Economics of health of economies

The Covid-19 pandemic crisis is a reminder of the importance of investing in the healthcare sector for any country. There is a strong relationship between health and economy. Healthcare performance of any country is directly dependent on its economy. This link between the two must be understood. On the face of it even the strong economies of the developed world appear to be faltering while dealing with an aggressive coronavirus. It is desirable that there is sufficiently large investment in health sector and it must be seen as an essential priority for any society even in normal times. By investing in health, a country not only keeps its population healthy but also makes people more productive to contribute towards the economy. It also helps in creating the health infrastructure gradually and thus prepare to deal with an unexpected health crisis such as Covid-19.

Is India vulnerable?

India ranks 156th globally when it comes to investment in health sector. Obviously that makes it one among the lowest rates in the world (see graphics). This has not happened in last few years but rather over the decades since independence. If one looks at history, successive governments prioritised industrial growth and agriculture, which are important, but healthcare remained on the backburner. And that set the course for the history of neglect and its outcomes we see today. The government’s total outlay on health is little more than one per cent of Gross Domestic Product which is far below the global average. It is well said that epidemics are a product of ignorance as well as disease. Adding fuel to the fire is a broken public education system. And the tendency to look away is allied to ignorance, that is, from the state of Indian healthcare, from the apathy of government after government, from the sicknesses already ravaging the population—even among those who should know better. Nothing brings this out better than our existing epidemic of tuberculosis. Vidya Krishnan, senior journalist covering the health sector says, ”India is the epicentre of the global tuberculosis crisis. As far as infectious diseases go, tuberculosis is the world’s biggest killer. In India, it claims nearly 1,400 lives every day. For the large majority of cases, tuberculosis has a cure—a course of medication delivered under close observation over several months. But the country’s healthcare system consistently fails to diagnose and fully treat tuberculosis patients. The more stubborn, drug-resistant strains of the disease are the products of uncoordinated and interrupted treatment, and in India they exist on a shocking scale. For decades, the country has done nothing to fix the systemic problems behind these symptoms.

Through modern Indian history, the government’s outlook on public health has largely been limited to damage control—containing outbreaks of leprosy, for instance. As the example of tuberculosis makes clear, even at that the government has very often failed”. The failure to invest adequately on health sector effectively meant handing over the responsibility of healthcare to the private sector. The private sector now controls seventy four per cent of health care market and forty per cent of the country’s bed capacity. A regulation free private sector with a free hand to charge as much as they wish, it has become more of a profit making industry where profit takes precedence over patients. Overdiagnosing, overtreating and overcharging those with insurance have become an established norm. Now two third population of the country which is part of informal sector of economy, which is roughly eighty crore people of this country, are left at the mercy of underfunded government hospitals where doctors tend to underdiagnose and offer meagre treatment.

India’s preparedness to face a health crisis

WHO recommends one doctor per 1000 people. India has less than one doctor per 1000 people and has just 2.3 ICU beds per 100,000 people in normal times. In rural areas the situation is more grim with one doctor per 10,000 population. This figure does not include the ad hoc arrangements being made at the moment. Ventilators are awfully short in supply. Imagine just 40,000 active ventilators for a population of 1.3 billion people. If we compare the beds and physicians per 1000 people of various countries India falls woefully short. As of 2016, the Indian Medical Association was showing a shortage of tens of thousands of critical-care specialists. The dominant share of doctors and beds is in the private healthcare sector, which has enormous leeway to set its own prices and make its own rules—and to exploit both to put profits before patients. Domain experts points out that even if ventilators are procured now there are not enough trained staff to handle them. Training medical staff to use ventilators and ensuring there are enough skilled operators to run them 24×7 is a bigger challenge than procuring machines, they say. “It’s a more complex issue than simply buying a machine. You need to train nurses and ensure continuity of care. If you factor in shifts, one unit of ventilator needs at least four nurses and five units need four resident doctors for round-the-clock care. Most government hospitals work at half the strength at any given time. A sudden increase will lead to Gorakhpur-like situation, where scores of children die because they can’t get adequate care,” said Dr Chaudhry, head of the department of pulmonary & critical care medicine, Post Graduate Institute of Medical Sciences (PGIMS), Rohtak.

Health of economies

Predictions on the economic front are painting a grim picture with every country expected to be experiencing a negative growth in 2020-21 barring a few. Trillions of dollars are being injected to bail out the economy from a slump but the world is in deeper trouble. IMF has already reported that over a hundred countries have approached it for funds to deal with the economic crisis. One pandemic has brought the entire world to its knees. Healthcare performance is strongly dependent on the economy. As we are approaching the end of lockdown 2.0 with some economic activities being allowed, the fact remains that the already struggling economy of the country with growth tending downwards quarter after quarter, is facing a huge challenge of revival. The big gamble here is that GoI while prepared to deal with a little surge in the number of cases, if it manages to control the situation on health front then it can turn to look towards the economy. The question is can it script a comeback, however modest the gains may be. Given the fact that all big commercial cities of the country are struggling with COVID-19, the government will have to look towards boosting rural consumption and related infrastructure. The task is not easy. It’s a fact that the virus has been slowed down if we go by the official numbers and it is a measure of success; but from here on the delivery on the economic front will be the barometer of success.