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What makes it difficult to deliver healthcare to the poor?

Nobel Laureates Banerjee and Duflo outline the hurdles behind improving healthcare services for the poor in India

A healthcare worker wearing personal protective equipment, arrives to collect swabs from villagers to test them for COVID-19, during the coronavirus disease (COVID-19) outbreak at Pitha village in the northern state of Uttarakhand.
A healthcare worker wearing personal protective equipment, arrives to collect swabs from villagers to test them for COVID-19, during the coronavirus disease (COVID-19) outbreak at Pitha village in the northern state of Uttarakhand. (REUTERS)

During the last two decades, significant progress was made in improving poor people’s access to healthcare. Under five mortality declined from 11 per 1,000 in 1990 to 26 per 1,000 in 2017. Nevertheless, frustrating gaps remain. Vaccination rates have plateaued at 85 per cent. Every year, 19.9 million children do not get the full dose of DTP, an essential vaccine. Around 60 per cent of these children live in 10 countries. Among those 10, India stands out as one of the richest.

While the delivery of high-quality social services to the poor is never easy, there are several factors that make healthcare especially difficult. First, as has been widely documented, a person’s decision about when and where to seek healthcare often has very little to do with his or her medical condition itself: It could just as well reflect how the person is feeling about life in general and health in particular, or his or her theories about the nature of diseases and treatment. These decisions may have little to do with the quality of care, since it is not easy to judge the efficacy of the treatment one is getting, given that one does not know what would have happened without the treatment. For example, it is estimated that 80 per cent of all diseases in a setting like India are self-limiting in the sense that one would get better without any treatment, but people may not be aware of this and as a result may credit the doctor with the cure. To make matters worse, patients may not be aware of the possibility that he could be actually harming you by giving you powerful medicines for something that was self-limiting. In this setting, the types of care which patients demand may have very little to do with what would be socially efficient to deliver. This problem of demand makes it particularly difficult to deliver healthcare to the poor.

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Second, there is no obvious aggregate measure of the performance of the healthcare system that is comparable to the matriculation rate in the case of education or the number of brown-outs in the case of electricity. The problem is that age-specific death rates may reflect the state of the health system where and when the person was a child, rather than the health system he currently lives under. This makes it difficult to assess the performance of a system. Without a correct assessment of the system and an identification of the main problems, designing and evaluating possible solutions is almost impossible….

On paper, India’s public healthcare system looks like the model for delivering universal health services in a large, poor country. Its comprehensive three-tier design ensures that all households, rural and urban, are close to a free government health facility. The infrastructure for this system is operational: The average household is within 2 kilometres of the nearest public facility; the facilities all fully staffed, by qualified medical personnel; and, while not free, public facilities are still far and away the cheapest option available for qualified medical care. Yet, the system quite apparently fails to deliver. Even though government facilities are cheaper and staffed by trained and certified personnel, most households prefer to see private providers, who are not only unregulated, but are often unqualified.

Development, Distribution, And Markets, edited by Kaushik Basu
Development, Distribution, And Markets, edited by Kaushik Basu

This situation could either reflect a problem of supply, a problem of demand, or both. Public healthcare centres are closed more than half the time, whereas private doctors are available round the clock. On the other hand, private doctors happily deliver shots of antibiotics and steroids that the patients appear to demand, which public doctors are often (rightly) not allowed to prescribe. To investigate the role of supply and demand, and how they may interact, we have conducted two randomized experiments, in collaboration with Seva Mandir, a local NGO, and Vidhya Bhawan, a network of schools and teaching colleges. In the first one, Seva Mandir collaborated with the government to monitor nurses on specific days. The intervention was initially successful in reducing absenteeism, but was eventually undermined from within. This illustrates the difficulty to improve/chk supply reliably without some feedback coming from the demand. In the second intervention, Seva Mandir provided very reliable immunization services in villages. This improved the rate of full immunization significantly (from 5 per cent to l7 per cent), but adding small incentives further increased the rate (from l7 per cent to 38 per cent). Combined, these two studies suggest that increasing demand for preventive care (and for the ‘proper’ curative care) is essential for any supply-driven intervention to be sustained in the long run. But they also suggest, fortunately, that improving demand may not be so difficult—households may be more indifferent than opposite. Once demand is stimulated, it may be possible to use it as a lever to improve supply.

Edited and excerpted from the essay "Improving Health Care Delivery in India", included in Development, Distribution, And Markets, edited by Kaushik Basu, with permission from Oxford University Press.

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