Decentralization and Health Care in India. Jeff Hammer December 13, PDF Free Download

Decentralization and Health Care in India Jeff Hammer December 13, 2006

Why I am not interested in my topic Politics probably leaves us with only this little bit of overlap and Monica gets to talk about this Important health policy issues Important decentralization issues In money terms

The problem in pictures State PRI s Clients Service Providers Status quo: voice at local level, accountability of providers to state; ineffective compact at local level as well as very weak client power (complaints from both sources are easily ignored).

So, if we are going to deal with health policy in India, we have to think out of the box

Boxes: Mindsets of what is and isn t possible Status quo rules Economics plus decentralization but with a lot of political constraints Economic principles Economics with a little administrative savvy Hey, let s go crazy and imagine a real out of the box decentralization

We re going to skip to the last two Well, with a little background first

Box-free recommendations Massively increase data collection, analysis and dissemination On health status On health-related services On citizen satisfaction In geographic areas small enough* for accountability Somehow (depending on what box we re in) direct additional money to fighting infectious disease primarily via genuine public goods* Actively support innovations like PPP, insurance or decentralization then evaluate to find out what works.

The Big Three National Rural Health Mission Consolidating CSS s and involving PRI s (particularly GP s) is a good idea. How this gets done via a CSS is unclear National Mission On Sanitation In spirit, great. Changing Peoples hygienic behavior should be a high priority Actual plan- supply driven construction of latrines is: The worst thing you could possibly do Reform Central Government Health Scheme There s something going on here that I don t understand

Box #1: The mindset we re in Status quo rules

Mindset (at least on record) Basic Care is universally given by the state The system is Pyramidal Most People use public facilities The private sector is just quackery and crookery Sub center for every 5,000 people PHC for every 30,000 people etc. etc. Integrated referral chain

Reality* (completely out of the box) 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Remember how small this is. Private sector Public Hospital Public PHC Preventive/ Promotive Public Health Population based Public Health Can we change how this is paid for or not?

* Data on the previous slide is made up from at least four different, dated, not-necessarily comparable sources Priority (box free) #1 Look at the real world What is almost certainly true: The sector is private, The public budget is 80% wages (and increases in budgets have gone to wages) Almost nothing has gone to disease surveillance and control

Mindset (at least on record) Poor people rely on the public system & the benefits of public care mostly accrue to them

Poor people rely on the public sector? Primary Health Care 100 80 60 40 20 0 Share of the private sector in number of visits for primary care services - rural areas Karnataka Kerala Rajasthan West Bengal All India poorest 2 3 4 richest Doesn t seem to matter how poor you are. But national average masks some interesting state variations. Hospitals Share of the private sector in hospital in-patient days - rural areas 70 60 50 40 30 20 10 0 Karnataka Kerala Rajasthan West Bengal All India poorest 2 3 4 richest Source: Calculations based on Mahal et al (2001) referred to in MTA Para 2.2.68

The best way to think outside the box is to LOOK outside the box... And that means regular measurement of the real world

Box #2: Economics (how people behave) Economic behavior

Main principles from public finance (for all sectors, which is why it is a bigger box) Fix market failures Characteristic market failures include Efficiency Some are scale-related and some definitely are not Public goods (pest control, sanitation, health education, surveillance, data collection & research) Externalities (infectious disease control) Information advantage of doctors Insurance The important thing for government is not to do things which individuals are doing already, and to do them a little better or a little worse; but to do those things which at present are not done at all J.M.Keynes 1926

Main principles from public finance : 2 Equity Improve distribution of income Equity of Health expenditure (we ll get to that) Health status Mortality by wealth, selected states Maharashtra Andhra Pradesh Karnataka Tamil Nadu.25 Under 2 Child Mortality - Kernel Smoothing.2.15.1.05 0-3 -2-1 0 1 2 3 4 5 6 7 Wealth Score

Mortality by wealth, selected states.25 Maharashtra Andhra Pradesh Karnataka Tamil Nadu Under 2 Child Mortality - Kernel Smoothing.2.15.1.05 0-3 -2-1 0 1 2 3 4 5 6 7 Wealth Score

Mortality by wealth, even more states.25 Uttar Pradesh Bihar Orissa Bengal Under 2 Child Mortality - Kernel Smoothing.2.15.1.05 0-3 -2-1 0 1 2 3 4 5 6 7 Wealth Score

Mortality by wealth, other states.25 Haryana Punjab Delhi Kerala Under 2 Child Mortality - Kernel Smoothing.2.15.1.05 0-3 -2-1 0 1 2 3 4 5 6 7 Wealth Score

And still more states.25 Himachal Pradesh Rajasthan Madhya Pradesh Under 2 Child Mortality - Kernel Smoothing.2.15.1.05 0-3 -2-1 0 1 2 3 4 5 6 7 Wealth Score

Box #3: Economics plus some administrative and political savvy (or, with government behavior, too) Economics with a little administrative and political savvy

Market and government failures A framework of relationships of accountability Policymakers Poor people Providers

Government failure: Accountability is the key Are policy-makers accountable to the public and really committed to improved health and financial protection? Politics may have led to a downward spiral (having hit bottom?) of political support and usage Are providers accountable to policy makers (and, through them, to people) for providing good service?

Main principles from public finance (including public accountability) Market failures Efficiency & Equity Government failure This is quantitative (even if it s a judgment call): Size of the market failures vs. Ability to fix them It is not sufficient to contrast the imperfect adjustments of unfettered private enterprise with the best adjustment that economists in their studies can imagine. For we cannot expect that any public authority will attain, or will even whole heartedly seek that ideal. Such authorities are liable alike to ignorance, to sectional pressure and to personal corruption by private interest. A.C. Pigou, 1920

Applying these criteria to health policy

Broad categories of health policy: Traditional public health Large scale, population based, surveillance/ measurement of outcomes Person-to-person preventive/promotive Primary health care mostly facility based, patient initiated Hospitals How do they compare on our criteria so far?

Complementarity/ conflict among efficiency; equity and implementability (accountability and a little scale) Traditional public health - strong complementarity Large scale, population based Person-to-person preventive/promotive Primary health care - modest efficiency effects (varies), potentially high equity effects, difficult management Hospitals high efficiency, high potential but low actual equity effects, easier management(?)

Efficiency of traditional public health Theory High externality activities Pure public goods ( i.e. there can t be a private sector even in principle because you can t get beneficiaries to pay - not just that you don t want them) Practice Large effects on health outcomes ( which we figure people would want to improve if they could)

What reduces infant/child mortality? Safe water/ sanitation Educated parents (probably mothers) Income (nutrition? better purchased care?) Immunization (highly correlated with income and education) Elsewhere: vector (pest) control probably here too but matching programs to outcomes is hard due to data

Well, I m not 100% sure... While there is a lot of international, cross national and Indian corroboration, the India-specific analyses are not entirely reliable due to data deficiencies Information is the ultimate public good. Measuring inputs and outputs regularly, in small geographic areas and publicizing the results is the least you can do

Traditional public health helps the poor 9 8 7 6 5 4 3 2 1 0 Poorest II III IV V VI VII Wealth in deciles VIII IX Richest Prevalence TB (x10) Malaria Blindness Disproportionate impact of infectious disease on poor Any reallocation from infectious to chronic disease hurts the poor (comparative advantage)

Traditional public health is relatively easy to implement Not a lot known about this Many activities are one-shot or campaign style India can handle famine but not hunger Pulse polio campaigns work- though perhaps at the expense of other immunizations Argument is weaker for continuously supplied services One glaring exception, particularly relevant to an MTA Big Three recommendation: the National Sanitation Mission

Latrines versus behavior change National Sanitation Campaign and building latrines déjà vu all over again Experience very strong and very negative

Traditional Program : Central Rural Sanitation Program (CRSP), 1986 Approach Top down allocation Significant financial commitment (250 Cr) Emphasis on hardware construction / Technology prescription Subsidies to toilet construction seen as drivers to change Outcome disappointing Coverage remained low less than 20% Large scale open defecation continued Toilets converted to alternate uses In Maharashtra, of the 1.7 million toilets constructed between 1997-2000 less than 50% were being used for the intended purpose; (many converted into storage space and pooja rooms) Subsidies for hardware did NOT lead to changed behavior

Latrine ownership usage 35 30 25 20 15 10 5 0 Ahmednagar Nanded Nandurbar Plus: analysis reveals that family usage of toilets explained health status of children, ownership of toilets did not. Percentage of people who defecate in open despite owning toilets in Maharashtra (2004)

Behavior matters, hardware doesn t Kerala, Goa construction (coverage very high) did not protect water sources no health effects. Use was for convenience/ privacy and health benefits not understood Himachal Pradesh: High usage of (traditional, safe) latrines plus washing hands does yield health benefits.

Traditional Public Health scores high on all three criteria Efficiency effects clear: address market failures with large welfare effects Equity effects clear: any reallocation from infectious to non-communicable diseases hurts the poor Implementation: generally not so hard (speculation)

Complementarity/ conflict among efficiency; equity and implementability Traditional public health - strong complementarity Large scale, population based Person-to-person preventive/promotive Primary health care - modest efficiency effects (varies), potentially high equity effects, difficult management Hospitals high efficiency, high potential but low actual equity effects, easier management(?)

Primary health care: efficiency At first glance kind of doubtful Large private sector Market failure hard to pin down in rich countries and usually leads to too much care Impact (additional to what people are doing for themselves) is hard to detect

What doesn t appear in Indian data to reduce infant and child mortality? The presence of health facilities in villages RCH survey (regression analysis): nothing NFHS I (regression): kuch nahin NFHS II (regression): kitchu na NFHS II (propensity score matching): onnum ille All controlling, of course, for income, education, etc..

Of course, I m still not completely sure Same lack of data makes this conclusion unproved Still, if it never shows up as significant

Equity of Primary Health Care: Subsidies do OK (1995-6*) * Note the date 35 30 25 20 15 10 Hospitals Primary Health Centers 5 0 Poorest II III IV Richest Source: calculations based on Mahal et. al. 2001

Implementing primary health care is difficult PHC usage is more progressive than hospital care: but what do poor people find when they get there?

PHC s: What do people find when they get there? % of staff positions vacant Vacancies 35 30 25 20 15 10 5 0 Doctors Nurses Punjab Haryana Gujarat M aharashtra Tamil Nadu Karnataka Andhra Pradesh West Bengal Chhatis garh Madhya Pradesh Rajasthan Assam Pradesh Uttaranchal Orissa Jharkhand Bihar

PHC s: What do people find when they get there? Absenteeism among health workers Vacancies Absent workers 45 40 35 30 25 20 15 10 5 0 Uganda Bangladesh India Indonesia Peru Source: Chaudhury, Hammer, Kremer, Muralidharan and Rogers (2004)

PHC s: What do people find when they get there? Absenteeism amongst doctors by state & reasons for absence 80 70 60 50 Official Duty 40 Leave No reason 30 20 10 0 Bihar Jharkhand Orissa Uttaranchal Uttar Pradesh Assam Rajasthan Madhya Pradesh Chhatisgarh West Bengal Andhra Pradesh Karnataka Tamil Nadu Maharashtra Gujarat Haryana Punjab 70 Absenteeism amongst staff by state & reasons for absence 60 50 40 30 Official Duty Leave No reason 20 10 0 Bihar Jharkhand Orissa Uttaranchal Uttar Pradesh Assam Rajasthan Madhya Pradesh Chhatisgarh West Bengal Andhra Pradesh Karnataka Tamil Nadu Maharashtra Gujarat Haryana Punjab

Absence rates from public health care centers: Bangladesh 2002 All workers Thana health centers 34% Upgraded FWC s 37% Doctors Thana health centers 40% Upgraded FWC s 74%

PHC s: What do people find when they get there? Vacancies Absenteeism Low capability Just Delhi!

The quality of care in Delhi is very low- in public and private sectors Distribution of Competence by Qualification Public--All M BBS Private--MBBS Density 0.1.2.3.4.5 Density 0.1.2.3.4.5-2 -1 0 1 2 Competence -2-1 0 1 2 Competence Histogram Kernel Density Histogram Kernel Density Private--Non-M BBS All Providers Density 0.1.2.3.4.5-2 -1 0 1 2 Competence Density/Percent 0.1.2.3.4.5-2 -1 0 1 2 Competence P ublic P roviders P rivate--mb B S Histogram Kernel Density Private--Non-MBBS

What does low quality mean? Probabilities of Non-Harmful Treatment by Illness Prob. of Postive Score 0.1.2.3.4.5.6.7.8.9 1 50/50 chance of harming patient Average Competence -2-1 0 1 2 Latent Variable (ML Estimate) Diarrhea Tuberculosis Pre-Eclampsia World Bank-ISERDD Study Viral Pharyngitis Depression

PHC s: What do people find when they get there? Vacancies Absenteeism Low capability Very little effort Standardized Effort -2-1 0 1 2 Effort and Competence CGHS facilities are in here CGHS facilities are in here -2-1 0 1 2 Competence:IRT Score Private, No MBBS Public (Non-Hosp) Private, MBBS Public Sector (Hosp. Only

What does very little effort mean? 7 6 5 4 3 2 low effort medium high 1 0 time questions exams Less than 2 minutes Just one question

PHC s: What do people find when they get there? Vacancies: over 20% nationwide for doctors Absenteeism: over 45% for all health workers Low ability: less than half of public doctors in primary clinics do no harm Low effort: Average (less than) two minutes, one question, zero examinations Donation requests: more illegal money goes to public health workers than police (Transparency International)

But don t feel bad: this happens everywhere health is rationed. Other/ DK 17% Health 27% Education 12% Ration Shops 4% Health 27% Education 6% Customs 11% Police & Judiciary 15% Ministries/ Offices 16% Legal 23% Power 20% Perceptions of most corrupt Nine Eastern Europe Countries Value of Donations - India

A word on quackery and crookery The problem isn t public versus private The problem is rich versus poor

Quackery and crookery for the poor in Delhi - no matter where they go Competence and Effort Locality-Income and Institution Rich Middle Poor Private PHC's Hospitals Private PHC's Hospitals Private PHC's Hospitals Effort of public doctor in a poor neighborhood PHC -2-1.5-1 -.5 0.5 Clinical Competence Effort-in-Practice

Incentive problems You are paid by salary You are not monitored by supervisors You will not be fired or have pay reduced under virtually any circumstances You are of much higher social status and have much greater political power than your clients complaints don t touch you You have lucrative alternative work in the private sector What would you do?

Incentive problems are not specific to India No rich country in the world pays their primary health care providers as per the previous slide. UK: capitation plus fees for specific services Almost everywhere else: Government pays (or ensures payment) for insurance, almost all providers are private Money follows the patient is a key principle The one exception (very informative): Sweden local government and currently reforming.

Hospital care - fixing market failures Insurance markets always fail Avoiding catastrophic financial loss a problem for everyone Great fear of falling into debt and inescapable poverty from the poor and nearly poor (Problems curable at PHC level won t do this) Scale effects: risk pooling for insurance, standard decreasing costs

Value of insurance as a % of expected cost - 1998 60 50 40 30 20 Outpatient Inpatient 10 0 Poorest 2 3 4 Richest

As is, hospitals don t help poor people much 35 30 25 20 15 10 5 0 Subsidies Poorest II III IV Richest Hospitals Primary Health Centers

But running a hospital is easier than running a network of PHC s Major incentive problem the same but A much less dispersed network to manage Staff satisfaction higher (and performance easier to ensure) in hospitals than in smaller facilities (AP study)

Recommendations from box 2: naïve economics A lot more infectious disease control (and find out if it s working) No direct provider on salary. Patients should not have to chase providers. Money should come from below: patients or Grama Panchayats. You d make hospitals more accessible by everyone, including poor people, via insurance (money following the patient)

And if you include a little administrative savvy (Box 3)? Well, some of the recommendations above won t work Money following the patient in the form of insurance could be massively abused Administrative constraints bind even if political ones are loosened

So: You d do a lot more infectious disease control (and find out if it s working) You d have no direct provider (organization) on salary except maybe You d make hospitals more accessible by poorer people roads? subsidized transport? incentives for appropriate referral? Or think outside another box:

Box #4: Decentralization with self-censoring Economics plus decentralization with a lot of political constraints

Decentralization with Political Constraints (not very interesting) So, we re left with this little bit of overlap Important health policy issues Important decentralization issues In money terms Medical care providers won t give up their salary and they will never work for a sarpanch

Decentralization and accountability: ASHA s, ANM s, Anganwadi workers Decentralization National policymakers Local policymakers Poor people Providers

Boxes: Mindsets of what is and isn t possible Hey, let s go crazy and imagine a real out of the box decentralization

Way outside the box: real decentralization Primary health care should be made directly accountable to local elected bodies and PRI s with appropriate devolution of administrative and financial powers How might decentralization work? What are the risks? Avoidable Unavoidable (but can be mitigated) Unavoidable (and can t)

What are the risks of decentralization? Unavoidable risks: elite capture: mitigated by better measurement, monitoring, grievance redressal technical specialization and inappropriate scale: handled by higher level of government or with cooperation between GP s

Personal Preventive Health Services State Local Block grant with varying degrees of technical support (maybe political support as well) and monitoring for local public goods and protection from capture Citizens Preventive /Promotive Service Providers

Contracting up for medical care State/ district / private sector Local Citizens Providers Local governments cooperate to hire from private sector or higher tier of government to handle economies of scale (but NOT spillover effects that needs direct support)

What are the risks of decentralization? Avoidable (but likely) risks compromises on intermediate decentralization to Zilla parishads and no farther may be worse than none at all

Partial decentralization may not work State Bad District, (Block)? Local Worse Better Citizens Providers Best?

Public Insurance money follows patient, high level government spreads risk State, National Government Citizens Providers

Recommendations Massively increase data collection, analysis and dissemination On health status On health-related services On citizen satisfaction In geographic areas small enough* for accountability Somehow (depending on what box we re in) direct additional money to fighting infectious disease primarily via genuine public goods* Actively support innovations like decentralization then evaluate to find out what works. Tackle incentive issues head on

MTA: good, bad and out of the box Good: diagnosis of current problems Bad: little connection between analysis and recommendations which are still way within the box (rules are followed and incentives to providers, to patients, to politicians - don t matter) Out of the box Focus efforts on high efficiency, high equity, easily implementable traditional public health (top down) activities Have health care money move from the bottom up, not the top down Find out if what you re doing works and publicize it

Decentralization and Health Care in India. Jeff Hammer December 13, 2006