Health sector is the lifeline for a nation’s wellbeing. It is the sum total of the health of its citizens, communities and settlements in which they live. The Indian healthcare sector has emerged as one of the most challenging sectors as well as one of the largest service sector industries in India. The health care system in India consists of public sector, private sector, and an informal network of care providers. The Indian Health sector operates in a largely unregulated environment, with minimal controls on the type of services to be provided by whom at what cost and in what manner. This is more complicated by the usual Indian propensity to lack of standardization and minimal compliance though there are norms and guidelines.

Healthcare Sector

India is one of the fastest growing economies in the world in terms of GDP and is expected to be the third largest economy by 2050. Healthcare services which are critical to the growth in economy have seen vast improvements over the past few years in India. India’s total expenditure in healthcare as a percentage of GDP is still one of the lowest in the world.

Contribution of Public and Private sector in healthcare sector

Public sector financial records for only around Twenty percent of the total healthcare payments representing around One percent of the GDP – among the lowest in the world. Public healthcare is funded and small in size to meet the current health needs of the country. It is mostly through national health programmers that the central government pumps in around 15 percent of the total funds in the healthcare sector. The Government Health Projects are implemented through the states, with the Department of Health facilitating access to external aid.

Adding to the challenge is also the changing demographics and lifestyles of the people. Dealing with these challenges requires the resources and expertise of public and private sector combined.

• Demographic Changes
• The Burden of Disease
• Health Infrastructure
• Financing Mechanism
• Social and National Objectives

Though access to healthcare is not a fundamental right, it is an obligation on part of the government to facilitate universal access to basic health services and to provide access to continuum care to all sections of the society.

The key aspects of the policy include

• Craving to utilize private sector resources for addressing public health goals.
• Insurance segment to provide new avenue for health finance.

Role of advisors to the PPP

The public sector partner identify the administration and financial consultant to advice on the projects. It is important that the chosen advisors should develop the contractual clause after discussion and in mutual agreement of both the public and private sector interests. This would enable a better business projection and incentivize the bottom-line objectives of the project.

Regulatory Role in a PPP setup

Public Private Partnership are looked upon as bringing the best of both public and private sector world practice and payback together to provide better healthcare. At the same time, a strong control mechanism is also needed to ensure that the public and private players operate within their defined roles and do not transgress boundaries that may undermine that larger industry context. Whereas self-regulatory mechanism are an option for enforce quality controls through expert associations, such a mechanism might still need some time to develop in India. An independent regulatory supervisory body is needed in dealing with disagreement resolution to maintain the business feasibility of the PPP as much as it is needed to ensure equitable access to all sections of the population.

Some of the areas where the regulator could contribute are:

• Consumer privileges defense – ensure that the poor are not worse off if PPPs are set up to serve up isolated areas of India. A clear policy on privileges of consumers in a PPP-type of arrangement, and patient rights in case of a PPP failure are genuine concerns that need to be addressed in any policy framework and have to be employed by the regulator to manage PPPs.