Journal of Health Management

In this article the author discusses how, despite an overall improvement of infra structure, there has been no corresponding improvement in the quality of 'illness care'. Non-medical professionals like sociologists and economists have stayed away from participating in the health sector, and there is a similar absence of concern for the non-medical components of health by the medical community. Though there is vast overproduction of doctors at public expense, a majority of them end up emigrating or serving the urban rich. Given the situation, the author calls for economists and members of the medical profession to join forces in order to provide effective health and medical care to all.

This study focuses on analysing the hospital efficiency of district-level govern ment hospitals and grant-in-aid hospitals in Gujarat. The study attempts to provide an overview of the general status of the health care services provided by hospitals in the state of Gujarat in terms of their technical and allocative efficiency. One of the two thrusts behind addressing the issue of efficiency was to take stock of the state of health care services (in terms of efficiency) provided by grant-in-aid hospitals and district hospitals in this state. The motivation behind addressing the efficiency issue is to provide an empirical analysis of the government's policy to provide grants to not-for-profit institutions to ensure the provision of hospital care in the state. The study compares the efficiency of grant-in-aid hospitals and public hospitals. This comparison between grant-in-aid hospitals and district hospitals in terms of their efficiency has been of interest to many researchers in countries other than India, and no consensus has been reached so far as to which category is more efficient. The relative efficiency of government and the not-for- profit sectors has been reviewed in this article. It is expected that the findings of the study would be useful to evaluate this policy and help policy makers to develop benchmarks in providing grants to such institutions.

India spends a high proportion of its gross domestic product (GDP) on health care but is still poor in terms of health outcomes as compared to countries at a similar level of development. It is, therefore, extremely important to understand the financial dimensions of the health sector to enable policy makers to take wise decisions in this sector. Taking the case of Karnataka, a state in India, this article seeks to estimate the total health expenditure as a proportion of the state domes tic product (SDP); examine the role of private and public sectors as financiers and providers of health services; and estimate health expenditure by different income classes of beneficiaries, and functions like preventive and curative care. Using National Health Accounts (NHA) as a tool of analysis, this article presents the results for 1993-94. It indicates that 76 per cent of health sector revenues come from private sources, of which almost 50 per cent go to private providers and 21 per cent are spent on drugs. Further, 7 per cent of household out-of-pocket expenditure is used as non-drug expenditure for using government facilities for out-patient and in-patient treatment. This has important policy implications for the government. The role of financial intermediaries, especially the insurance sector, is also highlighted in the analysis. A further analysis by income categories and functional classifications is expected to highlight important results.

In this article, budgetary subsidies in the health sector in Gujarat are estimated by following the methodology of the discussion paper on subsidies (Government of India [GOI (1997)] after duly recognising several problems with it. The 1997 methodology includes both the explicit and implicit subsidies for the merit and non-merit sub-sectors in the state. These subsidies are estimated for the years 1995-96 to 1999-2000. The cost recovery rates in the health sector are also esti mated and compared to the major states in the country. Gujarat's case is compa rable to other major states in the health sector. Implicit subsidies are more dominant than the explicit subsidies in this sector. Very low-cost recovery rates in the sector are associated with serious problems in the public provision of health care services in the state. After briefly discussing some of these problems, required reforms to reduce the subsidies in this sector are suggested.

Public spending and subsidies on health are justified because markets fail to deliver services equitably and also because of the large externalities associated with public health services. But attempts are on in India to phase out subsidies emanating from budgets to non-merit services. This article attempts to estimate and analyse the extent of budgetary subsidies in the health sector during 1985- 86, 1991-92 and 1998-99 covering six major states in India. The analysis sug gests that the budgetary allocations to the health sector have been declining while at the same time the cost of treatments for households has been increasing as evidenced by the two surveys of the NSSO. The survey results also suggest that the utilisation of public health facilities by the poor has witnessed a declining trend.

An analysis of budgetary spending and subsidies on health reveals that the level of spending or subsidies does not have any direct bearing on the level of health status. The complementary nature of budgetary spending and household spending on health warrants an increasing role for the governments in the health sector in order to improve the levels of health care consumption. Therefore, attempts to prune the budgetary subsidies or the spending on health would adversely affect the utilisation of the health care services.

This article investigates the community's preferences on various aspects of health insurance. The data has been collected from a sample of 300 households in Jaipur, Rajasthan. The study reveals a low level of awareness (15 per cent) about health insurance. Quality of care and cost are the two important factors identi fied by the community as the factors affecting their decision to subscribe to any new health insurance plan. An integrated provider and insurer system is preferred irrespective of public- or private-based management. Hospitalisation and mater nity services are preferred among the given choices for benefits to be included under the plan. The results also suggest that there is high level of willingness to join a health insurance plan in future if designed carefully for the informal sector. Some policy implications have been suggested in this study for the setting up of health insurance schemes.

Measurement of efficiency of any organisation (e.g., hospital, bank, etc.) that uses multiple inputs and generates multiple outputs is complex and comparisons across units are difficult. Charnes and Cooper (1985) describe a non-parametric approach in such situations to measure efficiency and the technique is known as data envelopment analysis (DEA). This analysis method is basically a linear pro gramming-based technique used for measuring the relative performance of organisational units where the presence of multiple inputs and outputs makes comparisons difficult. It involves identification of units, which in relative sense use the inputs for the given outputs in the most optimal manner; DEA uses this information to construct efficiency frontiers over the data of available organisa tion units. This efficient frontier is used to calculate the efficiencies of the other organisation units that do not fall on the efficient frontier and provide informa tion on which units are not using inputs efficiently. The objective of this article is to introduce the technique and demonstrate it through an example to show how relative efficiencies can be determined and identify units that are relatively less efficient.

The provision of ambulance services in remote areas is an important policy inter vention to strengthen the referral system and improve the quality of emergency care. The financial requirements resulting out of capital costs and operating expenses are considerable. Given the financial constraints facing state govern ments in India, departments of health need to explore alternative options. In this article we discuss the options of owning, leasing or hiring of vehicles. We also examine that if the facility has to be self-sustaining, what should be the fees col lected from the users of these services. We also discuss policy implementation issues of protecting the poor from high financial burdens and suggest an overall cap on total charges and exempting indigent patients. The role of local govern ments such as panchayats in creating contingency funds to meet the needs of the poor and developing appropriate exemption policies is considered important to sustain these services. The approach suggested in this article is an illustrative one and results would change depending on what numbers are used in analysis. These numbers are also expected to change from situation to situation. The spreadsheet used in this analysis can be obtained from the author on request.