Dr Barun Kanjilal of IIHMR gives an overview of the regulatory challenges associated with the rapid spread of health markets in India to the Health System Reform in Asia conference held in Hong Kong in early December 2011. He notes in particular the important role that informal providers have played in delivering health services in the wake of government reforms.

1. Regulatory challenges associated with the rapid spread
of health markets in India
Barun Kanjilal
Indian Institute of Health Management Research
December 10, 2011
Health System Reforms in Asia Conference, Hong Kong
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2. Background
 “Big bang” economic reform package in
1990s
 Macroeconomic reforms to address
microeconomic inefficiency and incentive
failure
 From an inward-looking, centrally-planned
economy towards one which is integrated
in global market place
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3. Transition in health market since
1990s
 Very rapid spread of private actors – mostly
unregulated
 Expansion of opportunities for modern medicines
and innovations in market linkage
 Government getting marginalized in both provision
and financing of curative care
 Relatively stagnant institutional and social
framework leading to distorted market relation and
complexities
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4. Expanding share of private sector in
institutional care: India
% of hospitalised cases seeking care from private
hospitals
61.8
58.3 56.9
56.2
40.3 39.7
Pre-reform Early-reform Late-reform Pre-reform Early-reform Late-reform
(1986-87) (1995-96) (2004) (1986-87) (1995-96) (2004)
Rural Urban
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5. Institutional care (cont’d)
 Increasing corporatization coupled with
medical arms race
 Facilitated by favorable government
policies
 Unimpressive role of Government as a
market player and a regulator
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6. Dominance of private providers in
outpatient care: India
Source: NSSO reports (42nd, 52nd, and 60th round) 6

7. Outpatient care (cont’d)
 Dominated by private providers (77%)
 Most of them are unrecognized village doctors
(RMP) operating in „underground‟ or „informal‟
market.
 A complex design of interface between formal and
informal providers
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8. ….and outstanding growth of pharma
market
Source: Report of the National Commission on Macroeconomics and Health. MoHFW, GOI, 2005

9. Pharma market (cont’d)
 Fast penetration of MNCs
 Increasing buy-outs of leading Indian
generic drug companies by MNCs.
 Technological innovations coupled with
high barriers to access medicines
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10. Changing responses in health market
• Government – Feeble response, caught unguarded
• Private formal – Phenomenal growth in inpatient care with
latest technology, using market failure to its advantage
• Private informal - Revival of informal providers aligned to a
neo-liberalized environment
• Voluntary – In the crossfire, yet to come up with a definite
social business model
• People - Facing a new set of vulnerabilities, insecurities,
and inequalities – responding with despair and anger.

11. Regulatory challenges
 Wide variation in provider‟s quality and prices
 Ambiguity in regulation role of the state
governments
 Failure of Self-regulating bodies and civil societies
 Sluggish change in institutional arrangements
 Need to go beyond traditional regulatory structure.
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12. Thank you!
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