Health Sector
Reforms

Outline:
• What is Health System?
• Health System Reform?
– Understanding the deeper meaning of health sector reform?
– Goals of HSR
• Historical Perspectives: Health Sector Reform
• Health System Reform in India:
Public Sector
Private Sector
• International Examples.
• Impact evaluation of Health Sector Reforms

What is Health System?
• A Complex issue.
• “All the activities whose primary purpose is to
promote, restore or maintain health.”
WHO 2000
• Every country has a health system;
• May be fragmented or however unsystematically it
operates.
• So Does India?

Health Systems: 3 Fundamental Objectives
• Improving the health of the population they serve;
• Responding to people’s expectations;
• Providing financial protection against the costs of
ill-health.
Why understanding the health system is complicated?
Complexity, Conflict, Social Context, Political

Health SystemFramework:

Health SectorReform?
Reform:
•“A change for the better or an improvement”.
•As verb: “to improve by alteration, correction of error, or removal
of defects or to put into a better form or condition”
Health system Reform:
“Sustained purposeful change to improve the efficiency, equity and
effectiveness of the health sector”
Peter Berman, 1995.
“Defining Priorities, refining policies and reforming the institution
through which the policies are implemented”
Cassels, 1995

Health SectorReform?..........
“A sustained process of fundamental change in policy and
institutional arrangements of the health sector, usually guided by
the government. The process lays down a set of policy measures
covering the four main core functions of the health system, viz.
governance, provision, financing and resource generation. It is
designed to improve the functioning and performance of the health
sector and ultimately the health status of the people.”
WHO 2000

Historical Perspective: Journey of Health
SectorReform?
• 1980s: Global economic crisis lead to changes in economic
policies of several countries.
• 1987: The World Bank report “Financing health services in
developing countries”.
• 1993: World development Report: “Investing in Health”.
• 1990s to 2000s: Poverty again gained the center stage and
thus health came in focus due to close linkage between poverty
and health.

Historical Perspective: India
• 1980s: Traces of economic liberalization but not significant.
• 1992: Economic liberalization took place. Health Sector
Reform process started.
• Reform Process continued under Five Year Plans:
 Eighth five year plan: (1992 – 97):
 Ninth Five Year Plan: (1997-2002):
 Tenth Five Year Plan: (2002 -2007):
 Eleventh Five Year Plan: (2007-12):

Three Generations of Health System
Reforms:
• The first generation:
• Establishment of national health care systems, and
• The extension of social insurance systems to middle income
nations
• The Second generation:
• Promotion of primary health care
• The third generation:
• The concept of universalism:

Understanding HSRdeeply;
• William Hsiao (2000):
• Specified a set of “control knobs”.
• famously known as Hsiao’s Knob.
• 6 such knobs:
Financing,
Payment,
Organization,
Regulation, and
Consumer behavior.

Key Concepts in the Definition:
• Fundamental:
– The “Big R”: Involving 2 or more Hsiao’s Knob:
Example: Setting up national health insurance scheme.
– The “Little R”: address only one control knob:
Example: Introduction of user charge in government hospitals.
Autonomy of national health institute.
• Purposeful:
Elements and components of the reform need to have been
developed in a rational manner
• Sustainable:
Most of the reform process are sustainable

Types of Health SectorReform
1. Changes in financial system:
Big R reform: Increasing resources to health sector, Change in
national health financing
Small R reform: Introduction of new user fee, small community
financing schemes.
2. Changes in health system organizations and
management:
Decentralization, Contracting out of service, Public private mix
3. Public sector reform
Increasing the role of local govt., Introduction of competition;,

The Health SectorReformCycle:
Ethics
politics
Problem
Definition
Policy
Development
Political
decision

HSRGoal: Improve Health System
Performance
• Access
• Equity
• Efficiency:
• Quality
• Sustainability
• Improved health status
Across all
services

Health SectorReforms in India:
• Real-time Health Sector Reform started in early 1990s.
• Economic liberalization.
Eighth Five year plan: (1992 – 1997)
• Process started.
• Paradigm shift in thinking: focus shifted from vulnerable to
underprivileged group.
• Introduction of user fee.
• Major reforms in the health infrastructure:
• Strengthening of facilities
• Provision of essential equipments
• Filling up of all vacant posts
• Ensuring supply of essential drugs, dressings and other material.

• Health management information system (HMIS):
• Need based target for health infrastructure:
• Re-organization of the Indian Systems of Medicine and
Homoeopathy (ISM&H) dispensaries.
• Health system research
• Involvement of private sector. Support and accreditation of
private sector.
• Family welfare:
• Holistic Approach:
• Decentralized planning and implementation.
• Target reduction in birth rate in place of couple protection rate
• Involvement of PRI in administration and implementations.
• Voluntary organizations in a mass movement

9th
Five yearplan (1997 – 2002)
• Horizontal integration of vertical programmes.
• Development of Disease Surveillance and Response mechanism.
• Health Impact Assessment.
• Appropriate management systems for emergency, disaster,
accident & trauma care at all levels of health care.
• Improved HMIS and logistics of supplies.
• Involvement of voluntary, private organizations and self-help
groups.
• Panchayati Raj Institutions (PRI) in planning and monitoring.

10th
Five YearPlan (2002- 07)
• Reforms at primary, secondary and tertiary level population.
• Near universal coverage:
– For meeting the cost of hospitalization and continuous care for
chronic disease.
– Health finance options:
Health insurance for individuals and social insurance for below
poverty line (BPL) families.
• Structural & Functional Reforms:
– Human resource development
– Integration of health and family welfare society at state
and district levels,
– Effective system of disease surveillance and response at
district, state and national level.

• Financial Reforms / Resource related reforms:
• Governance related
– Introduction of comprehensive regulations
– Evolving standard protocols for care for various illnesses
– Quality Assurance & redressal mechanism
– Involvement of the Panchayati Raj Institutions (PRIs) in planning,
monitoring of ongoing programmes
• Participation (Public Private Partnership):
– Private sector practitioners in the National Programmes.
– AYUSH and ISM and H practitioners.
– Contracting Private providers for RCH Services.
– Contracting out the services

ReformunderTenth Plan: Cont...
National Health Programme
•Formation of District Level Societies
•Participation from the private / NGO sector
•Involvement of NGOs in the Family Welfare Programme:
Mother NGO (MNGO) Scheme and the service NGO (SNGO)
scheme.
•Involvement of bi-lateral & multi-lateral agencies in health
sector reforms
•NRHM:

National Rural Health Mission
Reform or Not ?

NRHM: ParadigmShift in Health System

11th
Five YearPlan (2007 – 12):
• Improving Health Equity.
• System-centric approach than a disease-centric approach.
• Local enterprise for solving local health problems.
• Further Decentralizing Governance.
• Secondary and tertiary health care:
Establishment of Hospital Development Committees
Improvement of infrastructure and facilities.
• Establishing e-Health
• Health financing:
 Performance based incentives to providers:
 CBHI initiatives:
 Implementing the Food Safety and Standards Act, 2006.
• Essential medicine:

12th
Five yearPlan (2012 – 17):
• Universal Health Coverage (UHC)
• Substantial expansion and strengthening of the public sector
health care system
• Effective Public Health Administration:
– Public Health Act/Public Health cadre,
– Health Management Cadre,
– Mandatory practice of Clinical Treatment Guidelines and
prescription of generic medicines listed in the National List
of Essential Medicines in all Government facilities
– Mandatory test audit of medical prescriptions by faculty of
medical colleges

– Improve governance through citizen participation, social audit
and greater transparency
– Grievance redress system
• Health Financing: Increased expenditure on Health Sector
• Health Regulation Extend and enforcement: Central Clinical
Establishment Act 2012
• Development of Human Resource for Health
• Convergence and Stewardship
• Health Services Master plan:
Each district able to provide assured set of services to all its
residents.
• Convergence across sectors for better outcomes.

Private health care system: Reforms
• Major player for health care delivery.
• Consume major share of health care spending.
• Unregulated, No standardization, No accreditation.
• Clinical Establishment (Regulation and Registration) Act 2010.
• Clinical Establishment (Regulation and Registration) Rule
2012.
• 12th
Plan: Envisaging pvt. System to be alternative health
care provider on public funding.

International Experience: HSRin USA:
• Health Care Reform 2010 (Obama Care):
• Basically enactment of 2 laws:
• Patient protection and Affordable care bill (PPACA) 2010.
• Health Care Education Reconciliation Act of 2010.
• Advantage of Obama Care
– SBC: Summary of benefit and coverage :
– Consumer Assistance Programme:
– Appealing Health Plan Decisions
– Preventive Care
– Patient's Bill of Rights
– Doctor Choice & ER Access
– Grand fathered Health Plans

Health SectorReformin Chile:
• A dual health care delivery system till year 2000.
• Series of reforms after year 2000.
• Citizen has choice: govt. National health insurance plan (68%) or
one of the private health insurance (18%).
• Other 14% by other non- Profit insurance.
• Duality in system, reduce equity.
• Health Sector Reform (2000):
 Universal Health Care plan:
 Medical Benefit Package: prioritized list of 56 diagnoses and treatment.
 Pre- Arranged provider network

Table 1: Variables used in an algorithmto establish a prioritized list of
diagnoses and treatments for56 health conditions covered under
Chile’s universal health care plan:
Variable Feasibility
Magnitude Epidemiologic indicators, disability adjusted life years and
gaps in Mortality across socio-economic groups and user
preferences.
Effectiveness Treatments of each health condition were stratified into
high, medium and low levels of effectiveness. Conditions
whose treatments had a medium to high level of
treatment effectiveness were prioritized.
Capacity of the health
care system
A particular health condition was prioritized when the
capacity to deliver services was considered adequate.
Costs High-cost conditions (US$2 697 or more per annum) were
prioritized.
Social consensus Debate and social consensus were elicited by forums and
“deliberative dialogues” with scientific societies, medical
associations, universities and policy-makers.

Measuring effect of Health SectorReform
Effect Measure on following objectives:
•Allocative Efficiency
•Technical Efficiency
•Equity in Access and Care
•Equity in Finance and
•Financial sustainability

References:
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