Getting healthcare right: Learning from Rajasthan’s confrontation with hospitals

A framework that aligns the interests of patients, healthcare providers and payers is what is needed, not cure by fiat

Access to emergency healthcare is vital, so what is wrong if the government of Rajasthan asks its privately run hospitals to provide such care? Why should hospitals and doctors have gone on strike, in protest against the state’s Right to Health law that mandates such access?

Now that an agreement has been reached between the government and the striking doctors and hospitals, with many categories of private hospitals excluded from the ambit of the new law, what is at stake can be considered away from the heat of conflict.

Private hospitals are not places that house ministering angels waiting to heal the sick and wipe away tears of pain, regardless of reimbursement of the cost. They are businesses, just as much as medical shops or hotels or telecom services are businesses. Few would think it sensible to expect restaurants to feed the hungry for free or hotels to shelter the homeless on moral grounds.

These businesses have incurred investment and the capital has to be serviced, they employ people, whose salaries have to be paid. In other words, they must generate revenue, in order to continue to operate and make a surplus over costs, to sustain. The trouble with the Rajasthan Right to Health Act is that it leaves hospitals with no assurance of timely payment of the cost of treating patients.

Commandment doesn’t work

Private hospitals can and should play a vital role in comprehensive healthcare. But that has to be accomplished in a policy and operational framework that takes care of the private healthcare enterprises’ own financial health. Just by giving them a commandment, they cannot be converted into providers of free healthcare.

The normal structural framework for getting private healthcare providers to play their role in providing the curative part of healthcare provision is insurance. Those who can afford it, pay their own insurance premia, and the government pays the premium for those who cannot afford it on their own. Since insurance offers up volumes of those in need of care, insurers obtain bulk discounts for their customers from hospitals. The Central Government  Health Scheme (CGHS) rates at a hospital are a fraction of the rates it would charge those not fortunate enough to be an employee or a former employee of the Central government.

The least the government of Rajasthan could do is to create an insurance scheme for poor patients, whose annual premia it would pay. But that is just the least the government could do; there are better options.

The insurance model of healthcare is a minefield of conflicting incentives. The hospital’s incentive is to increase the healthcare bill of every insured patient, so as to maximise revenue and profits. This might result in superfluous investigations and procedures, besides padded costs. The insurance company’s incentive is to minimise the outgo on any patient, and to disallow items of expenditure claimed by the hospital. The patient’s welfare gets squeezed between these conflicting incentives.

Accountable care

There is a better model, which has been called accountable care. In this system, the premium is paid upfront, not after a healthcare emergency has been addressed. The healthcare provider takes on the responsibility of keeping the assigned population healthy, including through proactive, pre-emptive check-ups and by providing curative healthcare, when needed.

Since the funds for looking after a number of people is fixed and already received by the hospital, its focus is on minimising the need to spend that money. This is best done by keeping the people in its charge healthy, by monitoring their lifestyle and level of wellness. When they do fall ill, the focus would shift to providing least-cost solutions to provide the needed care.

The danger in this model, it might appear, is that the healthcare provider would be negligent about care, after having taken in the cost of care and more upfront: they might scrimp on pain relief or, in extreme cases, even let the patient die. This risk is more apparent than real. For one, this would entail reputational damage, and, in a competitive market of such healthcare providers, steer custom to those who do not shortchange patient welfare for the sake of a few rupees more. Patients should have the option to switch their healthcare provider once a year; the payer, the government in the case of the poor or the patient or the employer in other cases, following through, as per the patient’s wish.

Another factor that would minimise such risk is the possibility of logging all clinical steps in the provision of care using modern technology, storing the data on servers outside the reach of individual hospitals, and regular audit and analysis of treatment protocols and procedures. Such regulatory intervention would have been difficult in the past, but simple enough in the modern age of digital technology, communications, data science, artificial intelligence and massive computing power.

Such capture, storage and analysis of data would not just prevent malpractice but also help identify optimal treatment, by comparing different results in different hospitals and their different clinical protocols.

The system of accountable care has an added advantage. It would utilise the capability of a general physician to first identify a patient’s problem, instead of patients diagnosing their own problems and making the specialist deemed appropriate for their problem their first port of call. 

Importance of family doctor

The role of the friendly, neighbourhood family doctor in keeping people healthy cannot be overstated. These general practitioners  tend to be doctors for the patient rather than a doctor for a particular organ, with a holistic understanding of the patient and his or her health history. Such family doctors can tackle diseases amenable to their care and direct patients to the right specialists when the problem is beyond their capacity to solve.

There would be multiple family doctors to choose from, each attached to a healthcare provider on the basis of renewable annual contracts. Since hospitals would like to see most patients cured at the level of the family doctor itself, family doctors would be valued by hospitals, and paid well. This would incentivise quality doctors to stay on as general physicians, instead of joining a race to become a narrow specialist. Their incentive structure makes them strike the right balance between curing patients at their level, so as to spare the hospital needless expense, and postponing referral to a specialist, spoiling their own reputation.

Hospitals have the incentive to employ social workers, who would motivate people to perform group activity and exercise, whether long walks or yoga or the right workout on rudimentary gyms set up in parks. Group activity would combat loneliness as well.

A statewide system of accountable care would need to be complemented by low-cost, quality healthcare providers such as the glocal chain of clinics and hospitals that operate in several states. Once accountable care gets institutionalised, the scope would open up for more such hospital chains to emerge.

The Rajasthan government should try to align the incentives of the stakeholders in the healthcare system through an accountable care framework, instead of trying to make healthcare work by fiat.

Source: (TK Arun is a senior journalist based in Delhi.)