role of the government is primarily limited to financing healthcare which is not envisaged in the govt’s policy document. It is difficult to say which approach seems the most favorable in an area with this magnitude of social impact.

Published literature suggests that contrary to popular sentiment, conditional cash transfers are necessary but not sufficient for improving health. Instead, good government-funded health care is essential, as are schemes which address social determinants of health.

India’s move to adopt cash transfer through schemes such as the Janini Swasthya Yojana (JSY) attracted polarised debate despite the scheme reportedly having shown success by reducing infant and maternal mortality rates.

A study published in The Lancet, found that the opposition is on two counts. First is that cash transfer requires precise identification of the needy. As with anything that has cash and govt together in it, the percent of women receiving payments ranged from as low as 7% to as high as 42%. This may leave a substantial number of poor out of the benefits.

Second, the inability of some Indian states to fully participate in JSY may be due to disparities in public health infrastructure between regions in India. Where will people invest the cash they receive if there are no facilities? The fungibility of money and low health awareness in the masses adds to the complexity.

Although in 2005 India implemented the National Rural Health Mission (NRHM) with the goal of increasing public spending on health from under 1% to 3% of GDP, Indian healthcare is still largely private.  An increase in public spending to finance healthcare is – to quote Arun Shourie – more said than done.

Therefore, should govt even attempt to throw more good money after bad? Is tax payer money best spent improving the supply of public healthcare itself? Is that even something we can expect? Or are markets better placed to provide health care and services?

If the Prime Minister is held to his pre-electoral promise of ‘minimum govt, maximum governance’, it would mean that the govt takes radical steps to deregulate medical education, produce medicines and insure people. This can only happen through large-scale privatization of the industry as the govt changes track from providing healthcare to only governing its provision.

It must also mean eliminating all subsidies to the sick or unhealthy as subsidies act as incentives to its beneficiaries and therefore creates more of whatever is being subsidized. If subsidies to the sick promote carelessness, indigence, and dependency, can its elimination strengthen the will to live healthy lives and to work for a living?

As a recent paper on the economics of healthcare states, if people are determined to live unhealthy lives, then there is no system that can fix the underlying problem. At the end of the day, health is largely a matter of personal responsibility.

The health sector is characterized by information asymmetry where doctors know more than patients, and the industry knows more than regulator. Asymmetry creates an imbalance of power and therefore compromises on honesty and morality. If the market decides not to be honest, no govt intervention can prevent, or even deter it. Focusing the State’s energy, power and resources to plug this loop can probably be the most impactful intervention to improve India’s pathetic health sector.

Subsidies to the poor through another Rights bill could only incentivize unhealthy behavior in a section of society that doesn’t need it and hardly impact the section that desperately needs it. The Rights to Work, Food and Education have shown it to be true in the past but in true Indian style, no lesson seems to have been learned.


Get every new post delivered to your Inbox.

Join 2,157 other followers