Report No. 15753-IN India New Directions in Health Sector Development at the State Level: An Operational Perspective February 11, 1997 Population ancl Human Resources Division South Asia Country Department II (Bhutan, India, Nepal) u Document of the World Bank CURRENCY Rs/ US$ Currency Official Unified Market' Prior to June 1966 4.76 June 6, 1966 to mid-December 1971 7.50 Mid-December 1971 to end-June 1972 7.28 1971-72 7.44 1972-73 7.71 1973-74 7.79 1974-75 7.98 1975-76 8.65 1976-77 8.94 1977-78 8.56 1978-79 8.21 1979-80 8.08 1980-81 7.89 1981-82 8.93 1982-83 9.63 1983-84 10.31 1984-85 11.89 1985-86 12.24 1986-87 12.79 1987-88 12.97 1988-89 14.48 1989-90 16.66 1990-91 17.95 1991-92 24.52 1992-93 26.41 30.65 1993-94 31.36 1994-95 31.40 1995-96 33.46 April 1996 34.24 May 1996 34.99 June 1996 34.99 July 1996 35.52 Aug 1996 35.69 Sep 1996 35.73 Oct 1996 35.64 Nov 1996 35.74 Dec 1996 35.84 Note: The Indian fiscal year runs from April 1 through March 31. Source: IMF, International Finance Statistics (IFS), line "rr'; Reserve Bank of India. A dual exchange rate system was created in March 1992, with a free market for about 60 percent of foreign exchange transactions. The exchange rate was reunified at the beginning of March 1993 at the free market rate. Vice President Mieko Nishimizu Directors : Robert S. Drysdale, Edwin Limi Division Chief/Manager Richard Skolnik Staff Member Tawhid Nawaz, Senior Economist ABBREVIATIONS AND ACRONYMS AlIMS All India Institute of Medical Sciences ANM Auxiliary Nurse Midwife AP Andhra Pradesh APVVP Andhra Pradesh Vaidya Vidhana Parishad ASCI Administrative Staff College of India BDO Block Development Officer BOD Burden of Disease CAS Country Assistance Strategy CGHS Central Government Health Scheme CHC Community Health Center CPA Consumer Protection Act DALY Disability Adjusted Life Year DMO District Medical Officer DOHFW Department of Health and Family Welfare DPT Diphtheria, Pertusis and Tetanus DRDA District Rural Development Agency ESIS Employees State Insurance Scheme GDP Gross Domestic Product GFD Gross Fiscal Deficit GOI Government of India IAS Indian Administrative Service IEC Information, Education and Communication IMA Indian Medical Association JRY Jowahar Rojgar Yojana KFW Kreditanstalt Fuer Wideraufbau MCH Maternal and Child Health MNP Minimum Needs Program MOHFW Ministry of Health and Family Welfare NGO Non-governmental Organization NHP National Health Policy NMNP National Minimum Need Program NSS National Sample Survey ODA Overseas Development Authority OPD Outpatient Department ORG Operations Research Group PDS Public Distribution System PHC Primary Health Center PHU Primary Health Unit PRIs Panchayati Raj Institutions SC Scheduled Caste SDP State Domestic Product ST Scheduled Tribe UIIP Universal Immunization Program WB West Bengal WDR World Development Report WHO World Health Organization ZP Zilla Parishad I ACKNOWLEDGEMENTS This report has been prepared by Tawhid Nawaz (Team Leader and Senior Economist), with major contributions from Shreelata-Rao-Seshadri (Social Scientist), Keith Hinchliffe (Senior Economist) and Salim Habayeb (Senior Public Health Physician). Mark Schlagel and Rani Tudor were part of the team that contributed to the report. Background studies on the burden of disease and cost-effectiveness of health interventions, private sector and beneficiaries, and the panchayati raj institutions were undertaken by the following institutions and individuals: the Administrative Staff College of India (Hyderabad); Operations Research Group (Calcutta); Professor D.B. Gupta, the Delhi Institute of Economic Growth; and S. Basu, the Foundation for Research and Development for Underprivileged Groups. The peer reviewers include D. Jamison, H. Saxenian and P. Berman. The report benefited from comments from Roberto Zagha, Prabhat Jha, Anthony Measham and Fahrettin Yagci. The report is endorsed by Richard Skolnik, Chief, Population and Human Resources Division and Robert S. Drysdale, Director, South Asia Country Department II (Bhutan, India and Nepal) and was greatly facilitated by Heinz Vergin, who was the previous Department Director. The extensive collaboration of the Ministry of Health and Family Welfare (MOHFW) Government of India, and the Departments of Health and Family Welfare of Andhra Pradesh, Karnataka, Punjab and West Bengal is gratefully acknowledged. Special thanks go to Mrs. Shailaja Chandra, Additional Secretary, MOHFW, for her collaboration and support. The preparation of the report benefited from workshops held in Jaipur (February 1995), Simla (June 1995) and Pune (October 1995). The Green Cover version of the report was discussed with MOHFW and state health officials in Goa during November 12-14, 1996 at a Health Strategy workshop jointly organized by MOHFW and the World Bank, and comments received have been incorporated into the present version of the report. INDIA: ECONOMIC DEVELOPMENT DATA GNP Per Capita (US$, 1994-95): 310 a Gross Domestic Product (1994-95) Annual Growth Rate (% p.a., constant prices) % of 70-71- 75-76- 80-81- 85-86- 92-93- 93-94- US$ Bln GDP 75-76 80-81 85-86 90-91 93-94 94-95 GDP at Factor Cost 272.0 90.3 3.4 4.2 5.4 5.9 5.0 6.3 GDP at Market Prices 301.2 100.0 3.3 4.2 5.6 6.2 3.9 6.3 Gross Domestic Investment 69.7 23.2 5.3 3.7 5.7 9.5 -5.8 19.8 Gross National Saving 67.0 22.3 4.4 2.6 3.5 8.7 -1.1 17.2 Current Account Balance -2.7 -0.9 -- -- -- -- - - Output, Employment and Productivity (1990-91) Value Added Labor Force b V. A. per Worker US$ Bin. % of Tot Mill. % of Tot. US$ % of Avg. Agriculture 82.5 31.0 186.2 66.8 443 46.4 Industry 78.0 29.3 35.5 12.7 2195 230.0 Services 105.7 39.7 57.2 20.5 1849 193.7 Total/ Average 266.2 100.0 278.9 100.0 954 100.0 Government Finance General Govermnent c Central Government Rs. Bln. % of GDP Rs. Bln. % of GDP 1994-95 1994-95 90-91-94-95 1994-95 1994-95 90-91-94-95 Revenue Receipts 1809.0 19.1 19.5 910.8 9.6 10.1 Revenue Expenditures 2219.0 23.5 23.5 1221.1 12.9 13.3 Revenue Surplusl Deficit (-) 409.9 4.3 4.0 -310.3 -3.3 -3.2 Capital Expenditures d 337.9 3.6 4.3 266.8 2.8 3.5 ExternalAssistance(net) ' 51.5 0.5 0.7 51.5 0.5 0.7 Money, Credit, and Prices 89-90 90-91 91-92 92-93 93-94 94-95 95-96p (Rs. billion outstanding, end of period) Money and Quasi Money 2309.5 2658.3 3170.5 3668.3 4344.1 5308.0 6005.0 BankCredittoGovernuent(net) 1171.5 1401.9 1582.6 1762.4 2039.2 2224.2 2626.7 Bank Credit to Commercial Sector 1517.0 1717.7 1879.9 2201.4 2377.7 2896.6 3386.4 (percentage or index numbers) Money and Quasi Money as % of GDP 50.6 49.6 51.4 52.0 54.2 56.1 55.4 Wholesale Price Index (1981-82 = 100) 165.7 182.7 207.8 228.7 247.8 274.7 295.8 Annual Percentage Changes in: Wholesale Price Index 7.4 10.3 13.7 10.1 8.4 10.9 7.7 BankCredittoGovermnent(net) 20.3 19.7 12.9 11.4 15.7 9.1 18.1 BankCredittoCornmercialSector 14.4 13.2 9.4 17.1 8.0 21.8 16.9 a. The per capita GNP estimate is at market prices, using World Bank Atlas methodology. Other conversions to dollars in this table are at the prevailing average exchange rate for the period covered. b. Total Labor Force from 1991 Census. Excludes data for Assam and Jammu & Kashmir. c. Transfers between Centre and States have been netted out. d. All loans and advances to third parties have been netted out. e. As recorded in the government budget. Balance of Payments (USS Millions) 1993-94 1994-95 1995-96p Merchandise Exports (Average 1990-91-1995-96) Exports of Goods & NFS 27,947 32,760 39,682 Merchandise, fob 22,683 26,857 32,789 US$ MNi % of Tot. ImportsofGoods&NFS 29,798 38,150 48,536 Merchandise, cif 25,069 31,840 41,582 Tea 404 1.8 of which Crude Petroleum 3,468 3,428 3,672 Iron Ore 487 2.2 of which Petroleum Products 2,285 2,500 4,046 Chemicals 1,824 8.1 Trade Balance -2,386 -4,983 -8,793 Leather & Leather products 1,439 6.4 Non Factor Service (net) 535 -407 -61 Textiles 2,698 12.0 Garnents 2,731 12.1 Resource Balance -1,851 -5,390 -8,854 Gems and Jewelry 3,753 16.7 Engineering Goods 2,754 12.2 Net factor Incomea -3,929 -4,119 -4,455 Others 6,415 28.5 Net Transfersb 3,825 6,200 7,478 Total 22,506 100.0 Balance on Current Account -1,955 -3,309 -5,831 External Debt, March 31, 1996 Foreign Investment 4,235 4,895 4,347 US$ Mill. Official Grants and Aid 368 472 335 Public & Publicly Guaranteed 79,655 Net Medium & Long Term Capital 3,280 1,124 1,124 Private Non-Guaranteed 6,618 Gross Disbursements 7,307 5,953 5,953 Total (Including IMF and Short Term) 93,697 Principal Repayments 4,027 4,829 4,829 Debt Service Ratio for 1995-96 Other Capital Flows' 1,670 2,828 -3,180 Non-Resident Deposits 940 847 1,365 % curr receipts Net Transactions with IMF 190 -1,174 -1,719 Public & Publicly Guaranteed 20.9 Private Non-Guaranteed 1.4 Overall Balance 8,538 6,857 -1,840 Total (Including IMF and Short Term) 27.1 Change in Net Reserves -8,537 -6,858 2,005 IBRD/ IDA Lending, March 31, 1996 (US$ Mill) Gross Reserves (end of year)d 15,476 21,160 17,436 IBRD IDA Rate of Exchange Outstanding and Disbursed 9,849 17,499 JUndisbursed 4,122 4,583 End-March 1996' US$ 1.00 = Rs. 34.45 Outstanding incl. Undisb. 13,971 22,082 - Not available. a. Figures given cover all investment income (net). Major payments are interest on foreign loans and charges paid to IMF, and major receipts is interest earned on foreign assets. b. Figures given include workers' remittances but exclude official grant assistance which is included within official loans and grants, and non-resident deposits which are shown separately. c. Includes short-team net capital inflow, changes in reserve valuation and other items. d. Excluding gold. e. The exchange rate was reunified at the market rate in March 1993. f Total exports (commerce); net of crude petroleum exports. India Me& Same .&aSfl5Ssmar Now Latet aiffkyea recen ks Uni .1eduae Sit a- ue indte _me 197(75 19804.5 109899 Al Incs prew Prority Povery Indicators POVERTY Uer povey line local cwr. .. .. .. Headcount index % of pop. .. .. .. Lowe povety local cun. ..... Headcount index % of pop. .. .. .. GNPperc pita US$ 180 280 310 320 390 1,670 SHORT TERM INCOME INDICATORS Unskilled uen wage local cur. .. Uknskled url wages Rural tems of trde .8 94 Consumer price indtex 1987-100 45 85 189 Lower income Fooc? 27 83 176 Urban *3 176 Rural SOCLIL INDICATORS Public expenditure on basic social ervices % of GDP .. .. .. Gros enrollment rtios Primay % hool age pop. 79 96 102 98 105 104 Male 94 110 113 110 112 105 Female 62 80 91 87 98 101 Mouity infantmodality per thou. ive birtha 132 108 70 73 58 36 Under 5 nortality .. .. 97 106 101 47 Immnnization measles % age group .. .. 85.8 84.2 86.2 77.4 DPr' .. 41.0 90.2 88.6 89.1 82.0 Child nulnutrition (under-5) .. .. 63.0 61.5 38.2 Life expectancy Total years 50 55 62 61 63 67 Femle advantage -1.9 -0.4 1.3 1.2 2.4 6.4 Totl ferity rte births per woman 5.6 4.8 3.3 3.6 3.3 2.7 Matemal mortality rate per 100.000 live births .. 460 437 Supplementary Poverty Indicators Expenditures on social security % of total govt exp. .. .. .. Socidal security coveage % econ. ctive pop. .. .. .. Acces to sfe waer total % of pop. 31.0 56.3 .. Urban 80.0 76.0 .. Rural 18.0 50.0 .. Acceu to health care .. 75.0 .. Population growth rate GNP per capita growth rate Development diamondb (average annual, percent) loS (averge annual. percent) Life expecancy 4 5 ____________________ _ , GNP Gross 2 1 0 per primary 0- _ + l I l l -5 - . e Capita enrlren -2-1 1970-75 198045 1989-94 1970-75 - 198085 1989-94 Access to ufe waer r- India _ India - Low-income - Low-income a See te tdmical not, p.387. b. The devdopmnnt diamond, baed on four key indicato the averge level of development in the country compared with it income group. See the inutoduction. India L~ftetC kywa reet h6' Uni of Win"ag Seush L*W- IeMe lindiate mean"r 19f79.7 19.894 Ing-" Aska 6:0ilce grew Resources and Expenditures HUMAN RESOURCES Populdon (mrem-1994) thousnds 613,459 765,147 913,600 1,220.285 3,182,221 1,09688 Age dqpenkncy raio rtio 0.77 0.72 0.66 0.71 0.66 OJ3 Urban * of pop. 21.3 24.3 26.5 26.0 283 55.9 Populion growth mse anual * 2.3 2.0 1.7 1.8 1.7 13 Urban 3.7 3.0 2.7 3.1 3.2 2.7 Labor force thousands 260.515 329,608 394,330 528,108 1.590,533 4818647 Agiculture * of labor force 70 67 64 63 67 36 Industry - 13 14 16 16 14 26 Female 31 32 32 32 39 40 Labor paticipaion rtes Total * of pop. 42 43 43 43 50 45 Femae 13 14 14 29 41 36 NATURAL RESOURCES Area tiou. sq. km 3,287.59 3,287.59 3,287.59 5,133.49 40,391.42 40,594.43 Dewity pop. per sq. km 186.60 232.74 273.21 233.41 77.44 2666 Agiculturalland %*ofl ndarea 60.83 60.86 60.89 59.11 52.42 41.05 Chane in riculturallnd annual V 0.47 -0.07 -0.05 -0.02 0.16 -138 Agiultr land under inrigaion V 18.65 23.09 25.96 29.63 17.84 11.40 Forests and woodland thou. sq. km .. 551.19 517.29 658.32 7.632.00 5,969.25 Deforestation (net) chage, 1980-90 .. .. 0.63 INCOME Household income Shae of top 20* of househods * of income 49 41 43 Shae of bottom 40% of houshols 16 20 21 Sha of bouom 20% of housebolds * 6 8 8 EXPENDITURE Food * of GDP 43.6 35.3 .. Staples 20.6 12.4 .. Meat, fish, milk, cbeese, oW 6.5 7.4 .. Ceal imports tou. meter tones 7,669 205 694 6,211 36,922 68,936 Foodaidincereals 1,582 304 276 1,624 8,516 5,771 Foodproductionper capta 1987- 100 94 104 115 113 115 102 Ferdlizer comumpdio kglba 19.3 47.0 67.5 69.7 58.5 46.3 Share of agiculture in GDP * of GDP 36.6 29.5 26.9 26.6 27.6 14.0 Eousing *dof GDP 4.4 7.1 .. Averge hsehd size pe s per household 5.2 5.6 .. Urbn 4.8 5.5 .. Fixed invesct huing V of GDP 2.3 2.8 .. Fu- ad power * of GDP 2.4 2.3 .. BMWyconrumptionp rClpit kgofoilequiv. 124 170 243 219 373 1,602 Housebold with deccidty Urban * of households .. .. .. Rura . T port ad commslmhmm V of GDP 4.7 5.1 .. Fixed investmt transport equipment 1.4 2.3 .. .. .. Tota road legth thou. km 1,375 1,546 2,962 nViSTsw IN HUMAN CAPITAL Health Popuaion per phyican penor 4,900 2,522 .. .. .. 3.064 Population pernuNe * 3,710 1,701 .. Populationperhospitalbed 1,700 1,300 1,371 1,675 1,034 S92 Olrd rehydyntion therapy (undor-5) V of o .. .. 37 37 38 Edin Grou enrollment mtios Seondary * oftscoolagepop. 26 37 49 45 48 63 Femle 16 26 38 35 42 62 Pupil-cherrntio:pin ry pupils per tear 42 58 63 61 39 . Pupil-techer ratio: sconday 21 21 26 26 20 Pupils roachlgVads4 4o*cohort 51 58 .. Re_at rat: primry ftoalenrl 17 .. .. lliteracy * ofpop. (4r 15+) 66 56 48 51 35 Femle % of etm(aplSt+) 71 62 64 46 Nspapercrrcuation perdtu pop, 15 26 31 26 ..2 WorW Bnk IemnBal oommies Deatmoet, April 1996 INDIA NEW DIRECTIONS IN HEALTH SECTOR DEVELOPMENT AT THE STATE LEVEL: AN OPERATIONAL PERSPECTIVE Table of Contents Page No. Currency Abbreviations and Acronyns Acknowledgements Economic Development Data Executive Summary ........................ ................................................... v Table on Main Findings and Recommendations ........................................................ xvi CHAPTER ONE: INTRODUCTION A. Background ........................................................ 1 B. Purpose and Scope of the Study ......................................................... 1 C. Terms of Reference for the Study ........................................................ 2 D. Structure of the Report ........................................................ 3 CHAPTER TWO: CHALLENGES IN THE HEALTH SECTOR A. Sectoral Background ........................................................ 5 B. Looking to the Future: Challenges and Opportunities at the State Level ............. 5 CHAPTER THREE: BACKGROUND TO HEALTH POLICY AND PLANNING: DEMOGRAPHIC FEATURES, EPIDEMIOLOGY AND BURDEN OF DISEASE IN THE FOUR STATES A. Introduction. 9 B. The Health Transition .10 C. Epidemiology and the Evolving Burden of Disease in the Four States 11 D. Recommendations .18 ii CHAPTER FOUR: THE PRIVATE SECTOR IN HEALTH CARE AT THE STATE LEVEL A. Introduction ...................................................... 19 B. Scope of the Private Sector in Health Care Delivery ................................... 19 C. Services Offered by Private Sector ...................................................... 22 D. Public-Private Partnerships in the Health Sector ......................................... 24 E. Contracting Out ...................................................... 26 F. Quality of Services, Monitoring and Evaluation ......................................... 27 G. Recommendations ...................................................... 28 CHAPTER FIVE: CENTER-STATE FINANCING ISSUES IN THE HEALTH SECTOR A. Introduction ...................................................... 30 B. Center, State and Local Government Responsibilities in Health Financing ...... ... 30 C. Inter-State Equity Issues ...................................................... 34 D. Government Health Expenditures: All States ............................................ 35 E. Patterns of Health Expenditure Across States ............................................ 36 F. Mechanisms of Adjustment Effects on Center-State Transfers ........................ 37 G. Recommendations ...................................................... 40 CHAPTER SIX: PUBLIC SECTOR HEALTH EXPENDITURE IN THE FOUR STATES A. Introduction ...................................................... 41 B. State Finances ...................................................... 41 C. Trends in Expenditure in Health and Family Welfare .................................. 44 D. Per Capita Expenditures on Health ...................................................... 45 E. Effects of Fiscal Adjustment on Health Budgets ......................................... 45 F. Share of Budgetary Resources Devoted to Health ....................................... 46 G. Composition of Health Budgets ...................................................... 47 H. Future Trends in Public Sector Health Financing ....................................... 51 I. Recommendations ...................................................... 52 CHAPTER SEVEN: A SUPPLEMENTARY HEALTH FINANCING MECHANISM: USER CHARGES A. Introduction ...................................................... 54 B. User Charges: Operational Issues ...................................................... 54 C. User Charges: Existing Practices ...................................................... 56 D. Recommendations ...................................................... 57 iii CHAPTER EIGHT: THE COST EFFECTIVENESS OF HEALTH INTERVENTIONS A. Introduction ............................................... 59 B. Burden of Disease and Cost-Effectiveness Study ........................................ 59 C. Cost-Effectiveness Analysis ............................................... 60 D. Andhra Pradesh Burden of Disease and Cost-Effectiveness Study ......... .......... 60 E. Results ............................................... 64 F. Recommendations ............................................... 65 CHAPTER NINE: SPECIAL ISSUES IN MANAGEMENT ADMINISTRATION IN THE HEALTH SECTOR: DECENTRALIZED GOVERNANCE UNDER THE PANCHAYATI RAJ SYSTEM A. Introduction ............................................... 67 B. Rationale for Decentralization of Administration ........................................ 68 C. Three Models of Decentralization ............................................... 70 D. Key Linkage between State Health Administration and PRIs: District Level Organizational Structure of Health Administration .................................... 72 E. Role of PRIs in Health Delivery: Two Examples .................................... 74 F. Recommendations .................................... 76 Bibliography .79 ANNEXES 1. Decentralized Administration in the Health Sector ................................... 83 2. Cost Effectiveness of Services at First Referral Vs. Tertiary Level Hospital Care ........................... 108 3. Clinical and Diagnostic Service Norms ........................... 136 4. User Charges: Existing Practices in the Four States and Potential Revenue Generation ........................................... 182 TABLES 3.1 DALYs Estimated to be Lost During the Year 1992 .................................... 13 3.2 DALYs Lost per 1,000 Population ..................................... 14 3.3 DALYs Lost per 1,000 Population by Major Cause Groups in Rural & Urban Areas ............................... 14 3.4 Total DALYs Lost by Major Cause Groups ............................... 15 3.5 Percent of Total DALYs Lost by Major Cause Groups: 1990 and Projected for 2020 .18 iv 4.1 Distribution of Private and Voluntary Hospitals by Type of Ownership in Karnataka ........................................................ 21 4.2 Cost of Treatrnent for an Illness Episode in Nellore District (AP) in Rs . ........... 24 4.3 Comparison of the Cost of Treatment in Government and Private Hospitals ....... 24 4.4 National Health Spending: An Estimated "Source and Uses" Matrix ....... ........ 25 5.1 Center and State Shares in Different Components of the Government Health Budget ............................................ 33 5.2 Trends in Public Revenue Expenditures on Health 1988-1992 ........................ 37 6.1 Gross Fiscal Deficit as Proportion of State Domestic Product -- Project States 1990/91 -- 1993/94 .42 6.2 Revenue Deficit as Proportion of State Domestic Product -- Project States 1980/81-1993/94 ........................................................ 42 6.3 Expenditure on Health and Family Welfare as Percentage of SDP ................... 44 6.4 Per Capita Expenditures on Health and Family Welfare ........... ................... 45 6.5 Real Growth Rates in Health Expenditure -- Project States 1980/81-1993/94 ...... 46 6.6 Share of Health and Family Welfare Sector in Total State Revenue Budget ........ 46 6.7 West Bengal: Composition of the Health Budget ................. ...................... 47 6.8 West Bengal: Composition of Spending in Hospitals and Dispensaries -- 1992/93 -- 1994/95 .49 6.9 Karnataka: Distribution of Health Care Revenue Expenditures by Level of Care ...................................................... 49 6.10 Punjab: Distribution of Health Revenue Expenditures by Level of Care -- 1990/91 -- 1994/95 ...................................................... 50 7.1 Cost Recovery in Medical and Public Health Services (Non-ESIS) ........ .......... 54 8.1 Cost-Effectiveness of Interventions -- Outreach Level ............. .................... 62 8.2 Cost-Effectiveness of Interventions -- Primary Health Center Level ................. 62 8.3 Cost-Effectiveness of Interventions -- First Referral/Secondary Level ....... ....... 63 8.4 Cost-Effectiveness of Interventions -- Tertiary Level ................................... 64 9.1 Karnataka - Share of Allocations to PRIs in the Total Health Budget ................ 75 9.2 Decentralization Matrix: Scope for Change in Grassroots Administration in the Health Sector .................... ............................................. 77 FIGURES 3.1 Trends in DALYs Lost Due to Selected Diseases in India, 1990 to 2020 ........... 17 5.1 The Structure of Government Health Financing .................... ..................... 31 5.2 Channels Through Which Structural Adjustment Affects Health Spending ......... 39 9.1 The Maharashtra-Gujarat Model ..................................................... 71 9.2 The West Bengal Model .................. ................................... 71 9.3 The Karnataka-Andhra Model . ..................................................... 72 BOXES Box 1 Health Status in India and the Four States .10 Box 2 Financial Situation of the State and Implications for the Health Sector: The Example of Andhra Pradesh .43 INDIA NEW DIRECTIONS IN HEALTH SECTOR DEVELOPMENT AT THE STATE LEVEL: AN OPERATIONAL PERSPECTIVE EXECUTIVE SUMMARY A. SECTORAL BACKGROUND 1. During the past quarter of a century, India has made substantial progress in improving the health status of its population. Between 1970 and 1993, life expectancy at birth increased from 50 to 61 years and infant mortality decreased from 137 to 74 per 1,000 live births. India's health policy during this period has been based on the assumption that primary health care is a basic right to which people should not be denied access due to inability to pay or for other socio-economic reasons. Nationwide population-size based norms have determined the establishment of health facilities throughout the country. The National Health Policy (NHP, 1983) expanded this approach by specifying targets for fertility reduction and emphasized the reduction of preventable mortality and morbidity affecting mothers and young children. Greater improvements in health status could have been achieved if these priorities had been funded in accordance with the stated policy. However, public investments in health care have only partially reflected the priorities highlighted in the Government's policy. At the same time, private health services have been inaccessible to the poorest and most vulnerable sections of the population and do not address public health issues of national significance. As a result, substantial gaps remain in the effective delivery and quality of health services. 2. The health sector in India, in this period, has been characterized by: . A government sector that provides publicly financed and managed health services throughout the country, from primary health centers to hospitals, where free curative and preventive health services are made available to a large section of the population. Government-provided services are the dominant source of preventive care, such as immunization, ante-natal care, infectious disease control and hospital-based care, and account for about 22% of overall health spending and 1.3% of GDP. * A private sector comprising mainly of for-profit, fee-for-service practitioners, which plays a dominant role in the provision of individual curative care through ambulatory health services, and accounts for about 78% of overall health expenditures and 4.7% of GDP. Private health spending as a share of national income in India is amongst the highest for developing countries. Per capita expenditure is higher than in China, Indonesia and most African countries but lower than in Thailand and Malaysia. 3. Nationwide health care utilization rates show that private health services are directed mainly at primary health care, and are financed almost entirely from out-of-pocket sources. This is in contrast to the situation in many industrialized countries, where private health services are directed mainly at hospitalization, secondary and tertiary health care, little of which is financed directly by households. The reliance on such a high proportion of funds from out-of-pocket sources in India has placed a disproportionate burden on the poor. vii Such a program is politically possible, and operationally and administratively feasible, as demonstrated by the four states. However, there is substantial variation between states in terms of their commitment to undertake reform and their capacity to implement health programs. The initiatives proposed in the report, if implemented in a timely manner, will assist in developing an effective and sustainable health system which will carry India forward to the next century. The review wili help to develop action plans in several key areas of health reform for other states that seek to enhance the performance of their health care services, improve the health status of the population and the quality of people's lives. The performance of health services would be measured against: greater effectiveness and improved outcomes of existing programs; improved efficiency in the allocation of resources; greater access and equity; and * consumer satisfaction. D. CHALLENGES AND OPPORTUNITIES AT THE STATE LEVEL 7. States in India are beginning to address health care delivery issues in more efficient ways. Nevertheless, state governments have to trigger greater change with respect to key policy reform and institutional strengthening. The major challenges faced by the states in delivering a package of health care services and enhancing the performance of the delivery system are summarized below: 8. Key Aspects of the Health Care Strategy. Three main issues with regard to the existing health care strategy at the state level need to be addressed. First, the government's health care strategy is anchored on population-size based norms rather than the specific health needs at the community level. Different needs result from variations in disease pattern, and the extent of private and non-govermment (NGO) sector involvement in health care provision at the community level. For example, at present, in the four states included in this review, conmunicable diseases account for about 53% of the burden of disease, non-communicable diseases about 30%, and injuries and accidents about 17%. There is, however, some difference between the states, indicating that a health transition is underway, with an increasing incidence of non-communicable diseases, and injuries and accidents. This transition is expected to gain momentum resulting in a considerable change in the disease pattem over the next 10 to 20 years.' Moreover, epidemiological indicators in all states today show that the disease pattem varies from community to community, and between rural and urban areas within states. Studies and data also show that the changing nature of the burden of disease, the role of other providers, the needs of the consumers and societal dynamics at the block, district, state and regional levels necessitate a change in health care planning strategy to address present and future needs. 9. Second, the technical efficiency of key programs is seriously limited, as service functions are duplicated, and technical paradigms have become out-of-date. The mechanism for delivering public health services faces serious problems, including overlapping functions and duplication among the various tiers of the health care system. Lower tier institutions such as primary health centers are It is expected that in the year 2020, the burden of non-communicable disease will increase to 57% of the total, and injuries to 19%, while the burden of communicable disease will decrease to 24% (based on data from Murray and Lopez, 1996). ix government's objective of funding a basic package of health services, substantially more resources for health care are required, but the overall state finances noted above pose a serious problem. Second, within the health sector in most states, resource allocation in the public sector is skewed in favor of tertiary care services relative to needs at the primary and secondary levels, particularly rural and community hospitals. Third, much of the resources are absorbed by salary costs. The recurrent budget for operations and maintenance is chronically under-funded and the programs are not fully effective. 14. Alternative Methods of Health Care Financing. The resource constraints faced in the health sector will require alternative methods of health care financing to supplement budgetary allocations. Alternative methods of financing health care, such as cost recovery, social and private insurance, and participatory schemes, are limited. Reported revenue data indicate that cost recovery in the health sector is about 3% on average in India, although there are problems in estimating the level. Some of the problems faced with cost recovery include: (a) lack of an appropriate mechanism within the government to review user charges; (b) weak administrative mechanism for collecting user fees; (c) difficulty in targeting the poor for exemption from user fees; and (d) constraints to greater retention of funds generated through user charges at the point of collection. Based on international experience it should be noted, however, that a cost recovery rate of 15-20% in the health sector is about the most that can be expected in the public sector. In the long run, issues such as private insurance and managed health care will need to be addressed, as the industrial and urban sectors in India expand, and cost containment becomes increasingly important. 15. Analytical Capacity for Health Care Planning. Despite progress in recent years in the availability, quality and use of information on health financing at the national or state levels, the capacity to undertake analytical work for health planning and policy analysis remains limited within the central and state governments. For an example of what is possible, recent analytical work undertaken by the Administrative Staff College of India on the burden of disease and cost-effectiveness of health interventions has provided valuable input for health planning in Andhra Pradesh. 16. Health Care Management and Administration. The health care management system at the state level is weak. Some of the problems include: (a) ineffective overall management in the implementation of health programs; (b) overlapping functions of the different tiers of the health care system and lack of coordination and integration between them; and (c) the lack of involvement of community level organizations in revenue collection, planning and budgeting. 17. In the context of increasing decentralization of health care administration, the state governments need to build the management capacity in panchayati raj institutions (PRIs), one of the mechanisms for decentralized administration at the state level. The existing decentralized administration for health care suffers from inadequate coordination between different tiers of the PRIs, between the PRIs and technical departments, and between state level coordinating agencies. Furthermore, the PRI's limited capacities do not allow for effective health care planning and implementation, particularly with regard to resource allocation and revenue collection, planning, policy making and supervision. The inter-tier and inter-agency coordination of decentralized administrative structures needs to be improved, and the capacity of the PRIs needs to be enhanced to support health functions. x E. RECOMMENDATIONS 18. In response to the challenges faced in the health sector at the state level in India, it would be important for state governments to undertake a series of measures to increase the effectiveness of their health systems and initiate a process of reform. The report makes the following specific recommendations: I. Reorient the Health Care Strategy (Chapter 3) 19. Integrate the Population-Size Based Approach with a Need Based Approach. To enhance the effectiveness and efficiency of health care programs, states should integrate the current population- size based approach with one that would address the health care needs of the states based on the disease pattern, and the extent of private and NGO sector involvement in health care delivery at the community level. The development of health care strategy at the state level should involve local administration in the planning process to reflect the needs at the community level. The states should provide greater input in health policy making at the national level as well. 20. States should develop the essential components of a health care system to provide a basic package of services to address the major health problems and the transition in disease patterns underway. The development of this package of services would take into account state level variations in the disease pattem, public expenditure considerations, the extent to which the private sector is providing some of these services, the extent to which poverty alleviation is part of the government's strategy in the health sector, the cost-effectiveness of health interventions, and programs that have large positive externalities. The package of services would consist of: communicable disease prevention and treatment; limited clinical services; essential and emergency obstetric and pediatric care within easy access of people living in rural areas; capacity building for prevention and health promotion programs to cope with non-communicable diseases and their risk reduction; prevention and treatment of injuries; and limited treatment of non-communicable diseases which is cost-effective, such as cataract operations and basic medical treatment of heart attack, stroke and pain relief 21. Rationalize Service Norms and Update Technical Paradigms. Service norms at different level health facilities should be rationalized on the basis of demand for services and patient load to address problems of duplication in service delivery and lack of efficiency. Analysis shows that substantial cost savings would be gained if an effective referral system was developed and services could be provided at the lower levels of the health care system before patients are pushed up to a higher tier. Incentives should be provided to increase the effectiveness of the referral mechanism between the different tiers of the health system. Once service norms have been established, new yardsticks defining the sanctioned staff at health facilities of different size, infrastructure requirement, equipment, drugs and medicine and supporting services should follow. New technical paradigms also should be adopted to strengthen the effectiveness of programs and packages of services. 22. Workforce Issues. Create Incentives for Staff Incentives should be enhanced to address the issue of shortage of critical medical personnel, particularly doctors, in remote and rural areas. Such incentives could include monetary as well as non-monetary benefits such as suitable accommodation, preferential school admissions for children of doctors living in remote areas, transfer to an urban area after a stipulated length of stay, and training opportunities in clinical and management skills. Provide Training. A large pool of staff needs retraining, and the public health functions of various personnel xi categories should be strengthened. States should consider alternative means of engaging key technical staff on contractual arrangements. Lessons could be leamed from the experience of some state governments that are successfully utilizing staff through contractual arrangements in the implementation of some national disease control and other programs. II. Coordinate Public and Private Sectors Roles (Chapter 4) 23. The overall strategy for the health sector should take into account the existing levels of private finance and provision of services at the state level. State govemments should play an active role in creating an enabling environment for greater private sector participation in the health sector and fostering public-private partnership, while ensuring that the quality of care in both the private and the public sectors improves. There are several options for the govemment to ensure that the private health sector continues to play a vital role in the health sector and expand the scope of its activities. These are discussed below: 24. Increase Private Participation. To make more efficient use of total resources available in the health sector, state govemments need to evaluate alternatives related to direct provision of services versus public financing of some activities performed in the private sector. First, state govemments should facilitate the further expansion of the private sector in areas where it has a comparative advantage such as tertiary level health care, super-specialty and support services. Second, state govemments should encourage the private sector to adopt appropriate therapeutic norms and regimens recommended by the national programs. Third, state govemments should promote private sector participation in preventive and promotive care services by providing incentives and developing schemes to finance, train and integrate private providers in case-finding, diagnostics, and treatment for priority health problems that are of public health significance. 25. Increase Opportunitiesfor Contracting Out. There are no legal barriers inhibiting the use of contractual services for support functions, and the Contract Labor Regulation and Abolition Act (1970), which prohibits certain institutions from contracting out perennial services, exempts hospitals and health care facilities. Private contractual services are often more efficient and effective than directly hired labor. In view of the difficulties of employing government staff, such as slow recruitment procedures and poor attendance, contracting out certain services, especially support services, is an attractive altemative. The state govemments should, wherever economically attractive, contract out support services such as laundry, kitchen, landscaping, dietary services, sanitation, security and mainstream diagnostic and clinical services. In addition to economic considerations, state govemments should ensure that the quality of services is maintained. This will require improved management skills. Administrative procedures and guidelines, and adequate accountability functions should be in place to facilitate the contracting out of services. 26. Strengthen Linkages between Government and Non-Governmental Organizations (NGO). Government is the major provider of preventive and promotive health care services, but its coverage is limited. There should be a concerted effort by the states to involve credible NGOs in this area and provide them with opportunities to work with PRIs. Support for NGOs should be increased in areas such as social marketing of essential drugs and contraceptives, and behavior changing health education activities. The govemment should actively seek the cooperation of NGOs in disseminating public health messages by involving them in information, education and communication (IEC) activities. NGO participation could be promoted in the delivery of primary health care and first referral services xil in remote and rural areas where outreach is limited, as well as in urban slums. Contracting out the delivery of primary health care in remote areas to the NGO sector, which has a comparative advantage in improving access to such health services for some disadvantaged groups, could also be promoted. 27. Expand Capacity to Monitor and Certify. The government's capacity to register, certify and monitor private health care provision, especially the qualifications of doctors and other medical personnel and the quality of their services, should be strengthened. State governments could enact legislation and issue guidelines to register nursing homes, private clinics/hospitals and ensure minimum standards of care. Some of these functions could be undertaken collaboratively by the central and state governments, while others could be undertaken by a professional body such as the Indian Medical Association in accordance with all-India standards. III. Strengthen State Financing Arrangements for the Health Sector (Chapter 5) 28. Review Fiscal Structures and Develop Budgeting and Fiscal Tools. In order to simplify the complex budgeting and accounting arrangements, the state governments should, through their Ministries of Health and Family Welfare and Finance: (a) review the fiscal structures and procedures in the health and family welfare sectors including the roles of the central, state and local government in fmancing the provision of basic inputs; (b) develop program budgeting tools at the state and central levels to monitor and evaluate expenditure for important schemes; and (c) develop fiscal tools to enable greater experimentation with resource allocation and alternative financing mechanisms, and consideration of alternatives with regard to direct provision versus financing of health care services. 29. Provide Supplementary Finance. The actual transfers of central resources to the states are not addressing inter-state equity issues, especially for those states which are most in need. To alleviate the health care financing needs of poorer states, where socio-economic and health indicators remain depressed, supplementary financing could be provided through, for example, a health resources assurance fund. Priority could be given to those states which are most in need and are taking credible steps to improve their overall finances. IV. Enhance and Prioritize State Expenditures on Health (Chapter 6) 30. Improve Overall State Finances. To address the overall deterioration in state finances, state governments should take credible steps such as: increase tax revenue as a share of state domestic product; increase the buoyancy of tax and non-tax revenue; and reduce overall public expenditures on subsidies, salaries, and poorly targeted welfare programs. By improving their overall financial situation, the states would be better equipped to address resource needs in the health sector. 31. Increase Allocation to Health within the Overall Budget. State governments, on average, need to provide 50% more resources to the present contribution of US$2-3 on an annual basis to fund their basic package of health care services. This amnount may be difficult to provide in the present fiscal situation faced by the states. At a minimum, state governments should maintain the share of health sector allocation in the overall budget to redress the downward trend in the share of resources evident in most states. 32. Re-evaluate Prierities within the Health Budget. The state governments should reevaluate the priorities within the health sector budget, especially with regard to the allocation of resources xiii between primary, secondary and tertiary levels. The primary and secondary levels of health care need additional emphasis. This could be effected through reductions in the allocation to medical education, including tertiary hospitals, and social insurance schemes such as the Employees State Insurance Scheme (ESIS) that are not appropriately targeted to the poor. The share of primary and secondary levels, which provide the basic package of public health and clinical services, should be increased within the overall envelope of state government resources for the health sector. Over the next 3-5 years, state governments would need to allocate 75% of incremental resources allocated to the health sector to the primary and secondary levels. 33. Increase Allocations for Non-Salary Recurrent Costs. The state governments should also re-evaluate their priorities with regard to non-salary recurrent inputs such as drugs, essential supplies and maintenance budgets. With some minor variation between the states, it appears that about 75% of the health budget is absorbed by staff salaries and wages. Within these overall constraints, the state governments in the next 2-3 years should allocate adequate resources for drugs, essential supplies and maintenance budgets in accordance with established norms. In addition, the health budgets of the PRIs should be enhanced in order to allow them to carry out their maintenance functions and newly provided responsibilities. V. Implement Cost-Recovery Mechanisms (Chapter 7) 34. Develop an Instiutional Framework for Periodic Review of User Charges. The states should set up an institutional framework to review the structure of user fees and pricing policy periodically, and recommend revisions as necessary. The Strategic Planning Cells established in the health departments in the four states studied provide a viable institutional arrangement for this purpose. 35. Strengthen Collection Mechanisms and Target Vulnerable Groups for Exemptions. Analysis shows that substantial increases in revenue can be gained by concurrently strengthening the mechanism for collecting user charges and periodically revising them. State governments should increase cost recovery in the health sector from an average of about 3% to about 15-20% in the next 3- 5 years. In addition, adequate targeting mechanisms to identify the poor should be implemented both in rural and urban areas. Due to the administrative costs involved, it is preferable to strengthen the existing system for targeting the poor rather than create a new mechanism. 36. Retain Revenues at the Point of Collection. Hospitals and health facilities should be allowed to retain all of the revenues collected. Alternatively, district health committees or health systems corporations (e.g. as in Andhra Pradesh and Punjab) could be empowered on their behalf to retain such revenues and redistribute them among hospitals within the district according to both need and level of collection. 37. Utilize Revenue for Non-Salary Recurrent Expenses. Revenue collected should be used for non-salary recurrent expenditure items such as drugs, essential supplies and record keeping. A modest fee could be charged for out-patients, as is currently being done in West Bengal and charges concentrated on diagnostic and other services, as well as on voluntary services such as private rooms or wards and on medical services with a relatively low cost-effectiveness. Increased charges should be introduced in a phased manner and matched with higher quality of service. xiv VI. Improve the Analytical Basis for Decision-Making (Chapter 8) 38. Use Cost-Effectiveness and Other Analyses to Inform Policy-Making. Cost-effectiveness analysis is an important analytical tool to aid and inform policy and decision-making in the health sector. The results have relevance for decisions regarding resource allocation for priority diseases, development of a basic package of services, rationalization of services by levels of health care institutions, and for establishing a basis for the charging of user fees. Cost-effectiveness analysis should not, however, be viewed as the only tool for decision-making. As stated in the World Development Report (1993), the most justified public measures combine a rationale for public action with a cost-effective intervention. There are several factors which need to be considered jointly in developing government resource allocation policies, including: the presence of other interventions that might affect costs; the possibility of eliminating a disease as a public health problem, such as leprosy; those diseases that have large initial costs but permanent benefits; those interventions that have positive externalities beyond health such as farnily planning; those interventions that have high poverty reduction benefits; and the pattern of private health expenditures. 39. Develop Institutional Capacity for Health Sector Planning. States should strengthen their planning capacity in the health sector to: (a) undertake analyses of their burden of disease regionally and at the community level; (b) review the cost-effectiveness of key health interventions; and (c) carry out other important analytical work, such as manpower planning. Developing local institutional capacity to undertake such analyses should remain an important priority. VII. Strengthen Public Sector Management of Health Care (Chapter 9) 40. Strengthen Overall Management Authority. Management arrangements at the state level and below should be strengthened to ensure that health programs are implemented effectively. States should strengthen the implementation and supervision capacity of the implementing agency. Andhra Pradesh and Punjab have established autonomous implementing agencies at the secondary level to improve management and administration, and provide financial and workforce related autonomy. Although this is not the only approach to improving the implementation and supervision capacity of the states, enhanced management authority with regard to finance, personnel matters and effective implementation should be ensured. It is possible for the states' Department of Health and FamilyWelfare (DOHFW) to perform these functions, but they should be given greater authority and flexibility with regard to finance, supervision and workforce related issues. 41. Enhance the Capacity of PRls. Decentralized govemance and local level participation can contribute importantly to improving the health care system, through better monitoring and supervision of the functioning of the health system at the local level, and by assisting in developing plans which take care of local perceptions and needs. Panchayati Raj Institutions (PRIs) are one way of addressing the issue of decentralized govemance. Analysis shows that, for the PRIs to be more effective, more power should be given to them in the areas of budget allocation, resource use, revenue raising, planning, policy making, supervision, maintenance and training. The notion of decentralised governance would be more meaningful only when the PRIs' capacity is enhanced and their access to resources becomes more substantial. A process of consultation and coordination between the DOHFW and PRIs in each state needs to be initiated on these aspects, and clear structures and systems need to be worked out to facilitate implementation. xv 42. Increase Coorination between Adninistrative Agencies. Three important issues emerge from the analysis of the Panchayati Raj Acts of different states: (a) linkages between the three tiers of the PRI need to be strengthened to improve implementation of health programs; (b) co-ordination between PRIs and the technical departments needs to be strengthened to improve implementation of health programs at the grassroots level; and (c) coordination between PRIs and state level agencies needs to be strengthened by developing a viable mechanism to facilitate the effectiveness and efficiency of program implementation. F. DISSEMINATION AND ISSUES FOR FURTHER ANALYTICAL WORK 43. Dissemination. This report continues the on-going dialogue on state level health sector development issues between the Bank, GOI and state governments which was initiated in 1992. The Green Cover version of the report was discussed with senior officials of the Union Ministry of Health and Family Welfare (MOHFW) and state health officials in Goa during November 12- 14, 1996 at the Health Strategy Workshop jointly organized by the MOHFW and the World Bank, with follow-up discussions in Delhi soon after. The report has also benefited from collaboration and discussion with WHO, ODA and KfW. It is intended to widely disseminate the report within India and among the donor community, especially those agencies that have been actively involved in discussions on the development of the health sector. The report will help to continue the series of workshop and seminars that the Bank has been jointly conducting with the MOHFW and will be used as an instrument to invigorate the public debate on health sector development and reform issues in India. 44. Issues for Further Analysis. This review has covered a number of major issues with regard to health sector development and institutional strengthening at the state level. There are several other issues at the state level which would benefit from additional analytical work, including incentives for the workforce, alternative financing options such as social and private insurance, community financing, and selected aspects of the efficiency and effectiveness of technical paradigms relating to specific health programs. xvi Table on Main Findings and Recommendations Issues Actions Key Aspects of the Health Reorient the Health Care Strategy Care Strategy: * Three main issues with regard to * Integrate the Population-Size Based Approach with a Need Based the existing health care strategy Approach: States should integrate the current population-size at the state level need to be ad- based approach with an approach that would address their health dressed: (i) inefficiencies of the care needs based on the disease pattern and the extent of private population-size based approach; and NGO sector involvement in health care delivery at the com- (ii) shortcomings in the technical munity level. The content of such a package is outlined in the re- efficiency of key programs with port and may vary across states based on their burden of disease. regard to duplication of func- * Rationalize Service Norms and Update Technical Paradigms: tions and outdated technical States should rationalize service norms; tailor yardsticks defining paradigms; and (iii) insufficient the sanctioned staff at hospitals of different sizes to fit current incentives for the workforce. needs based on patient load and service norms; create new para- digms to strengthen the effectiveness and efficiency of programs and packages of service delivery; and provide incentives to make the referral mechanism between the different tiers of the health system more effective. * Enhance Incentives for Staff and Provide In-Service Training: Incentives for staff should be enhanced in order to address the shortage of critical medical personnel, particularly doctors, in re- mote and rural areas. A large pool of staff require retraining; and states should consider hiring key technical staff on a contractual __ asis. Public-Private Partnership: Coordinate Public and Private Sector Roles at the State Level * The health care strategy at the * Increase Private Participation: State govermments should: (i) fa- state level does not fully take cilitate the further expansion of the private sector in areas where it into account the vital role of the has a comparative advantage such as tertiary health care, super- private sector in the provision of specialty and support services; (ii) encourage the private sector to selected health serices and has adopt appropriate therapeutic norms and regimens recommended not fully recognized the oppor- by the national programs; and (iii) promote private sector partici- tunities for greater private sector pation in preventive and promotive care services by providing in- involvement in policy making. centives and developing schemes to finance, train and integrate private providers in case-finding, diagnostics, and treatment of priority health problems that are of public health significance. * Increase Opportunities for Contracting Out: Where feasible, state governments should contract out support services, and diagnostic and clinical services. The decision to contract-out should be based on economic considerations, while ensuring that the quality of services is maintained. Administrative procedures and guidelines, and adequate accountability functions should be in place to facili- tate contracting-out. xvii Issues Actions * Strengthen Linkages between Government and NGO Sectors: State governments should actively seek the cooperation of NGOs in disseminating public health messages, by involving them in in- formation, education and communications activities. Where fea- sible, they should also involve NGOs in increasing access to pri- mary health care and first referral services in remote and rural ar- eas. . The states' capacity to register, . Expand Capacity to Monitor and Certify: The states' capacity to certify and monitor private register, certify and monitor private health care provision could be health care provision is weak. strengthened and implemented by enacting legislation and issuing guidelines for ensuring minimum standards of care. These func- tions could be undertaken by the government and/or by a profes- sional body such as the Indian Medical Association in accordance .____________ ___________ _ with All-India standards. Complexity of Budgeting and Strengthen State Financing Arrangements Accounting Structures: . The existing financing arrange- . Review Fiscal Structures and Develop Budgeting and Fiscal Tools: ments and administrative struc- The Ministries of Health, Family Welfare, and Finance of the cen- tures for financing health care ter and state governments should: (i) carry out a substantial review are complex and hinder effective of fiscal structures and procedures in the health and family welfare management. sectors with regard to the roles of the center, state, and local gov- ernment in the financing of basic inputs; (ii) develop appropriate budgeting tools to monitor and evaluate expenditures for important schemes; and (iii) develop fiscal tools to enable greater experimen- tation with resource allocation and alternative financing mecha- nisms. . Center-state health care financ- * Provide Supplementary Finance: The central government could ing mechanisms do not ade- consider supplementary financing through, for example, a health quately address inter-state equity resources assurance fund, giving priority to those states which are issues. States which need funds most in need and are taking credible steps to improve their overall the most are often least able to finances. provide resources for health care programs. Low Level of Resources and Enhance and Prioritize State Expenditures on Health Efficiency in the Health Sector: * Health sector financing issues * Improve Overall State Finances: States should take credible steps need to be reviewed in the con- to increase their overall finances by: increasing tax revenue as a text of deteriorating overall fis- share of state domestic product; increasing the buoyancy of tax and cal situation in many states. non-tax revenue; and reducing overall public expenditures on sub- This is indicated by a rising fis- sidies, salaries and poorly targeted welfare programs. By improv- cal deficit, increasing interest ing their overall financial situation, the states would be better payments as a share of total equipped to address resource needs in the health sector. revenues and an increasing share of debt outstanding as a share of State Domestic Product. xviii Issues Actions * State health and family welfare * Increase Allocations to Health within the Overall Budget: State expenditures are: (i) below the governments, on average, need to provide 50% more resources to international estimates consid- fund their basic health care package. At a minimum, state govern- ered adequate for low income ments should maintain the share of health sector allocations in the countries to meet public health overall budget to redress the share of declining resources to the priorities as suggested by the sector in most states. WDR (1993); and (ii) below the levels required to achieve the service norms set by GOI. * Public expenditures in the health . Re-evaluate Priorities within the Health Budget: The shares of sector are skewed in favor of ter- primary and secondary-level health care, which provide the basic tiary level facilities and medical package of public health and clinical services, should be increased education relative to secondary within the overall envelope of state government resources for the level hospitals, particularly rural health sector. Over the next 3-5 years, state governments would and community hospitals. need to allocate 75% of incremental resources allocated to the health sector to the primary and secondary levels. * State level health expenditures * Increase Allocations for Non-Salary Recurrent Costs: Within the on drugs, essential supplies, and next 2-3 years, state governments should allocate adequate funds operations and maintenance for drugs, essential supplies, and maintenance budgets in accor- services are low; the allocation dance with established norms. Supplemental funds from user of fuinds to the PRIs for health charges could also be targeted for non-salary recurrent cost items. care are inadequate to carry out Moreover, the health budgets of the PRIs should be enhanced in maintenance activities. order to allow them to carry out their maintenance function and newly provided responsibilities. Alternative Methods of Health Implement Cost-Recovery Mechanisms Care Financing: * There is no appropriate institu- * Develop an Institutional Framework for the Periodic Review of tional frame work for reviewing User Charges: The states should set up an institutional framework user charges; the level of cost re- to review user charges such as through the Strategic Planning Cells covery is minimal due to the low established in the health sector in the four states studied. structure of fees and inadequate . Strengthen Collection Mechanisms and Target Vulnerable Groups collection mechanisms; targeting for Exemptions: State governments should increase cost recovery mechanisms for exempting the in the health sector from an average of about 3% to about 15-20% poor from user charges are diffi- in the next 3-5 years. This can be achieved by concurrently cult to implement; and there is strengthening collection mechanisms and by reviewing and peri- no adequate mechanism to en- odically revising user charges. At the same time, adequate mecha- sure that funds collected would nisms to target the poor for exemptions from user charges should be used at the point of collection. be implemented. * Retain Revenues at the Point of Collection: Hospitals, district committees or state health systems corporation should be allowed to retain 100% of the revenues collected, for redistribution to hospitals within the district. * Utilize Revenue for Non-Salary Recurrent Expenditures: In- creased charges should be introduced in a phased manner and matched with higher quality of service. Revenue collected should be used primarily for non-salary recurrent expenditure items. xix Issues Actions Analytical Capacity for Health Improve the Analytical Basis for Decision-Making Care Planning: . The states and the center have * Use Cost-Effectiveness and Other Analyses to Inform Policy Mak- limited capacity to undertake ing: The burden of disease and cost-effectiveness analyses of analytical work for health care health interventions should be viewed as analytical tools to broadly planning. Yet, analyses such as position policy and achieve better decision-making in the health the Burden of Disease and Cost- sector. Effectiveness analyses under- taken in Andhra Pradesh have . Developlnstitutional CapacityforHealth SectorPlanning: States proven to be very useful in should strengthen their planning capacity in the health sector and helping the state with its health provide greater input in health policy making at the national level. care planning. States should undertake analyses of their burden of disease re- gionally and at the community level; review the cost-effectiveness of key health interventions; and carry out other important analyti- cal work such as manpower planning needed to facilitate and im- prove policy-making. Health Care Management and Strengthen Public Sector Management of Health Care Administration: * Management of health care at * Strengthen Overall Management Authority: Management functions the top is diffuse, and the state with regard to finance, flow of funds, personnel matters and effec- level Departments of Health of- tive implementation in the health sector should be strengthened, ten lack authority on matters re- and the management authority needs to be given greater autonomy lated to finance, flow of funds in these key areas. The management structure could be a corporate and personnel matters. entity or a strengthened DOHFW -- both approaches are viable. * The PRIs' limited capacities and * Enhance the Capacity of PRIs: In order for the PRIs to be more problems in coordination are ad- effective, more power should be given to them in the areas of versely affecting the planning budget allocation, resource use, and revenue raising, planning, process at the lower levels of the policy-making, supervision, maintenance, and training. A process Panchayati Raj bodies. of consultation between the DOHFW at the state level and PRI needs to be initiated on these aspects, and structures and systems need to be worked out to facilitate implementation. * Increase Coordination between Administrative Agencies: Link- ages between the three tiers of the PRI need to be improved in or- der to enhance implementation of health care programs. The coor- dination between the PRIs and the technical departments and state- level coordinating agencies also needs to be improved. CHAPTER 1 INTRODUCTION A. Background 1.1 The Government of India (GOI) and the World Bank have been engaged in a dialogue on health sector development policy since 1992. The focus of that dialogue has been on helping India address the most burdensome diseases in a cost-effective manner, while moving toward the establishment of health systems at the state level that are efficient and effective. A more sustainable health system at the state level will reduce the financial demands on the state in the future and address poverty issues in a key sector of the economy. The focus on health reform and financing at the state level is consistent with the recent Country Assistance Strategy (CAS)l, which reiterates the Bank's strategy to make health systems more effective and sustainable in India. The first part of the strategy in the health sector is to reduce the most significant diseases through the support of priority programs. The second is to strengthen the performance of the health system of the states by providing more efficient and effective health care, especially for the poorer segments of society who have limited access to basic health care services. This sector work is in line with the emphasis on private sector initiatives and the importance of focusing on state level issues such as greater effectiveness of existing programs, reform of sectoral expenditures and decentralized administration. B. Purpose and Scope of the Study 1.2 The report analyzes health care strategy and reform in the four states of Andhra Pradesh (AP), Kamataka, Punjab and West Bengal that provide valuable lessons for other states. It provides a comparative review of the experience of these four states and assists in developing action plans in several key areas of health reform for other states that seek to improve the performance of health care services, the health status of the population and the quality of people's lives. Such performance indicators include greater effectiveness and improved outcomes of existing programs, improved efficiency in the allocation of resources, greater access and equity, and consumer satisfaction. The review continues the on-going dialogue on state level health sector development issues between the Bank, GOI and state Governments which was initiated four years ago. The report has also benefited from collaboration and discussion with WHO, ODA and KfW. 1.3 The report and related dialogue will, over the next three to five years, provide a clear assessment of state level health sector strengthening and reform that needs to be undertaken to promote an effective, efficient and sustainable health system. This report addresses systemic issues and options that states face for strengthening institutional capacity and implementing a program of health reform in selected areas. Such a program is politically possible, and operationally and administratively feasible, as demonstrated by the four states. However, there is substantial variation between states in terms of their commitment to undertake reform and their capacity to implement health programs. The initiatives proposed in the report are incremental and modest, and will assist in developing an effective and sustainable health system which will carry India forward to the next century. 1 India: Country Assistance Strategy-Progress Report, Report No. IDA/R96-154/1, September 5, 1996. 2 1.4 This study elaborates what states can do to implement a program of institutional strengthening and health reform in selected areas, drawing on analyses of the changing epidemiology and burden of disease, public/private partnerships in the provision and financing of health care, center-state health financing issues, adequacy of finance and finance strategies and institutional and management issues related to decentralized initiatives at the state level. It does not, however, analyze financing issues such as health insurance or community financing, efficiency and effectiveness analyses of technical paradigm shifts related to specific health interventions, incentives for the workforce or all aspects of management and administrative arrangements, some of which have been covered in other reports or need to be further addressed. 1.5 Linkage with Previous Sector Work on Health Financing. This sector work builds upon an earlier study "India: Policy and Finance Strategies for Strengthening Primary Health Care Services", Report No. ] 3042-EN, May 1995. While the earlier study focused primarily on health care at the level of the central government, this sector work extends the discussion on the center-state relationship and focuses on health care reform issues at the state level. Subsequent to the earlier sector work, further studies, workshops and seminars on health reform at the state level were undertaken during the preparation of two state health systems projects and this sector work. The information garnered through this further work on the health sector provides some of the information and database for the report. A review was undertaken on public expenditures on health in the four states of Andhra Pradesh, Karnataka, Punjab and West Bengal; a burden of disease and cost effectiveness study was undertaken in Andhra Pradesh; a burden of disease study was undertaken in Kamataka, Punjab and West Bengal; analyses of the private sector and beneficiaries were indertaken in Andhra Pradesh, Karnataka, Punjab and West Bengal; and a study analyzing the decentralized panchayat administration system to assess their capacity to manage and supervise health programs was undertaken. Extensive discussions were held with central and state level policy makers in the health sector through workshops and seminars. The bibliography provides a listing of reports used as background material for this study. The detailed terms of reference for the study are discussed below. C. Terms of Reference for the Study 1.6 An Initiating Memorandum (IM) was issued on July 19, 1995, with the following objectives: (a) review the evolving burden of disease and cost-effectiveness of interventions at the state level; (b) analyze the role of the private sector in health service delivery, clarify the roles of the public and private sectors in the financing and provision of health services, and explore the opportunities for enhancing the scope and importance of the private sector at the state level; (c) analyze state level health expenditure data in the four states; (d) estimate the cost-effectiveness of contracting out selective services to the private sector; (e) analyze different scenarios of user-charges implemented at state level institutions; (f) investigate the practical implications of decentralizing administrative authority on health related issues to the panchayat level of administration; and (g) analyze selected aspects of the beneficiary assessments to identify the most needy populations, assist in targeting such populations and estimate the costs of delivering adequate and necessary health care to such populations. 1.7 Dissemination. The background work for the report has been conducted in a collaborative fashion with the Union Ministry of Health and Family Welfare (MOBFW) and several state Govemments. Three important serminars, held in Jaipur (February 1995), Shimla (June 1995) and Pune (October 1995) have contributed extensively to sharpening the issues to reflect the priorities and 3 to operationalizing the recommendations. Collaborative work has also been conducted with local institutions, who have provided inputs to this report. These include the Administrative Staff College of India (ASCI), the Delhi Institute of Economic Growth, Operations Research Group (ORG), and the Foundation for Research and Development of Underprivileged Groups, in addition to those who contributed to the previous health sector report. The Green Cover version of the report was discussed with the Union Ministry of Health and Family Welfare (MOHFW) officials and state health officials in Goa during November 12-14, 1996 at a Health Strategy workshop jointly organized by the MOHFW and the World Bank. This was followed by further discussions in Delhi with senior MOHFW officials. The report has also benefited from collaboration and discussion with WHO, ODA and KfW. It is intended to widely disseminate the report within India and among the donor community, especially those who have been actively involved in discussions on the development of the health sector in India. This report will help to continue the series of workshop and seminars that the Bank has been jointly conducting with the MOHFW. The report will be used as an instrument to invigorate the public debate on health sector development and reform issues in India. D. Structure of the Report 1.8 The chapters in this report are organized as follows: (a) Chapter 2 provides a discussion of the challenges and opportunities in the health sector at the state level in India. The key issues highlighted are: health care strategy, epidemiology and burden of disease; public/private roles in the provision and financing of health care; allocative efficiency of health care resources; supplementary mechanisms for augmenting health care financing through user charges; cost- effectiveness of key health interventions; and health care management and administrative issues related to Panchayati Raj institutions (PRIs) and decentralized administration. (b) Chapter 3 provides a comparative overview of the health sector in the four states including the sectoral background and demographic features in Andhra Pradesh, Karnataka, Punjab and West Bengal; the evolving burden of disease and epidemiology; and the changes in emphasis that will be needed to address the health transition and the epidemiological polarization in India over the next twenty years. (c) Chapter 4 summarizes the role of the private sector in the delivery of health care services at the state level, covering the availability and cost of private health services; access to private health services; provision vs. financing of health services by the public and private sector; and public/private/voluntary sector partnerships in providing health services. (d) Chapter 5 discusses center-state financing issues; central, state and local government responsibilities in health finances; inter-state equity issues; government health expenditures in all states; patterns of health expenditures across states; and mechanisms of adjustment effects on center-state resource transfers. 4 (e) Chapter 6 analyzes public sector health expenditures in the four states included in this review; trends in state level public expenditures on health and family welfare; per capita expenditures on health; the effects of fiscal adjustment on health budgets; the share of budgetary resources devoted to health; the composition of health budgets; and future trends in public sector health financing. (f) Chapter 7 analyzes supplementary financing mechanisms related to user charges; existing practices relating to user fees in the four states; and the potential for raising revenues from user fees at the state level. (g) Chapter 8 discusses the cost-effectiveness of health interventions, using the Andhra Pradesh Burden of Disease and Cost Effectiveness of Interventions study as a basis for drawing lessons for other states. (h) Chapter 9 discusses the opportunities to improve implementation of health care delivery by decentralizing management and administration in the context of PRIs at the state level; key linkages between the state health administration and PRIs; and the role of PRIs in health care delivery. 5 CHAPTER 2 CHALLENGES IN THE HEALTH SECTOR A. Sectoral Background 2.1 During the past two decades the govemment has developed a health care system which finances and manages a basic health care infrastructure. Government-provided services are the dominant source of preventive care, such as immunization, ante-natal care, infectious disease control, as well as hospital-based care, and account for about 20% of overall health spending. The private sector, on the other hand, provides individual curative care through ambulatory care services for acute illnesses or illnesses not requiring hospitalization, and accounts for about 80% of overall health expenditures. Nationwide health care utilization rates show that the services provided by the private health care are highest for primary health care, such as visits to general practitioners, and are financed almost entirely from out-of-pocket sources. This is in sharp contrast to the situation in industrialized countries, where hospitalization, secondary and tertiary health care services account for the largest share of spending, little of which is financed directly by households. The reliance on such a high proportion of funds from out-of-pocket sources in India places a disproportionate burden on the poor. Private health services are inaccessible to the poorest and most vulnerable sections of society and do not address public health issues of national significance. As a result, substantial gaps remain in the effective delivery of health care services provided to the population. 2.2 The Government's long-term strategy, as enunciated in the National Health Policy (1983), gives high priority to the control of fertility, infectious diseases of public health importance and preventable causes of matemal and childhood mortality and morbidity. This is an appropriate policy given India's burden of disease. However, investment allocations only partially reflect the priorities highlighted in the Government's policy. Public spending on health is about 1.3% of GDP which is lower than in comparable Asian countries. The bulk of public spending on health, about three-quarters, is accounted for by the states, which are primarily responsible for implementing health programs. As a result, a major area of financing and policy reform to increase efficiency and improve effectiveness of health programs needs to be targeted at the state level. B. Looking to the Future: Challenges and Opportunities at the State Level 2.3 States in India are making progress in pursuing more efficient approaches to addressing health care delivery. Nevertheless, the states need to develop the essential components of a basic package of health services to address the health transition underway and the major health problems which will face them in the coming years. At present, in the four states included in this review, communicable diseases account for about 53%, non-communicable diseases about 30%, and accidents and injuries about 17% of the burden of disease on average. Epidemiological indicators show that disease pattems vary by states, with states more advanced in the health transition having a higher proportion of non- communicable diseases and injuries. The health transition is expected to gain momentum and is likely to result in considerable change in the disease pattem over the next ten to twenty years (see Chapter 3). 2.4 A basic health care package should take into account these state level variations in epidemiology and burden of disease. The package of services would consist of: communicable disease 6 prevention and treatment; limited clinical services; essential and emergency obstetric and pediatric care within easy access to people living in rural areas; capacity building for prevention and health promotion programs to cope with non-communicable diseases and their risk reduction; prevention and treatment of injuries; and limited treatment of non-communicable diseases which is cost-effective, such as cataract operations and basic medical treatment of heart attack, stroke and pain relief Within this framework, the development of the package of services would take into account public expenditure considerations, the extent to which the private sector is providing some of these services, the extent to which poverty alleviation is part of the government's strategy in the health sector, the cost-effectiveness of health interventions, and programs that create large extemalities. The package of services needs to be developed through a consultative and collaborative process, involving leading health practitioners and policy makers from the different levels of the health system, private and NGO sectors for social input, and the Finance Department of the state govemment to assess the financial ability of the state to provide the recommended package of services. 2.5 In order for the states to provide a basic package of services, which would be targeted to the needy sections of society, state governments would need to undertake a series of measures to reorient their health care system by strengthening institutional capacity and initiating a process of policy reform . These are discussed below. 2.6 Key Aspects of the Health Care Strategy: Three main issues with regard to the government's health sector strategy include: (a) the need to integrate the government's population-size based health care strategy from with an approach that addresses the health care needs of the people. The government's current health care strategy is based on a network of primary health care centers that are more or less uniformly interspersed across the country on the basis of population size. This approach is neither an efficient nor an effective way to address health care needs of different sections of the population because of the variation in the epidemiological profile and public-private mix across communities, blocks, districts, states and regions in the country. There is a need to revisit the health care strategy and fine-tune it based on epidemiological data available at the grassroots level, and the extent of involvement of private and NGO sectors in health care delivery. The panchayat administration provides an excellent basis for greater community level participation in the planning process for health care services, but the structures and systems linking the panchayat admninistration with health administration will need to be more clearly defined; (b) the need to improve technical efficiency of key programs which are seriously limited, rationalize service norms at various health facilities, improve staffing norms to better address need and patient load, improve effectiveness of the referral mechanism and update some of the technical paradigms. For example, the mechanism for delivering public health services faces serious problems, including overlapping functions among the various tiers of the health care system. Services provided at different tiers of the system are often duplicated and there is no clear delineation of services at each type of facility -- the lower tier institutions such as primary health centers (PHCs) are underutilized due to a multitude of reasons, including a lack of support from first referral institutions. The same applies for national disease control programs. There are some positive trends. The leprosy control program, for example, has shifted to a multi-drug therapy approach from the ineffective Dapsone monotherapy that was used in the past; other inadequacies in coverage, insufficient disability and ulcer care, inadequate detection 7 among female patients, low public awareness of the disease and associated social stigma are also being addressed. Similar paradigm shifts are needed for TB, cataract blindness, malaria and other national programs that are implemented at the state level; and (c) the need to provide better incentives for the workforce and address training needs. Problems related to the availability and quality of staff impede the technical efficiency of health programs and affect productivity. Overall, there is no shortage of doctors in the country but there is a shortage in remote and rural areas. There is also a shortage of nurses nationwide. Incentives need to be provided to medical professionals to encourage them to remain in their rural posts, thereby decreasing absenteeism. Training facilities and in-service training are limited, and professional staff are not up-to-date in clinical and management skills. A better understanding of the shortage of critical medical personnel and manpower needs is required. 2.7 Public-Private Partnership in the Delivery of Health Care Services. Despite accounting for 80% of overall health expenditures, the role of the private sector in the overall health care strategy is not clearly defined. The vital role the private sector plays in the provision of selected aspects of health services, such as ambulatory care, and the opportunities which remain for greater private sector involvement in other areas have not been fully recognized in policy making. The main challenges with regard to strengthening the public-private partnership in the delivery of health care services include: enhancing the scope and importance of the private health sector, while improving the quality of services; encouraging private sector involvement in preventive and promotive aspects of health care rather than solely in individual curative care; finding the appropriate mix between direct provision versus public financing of some activities performed by the private sector; promoting partnership between the public, private, and voluntary sectors; and improving the existing arrangement for regulating and monitoring private health care. 2.8 Resource Allocation and Efficiency in the Health Sector. The overall fiscal situation in many states has deteriorated sharply, with a rising fiscal deficit, increasing interest payments as a share of total revenue, and an increasing share of debt outstanding as a share of state domestic product. The overall financial situation faced by the states has affected health sector allocations. The public sector currently provides about US$2-3 per capita for health. The amount recommended by the World Development Report (1993) to provide a basic package of public health and clinical services for low income developing countries is about US$12 per capita annually. In the context of the Indian states, this may be a high estimate. Nevertheless, a sizable increase over the present allocation will be required to finance a broadly defined package of services. Moreover, within the health sector at the state level, resource allocation is skewed in favor of tertiary relative to primary and secondary services, and this imbalance needs to be corrected.2 In addition, since much of the resources are absorbed by salary costs, the recurrent budget is chronically underfunded. Recognizing that overall state finances pose a serious problem, the state govemments' objective of funding a basic package of health service will require more resources for health care, especially for primary and secondary health care services. 2 The terms first referral and secondary level hospitals are used synonymously in this report. They denote community/rural hospitals that have a bed strength of about 30-50 beds; area/taluka hospitals that have about 75-100 beds; sub-divisional/State General hospitals that have about 100-350 beds; and district hospitals that have about 300-550 beds. The level of services offered increase from community to area to sub-divisional to districts hospitals. 8 2.9 Alternative Methods of Health Care Financing. Since cost recovery mechanisms in the health sector are not well developed in India, revenue collection remains low. Some of the problems faced in this area include, inter alia: lack of an appropriate mechanism to review user charges; weak administrative mechanism for the collection of user fees; difficulty in targeting the poor for exemption from user fees, and constraints to greater retention of funds generated through user charges at the point of collection. The resource constraints faced in the health sector will require development of alternative methods of health care financing, such as cost recovery, private and social insurance and participatory schemes. 2.10 Analytical Capacity for Health Care Planning. Despite progress in recent years in the availability, quality and use of information on health financing at the national or state levels, the capacity to undertake analytical work for health planning and policy analysis remains limited within the central and state governments. States should undertake analyses of their burden of disease regionally and at the community level; review the cost-effectiveness of key health interventions; and carry out other important analytical work such as manpower planning needed to facilitate and improve policy- making. 2.11 Health Care Management and Administration. The health care management system at the state level is inefficient. Some of the problems that need to be addressed include: weak overall management and health planning capacity; overlapping functions of the different tiers of the health care system and lack of coordination and integration between them; uncertainties associated with the decentralization of authority to the panchayat system on the administrative operations of health care provision and financing; and the lack of involvement of community level organization in revenue collection, planning and budgeting. Health care management at the state will need to be strengthened by addressing these issues. 2.12 The key issues in the health sector are inter-linked. The dynamics between them will continue to affect the effectiveness and performance of the health care system. The improvements in the health sector will be measured by greater effectiveness and improved outcomes of programs, improved efficiency in the allocation of resources, greater access and equity, and consumer satisfaction. 9 Chapter 3 BACKGROUND TO HEALTH POLICY AND PLANNING: DEMOGRAPHIC FEATURES, EPIDEMIOLOGY A-ND THE BURDEN OF DISEASE IN THE FouR STATES A. Introduction 3.1 The challenge faced by each state in the health sector varies to some extent depending on the burden of disease, existing public health programs, past pattern of investment in the health sector, involvement of the private sector and the level of poverty. While resource allocation, institutional weaknesses and management issues are themes common to the health care system in all states, the demographic characteristics, epidemiological features and the burden of disease determine the nature of the health problems faced by each state. This chapter provides a brief outline of the basic demographic features, the epidemiological profile and the comparative burden of disease in the four states included in this review. The findings of the Andhra Pradesh Burden of Disease (AP BOD) and the BOD estimates for Kamataka, Punjab and West Bengal are presented to illustrate the main differences between the states. These differences show the varying pace of the health transition across states -- the differences are especially marked between rural and urban areas. 3.2 The states of AP, Kamataka, Punjab and West Bengal are included in this analysis because of the richness of the data that was generated during the preparation of the state level health systems projects and through subsequent analysis of the BOD in these states. They provide an opportunity to study states that are at different levels of health and overall development, and have diverse geographical, cultural and socio-economic features. West Bengal, for example, is a state with large pockets of poverty and an underdeveloped private sector in health care provision; Karnataka and AP are states with a per capita income which is about the national average, but with large regional variations; and Punjab is a state with a high per capita income, which requires a somewhat different emphasis in the type of health package proposed. Together, they represent sufficient diversity among states in India to draw lessons that are applicable at the state level generally. 3.3 These four states also represent different stages in the health transition -- ranging from a high incidence of communicable disease, with relatively lower levels of non-communicable disease and injuries to a situation of high levels of non-communicable disease, with relatively lower incidence of communicable disease and injuries. The poorer and more populated states, such as West Bengal, still face a large incidence of communicable diseases. More prosperous states, such as Punjab, are further along in the health transition and are seeing a sharply increasing incidence of non-communicable diseases, especially in urban areas. There are states that are poorer than West Bengal and less advanced in the health transition process (such as Orissa) and others that are further along in the health transition (such as Kerala or Maharashtra), but the four states included in this review generally represent the main spectrum of health care issues faced by the Indian states. 10 Box 1: Health Status in India and the Four States Andhra West India Pradesh Karnataka Punjab Bengal Population (millions in 1995) 919 66.5 47.9 20.3 72.4 Annual Growth Rate of Population 2.1 2.2 1.9 2.1 2.2 Crude Birth Rate 28.7 24.2 25.9 25.0 25.5 Crude Death Rate 10.1 9.1 8.5 8.2 7.3 Infant Mortality Rate 78.5 70.4 65.4 53.7 75.3 Expectation of Life at Birth 60.6 59.1 62.1 66.6 62.0 Percentage of Currently Married Women 13-49 Using any Contraceptive Method 40.6 47.0 49.1 58.7 57.4 Pregnant Mothers Receiving Ante-natal Care 78.1 86.0 84.0 85.1 80.0 Andhra Pradesh: The population of Andhra Pradesh was about 67 million in 1995, with a population density of 242 people per square kilometer, which was lower than the all India average of 270. The percentage of Scheduled Castes (SCs) and Scheduled Tribes (STs) is slightly lower than the all India average, while the sex ratio of 972 females per 1,000 males is higher than the Indian average of 927. The state has become more urbanized, with 27 percent of the population living in urban areas in 1991. Karnataka: The population of Karnataka was about 48 million in 1995, with urban areas accounting for about 31 percent of the population. SCs and STs constitute about 16.4 and 4 percent of the state's population respectively. With 40 percent of its population living below the poverty line compared with about 33 percent for India as a whole, the state has a comparatively large percentage of people living in poverty. Punjab: With a population of 20 million in 1995 and an annual population growth rate of about 2.1 percent, Punjab is one of India's more afiluent states. Its population density of 403 per square kilometer in 1991 is high compared to the Indian average of 273, as is the percentage of the population living in urban areas (29.6 percent as compared to 23.9 percent for India). Punjab's 1991 per capita income at $554 ranked it first among Indian states in terms of income. Yet 12 percent of the state's population is living below the poverty line. Also, as in other states, there is substantial regional variation in per capita income, with the northwest corner of the state having 40 percent of its population below the poverty line. While social indicators have improved on many fronts, the female-male sex ratio at 882 females per thousand males is still a matter of grave concern. West Bengal: With a population of about 72 million, West Bengal is the fourth most populated Indian state. Around 40 percent of the population is below 15 years of age, and only 27.5 percent live in urban areas. The large rural population is mainly agricultural, with a predominance of small and marginal farmers. It is estimated that more than 30 percent of the rural population lives below the poverty line. STs constitute 5.6 percent of the population and 23.6 percent belong to SCs. Figures, unless otherwise noted, are from National Health Survey, 1991. B. The Health Transition 3.4 Key health indicators in India show that the health status of its population remains low. Communicable diseases continue to be major health problems; maternal mortality is high; acute 11 respiratory and diarrheal diseases account for a large proportion of childhood mortality; and preventable mortality and morbidity especially among the poor, exact a high toll. Health indicators in India, when compared with other countries in the region that started with a similar resource base several decades ago, show that India has not fared as well as some of its neighbors. The gains in life expectancy over the past three decades, for example, have been 23% in India compared to 60% in China and 28% in Indonesia (World Development Report, 1993). 3.5 In addition, India is moving into an epidemiological transition. Communicable diseases and matemal and perinatal causes currently account for a large number of deaths in India (about 470 per 100,000 population, standardized for age, compared to only 117 in China and 187 in the world as a whole).3 At the same time, the gains achieved in life expectancy have resulted in proportional increases in mortality from chronic and degenerative diseases of adulthood, such as heart ailments, cancers and risk factors. These trends are likely to persist. As fertility declines, the age structure of the Indian population will shift and the proportion of people above the age of 60 years will increase as will the risk factors. As a result, the burden of non-communicable diseases will rise further. At the same time, the challenge of communicable diseases of the young, middle-aged, and poor will persist. The central and state govemments, therefore, will need to deal with both a high level of communicable diseases and a rising incidence of non-communicable diseases and injuries and accidents. 3.6 This dual burden of communicable and non-communicable diseases is likely to result in an "epidemiological polarization" in which one part of the Indian population will successfully complete a demographic and epidemiological transition while another part remains in the pretransition phase. Indeed, this situation is already present in India, especially in terms of the differences between rural and urban areas, and accounts for much of the dilemma for the publicly provided health care system. The demands of the rural and urban middle and upper classes for accessible, technologically advanced, and free clinical services compete with the still pressing need for coverage with basic disease control interventions in rural areas. As a result, the conflict over public resources is likely to be exacerbated by the on-going epidemiological and demographic changes and poses a major future challenge for primary health care policy at the state level in India. Moreover, the competition for scarce resources has the potential to worsen the unequal quality of health care among the states, as the poorer states are unable to provide the matching funds required to qualify for some federal monies. C. Epidemiology and the Evolving Burden of Disease in the Four States 3.7 For a long time, mortality was the predominant indicator in assessing the health status of populations (Murray and Lopez, 1996). The burden of disease has traditionally been based on the number of deaths different diseases cause and has relied on mortality data. This approach served the purposes of development planners for a long time, since cause specific mortality used to correlate well with morbidity and disability, particularly for many infectious and parasitic diseases. Over time, with the decline of mortality rates, morbidity measures have come to assume greater importance in quantifying the burden of disease, and the inadequacy of mortality as a measure of health status is increasingly recognized. For example, there is now evidence that low child mortality levels can be maintained even in the presence of sustained high levels of under-nutrition and morbidity. For both communicable and non-communicable diseases, there is increasing recognition that assessment and 3 World Development Report, 1993; Table A.7. 12 reduction of risk factors can lead to health gains. For example, low caloric and micro-nutrient intake, infections and poor breast feeding predict childhood malnutrition; and cholestorol, smoking and hypertension predict cardio-vascular diseases. 3.8 This calls for indicators that can simultaneously combine the load of morbidity, disability and risks with the level of mortality. Burden of disease estimates provide a mechanism of aggregating and comparing the size of various health problems through a single indicator, which is the Disability- Adjusted Life Years (DALY).4 The World Health Organization, together with the World Bank, developed a methodology and presented estimates of the full loss of healthy life due to different causes in terms of DALYs lost in the WDR (1993), which has been updated by Murray and Lopez, 1996. According to these estimates, India accounted for 288 million DALYs lost in the year 1990, which is over 21 percent of the global burden of disease, even higher than its share of overall mortality. 3.9 Methodology. The Andhra Pradesh BOD study and subsequent analyses in Karnataka, Punjab and West Bengal form the basis of the discussion of the BOD in this chapter. These studies were commissioned by the Bank and undertaken by the Administrative Staff College of India (ASCI), with the objective of: (a) estimating the BOD caused by common diseases including accidents and injuries; and (b) comparing the disease burden in urban and rural areas of the four states. The cost- effectiveness of selected health interventions using DALYs as a measure of effectiveness was also undertaken, but only for AP, and is discussed in Chapter 8. The BOD part of the study analyzed the following data: (i) demographic estimates, including age-specific mortality, preliminary disease lists, and surveys of the cause of death; (ii) information gathered from expert opinion and field inquiry; and (iii) a literature review of existing epidemiological studies and available data. 3.10 The methodology of the AP BOD study was repeated in the other three states included in this review. Estimates of disease burden for 1992 were used, since this is the latest year for which Sample Registration System data on age and sex specific mortality rates are available. Population projections for 1992 were made using the exponential method. In the three states, original data were used for the urban areas, which was obtained from the Medically Certified Causes of Death Register. In rural areas, sample cause of death was used based on verbal autopsy. For disability, epidemiological information from the national programs at the state level were used to get at the state-specific prevalence data. Incidence data in each state was modified from the AP data on the basis of state- specific disease patterns ( e.g. kala-azar exists in West Bengal, but not in AP) and on the basis of existing empirical evidence in each state. The incidence rates in each state were calculated based on the prevalence rate, general mortality and remission data, using the standard "Dismod" model. 3.11 Findings of the BOD Estimates. The data are summarized in Tables 3.1, 3.2, 3.3 and 3.4. They are presented according to DALYs lost in rural and urban populations, in absolute numbers, as well as DALYs lost per thousand population. Diseases are categorized as follows: (a) category I: communicable diseases, including TB, sexually transmitted diseases, diarrheal disease, meningitis, hepatitis, malaria, tropical cluster, childhood cluster, leprosy, trachoma, 4 The WDR (1993) defines Disability-Adjusted Life Years (DALYs) gained as a unit used for measuring both the global burden of disease and the effectiveness of health interventions, as indicated in the reduction in the disease burden. It is calculated as the present value of the future years of disability-free life that are lost as a result of the premature death or cases of disability occurring in a particular year. 13 intestinal helminths, respiratory infections, maternal causes and perinatal causes. Since nutritional deficiency disorders predominate in the pretransition phase, they were also included in this group; (b) category II: non-communicable diseases (NCD), including malignant neoplasms, diabetes, neuropsychiatric disorders, sense organs, cardiovascular, respiratory, digestive, genitourinary, and musculoskeletal disorders, as well as dental health; and (c) category m: accidents and injuries. Table 3.1: DALYs Estimated to be Lost During the Year 1992 State Rural Urban Al Andhra Pradesh 14,037,909 3,619,609 17,657,518 Karnataka 8,945,778 2,616,910 11,562,687 Punijab 3,942,743 1,268,929 5,193,672 West Bengal 14,032,832 3,274,114 17,306,947 3.12 An important finding of the BOD estimates in the four states is that the distribution of the BOD between categories I, II and III is different from the distribution presented in the WDR (1993), but sirilar to the updated version presented by Murray and Lopez (1996). The first difference is with regard to the contribution of NCD (category II) to the overall BOD. In AP, Karnataka, Punjab and West Bengal, the contribution of category II amounted to about 30%, 28%, 29%, and 28% respectively. This compares to 41% estimated in the WDR (1993), but is more in line with the 29% estimated by Murray and Lopez (1996) for India as a whole. A small percentage of this difference could be explained by the exclusion of nutritional deficiency disorders from category II in the BOD estimates for the four states and in the Murray and Lopez estimates (1996). The second difference is with regard to the contribution of injuries and accidents (category E1) to the overall BOD. In the four states, the contribution of category Im to the total BOD ranges from between 15% and 19%, whereas the WDR (1993) estimate, for all of India, was about 9% and the Murray and Lopez (1996) estimate is about 15%. The difference between the BOD estimate in the four states and the WDR (1993) estimate with regard to the contribution of communicable disease (category I) is not significant. However, it should be noted that these model based estimates are subject to considerable imprecision, as shown by the marked changes between different DALY estimates for NCD. Improving these estimates will require much better data collection, such as the disease-surveillance point surveillance used in China or strengthened and expanded Rural Cause of Death Survey conducted by the Registrar General of India. 3.13 As shown in Table 3.1, Andhra Pradesh had the highest total of DALYs lost in 1992, at about 17.7 million, followed by West Bengal, at 17.3 million. Karnataka and Punjab followed, with about 11.6 million and 5.2 million respectively. The DALYs lost are roughly in proportion to their overall population. The total DALYs lost in rural areas accounted for 80 percent of the total number of DALYs lost in Andhra Pradesh and West Bengal, but was slightly lower for Punjab at 76 percent and Karnataka at 77 percent. Data elsewhere also indicates that the relative burden of disease seems to be higher among the residents of rural areas. 14 3.14 The data also show that the DALYs lost per 1,000 population in rural areas of Andhra Pradesh, Karnataka, and Punjab are similar at approximately 289, 288 and 272 DALYs lost per 1,000 respectively. The figure for West Bengal was lower at about 276 DALYs lost per 1,000, largely because of the lower DALYs lost per 1,000 in urban areas. Punjab and AP are estimated to have a higher disease burden in urban areas relative to the other states, at about 205 and 202 DALYs lost per 1,000, respectively, as against only about 171 and 184 DALYs lost per 1,000 in West Bengal and Karnataka. As shown in Table 3.2, the greatest difference between urban and rural areas was found to be in West Bengal and Karnataka, with a difference of about 105 and 103 DALYs lost per 1,000 respectively, indicating relatively poorer access to health care in the rural areas in these two states. Table 3.2: DALYs Lost per 1,000 Population Urban-Rural | State Rural Urban Total Differences Andhra Pradesh 289 202 266 87 Karnataka 288 184 253 103 Punjab 272 205 252 67 West Bengal 276 171 248 105 Table 3.3: DALYs Lost per 1000 Population by Major Cause Groups in Rural and Urban Areas State l Rural Urban -I L I i III III I II LI Andhra Pradesh 160.0 81.5 47.2 97.7 74.3 30.5 Karnataka 168.0 72.2 43.6 86.5 66.7 30.3 Punjab 153.2 72.5 45.9 93.8 71.8 39.7 West Bengal 164.4 68.6 44.4 71.0 71.1 28.7 3.15 Communicable diseases (category I in Table 3.3) still predominate in the rural areas of all four states. The total DALYs lost per 1,000 in rural areas in this category in AP, Kamataka, Punjab and West Bengal were about 160, 168, 153 and 164 respectively. The total DALYs lost per 1,000 in category II and Im combined in rural areas was much less at about 129, 116, 119 and 113 respectively. Moreover, the magnitude of the disease burden caused by communicable diseases closely corresponds to the total burden, following the trend in all developing countries. This trend, however, was reversed in urban areas, where in all states, the total of DALYs lost per 1,000 in category II and HI was higher than that of category I, indicating that the urban areas are in a more advanced state of demographic transition. The predominance in Punjab of DALYs lost per 1,000 due to diseases in category Im, especially in urban areas, can partly be explained by the political disturbances in the state during that period. 5 5 It should be noted, however, that the number of inpatient and outpatient hospital visits, and their distribution between the different categories of diseases may be quite different from the burden of disease. In Punjab, for example, hospital level data indicates that category II cases account for about 76% of all outpatient hospital visits and about 86% of all inpatient visits in Punjab. In Karnataka, comparable data indicates that category I and category II diseases contribute almost equally to outpatient visits -- about 36% and 38% respectively. With regard to inpatient visits, however, there is a significant difference, with category I diseases contributing only 27% of hospital visits as compared to 49% by category II diseases. 15 Table 3.4: Total DALYs Lost by Major Cause Groups Population in DALYs lost DALYs lost per 1,000 State Thousands I I m I m || A.P. 66,508 9,528,102 5,288,635 2,840,781 143.26 79.52 42.71 | Karnataka 45,781 6,529,396 3,227,299 1,805,992 142.62 70.49 39.45 Punjab 20,628 2,793,402 1,491,451 908,818 135.41 72.30 44.06 West Bengal 69,692 9,684,410 4,829,643 2,791,562 138.96 72.30 40.06 3.16 DALYs Lost by Age Group. The overall distribution of DALYs lost per 1,000 population in different age groups indicate that the pattern is more or less similar in all the states. The highest burden was estimated in the 0-4 years age group, while in the 5-14 years age group the burden was least. In the 15-44 years age group the burden of disease was relatively higher among females due to maternal disorders. 3.17 The distribution of the DALYs lost in each age group by major cause category (categories I, II and IE) indicate that among the 0-4 years age group, category I disorders were dominant as expected. Punjab had a relatively lower burden due to category I disorders among males in this age group. The differences between both sexes with regard to category I diseases were more marked in Punjab (a difference of 85 DALY per 1,000 between male and female children) as compared to the difference in other states, thereby indicating higher vulnerability of female children in Punjab. 3.18 In the 5-14 years age group, the burden caused by category I diseases was close to that of total burden caused by categories II and Im together. In fact, the burden caused by category II in most states was responsible for a third of the burden among males. This is quite plausible, considering the higher vulnerability of this age group to injuries and accidents. The corresponding proportion in case of females was less than 25%, suggesting that female children are less prone to injuries in this group. 3.19 In the 15-44 years age group, the epidemiological transition is quite evident in males. The total of category II and category Im disorders was nearly double that of category I. However, in case of females the trend observed in the 5-14 years (category I burden being equivalent to total of categories II and III) still continued, essentially due to higher burden caused by maternal conditions. Thus, the analysis clearly indicates that there is an urgent need to address maternal health problems on a priority basis. Surprisingly, Punjab had the highest burden due to category I among females in this age group. This has implications related to access for essential and emergency obstetric services. 3.20 In the 45-49 years age group, the epidemiological transition is quite evident as degenerative disorders (category II) are dominant. However, in the case of women, the burden caused by all the major cause categories was estimated to be relatively low compared to males. This trend was especially marked in the case of degenerative disorders (difference of 40-60 DALYs per 1,000). 16 3.21 In the 60+ age group the degenerative disorders are the dominant cause of burden of disease in both sexes. Higher relative burden of category m disorders among females could be partly explained on the basis of higher vulnerability to injuries due to osteoporotic changes and hormonal imbalances. 3.22 Forecast of DALYs lost due to Selected Diseases in India, 1990-2020. Murray and Lopez (1996) provide a possible scenario of the disease burden for India in the year 2020. They provide a set of projections for important causes of death and disease burden until 2020, based on a statistical model, to predict different scenarios of cause specific mortality. They have calculated the change in DALYs that would occur if 1990 age-specific DALYs are applied to the population projections for 2020 and the change in DALYs if 2020 DALY rates are applied to 1990 population. These predictions are based on four independent variables: (i) income per capita; (ii) human capital, estimated as the average number of years of schooling in a population; (iii) smoking intensity; and (iv) time, reflecting growth of knowledge. DALYs lost for the year 2020 are determined by the interaction of a growing and aging population with changes in the projected level of the four variables noted above. Changes in DALYs can be divided into two components: (i) the demographic factor -- increase or decrease expected due to changes in size of the population; and (ii) the epidemiological factor -- the increase or decrease expected due to changes in age-specific DALY rates (WHO, 1996). 3.23 The projected changes in disease burden are shown in Figure 3.1. The decrease in DALYs lost is dramatic for diarrhoeal diseases and respiratory infections. Less dramatic, but significant decreases are noted for maternal conditions. TB is expected to plateau by the year 2000, and HIV infections are expected to rise significantly upto the year 2010, after which a decline is expected. On the other hand, cardio-vascular diseases, resulting mainly from risk associated with smoking and diet, is expected to increase dramatically. Injuries are expected to increase less significantly, and so are neuro-psychiatric conditions and malignant neoplasms. 17 Figure 3.1: Trends in DALYs lost due to selected diseases in India, 1990 to 2020 70 60 - Diarrhoeal diseases & respiratory \infections 50 - \ Injuries Cardiovascular o: \ / diseases :i40 -- Neuro- >330 -- psychiatric conditions 20 4 Tuberculosis^ Malinpant_ HI 10 neoplasms HIX Maternal O --- > I I Conditions 1990 2000 2010 2020 Year Source: Based on data from Murray & Lopez, 1996. 18 Table 3.5: Percent of Total DALYs Lost by Major Cause Groups: 1990 and projected for 2020 __________________________ 1990 2020 Category I 56 24 Category II 29 57 Category Im 15 19 Source: Based on Murray and Lopez, 1996. 3.24 Table 3.5 shows that the disease burden in India, estimated for 1990 at about 56% for category I, 29% for category II and 15% for category III is predicted to change dramnatically by the year 2020, to 24% for category I, 57% for category II and 19% for category Im. These changes can be attributed to the epidemiological and demographic factors discussed in para. 3.22. The dramatic change resulting in a lower share of category I diseases can be explained mainly by the reduction in DALYs lost due to epidemiological factors, offset only marginally by increase in DALYs lost due to demographic factors. For category II diseases, the situation is reversed -- the dramatic increase in the share of the disease burden of category II diseases can be explained mainly by the increase in DALYs lost due to demographic factors, offset marginally by the decrease in DALYs lost due to epidemiological factors. For category m diseases, the increase in the share of disease burden from 15% to 19% is explained mnainly by the increase in DALYs lost due to demographic factors, which is somewhat offset by the decrease in DALYs lost due to epidemiological factors. D. Recommendations • The comparison of the demographic features in the four states and their evolving burden of disease highlights the continuing need to address those diseases which contribute the most to the BOD, in a cost-effective manner. Communicable diseases and maternal and perinatal conditions (category I), which account for the majority of DALYs lost in all four states, should continue to be the focus of services provided by the public sector. Health care policy, however, should address a wider spectrum of health conditions, especially in view of the health transition underway, which is likely to result in a huge increase in the incidence of NCDs in the future. * The emphasis on addressing communicable disease should not overlook the marked difference in demographic indicators and disease burden at the regional, state, district and block levels. The strategy should, therefore, be flexible in addressing the specific needs at the community level, within the larger context of service provision and policy issues discussed above. * The data indicate that in the case of urban areas, the emphasis should be in moving towards improving lifestyle and behavior patterns due to the predominance of category II and III diseases. Prevention of NCDs and injury are quite cheap and should be promoted. Some curative services for NCD and injury, especially at the secondary level, are cost-effective and may be provided by the state governments. Cost sharing could be considered for other services which are less cost- effective, with exemptions for the poor. 19 CHAPTER 4 THE PRIVATE SECTOR iN HEALTH CARE AT THE STATE LEVEL A. Introduction 4.1 Total health spending in India accounted for about 6% of GDP (1991), which is about Rs. 320 or about US$13 per capita in 1991 prices. While the level of spending per capita on health is low in absolute terms, the health sector's contribution to national income in India is higher than in most developing countries at similar levels of per capita income. Despite the historical emphasis on the Government's role in the health sector in India, expenditure data clearly indicates the dominance of non-government spending. Private sector expenditure in India is estimated to be about 78% of total health spending. This share of total private spending on health is comparable with Thailand, which has an absolute per capita spending four times greater than that of India. Government health spending in India, on the other hand, is in the middle of the range reported for lower income Asian countries -- it is higher than Indonesia and the Philippines; and lower than China and Sri Lanka.6 4.2 Inspite of the importance of the private sector, the government has not clearly defined or articulated its role in the overall health strategy. In particular, the vital role the private sector plays in the provision of selected services, such as individual curative care through ambulatory services, and the opportunities for greater private sector involvement in other areas has not been fully recognized in policymaking. The main challenges with regard to public-private partnerships include: * enhancing the scope and importance of the private sector, while improving the quality of services; * encouraging private sector involvement in preventive and promotive aspects of health care rather than solely in individual curative care; - promoting partnerships between the public, private and voluntary sectors; * increasing efficiency through contracting-out of services; and * improving the existing arrangement for regulating health care. B. Scope of the Private Sector in Health Care Delivery 4.3 Relative Size of the Private Sector. The private health sector is fairly large in all the states, except in West Bengal, and is growing very fast, particularly in AP and Karnataka. At the primary care level, the private sector is pervasive and heavily used despite the vast network of primary health infrastructure developed by the government. At the secondary and tertiary levels, the private sector presence is less dominant, but its share of services in the tertiary sector is increasing. This is partly due to client perceptions of public health care services being more positive at the secondary and tertiary 6 India: Policy and Finance Strategiesfor Strengthening Primary Health Care Services. World Bank Report No. 13042-IN; May 1995. 20 levels than at the primary level. In 1992 a survey conducted by the Institute of Health Systems indicated that in AP the bed strength in the private sector was larger than the public sector: the government accounted for 33,949 beds, while the private sector accounted for 42,192 beds, in 3,029 private health care institutions. In Karnataka, the total bed capacity of registered private and voluntary institutions was 40,900, in 1,709 private health care institutions as against a total of 31,840 beds in government hospitals. West Bengal is an example of a state where the contrary is true: only 10% of the total bed strength is in the private sector, with a total of only 6,912 beds. In the states studied, except for West Bengal, the distribution of medical manpower is also skewed towards private institutions. In AP, for instance, of a total of 33,983 doctors registered with the Medical and Nursing Council, only 5,148 doctors (excluding those in administrative positions) are employed in the government sector. Almost 50% of registered nurses and auxiliary nurse midwives (ANMs) are employed in the private sector as well. 4.4 Due to various data problems, we may still have an incomplete picture of the size of the private sector. In recent years, the corporate sector has invested heavily in large and highly sophisticated facilities catering to the urban middle and upper class patients. Evidence suggests that the number of nursing homes, even in rural towns, has rapidly expanded. There is rapid and highly visible growth of for-profit hospitals in major urban centers. However, private sector investment in secondary level hospitals has not increased as rapidly. 4.5 Ownership and Management. With regard to ownership and management, the private sector facilities in the states studied can be classified as follows: - Clinics owned and managed by single practitioners. - Nursing homes/hospitals of varying sizes. - Large corporate hospitals. - Hospitals not-for-profit. - Charitable/religious institutions. 4.6 In terms of bed strength, hospitals can be divided into those with less than 30 beds; 30-50 beds; 50-100 beds; and more than 100 beds. More than three-fourths of private institutions have less than 30 beds. These small facilities are usually owned by single doctors or a family, and are generally attached to a medical shop or pharmacy. Very few hospitals have more than 100 beds, and these are usually attached to private medical colleges. Partnership firms constitute about 7% of private institutions, while charitable trusts and religious missions constitute about 5%. The pattern of ownership of private institutions in Karnataka, for example, is shown below: 21 Table 4.1: Distribution of Private and Voluntary Hospitals by Type of Ownership in Karnataka Ownership Bed Strength 100 and <10 10-29 3049 50-99 above Total Charitable Trust 8 20 18 13 9 68 Religious Mission 3 10 2 4 8 27 Registered Society 6 10 6 1 19 42 Limited Company 1 5 3 5 5 19 Partnership 17 67 34 7 3 128 Individual 575 717 90 31 12 1425 Total 610 829 153 61 56 1709 4.7 Intra-State Variations. Neither the private institutions nor the hospital beds are evenly distributed across the states. They tend to be concentrated in densely populated urban centers. In AP, for instance, the bed-population ratio ranges from a low of 0.07 beds per 1,000 population in Mahbubnagar to a high of 1.41 in Krishna district. In WB, 21% of all private hospitals and 47% of all hospital beds are concentrated in the Calcutta Metropolitan Area. In Kamataka, private sector institutions in three districts -- Dakshina Kannada, Bangalore and Belgaum -- contributed more than 1 bed per 1,000 population, while the districts of Raichur, Bellary and Chickamagalur had less than 0.5 beds per 1,000 contributed by the private sector. The principal contributing factor to this disparity is the relative affluence of a region, making it more profitable to establish and operate a private hospital. Other factors include higher population density, the presence of educated clientele, and the existence of pressure groups. 4.8 Access. The private sector studies in the four states also indicate that the access to services in the public and the private sectors in health varies widely between states. The factors which determine access to health services include socio-economic status, the level of fees, availability of services and the nature of the illness. * Physical Access. Clearly, hospital services provided by the government are inadequate in rural areas. Distance traveled to reach first referral hospitals seems to be an important factor in determining utilization. For example, community hospitals in tribal areas are located very far from tribal hamlets, with poor transportation and communication facilities, and often with no convenient residential arrangements for the medical personnel. In addition, areas such as the Sunderban region of West Bengal, for example, pose a special challenge since transport and communication networks are inadequate, and riverine transport between the network of 54 islands is unreliable. Non-availability of staff in government hospitals, particularly doctors, is the most important reason for preferring private medical care. Especially in emergency situations, the easy accessibility and ready availability of private doctors, even though many are quacks or underqualified, is a major determining factor of community preference for their services. Another major constraint to patient satisfaction is the non-availability of necessary drugs and medicines at first referral hospitals, particularly for curative care. There is a special need to strengthen health care networks to address these issues, and to encourage the development of the private and NGO sectors to provide outreach services which the public health services are unable to provide. 22 * Social Access. Results from the qualitative survey conducted in three states indicate that tribal populations, scheduled castes and women have special sets of beliefs and practices which affect their health seeking behavior. In tribal areas, such beliefs and the insensitivity of medical personnel strongly influence the community's confidence in the health system. According to hospital sources, the proportion of hospital users belonging to SC/ST groups is commensurate with their proportion in the general population. However, considering the poor socio-economic condition of these groups, and their low nutritional level, the morbidity and mortality in this population is greater and warrants a higher utilization of primary care and secondary hospital services. An additional issue is the low utilization of health services by women. In Kamataka, for example, the National Sample Survey (NSS) indicates that the sex ratio among hospitalized cases is 786 females per 1,000 males, whereas the sex ratio in the population is 960 females per 1,000 males. There is therefore a need for special outreach efforts to improve the access of these groups to health care services as well. * Economic Access. The data show that substantial costs -- on fees, drugs, tests and transport -- are being incurred by tribals and poor populations, possibly because they postpone treatment until the problem has become more acute. In addition, due to the relative inaccessibility of government health care services, populations in rural and remote areas are approaching the private sector first for their health care needs. 4.9 State governments need to ensure that the private sector plays an important role in addressing these access issues. States could facilitate access to preventive and promotive care through the involvement of NGOs and provide them opportunities to work with PRIs. Support for NGOs needs to be increased in such areas as social marketing of essential drugs and contraceptives, and behavior changing health education activities. The Government needs to actively seek the cooperation of NGOs in disseminating public health messages by involving them in information, education and communication (IEC) activities. NGO participation could be promoted in the delivery of primary health care and first referral services in remote and rural areas where outreach is limited. Contracting- out the delivery of primary health care in remote areas to the NGO sector, which has a comparative advantage in improving access to such health services for some disadvantaged groups, could also be promoted. C. Services Offered by the Private Sector 4.10 Government provided services are the major source of inpatient care. In contrast, non- government providers -- mainly for-profit, fee-for-service practitioners -- provide the bulk of outpatient and ambulatory care, the curative component of health care. Government providers are also the major source of preventive care in rural areas, although coverage remains low overall for several dimensions of routine preventive care for mothers and children. In urban areas, the coverage is higher, and there is a larger private sector role. Diseases for which mass public health outreach programs exist, such as TB control, malaria control, diarrheal disease control and safe motherhood/maternal and child health (MCH) make up a large part of the caseload for public hospitals. Most of these public health programs have low coverage in terms of finding and treating patients on an outpatient basis. Publicly funded outpatient treatment of TB reaches only half of those reporting the disease, and coverage for other diseases is much lower. Given that private primary level treatment is the dominant source of care for a number of such diseases which have been targeted by public disease control programs in both rural and urban areas, state governments need to (a) encourage the private sector to adopt appropriate 23 therapeutic norms and regimens recommended by the national program, and (b) provide incentives to develop schemes to finance, train and integrate private providers in case-finding, diagnostics and treatment for priority health problems that are of public health significance. 4.11 The studies in the four states indicate that, at present, the private health sector provides mainly diagnostic and individual curative health services, leaving the entire field of preventive health services to the government. For example, private nursing homes catering to delivery cases are very extensive. A high percentage of curative services offered are comprised of ambulatory services not requiring hospitalization. Intermediate patient care services, with short term hospitalization, are also provided by private institutions. On the other hand, very few private institutions offer intensive care. Most intensive and emergency care is provided by government teaching hospitals. 4.12 Allopathy is the predominant system of medicine practiced, especially in hospitals. General medicine is the most common service offered by private institutions. Obstetrics and gynaecology comes next. The size of the hospital seems to have an influence on the range of services offered: most smaller hospitals offer general medicine, with very few surgical specialties, which increase with size of hospital. 4.13 The support services available to private sector institutions are uneven. Based on data from Kamataka, about 55% of private institutions had attached diagnostic laboratories, while about 40% had x-ray plants. About 25% of the hospitals had ultrasound scanners, and 20% had attached pharmacies. The private/ voluntary sector in the whole state had 33 CT scanners, of which nearly half were located in the state capital. However, only 3% of the private hospitals had a blood bank and, in many districts, there was no blood bank listed in the private sector. 4.14 Fee Structure. The data on fees charged in samples taken in Kamataka and AP are shown in Tables 4.2 and 4.3. It is evident that a wide variation in fee structure exists. Charges are highly subsidized in hospitals run by charitable organizations and religious missions. Some hospitals run by private medical colleges also offer subsidized services to the poor. Fees are charged generally for registration; consultation; investigative procedures; treatment; inpatient procedures; and use of support facilities. Fees charged vary from institution to institution, depending on the range of services provided; doctor's qualifications, experience and expertise; type of disease; location of hospital; equipment and facilities; local availability of alternatives (competition); availability of facilities like operating theater and surgery; availability of consumables and disposables; and the reputation of the hospital. 4.15 There is a wide difference in the cost of inpatient treatment between urban and rural areas: for similar illnesses, though not fully controlled for case-mix, rural patients at private institutions spent Rs. 225 per illness episode, while their urban counterparts spent Rs. 975, almost 4 times as much. Table 4.3 gives the use of services and cost of treatment in private and government hospitals. The data show that the cost per illness in private hospitals is nearly three times that in government hospitals for inpatient services (Rs. 600 vs. Rs. 208); while for outpatient services, the cost per illness in private hospitals is about double that in government hospitals (Rs. 96 vs. Rs. 47). Chapter 7 presents a more detailed discussion of user charges in the public sector. 24 Table 4.2: Cost of Treatment for an Illness Episode in Nellore District (AP) in Rs. Rural Areas Urban Areas Individual Govt. Contributions Private Govt. Private Inpatient 1 123 225 12 975 Outpatient 1 32 71 1 120 Source: A Review of the Private Health Sector in Andhra Pradesh. G. Kumara Swarny Reddy; 1994. Table 4.3: Comparison of the Cost of Treatment in Government and Private Hospitals Type of Health Care Provider Average Expenditure per Illness (Rs.) l________________________________ Inpatient Outpatient Government Hospitals and PHCs 208 47 Pnvate Hospitals, Nursing Homes, Non- 600 96 Profit Organizations Source: A Review of the Private Health Sector in Andhra Pradesh. G. Kumara Swamy Reddy; 1994. D. Public-Private Partnerships in the Health Sector 4.16 The "sources and uses" matrix shown in Table 4.4 shows that household out-of-pocket expenditure accounts for about 75% of total national health expenditures (about Rs. 240 per capita). Corporate and third party insurance contributes an additional 3%. Private health spending is, therefore, about 78% of total health spending. Central, state and local government contributions account for the remaining 22%. Private spending accounts for 82% of primary care, 92% of curative care, 70% of secondary/tertiary care and only 27% of preventive and promotive care. In contrast, state governments account for only 10% of all primary care spending, 6% of curative care, 22% of secondary and tertiary care, and 30% of preventive and promotive care. 25 Table 4.4: National Health Spending: An Estimated "Source and Uses" Matrix (in percent of total expenditures) Sources Central State & Corporate/ Uses Government Local 3rd Party Household Total Government s Primary Care 4.3 5.6 0.8 48.0 58.7 Curative 0.4 3.0 0.8 45.6 49.7 Preventive and Promotive Health 4.0 2.7 2.4 9.0 Secondary/Tertiary 0.9 8.4 2.5 27.0 38.8 Inpatient Care Non-service 0.9 1.6 N/A N/A 2.5 Provision TOTAL 6.1 15.6 3.3 75 100 Derived fiom: India: Policy and Finance Strategiesfor Strengthening Primary Health Care Services. World Bank Report No. 13042-IN; May 1995. 4.17 The Share of Out-of-Pocket Spending. In industrialized countries, hospitalization accounts for the largest share of health expenditure and little of it is financed directly by households. In India, the pattern is reversed -- about two-thirds of household out-of-pocket health spending is on ambulatory or outpatient services and one-third on inpatient care. About 70% of the latter is attributable to household spending. This pattern is especially relevant to policy on primary health care, since private practitioners dominate in the provision of outpatient services, much of which substitutes for services which are supposed to be available through government providers as part of public sector primary health care programs. 4.18 Out-of-Pocket Health Spending and the Poor. Government primary care services do not appear to be well targeted to the poor.' Despite public subsidies for hospital care, out-of-pocket expenses for serious illnesses impact the poor disproportionately. In a serious illness episode, families might pay fully for private ambulatory care, then go to a public hospital where they might receive a free or highly subsidized day charge but still pay for other services as well as for items not available at a public hospital. After discharge, they may again pay fully for private follow-up treatment. The total costs of treatment are much higher due to the use of private health services. 4.19 The burden of out-of-pocket spending falls disproportionately on the poor even for primary illness care. On average, 5% of total household consumer expenditure in rural areas was for health expenditure, while 2.3% of total household expenditures in urban areas was health 7 India: Policy and Finance Strategiesfor Strengthening Primary Health Care Services. World Bank Report No. 13042-IN; 1995; pg. 76. 26 expenditures.8 In almost all cases, the percentage of household spending on health was highest in the lowest expenditure quintiles, reflecting the fact that the burden of out-of-pocket spending was regressive and imposed a heavier burden on the poor. This trend was even stronger when household spending on ambulatory illness care was examined separately. Ambulatory care accounted for a larger portion of household health spending in the lower expenditure quintiles in both rural and urban areas. 4.20 In order to address this high level of out-of-pocket spending, the government needs to encourage prepaid risk-pooling mechanisms in the long run, such as better targeted social insurance schemes9, private voluntary insurance'° and community financing. Risk-pooling would provide more accessible and efficient health care, to both the poor and the non-poor. At present, private voluntary insurance coverage is only about 3.3% for the country as a whole. This is low compared to other Asian countries -- in Indonesia, for example, 9% of the population is covered by some type of insurance, mainly civil servants and the armed forces (Abel-Smith, 1995). The scope for private insurance, while limited at this time, can be enhanced in the urban and industrial sectors, with appropriate government advocacy, as income levels and literacy increase. E. Contracting-Out 4.21 The private contracting of health services, especially support services, by the government is becoming increasingly important since the state Governments can effect substantial cost-savings through such a mechanism. Private contractual services can be more efficient and effective than direct labor. Anne Mills (1995, 1996)11 provides a rationale for contracting and summnarizes the lessons from experience in six developing countries. The study notes that non-clinical contracting was usually justified in terms of lower costs, easier implementation and greater flexibility in the use of labor; the justification for clinical contracting was the unavailability of the service in the facility or area, a pragmatic response to the inability to expand the service and financial restrictions on capital investments. The study shows that the extent of contracting is relatively limited. For example, in Bombay, clinical contracting for 8 ibid, Tables 5.1 and 5.2. 9 There currently exists a government subsidized insurance plan, the ESIS, providing benefits to government workers and their dependents for sickness or employment injury covering about 27 million beneficiaries. ESIS maintains a sizable network of hospitals (111) and dispensaries (1,400). In addition, the CGHS provides medical care to central government employees and their dependents covering 3.8 million beneficiaries. Estimates of the composition of ESIS and CGHS expenditures were not available for this report. Overall, these insurance schemes do not cover non-government workers and are subsidized for government workers. 10 At present, inpatient care is the predominant expenditure for private sources of financing, such as private firms, which make payments directly for their employees or pay for private insurance. '1 Mills, Anne. "Contractual Relationship between Government and the Commercial Private Sector in Developing Countries: Are They a Good Idea in Health?" Private Health Providers in Developing Countries: Serving the Public Interest; 1996. Mills, Anne. "Improving the Efficiency of Public Sector Health Services in Developing Countries: Bureaucratic versus Market Approaches." Departmental Publication No. 17; London School of Hygiene and Tropical Medicine; 1995. 27 hospital and primary care was done by agencies providing health services for civil servants and the compulsory social insurance scheme, but not for health services for the general public. Also, in the Bombay case, contracting for non-clinical services such as cleaning, catering, pharmacy, laundry, maintenance, printing and security, was more common, which seems to be consistent with practice in other urban areas of India 4.22 Contracted out services are a small proportion of overall expenditures at the state level in India, but there appears to be considerable scope for the expansion of contracting out services, especially for non- clinical services. There are no legal barriers inhibiting the use of contractual services. The Contract Labor Regulation and Abolition Act (1970), which prohibits certain institutions from contracting out perennial services, exempts hospitals and health care institutions. In view of the difficulties of employing government staff, such as slow recruitment procedures and poor attendance, contracting out certain services, especially support services, is an attractive alternative. However, Anne Mills (1996) points out that contracting out is not a solution to weak public sector management and can be more demanding on managers than direct provision, requring some new skills. The state governments should take into account lessons learned from past experiences in contracting out In particular, where economically attractive, governments should consider contracting out support services such as laundry, kitchen, landscaping, dietary services, sanitation, secuity and mainstream diagnostic and clinical services. In addition to economic considerations, state governments should also take into account the quality of services, as well as administrative ability and management capacity to supervise such contracts. Administrative procedures and guidelines, and adequate accountability functions will also need to be in place to facilitate the contracting of services. F. Quality of Services, Monitoring and Evaluation 4.23 Although private health services are easily accessible, the quality of medical services offered by the private sector is uneven. There is a need to monitor the clinical effectiveness and quality of services offered at different private facilities and provided by the drugs and pharmaceuticals industry; to strengthen the referral system between private sector institutions and government first referral institutions to facilitate the treatment of poor patients; and to ensure that staffing and technical norms used in the private sector are within an acceptable range. In addition, the quality of medical practitioners varies greatly. 4.24 Data on the total number of "doctors" or "medical practitioners" are not available in India. Government figures indicate a national average of one privately practicing physician for every 3,500 people. These figures do not include the often-illegal private practices of publicly employed doctors, although these may not be as widespread as in other countries. Official data provide information only on the qualified, allopathic practitioners -- the MBBS or MD physician. However, private providers include a wide array of qualified, less-than-qualified, and unqualified practitioners. Most are unregistered, unlicensed, and unregulated, although there are numerous gradations of legal practice which vary from state to state. While little is known about the typical private practitioner, there may be other sources of private medical care even less well documented. Drug sellers and pharmacists commonly diagnose and prescribe as well as dispense drugs. It is unclear to what extent they are included in the response "private doctor" on surveys. In some parts of India, private diagnostic facilities such as radiology and laboratory testing are now appearing even in small rural towns. It is not known to what extent these are also increasingly functioning as private treatment facilities. 28 4.25 Consumer Protection Act. As a result of the consumer movement in India, and in an effort to monitor the quality of services provided by both public and private health care providers, the Government passed the Consumer Protection Act (CPA) in 1986. In order to make it more meaningful and effective, the Act was amended to bring medical services under its purview. It was clarified by the National Consumer Redressal Commission (1992) that services of any description which involve payment should be given consideration under the Act, and the Act should not be restricted in its interpretation only to services related to consumer transactions. This has raised concerns in the medical community with regard to the sanctity of the doctor-patient relationship, the spread of defensive medicine, and the fear of doctors being held responsible for problems caused by the lack of support services such as clean blood banks, ambulance services and para-medical services. 4.26 The issue is complicated by the fact that there is no standardized medica1 audit system which can provide patients and the legal community with information regarding acceptable procedures for diagnosis and treatment. The need for documentation with regard to standard medical care is urgent, not only for the benefit of the patient, but also for the appropriate regulation and accountability of the medical profession. As a result of the CPA, the Indian Medical Association (JIMA) has recommended that the MCI Act be appropriately amended to ensure more complete accountability of doctors. While no such regulation would be proof against human error, the medical profession would henceforth operate under the scrutiny and supervision of the amended MCI Act. The IMA also recommended, in order not to overburden the legal system, that only cases involving criminal dimensions be referred to the courts. A separate tribunal would be constituted in the place of a civil court, receiving the greatest priority and attention in disposing of cases expeditiously. In the state of Kamataka, for example, there are currently about 25 such cases pending judgment in the court system. G. Recommendations 4.27 The overall strategy for the health sector should take into account the existing levels of private finance and provision of services at the state level. State governments should play an active role in creating an enabling environment for greater private sector participation in the health sector and fostering public-private partnerships. There are several options for the government to ensure that the private health sector continues to play a vital role in the health sector and expand the scope of its activities. These are discussed below: * Increasing Private Participation in Preventive and Promotive Care. To make more efficient use of total resources available in the health sector, state govemments should evaluate altematives related to direct provision versus public financing some activities performed in the private sector. This would imply that (a) state governments should facilitate the further expansion of the private sector in areas where it has a comparative advantage such as tertiary level health care, super- speciality and support services; (b) state govemments should encourage the private sector to adopt appropriate therapeutic norms and regimens recommended by the national program; and (c) state governments should promote private sector participation in preventive and promotive care services by providing incentives and developing schemes to finance, train and integrate private providers in case-finding, diagnostics, and treatment for priority health problems that are of public health significance. 29 Strengthening Linkages between Government and Non-Governmental Organizations (NGO). States should increase efforts to involve NGOs in the area of preventive and promotive care and provide them opportunities to work with PRIs. Support for NGOs should be increased in such areas as social marketing of essential drugs and contraceptives, and behavior changing health education activities. The Govemment should actively seek the cooperation of NGOs in disseminating public health messages by involving them in information, education and communication (IEC) activities. NGO participation could be promoted in the delivery of primary health care and first referral services in remote and rural areas where outreach is limited. Contracting-out the delivery of primary health care in remote areas to the NGO sector, which has a comparative advantage in improving access to such health services for some disadvantaged groups, could also be promoted. * Increasing Opportunitiesfor Contracting Out. State govemments should, wherever economically attractive, contract out support services such as laundry, kitchen, landscaping, dietary services, sanitation, security and mainstream diagnostic and clinical services. In addition to economic considerations, state govemments should take into account the quality of services, which will require improved management skills. Administrative procedures and guidelines, and adequate accountability functions will also need to be in place to facilitate the contracting-out of services. Expanding Capacity for Monitoring and Certification. The Govemment's capacity to monitor, register and certify private health care provision, especially qualifications of doctors and other medical personnel and the quality of their services, should be strengthened. State govemments should enact legislation and issue guidelines to register nursing homes and private clinics/hospitals, and ensure minimum standards of care. Some of these functions could be undertaken collaboratively by the central and state govermments, while others could be undertaken by a professional body such as the Indian Medical Association in accordance with all-India standards. 30 CHAPTER 5 CENTER-STATE FINANCING ISSUES IN THE HEALTH SECTOR A. Introduction 5.1 Over the past two decades, state governments have directly provided about 73% percent of the total public resources for health on average, the central government about 25%, either directly or through grants for centrally sponsored schemes managed by the states, and the rest is provided by urban municipal bodies. This chapter focuses on center-state responsibilities for health in the public sector. It includes a discussion of the administrative set-up and budgetary processes in the health sector, inter-state equity issues in the transfer of central funds to the health sector; the levels, trends and patterns of health expenditures at the state level; and the mechanisms of adjustment effects on center- state transfers. B. Center, State and Local Government Responsibilities in Health Financing 5.2 The provision of health care is a responsibility shared by the state, central, and local governments. Although it is effectively a state responsibility in terms of delivery, the overall responsibility for health is at three levels. First, health is primarily a state responsibility. Second, the center is responsible for health in Union Territories without a legislature. The center is also responsible for developing and monitoring national standards and regulations, providing the link between the state governments and intemational and bilateral agencies, and sponsoring numerous schemes through the provision of finance and other inputs for implementation throughout the state governments. Third, both the center and the states have joint responsibility for programs listed under the concurrent list. Goals and strategies for the public sector in health care are established in a consultative process involving both the central and state governments through the Central Council of Health and Family Welfare. While each state can formulate its own health policy, in practice state governments have to function within the parameters of the NBP. Within the overall ambit of national policies, there is sufficient scope for the states to administer health schemes in conformity with local conditions. The mechanism used by the central governments to fund health programs at the state level has the potential to reduce disparities in resources among states, and even within states. However, as currently organized, these mechanisms are not designed to overcome inter-state inequities, and in some cases are exacerbating the problem. 5.3 Center-State Financing Responsibilities. The interaction between the center and the state governments in the health sector occurs at two distinct levels. The first involves the overall allocation of resources by the center's Planning and Finance Commissions to states, which constrains or provides opportunities for states' initiatives in new projects. The second level involves the intra-sectoral allocations of grants-in-aid and other earmarked funds from the center to the states. 5.4 The budgeting and accounting of government expenditures at the central and state levels are influenced by the planning process, which takes place within the framework of central and state five- year plans. The plan budget refers to all expenditures, both capital and recurrent, incurred on programs and schemes that have been initiated in the current five-year plan. Once the five-year period of any 31 particular plan is over, the recurrent expenditure associated with the continuation of that activity is generally transferred to the non-plan budget, except for the Family Welfare Program. Figure 5.1: The Structure of Government Health Financing I~> .- ' tnXo: ;, . | - State |Geverinment. ...|Center-state untied transfers plan/non-plan .Goler.amnt t State/sectoral allocations Plan/N on lan Tied g rants/ Centrally sponsored / t ~~~~local governments Source: "India: Policy and Finance Strategies for Strengthening Primary Health Care Services." World Bank Report No. 13042-IN, May, 1995. 5.5 Plan expenditures in the health sector accounts for about one-third of total government health spending. If the FWP, which is financed almost entirely out of the central plan budget is excluded, the ratio of plan to total health spending drops to less than 20%. In other words, more than 80% of 32 government health spending, excluding FWP, is made up of committed expenditure on maintaining existing the level of services, financed out of the non-plan budget. In fact, the degree of flexibility that central and state governments have over their health budgets is even more limited than this 20% ratio would indicate, since a part of plan spending is also of a committed nature. Between the center and the states, the former enjoys a relatively greater degree of flexibility. About 65% of central health spending and 99% of family welfare: spending is in the plan budget, while 86% of state health spending in the aggregate is in the non-plan budget. 5.6 In the case of centrally sponsored programs (other than the FWP), central financing ratios refer only to the plan component of expenditure. For example, the centrally sponsored National Tuberculosis Control Program is implemented as a 50% centrally funded program. This means that central grants finance half of plan expenditures under this program, while state governments have to bear the full amount of non-plan expenditures. This implies that central grants account for much less than 50% of total government spending on tuberculosis control. The same is true of other national programs where the states actually fund a greater share than the officially mandated ratio. The average share of central financing of communicable disease control programs is less than 25%. Thus, central leverage is limited in its power to assure adequate state funding of the non-plan inputs. These include field staff, drugs and other operational expenditures. 5.7 Center-State Contributions. Central and state governments finance very different components of total expenditures. Table 5.1 breaks down the uses of funds in the 1991-92 budget by the center and state shares. States mainly finance primary health care facilities, hospitals, disease control programs and insurance. The center, on the other hand, emphasizes family welfare and disease control programs and, to a somewhat lesser extent, education and research. Capital investment is shared equally by the center and the states. The central Department of Health allocates over 45% of its budget to the central teaching hospitals and research institutions, about 15% towards the Central Government Health Scheme (CGHS), a medical benefit scheme for its own employees, and about 35% towards the disease control programs. The Department of Family Welfare allocates about 85% of its budget towards family planning and 15% towards maternal and child health and universal immunization. 33 Table 5.1: Center and State Shares in Different Components of the Government Health Budget (1991-92) l ____________________________ Center's Share % States' Share % Hospitals 3.1 96.9 Public Health 0 0 100.0 Primary Care (Disease Control) 99.7 0.3 Family Welfare 22.6 77.4 Insurance (CGHS, ESIS) 18.2 81.8 Medical Education & Other 41.7 58.3 Administration & Other 11.0 89.0 Capital Investment 49.7 50.3 Source: "India: Policy and Finance Strategies for Strengthening Primary Health Care Services". World Bank Report No. 13402-IN; May 1995. 5.8 The family planning and immunization programs are fully centrally financed, while most of the disease control programs are partially financed by the center. The state govemments are required to allocate matching funds from their budgets and bear staff costs. In either case, the concemed department of the central ministry is responsible for program design and monitoring, while the corresponding state level department is responsible for implementation. The entire expenditure on these national programs is recorded in the state budgets, while the centrally financed component is also recorded in the central budget as a grant to the states. 5.9 State Governments finance the bulk (97%) of curative hospital care, as well as a significant share of expenditure for operating the primaiy health care infrastructure in rural areas. Central grants partially finance the disease control programs and the centrally-financed "rural health" scheme under the public health head which provides some resources for operating primary care facilities. The state governments bear all other costs of non-hospital rural services. 5.10 Central intervention in the health sector is both through the design and operation of centrally- sponsored programs as well as through support for infrastructure development. A major vehicle for the latter is the National Minimum Need Program (NMNP), a mechanism that allows the center to influence and encourage states develop infrastructure for rural health, water supply and nutrition. The NMENP is part of each state government's own plan, but for each rupee that the state spends towards these minimum needs, it receives a matching rupee from the center as a grant. In other words, disbursements under one of the central national programs is tied to the states' own efforts to fulfill minimum requirements of rural health infrastructure. 5.11 Local Governments. Local bodies have no significant financial authority in India except in large cities. In some states, however, local bodies have a significant responsibility for managing services and implementing national or state government programs. The degree and pattern of 34 decentralization in state-local relations exhibits wide inter-state variation. Transfers to local bodies, as a share of total state government budgets, for example, vary from over 40% (Gujarat and Maharashtra) to 15% or less (Haryana and Madhya Pradesh). For the 14 major states, the average share of transfers to local bodies was 30% of total expenditure in the second half of the eighties; the share of such transfers accounts for about 11% of state health spending. 5.12 While the federal structure of government in India is based on a significant devolution of taxing powers to the states, supplemented by a statutory right to their share in major central taxes, local bodies have very limited taxing powers or statutory rights. Decentralization has taken the form of delegation of implementing responsibility with minimal or no devolution of financial powers. Thus, even in the case of Gujarat or Maharashtra, where 40% of state government expenditures is transferred as grants to local bodies, the local bodies have little or no access to any financial resources of their own; their spending is totally dependent and determined by what is transferred from the state budget. The only exceptions to this general rule are municipal corporations of cities and towns, which raise their own resources on health and related services. 5.13 Of the total amount transferred as grants by the states to local bodies, over 95% consist of specific purpose grants to support social service facilities run by local bodies, such as grants to support salaries of Panchayat school teachers, and grants to support salaries of paramedical staff in rural health centers. Less than 5% consists of general purpose grants over which the local authority has flexibility of use. Such grants have remained more or less constant in nominal terms in all states, over the past four and half decades. 5.14 In sum, the existing fiscal and administrative set-up in the health sector is complex and hinders effective financing and accountability for decentralized management of health facilities. The center- state financial transfer mechanisms along with the plan and non-plan breakdown of the budget and the two separate structures for the Health and Family Welfare Departments is ineffective in providing essential inputs, correcting inequities between states, strengthening decentralized management and monitoring program performance. The central and state governments should consider: (i) a substantial review of the fiscal structures and procedures in the health and family welfare sectors including the roles of central, state and local govemment financing in the provision of basic inputs; (ii) the development of program budgeting tools at the central and state levels to monitor and evaluate expenditure for important schemes; and (iii) the development of fiscal tools to enable greater experimentation with resource allocation, alternative financing mechanisms and with choices between provision versus public financing of some activities performed in the private sector. C. Inter-State Equity Issues 5.15 The mechanisms used by the central government to fund health programs at the state level have the potential to reduce disparities in resources among states, and even within states. As currently organized, however, these mechanisms are not designed to overcome inter-state inequities. Interstate disparities are manifest in the following ways in the health sector: 5.16 First, a few of the centrally-funded communicable disease programs, including the largest National Malaria Eradication Program are inequitable, since they are funded on a 50-50 matching basis by state and central budgets. Some poorer states are unable to raise sufficient matching funds to make optimum use of the program. Even 50-50 matching schemes often require more than a 50% 35 contribution by the states, since overhead and some other recurrent costs bome by the states are excluded from the estimate of total program cost. Poorer states are least able to attract but most in need of supplementary central allocation to these programs. 5.17 Second, since plan schemes generally revert to non-plan schemes after five years, states are wary of participating in projects initiated by the central government under plan budgets. Participating implies that the state will bear the responsibility for recurrent costs in subsequent plan periods. For example, extensive construction of primary health centers (PHCs) under one plan period can become a liability during the following period, when all operating costs must be found within the states' non-plan allocation, and the center has completed its assistance. The integration of Indian Systems of Medicine doctors into PHCs, undertaken by the central government in many states in an earlier plan period, must now be supported by the states, which find themselves with additional personnel costs. Again, the better-off states are better able to take advantage of plan projects than the poorer states, though their need for such projects may be smaller. 5.18 These factors point to the conclusion that central transfers of resources for the health sector have not been commensurate with the needs of poorer states where socio-economic and health indicators remain depressed. Moreover, because of the differential impact of stabilization policies on state resources for the health sector, some poorer states have suffered disproportionately from imbalances and cutbacks introduced into the system at the state level. There is, therefore, a growing need to provide increased supplementary central funding to the poorest states where alternative sources of revenue are limited for the health sector. Supplementary financing could be provided to those states most in need which are taking credible steps to improve their overall finances. D. Government Health Expenditures: All States 5.19 In India, governments account for about 20% of total expenditures on health services, defined to include medical, public health and family welfare services. About 75% is funded by individuals directly from out of-pocket sources; indirect funding through health insurance schemes is limited (about 3.3%). It is important to stress that, apart from some services provided at teaching hospitals, the public sector caters largely to the poorest segment of Indian society. This is important for assessing the adequacy of government expenditure in providing health services, the pattern of allocations and the desirability and feasibility of increasing cost recovery for services. A second factor of some importance in analyzing publicly financed health expenditures is that the population's health is directly affected by several government programs outside of the departments of health. These include domestic water supply, sanitation, nutrition and housing in addition to those welfare programs which directly and indirectly increase the purchasing power of the poor and their ability to adopt a healthy and hygienic lifestyle. Most of the discussion in this chapter uses a narrow definition of government health expenditure -- that spent by the departments of health. Other expenditures are included only selectively. 5.20 Overall, health expenditures are a small share of total government expenditures and the trend over the past two decades has been downward. Whereas the share was 3.8 percent during the period 1974-78, it had fallen to 3.4 percent between 1986-90, with most of the reduction occurring during the later years (Tulasidhar 1996). However, publicly financed health expenditures broadly maintained their share of national resources at around 1 percent of GDP, since government expenditures have been increasing at a faster rate than GDP over the period. The fall in the share of government expenditure on 36 health and the maintenance of its share of GDP does not imply that real resources did not increase. Over the period described, per capita health expenditures increased by over 60 percent. Relative to other government activities, however, health services were neglected. For instance, the share of total government expenditure allocated to education increased from 9.4 to 11.6 percent and the share of GDP allocated to education increased from 2.4 to 3.6 percent. 5.21 The fall in the share of health expenditures in total government expenditures has recently intensified: from 3.1% in 1991/92 to 2.6% in 1994/95 (budget estimates) (Duggal, Nandraj, Vadair 1995). Since the central government's share has been largely maintained (at under 0.50 percent of its total expenditure), the reduction is due solely to falling expenditure shares in the states. The reduced share resulted in a lower level of real expenditure equal to about 4 percent less by 1992/93 compared to 1990/91. This was only partially compensated for in the following two years. 5.22 Not all categories of health activity have been subject to the same trends. Between the periods 1974-78 and 1986-90, the share of the mainly curative medical services decreased from 65 to 62 percent, and that of public health from 21 to 19 percent while the family welfare share increased from 14 to almost 19 percent. These changes in shares reflected differences in real percentage increases over the period of 49, 42 and 102 percent for medical services, public health and family welfare, respectively. In contrast, during the first two years of adjustment when real expenditures on health fell by 4 percent, both medical services and family welfare shared the major brunt, while the public health allocation remained virtually constant. E. Patterns of Health Expenditure Across States 5.23 Public sector health budgets at the state level, which include all non-hospital primary health care as well as hospitals up to the district level, are financed out of three distinct budget sources: (a) the state's non-plan budget that finances the recurrent cost of maintaining the infrastructure and level of services established through previous plans; (b) the state plan budget that finances schemes initiated by the state during the current five-year plan, as well as the state's component of financing centrally sponsored programs; and (c) the central plan grants that finance the central component of national programs. Total spending in health and family welfare at the state level is financed out of these three different budget sources roughly in the ratio of 68:14:18 (1990/91). The corresponding ratio in the case of drinking water supply is estimated at 28:56:16. 5.24 The composition of the health budget of state govemments by these different sources of funds is significant from the standpoint of protecting public health spending in the context of general fiscal contraction. The degree of financial constraint can be very different on these three different budget sources. Typically, the non-plan budget of each state is constrained by the overall revenue position of that state, supplemented by the statutory central transfers recommended by the Finance Commission. The state plan budget is constrained by the non-plan gap of the state and the untied central assistance to state plans, whose level is determined by the Planning Commission. Finally, the constraints on tied central plan grants are determined by the budget of the concerned central ministry. In the former two cases, inter-state differences in the degree of financial constraint can be considerable, whereas the constraint is uniform in the case of the budget services financed out of central plan grants. 5.25 Both the aggregate resources available to states and the commitment to provide health services differ between states. In 1994/95 in the 16 major states, the average share of state government revenue 37 devoted to health was 5.8 percent. The range was between 4.7 and 7.4 percent (apart from Haryana where the share was much lower). In 11 of these 16 states, the share was lower than in 1991/92. The shares in 1994/95 compare to an average in 1985/86 of 7.3 percent and a range of 5.7 and 9.7. While the average share has fallen, the range has narrowed implying that expenditures in the more advanced states such as Kerala and Punjab have increased more slowly than in the backward states such as Bihar and Uttar Pradesh. This recent trend also reflects the medium term trend. Tulasidhar (1996) has calculated gini coefficients to describe inequalities in per capita expenditures across states over four time periods back to 1970-74. Overall, and for the individual categories of medical services and family welfare, the results indicate decreases in spatial inequalities over time while for public health they indicate an increase. The overall results contrast with those for expenditures on nutrition programs which show a substantial widening of inequality between states. Despite the narrowing, differences in per capita health expenditures across states remain very wide. In 1994/95 they ranged from Rs. 59 in Bihar to Rs. 122 in Kerala. F. Mechanisms of Adjustment Effects on Center-State Transfers 5.26 Several recent studies have attempted to document the effects of the adjustment process on public expenditure by different categories of states. For health, the most detailed is by Tulasidhar (1996). Table 5.2 describes part of this analysis, from 1988/89 to 1992/93 for all states and for three separate state income categories. The choice of base year influences the implications of the figures. With 1989/90 as the base year (as chosen by the author), the poor group of states witnessed a consistent fall in real expenditures while there were moderate increases in middle income states and a small increase in the richer states. Table 5.2: Trends in Public Revenue Expenditures on Health 1988-1992 Constant Prices (1989/90 = 100) 1988/89 1989/90 1990/91 1991/92 1992/93 All States 93 100 106 102 102 Poor 87 100 98 93 93 Middle Income 94 100 115 108 113 Rich 98 100 107 107 103 Source: Tulasidhar, 1996 5.27 With 1990/91 as the base, expenditures fell slightly in the middle and richer states and more so in the poorer ones. Compared to 1988/89, however, each group of states in 1992/93 had higher real expenditures. Whatever the base year chosen, however, the peak year for expenditure was 1990/91 and falls of between 2 and 5 percent followed in the next two years. 5.28 The responses to the overall constraint on expenditures during 1988/89 to 1992/93 varied by states according to income group. The rich states reduced expenditure in medical services and disease control, maintained them in public health and increased them in family welfare. The middle income group again reduced expenditures in medical services, maintained those for family welfare and disease control and significantly increased expenditures in public health. The poor states reduced expenditure in each of the four categories of service. Across all states, real expenditures on public health activities were maintained while those for all other activities were reduced. Since a large share of family welfare 38 expenditures and a significant share of disease control expenditures are dependent on receipt of central govermment grants, the clearest message regarding the decisions of state health authorities is that with resource constraints, the attempt was made to defend public health expenditures at the expense of medical services. 5.29 A separate study of the impact of adjustment by Gupta (1995) on public expenditures uses data to 1993/94 and includes water supply, sanitation, housing and urban development together with health expenditures. In that year, the growth in state 'social' expenditures was below the overall growth in state expenditures across all states and for the low income group was equal to only half the growth rate across all states. Further, in this low income group of states alone, the growth was below the rate of inflation. The study also notes that over the past two decades, govemment financing of health services across India has demonstrated a downward trend in relation to both total govemment expenditures and GDP. Within this trend there have been variations between individual states. Overall, the variations in expenditures across states have narrowed in relative terms though the absolute differences in per capita expenditures remain very wide. 5.30 The process of adjustment can affect the output of govemment health spending by affecting: (a) the quantum of financial resources available with health ministries and departments; and (b) the unit costs of providing health care. Fiscal contraction by the central govemment is translated into tightening of budget constraints at the state level through different mechanisms, corresponding to the three different sources of financing health expenditures at the state level, namely by the non-plan budget of the start, the state's own plan budget and the budget of centrally sponsored programs. Figure 5.2 shows the different channels through which impact of adjustment is conveyed to the state level. 5.31 There are two kinds of pressure on the financial resources of state govemments, namely: exogenous macroeconomics factors and contraction of central transfers to states. A deceleration or decline in domestic industrial output, for example, may lead to a reduction in tax revenues collected by both the center through excise duties and personal income taxes, and by the states through sales taxes. Reductions in either of these types of tax revenue squeeze the revenue of both the center and state govemments, since a statutorily fixed proportion of central excise duties and personal income taxes are shared with the states. 5.32 In addition to revenue effects, the center can: (a) reduce the quantum of untied plan grants to states and/or (b) reduce the quantum of tied plan grants transferred under one or more centrally- sponsored programs. Reductions in allocations to centrally-sponsored health sector programs are the most obvious form of squeezing the health sector and have received attention in Bank-GOI dialogue. However, the other channels of pressure, though less visible, are likely to be more significant as the funds involved are much larger in magnitude. 39 Figure 5.2: Channels Through Which Structural Adjustment Affects Health Spending Exogenous reductions in center's revenue _ | ~CENTER'S EXPENDITU]RE | OH FW Planning | |Fnnc * in| C om m ission | |C om siso C uts in u tI schem es nunted \ on C u ts inpu tiesd HEALSTATE EXPENDITUREO Scecto r-sp ec Ific ad justmn ents at . ~~~state level R- t Exogenous 5.33 Ce l tPLAN b, c n of t sring ane g lnu M acr oeconom icn anhnc nta rveue effects o On the lth Bd etd a on anput prgces a t |IEL-lII SERVICE PROGRAM Source: "India: Policy and Finance Strategies for Strengthening Primary Health Care Services." World Bank Rxeport No. 13042-IN. May, 1995. 5.33 Central transfers to the non-plan budgets of states, consisfing of tax sharing and gap fillne g grants, are statutorily determined by a quasijudicial body called the Finance Commission; such transfers are therefore not at the discretion of the central govefment and hence not vulnerable to contractionary pressures by the centera On toe ot 1mher hand, central plan transfers to states, both bied and untied, are largely at the discretion of the center and hence more vulnerable to central policy. 5.34 Untied transfers from center to states, called "central assistance to state plan", consist of 30% grants and 70% loans in the case of the 14 major states, and of 90% grants and .O% loans in the case of the special category states, which are mainly hilly and predominantly tnibal states plus the state of Jamnmu & Kashmir. The center is free to decide the quantum of assistance to each of the special category states, whereas the assistance to the 14 maj'or states is distributed among them on the basis of an objective formula called the modified Gadgil formula. However, even in the case of the latter, only the inter-state distribution is formula driven; the total quantum of such assistance is at the discrefion of the central Ministry of Finance. 5.35 States also have some discretion in how they use untied funds. For example, a reduction in central assistance to state plan may result in different levels of reduction to health spending in different 40 states. Similarly, states exercise some discretion in their non-plan spending, and so can favor or disfavor the recurrent cost needs of the health sector. 5.36 In addition to the factors outlined above, there are also other macroeconomic pressures that operate on state revenues, such as (i) reduction in small savings by households and (ii) the devaluation of the Rupee. A fixed proportions of collections from national savings schemes, operated by post offices and linked with tax incentives, are on-lent by the center to the states as a loan under the non- plan account; any decline in such collections would thus reduce the quantity of central loans available to the states. A major devaluation of the currency, by affecting the cost of imported inputs, especially drugs and pharmaceuticals, could affect the unit cost of health care financed by the government. Even if financial allocations are maintained, the real value of such allocations could decline due to an abnormal rise in the unit costs. G. Recommendations 5.37 The following recommendations are suggested to improve the existing complex structure of fiscal and administrative set-up in the health sector and the inter-state inequities in the transfer of funds from the center to the states, as well as to better prepare the states to address financing issues in the course of designing future strategy: * The state governments should consider, through their Ministries of Health and Family Welfare and Finance, a substantial review of the fiscal structures and procedures in the health and family welfare sectors including the roles of the central, state and local govemment financing in the provision of basic inputs. Some of this is occurring at the state level in the four states where Bank- financed health systems projects under implementation are undertaking more systematic planning of state and local level health sector related activities through their strategic planning cells. * The state governments should develop program budgeting to monitor and evaluate expenditure for important schemes; * The state governments should develop fiscal tools to enable greater experimentation with resource allocation, alternative financing mechanisms and with regard to choices between providing versus financing of health care services. A mechanism for coordination between the Departments of Health and Finance would be essential to work out the opportunities for such activities. * To alleviate the health care needs of poorer states, where socio-economic and health indicators remain depressed, supplementary financing could be provided with a priority to states most in need which are taking credible steps to improve their overall finances. For example, a health resources assurance fund at the center could be established to mitigate some of the interstate inequities in allocation of central funds to the states. * Greater sharing of responsibilities and coordination between the center and the states in the health and family welfare sectors is needed, especially with regard to sectoral planning, health strategy and policy reform. Involving the states more intensively and collaboratively will help to solidify their commitment to the overall development policy on health and family welfare. The modalities need to be discussed and worked out between the center and the states. 41 CHAPTER 6 PUBLIC SECTOR HEALTH EXPENDITURES IN THE FouR STATES A. Introduction 6.1 This Chapter provides an analysis that is complementary to the center-state financing issues in the health sector that were examined in Chapter 5. It focuses on health expenditures at the state level, which currently account for about 73% of public expenditures on health care in India. Illustrative case studies of trends and pattems of health expenditures in four states are presented to provide a comparative perspective of health expenditure pattems generally at the state level. A review of selected aspects of state level public finance in the states of Kamataka, Punjab, West Bengal and Andhra Pradesh is initially presented to provide some background against which to view the main concern of this section -- state government expenditures on the provision of health services. As part of the exercise, total health expenditures in the respective states have been disaggregated and re-classified by level of service. 6.2 This chapter reviews public financing of health care from the perspectives of the state govemments. Public expenditure analysis provides several opportunities for examining priorities, evaluating government intentions, policies and implementation, particularly in times of economic austerity when resource choices are unavoidable. Sectoral expenditures over time measured against total expenditures or national income, provide a basis for evaluating the importance of the sector and changes in its importance in terms of pre-empting resources. Expenditures across states and disaggregations of expenditures by categories of activities also provide information with which policy- makers can re-think their own priorities. Efficiency aspects and effectiveness of public programs play an important role in such decisions of policy-makers. However, equity aspects in the provision of health services must also play an important role in a country like India where nearly a third of the population live below the poverty line. Eighty percent of health expenditures in India are bome directly by individuals; equity aspects should therefore remain important because government services in general are utilized by the poorest sections of the population. B. State Finances 6.3 Trends in the level and composition of public expenditures on health and family welfare need to be seen against the backdrop of the overall developments in state government finances -- both prior to the economic and fiscal crises of 1991/92 and during the period of adjustment and including specific policies enacted by particular states outside of the context of adjustment. Through the 1980s, overall state government revenues grew at a slower rate than expenditures leading to the emergence of revenue deficits and the growth and changing composition of fiscal deficits. In the more recent period, state finances have been influenced both by the nature of macroeconomic adjustment, which affects overall tax revenues, and by fiscal adjustment by the Central govemment which has affected the size of the Central govemment's transfers to states, particularly the grant component. 42 6.4 The combined gross fiscal deficit (GFD) of the states was equal to 3.0 percent of GDP in 1986/87 and to 3.2 percent in 1993/94. Calculations of individual state deficits as a proportion of their own State Domestic Product (SDP) suggest that for the eleven most populated states the average increased slightly, from 4.2 to 4.3 percent between 1990/91 and 1994/95. Differences between states, however, are quite substantial. Table 6.1 presents the data for Andhra Pradesh, Karnataka, Punjab and West Bengal from 1990/91 to 1993/94. Apart from Andhra Pradesh, in each state the deficit has fallen as a share of state income. It remains the highest in Punjab. Table 6.1: Gross Fiscal Deficit as Proportion of State Domestic Product Project States 1990/91 - 1993/94 1990/91 1991/92 1992/93 1993/94 Kamataka -5.2 -5.5 -4.7 -3.7 Punjab -8.5 -6.5 -6.3 n/a West Bengal -6.0 -4.2 -3.4 -3.8 Andhra Pradesh -3.3 -3.3 -4.2 -4.0 Note : Measurement of state domestic product may differ slightly between states. This may affect comparisons between states but not trends within states. No estimate of SDP for Punjab in 1993/94 is available. Source: Reserve Bank of India Bulletin (various issues). 6.5 The gross fiscal deficit largely reflects the combined balances in the revenue and capital accounts. Between 1980/81 and 1986/87 a deficit on the aggregate states' revenue account occurred in only one year. Since then, deficits have occurred in each year. Although trends in the revenue deficit are unfavorable for all states combined, the position of individual states again is far from uniform. Karnataka has had relatively small revenue deficits in recent years and a small surplus in 1993/94 (Table 6.2). As a percentage of net SDP, the revenue deficit/surplus was -0.7% in 1991/92 and +0.6% in 1993/94. In Andhra Pradesh, the deficit remained equal to 0.5 percent over this period, though it increased to 1.4 percent in 1994/95. Punjab has had more substantial revenue deficits, both in absolute terms and as a share of SDP. In 1991/92 and 1992/93, they were equal to -2.4% and -2.2% of SDP respectively. The revenue deficits of West Bengal have also increased since 1989/90 though not yet to the extent of Punjab. Table 6.2: Revenue Deficit as Proportion of State Domestic Product Project States 1980/81 - 1993/94 1980/81 1985/86 1989/90 1990/91 1991/92 1992/93 1993/94 Karnataka +1.0 -0.8 -0.8 -0 4 -0.7 -0.6 +0.6 Punjab +0.4 +0.1 -1.5 -3.3 -2.4 -2.2 n/a W. Bengal -0.3 +0.5 -1.8 -3.2 -1.8 -1.6 -2.1 AndhraPradesh -- -- -0.9 -0.5 -0.3 -0.3 -0.5 Note: SDP figures taken from State Directorates of Economics and Statistics; Karnataka SDP figures from 1990/91 onwards supplied by Govt. of Karnataka. Source: Reserve Bank of India Bulletin (various issues). 43 Box 2: Financial Situation of the State and Implications for the Health Sector: The Example of Andhra Pradesh Andhra Pradesh has been under considerable financial stress since the mid-1980s due to the declining tax revenue as a share of its gross state domestic product (GSDP), the extremely low buoyancy of tax and non-tax revenue, rising public expenditures especially on subsidies, salaries, poorly targeted welfare programs, and sharply falling longer term investments in infrastructure and social sectors, and non-wage O&M. The increase of the fiscal deficit to a level between 3 to 4 percent of GSDP, outstanding debt as a share of GSDP of 24%, and interest payments of 12% as a share of total revenue highlight the deteriorating financial situation. While the fiscal situation and its rate of deterioration have been somewhat worse in Andhra Pradesh than the average of 14 major states, the lessons are applicable to other states as well. The state has not been able to generate the amount of revenues needed to meet its budgetary requirements. Its tax revenue has been declining since 1986/87 when the proliferation of rates and tax concessions made administration difficult and inefficient. The introduction of full liquor prohibition in 1995 aggravated the revenue situation and contributed to the decline in tax revenue from 9.5% of its GSDP in 1986/87 to 6.8% in 1995/96. The very low buoyancy of both tax and non-tax revenue is a critical weakness of the state's revenue system and one which has not been adequately addressed by the tax reform measures of the past two years. The problem of the deteriorating fiscal situation and low level of revenue generation is compounded by Andhra Pradesh's expenditure priorities. There has been a proliferation of welfare programs, an increasing salary bill which has grown at an annual rate of 5.7% in real terms over the past 10 years and a rise in the shares of subsidies. The cost of these has been smaller allocations for investment in the social sectors and non-wage O&M. This has led the share of health and family welfare in the total state revenue budget to decline since the early 1990s. Andhra Pradesh must take credible steps to improve its overall finances through reprioritizing expenditures and enhancing revenues. This will help to better address health sector needs as well. Within the health sector, the state needs to address the issue of public expenditures which are skewed in favor of tertiary facilities and low expenditures on drugs, essential supplies and O&M. The state must also enhance and prioritize expenditures on health through increasing health allocations within the overall budget, allocating 75% of incremental resources in the health sector to the primary and secondary levels over the next 3-5 years, and increasing allocations for non-salary recurrent costs over the next 2-3 years. The govermnent has initiated a move to this end through policy changes in the ongoing Andhra Pradesh First Referral Health Systems Project. This project is helping improve efficiency in the allocation of health resources through policy and institutional development and performance of health care through improved quality, coverage, and effectiveness of health programs. Better sectoral resource allocation and enhanced cost recovery with exemptions for the poor will help improve provision of basic health care services in the long run. Source: India - Andhra Pradesh: Agenda for Economic Reforms. World Bank, January, 1997. 44 6.6 As a consequence of increased revenue deficits in general, the nature of the fiscal deficit, and hence the borrowing requirement, has changed. Whereas, previously, borrowing had been required only for covering deficits im the capital account, by 1994/95 over a quarter of the borrowing was to cover deficits in the revenue account. This indicator is particularly revealing of the financial health of state governments, since it represents the pre-emption of borrowed funds for meeting current expenditures. In Punjab, the revenue deficit contributed over 50% of the GFD in 1992/93 and was budgeted to be about 34% in 1994/95. In West Bengal, the revenue deficit was 43% of GFD in 1992/93 and was scheduled to rise to over 62% in 1994/95 A substantial increase also occurred in Andhra Pradesh where the share increased from 17 to 32 percent. In Karnataka, the revenue deficit was 12 percent of the GFD in 1992/93 but made no contribution to the fiscal deficit in the following two years. 6.7 Budget deficits have led to increased loans and indebtedness. At the same time, interest rates have increased. As a result, interest and capital repayments are high and growing. As a percent of total state revenue m 1985/86 and 1993/94 they doubled in many states and trebled in some. Across 11 major states in 1994-95, interest payments averaged 18.0 percent of revenues -- in Karnataka 14.7, Andhra Pradesh 14.8, West Bengal 19.1 and Punjab 22.4 percent. Interest payments are increasing at an unsustainable rate and are resulting in a falling share of development expenditures, including those in the health sector. C. Trends in Expenditure in Health and Family Welfare 6.8 In all four states, govemment health and family welfare expenditures are well below the level considered adequate to meet public health priorities (World Development Report 1993); and below the levels required to achieve the service norms set by the Government of India (India: Policy and Finance Strategies for Strengthening Primary Health Care Services). Punjab spends less than 0.9% of state domestic product, Andhra Pradesh and West Bengal 1.1 percent and Kamataka around 1.3 percent (Table 5.3). In addition, compared to the early and mid 1980s the shares have declined in three of the four states. The decline has been especially steep in West Bengal, where health expenditures fell from around 1.5% of SDP in 1980/81 to 1.0% in 1992/93; and are estimated to be around 1.16% in 1993/94. In Punjab and Andhra Pradesh, the share fell also. In Kamataka, the share is back at the same level as in the early 1980s (at around 1.3% of SDP). Table 6.3: Expenditures on Health and Family Welfare as Percentage of SDP 93/94 94/95 I |____________ 80/81 85/86 89/90 90/91 91/92 92/93 R.E. B.E. Kamataka 1.26 1.33 1.25 1.18 1.11 1.29 1.29 1.40 Punjab 1.09 1.00 1.04 0.99 0.91 0.88 n/a. n/a. W. Bengal 1.54 1.28 1.17 1.35 1.07 1.03 1.16 n/a. Andhra Pradesh -- -- 1.19 1.05 1.00 1.07 1.13 0.96 Note: SDP figures taken from State Directorates of Economics and Statistics; Karnataka SDP figures from 1990/91 onwards supplied by Government of Karnataka. Source: State Budget Documents. 45 D. Per Capita Expenditures on Health 6.9 Measures of aggregate resources devoted to public sector health programs do not convey the absolute levels of real expenditure per capita (Table 6.4). Despite the relatively low share of public resources devoted to health in Punjab, real per capita expenditures have been the highest of the three states and have been maintained at roughly the same level since 1980/81 (between Rs. 30-35 per year at 1980/81 prices). Per capita expenditures which were lowest in Kamataka -- between Rs 20-25 per year at constant prices during the 1980's have risen since 1991-92 to around Rs. 30. West Bengal displays the most disturbing trend. The fall in real expenditures per capita has become pronounced in recent years, from Rs. 25 per year in 1980/81 and Rs. 26 in 1990/91 to Rs. 22 per year in 1993/94. The decline has been most serious for non-salary recurrent expenditures. Table 6.4: Per Capita Expenditures on Health and Family Welfare (in 1980/81 Rupees) 93/94 94/95 80/81 85/86 89/80 90/91 91/92 92/93 R.E. B.E. Kamataka 19.00 22.12 26.00 24.12 25.01 27.83 30.20 33.31 Punjab 29.13 31.95 38.06 36.18 34.12 33.60 33.30 31.16 W. Bengal 24.63 21.50 22.36 26.07 21.37 20.99 21.97 20.95 Source: State Budget Docuiments. 6.10 Despite the differences between the states, the per capita expenditure in each is low. In 1993/94, per capita expenditure at current prices was Rs. 100 in Punjab, Rs. 90 in Karnataka, Rs. 72 in West Bengal and Rs. 65 in Andhra Pradesh (or between US$ 2-3 per capita). The expenditures are well below those required to fund the health provision norms set by GOI which, in total, would require a 50 percent increase in budgetary allocations over the current level. E. Effects of Fiscal Adjustment on Health Budgets 6.11 Spending on health and family welfare grew at around 12-13% per annum in nominal terms in the four states between 1980/81 and 1990/91. At constant prices, annual growth rates were in the range of 2.8% to 4.4%. Expenditures grew most rapidly in Karnataka and Andhra Pradesh, followed by Punjab and West Bengal (Table 6.5). 6.12 The consequences of the economic and financial difficulties at the start of the 1990s and the resulting adjustment measures have differed across the three states. In West Bengal and Punjab, expenditures fell in real terms in the first year of adjustment. While there has been a partial recovery in Punjab, the level of expenditures previously attained in West Bengal have yet to be regained. Expenditures fell by 16% in real terms in 1991/92. Although the growth rate increased in subsequent years, the absolute level of real expenditures in 1993/94 was still below that of 1990/91. In Andhra Pradesh real expenditures in 1993/94 were around 4 percent higher than in 1991/92. In Punjab, the nominal growth rate in 1991/92 was positive, but real expenditures fell by almost 4%. Real growth in subsequent years was very small so that the level in 1993/94 was (slightly) below that in 1990/91. Kamataka has been the most successful in sustaining high real growth rates resulting in much higher real expenditures in 1993/94 when compared to those attained in 1990/91. 46 6.13 It would appear, therefore, that the effects of the fiscal crisis and the consequent adjustment measures on the overall budgetary position were handled in such a way in Kamataka that the health sector was not unduly affected. Conversely in Punjab and West Bengal there were declines in real expenditures. Given the relatively low level of expenditures on health particularly in West Bengal, these trends are of concern. Special mechanisms will be required to protect and raise the level of real expenditures on health in these two states. While in Andhra Pradesh, real expenditures were initially maintained, the state's decisions to both increase the rice subsidy and reduce income from liquor taxes have led to a fall in health expenditures as a share of state GDP from 1.13 percent in 1993/94 to 0.88 percent in 1995/96 (budget estimates). F. Share of Budgetary Resources Devoted to Health 6.14 Health and Family Welfare budgets in the four states generally absorbed less than 10% of the total state revenue budgets throughout the 1980's (Table 5.6). In each state the share has declined over time suggesting that during the period of adjustment past trends have been exacerbated, rather than reversed. This decline in shares occurred despite the rise in real per capita expenditures in all states up to 1990/91, indicating that total state government expenditures rose even faster than health expenditures. Since 1990, the budget share has increased in Karnataka (from 6.1 to 6.4%), but fallen further in West Bengal (from 8.4 to 7.2%), Punjab (from 6.6 to 5.3%) and Andhra Pradesh (from 5.9 to 5.4 percent). Table 6.5: Real Growth Rates in Health Expenditures Project States 1980/81 -1993/94 (annual in %) Andhra Karnataka Punjab W. Bengal Pradesh 1980/81-90/91 4.4 4.3 2.8 4.4 1991/92 5.7 -3.8 -16.2 _ 1992/93 13.4 0.5 0.4 3.2 1993/94R.E. 10.6 1.1 7.0 2.9 Source: State Budget Documents. Table 6.6: Share of Health and Family Welfare Sector in Total State Revenue Bud_et 93/94 80/81 85/86 89/80 90/91 91/92 92/93 R.E. Karnataka 7.87 6.53 6.51 6.12 5.96 6.44 6.43 Punjab 9.00 7.19 7.76 6.60 4.32 5.78 5.31 W. Bengal 12.05 8.90 8.01 8.44 7.32 7.55 7.15 Andhra Pradesh 6.42 5.95 8.79 5.87 6.40 5.60 5.38 Source: State Budget Documents. 47 G. Composition of the Health Budgets 6.15 The allocation of spending between primary, secondary and tertiary level facilities and services is not readily available in state budget documents. The approximate shares can be obtained only by reclassifying individual line items. This exercise has been undertaken in varying degrees for each state. 6.16 West Bengal. The total health budget in West Bengal for the years 1989/90 to 1994/95 has been re-classified under five heads: (i) primary health care (ii) rural hospitals and dispensaries (iii) urban health care facilities (iv) items of general expenditure and (v) medical education (Table 6.7). Primary care comprises expenditure on public health, family welfare, rural health services (allopathic and non-allopathic) and urban non-allopathic services. Expenditure on Employee's State Insurance has been placed under urban health care facilities since the scheme covers workers in the organized sector of industry, which is mainly located in urban areas. Table 6.7: West Bengal -- Composition of the Health Budget (as % of total) l______________________ 89/90 90/91 91/92 92/93 93/94 94/95 I. Primary care 39.66 38.19 40.30 38.55 40.53 39.24 MNP 6.40 - - - - - Subsidiary centers 1.73 - - - - - Other 3.01 1.03 0.008 0.006 0.004 0.004 Rural health service. (non-allopathic) 1.42 1.02 0.009 0.009 0.009 0.009 Urban health service (non-allopathic) - 0.006 0.007 0.007 0.008 0.009 School health scheme - - - - - - Public Health 12.42 13.77 13.02 12.25 12.48 12.28 Family Welfare 12.93 12.36 13.38 13.0 14.59 13.09 PHCs 1.73 9.32 11.33 10.92 11.15 11.40 II. Rural Hospitals & Dispensaries 3.90 2.42 1.90 2.2 2.13 2.24 III. Urban facilities 40.00 40.12 43.16 43.16 42.52 43.50 Urban hospitals & Dispensaries 32.49 33.38 35.40 36.67 34.20 34.96 Employees' State Insurance 7.5 6.74 7.75 6.98 8.32 8.54 IV. General 10.34 12.23 8.15 8.62 7.46 7.48 Direction & Admn. 3.15 3.58 3.75 3.85 3.25 3.32 Medical store depots 6.4 5.43 4.03 4.51 3.86 3.81 Other exp. 0.006 3.03 - - - - V. Medical Education and Training 6.12 7.01 6.47 7.44 7.34 7.52 Total (Rs. crores) 322.77 445.2 386.96 426.55 502.11 539.46 Source: Govt. of West Bengal, Budget Documents. 6.17 According to this reclassification, primary health care absorbed around 40% of the health budget in 1989/90 and this share has been maintained subsequently. The share for urban (secondary 48 and tertiary) facilities increased from 40.0% to 43.5%, much of it going to tertiary level hospitals. The share for medical education and training also rose marginally from 6.1% to 7.5% in 1994/95. 6.18 By contrast, rural hospitals and dispensaries have received the lowest share of expenditures and this has been reduced almost by half since 1989/90, from 3.9% in 1989/90 to 2.2% in 1994/95. Recent sector work has demonstrated that there is considerable under-funding nationally of this segment of the health services in relation to both needs and prescribed norms (India: Policy and Finance Strategies for Strengthening Primary Health Care Services). Moreover, it appears that these services have been under the greatest pressure in recent years. 6.19 The share of general expenditures has also decreased, from 10% to 7.5%. This is almost entirely due to the reduction in the share for medical stores and depots, which declined from 6.4% to 3.8%. Thus, in addition to rural hospitals, expenditure on drugs and other consumable has also borne the brunt of expenditure contraction during the period of adjustment. 6.20 In order to determine the broad allocation of resources across different categories of inputs and different levels of hospital services, the composition of non-plan expenditures on hospitals and dispensaries in West Bengal during the last three years was examined. Urban hospitals were divided into two categories, tertiary and secondary. Hospitals in metropolitan centers and specialty hospitals were designated as tertiary, while all district urban hospitals were designated as secondary. The results are presented in Table 6.8. The level of expenditure on urban secondary and tertiary hospitals is broadly similar. Expenditure on rural secondary hospitals is only one ninth of that on urban secondary hospitals. 6.21 In urban tertiary hospitals, salaries and wages account for about two-thirds of revenue expenditure. Although there was a slight reduction in 1993/94 (to about 60%), the budgeted share rose to 65% in 1994/95. Expenditure on materials and supplies (including drugs) comprise around 9-10% of the total, although again there was a slight dip in 1993/94. Machinery and equipment absorbed over 5 % of the total in 1992/93 and 4.7% in 1993/94. Expenditure on diet rose from less than 6% to 9%. Expenditure on maintenance has been negligible, but this understates the overall maintenance expenditure on buildings which is included in the budget of the Public Works Department. The remaining share of expenditure is absorbed by overhead costs and by aid to non-government hospitals - - about 10% and 3-4% respectively. 6.22 The expenditure pattern is broadly similar in urban secondary hospitals, with about 75% going towards salaries. Apparently, expenditure on materials and supplies fell quite dramatically in 1992/93 (to less than 5%), rising to around 9% in subsequent years. Expenditure on machinery and equipment is 2%, while expenditure on diet has increased to about 7%. It would appear that in urban secondary hospitals, the share of salaries was protected during 1992/93, with the budget cuts borne by drugs and consumables. 6.23 In rural secondary hospitals, the share of materials and supplies fell to 1% of the total in 1992/93, while the share of salaries was 75%. In the following two years, however, the share of salaries and wages was brought down drastically to less than 60%; salary expenditure actually fell in absolute terms, probably indicating that vacancies were not filled. The share spent on materials and supplies rose to over 12%. However, since the absolute expenditures on rural hospitals hardly increased in this period, and real expenditures fell, the rise in the share does not indicate any significant 49 improvement in availability of drugs and consumables though it does indicate an attempt to restore the levels of spending attained earlier. Table 6.8: West Bengal -- Composition of Spending in Hospitals and Dispensaries 1992/93 - 1994/95 Urban Tertiary Urban Secondary Rural Secondary l___________ 92-93 93-94 94-95 92-93 93-94 94-95 92-93 93-94 94-95 Salaries and 66.1 60.1 65.0 74.9 74.5 74.1 75.3 58.3 59.8 Wages Materials & 10.2 8.7 9.3 4.6 9.5 8.9 1.0 12.7 11.9 Supplies Machinery and 5.2 4.2 4.7 1.2 1.7 2.0 2.8 4.2 4.5 Equipment I Motor Vehicles 0.2 8.0 0.1 0.3 0.3 0.3 1.0 0.4 0.4 Diet charges 5.9 7.1 8.0 3.2 6.6 6.7 7.9 15.8 15.0 Maintenance 0.03 0.06 0.06 0.02 0.02 0.02 - Aid to non- 2.7 2.8 3.0 0.9 0.9 0.9 - govt. hospitals IlI Office Exp. & 9.7 9.1 9.9 14.9 6.5 7.1 11.9 8.5 8.5 0th. Total (Rs. 74.49 87.58 88.30 76.82 83.85 91.82 8.43 9.48 10.06 crores) I I__ Note: Total refers to Non-Plan spending only. 1993/94 expenditures are revised estimates and 1994/95 expenditures are budget estimates. Source: Govermnent of West Bengal, Budget Documents. 6.24 Karnataka. Budget allocations in Karnataka were disaggregated and re-classified into functional activities: primary health, family welfare, secondary and tertiary health, medical education and training, and administration. The percentage distributions from 1990/91 to 1994/95 are described in Table 6.9. Table 6.9: Karnataka -- Distribution of Health Care Revenue Expenditures by Level of Care 1990/91-94/95 Function 1990/91 1991/92 1992/93 1993/94 1994/95 Administration 2.6 2.9 2.2 2.2 2.1 Medical Education 9.1 9.8 10.5 8.7 10.1 Secondary & 34.3 34.8 32.5 35.9 33.0 Tertiary I I Public Health 38.3 34.3 38.4 37.2 37.7 Family Welfare 15.7 18.2 16.4 16.1 17.1 Source: Govermment of Karnataka, Budget Documents. so 6.25 Throughout the period, primary health care and family welfare absorbed around 53 percent of the total health budget. Secondary and tertiary care combined absorbed between 33 and 36 percent and medical education and training, around 10 percent. The most notable change in shares has been for family welfare. For this activity, nominal expenditures increased by 23 percent a year compared to the lowest growth rate of 16 percent for secondary and tertiary care and 18 percent for primary health care. It is of interest to note that family welfare is a 100% centrally sponsored scheme. 6.26 Complicating the disaggregation of allocations in Kamataka is the substantial degree of decentralization to the district councils or Zilla Parishads. While most of the health functions of the councils relate to primary health care and family welfare, they also include community and some district hospitals. From a review of the budgets of one Zilla Parishad from 1990/91 to 1994/95, the share for these facilities appears to have fallen from 23 percent to 5 percent. If this is typical, the rural hospitals in Karnataka have been under severe and increasing pressure similar to the apparent case in West Bengal. 6.27 Punjab. Health expenditures for Punjab were re-classified under primary, secondary and tertiary health care. Primary care was defined as including primary health centers, sub-centers, services from non-allopathic systems of medicine (apart from teaching), family welfare (apart from MCH, included at the secondary level), disease control programs, drug control, public health laboratories and paramedical training. Secondary care includes MCH, CHC and district hospitals. Tertiary care covers the teaching hospitals. The composition of health expenditures between these three levels of service is described in Table 6.10. According to the breakdown, an average of 61 percent of expenditures are allocated to primary care, 27 percent to secondary and 12 percent to tertiary. Over the five year period, however, some changes have occurred. The shares for primary and tertiary health care have fallen by 5 and 1.5 percentage points respectively while the share for secondary care has increased by 6.5 percentage points. Table 6.10: Punjab -- Distribution of Health Revenue Expenditures by Level of Care 1990/91 - 1994/95 Function 1990/92 1991/92 1992/93 1993/94 1994/95 Primary 63.5 60.9 65. 9 56.9 58.4 Secondary 23.0 26.5 21.8 31.8 29.6 Tertiary 13.5 12.6 12.3 11.3 12.0 Source: Government of Punjab, Budget Documents. 6.28 The data prepared for Punjab also allow for some analysis of items of expenditure. For each level of care, salary items dominate. In 1994, salaries absorbed 77, 70 and 67 percent of primary, secondary and tertiary care expenditures. Materials, supplies and equipment absorbed 10, 25 and 18 percent respectively. Over time, there are no clear trends in these distributions. 6.29 Andhra Pradesh. Mahapatra and Berman (1995) and Mahapatra (1996) have analyzed health service expenditures between 1980 and 1993. A number of conclusions emerge. First, the share devoted to public health increased from 48 to 57 percent while the share for hospitals fell from 39 to 30 percent. Within public health, the shares between the various activities have changed little. While the share for family planning is reported to have fallen substantially, this results from changes in definition. Second, while expenditures on secondary level hospitals were very slightly above those for tertiary 51 hospitals in 1980, by 1993 the situation was reversed and the tertiary hospitals share was higher by 6 percentage points. The combined share of both secondary and tertiary hospitals (at 30 percent) is low by intemational standards. In a survey by Barnum and Kutzin (1993) covering twenty-nine countries, only four countries spent less than 40 percent of their health budget on hospital services. H. Future Trends in Public Sector Health Financing 6.30 The level of government resources made available for health services depends to a large extent on the overall public finance situation facing each state. This issue of the overall developments in state government finances was discussed in Section B on state finances. With that as background and subsequent discussion on trends in expenditure on health, the share of resources to the health sector and the composition of the health budget, a brief discussion on the state level sustainability of public health finance follows. 6.31 Karnataka: Is there any reason to expect that the high growth rates of health expenditures over the past fifteen years will be maintained? The revenue account in 1993/94 was in surplus. The gross fiscal deficit is equivalent to 17 percent of revenues -- one of the smallest among the major states. Interest payments on debt accounted for 11.6 percent of total revenue expenditures in 1992/93 rising to 12.7 percent in 1994/95. Public debt was equal to 26.3 percent of state domestic product in 1990/91 and to 27.0 percent in 1994/95. The indicators of public finances in Karnataka show some slight deterioration over the past few years as a result of increased borrowing for capital expenditures but overall demonstrate a picture of reasonable strength. 6.32 Punjab: The deficit on the revenue account was estimated at 13.5 percent of revenue receipts in 1994/95 and to 23 and 24 percent in the two previous years. The gross fiscal deficit has been equal to 40-45 percent of revenue receipts over the past three years - the highest for any state. Interest payments on the state government's debt as a share of total state revenue rose from 12.5 percent in 1985/86 to 37.2 percent in 1994/95 - the second highest among the eleven most highly populated states. Revenue growth from state taxes has been buoyant in recent years and well above that for all states combined. However, additional efforts will be required both to increase revenue receipts further and to restructure expenditures if growth in social sector real expenditures is to revive. The relative wealth of the state suggests that increased revenues should be possible to generate. 6.33 West Bengal: Real growth rates in health expenditure through the 1980s averaged 2.8 percent a year. In 1991/92 real expenditures fell by 14 percent. Since then they have risen by an average of 2.9% a year. The deficit on the revenue account was equal to 19 percent of revenue receipts in 1994/95, the highest ratio across the 15 major states. This has increased from 14 percent in 1991/92. The gross fiscal deficit is currently (1994/95) equal to 30 percent of revenue receipts. Interest payments on the state government's debts were equal to 19.1 of revenue expenditures in March 1995. This is slightly above the average across the major states (18.0 percent). Outstanding debt is equivalent to 22.6% of state domestic product which is slightly below the average. Efforts are underway to improve state public finances. The fiscal deficit in 1995/96 is anticipated to be below the previous year's and as a share of revenue receipts is planned to fall to 27%. Further efforts to increase revenues and to alter the structure of expenditure obviously will be necessary to reverse the relatively weak position of public finances in general and the deteriorating situation of finances for the health sector in particular. 52 6.34 Andhra Pradesh: The financial situation of the state has deteriorated considerably during the past 15 months, largely because of a drop in revenue receipts and new government subsidies on rice. In 1994/95 the revenue deficit was 1.2% of the state domestic product; the gross fiscal deficit was at 4% of the state's domestic product; and total outstanding debt stood at about 24% of the state domestic product. The interest payment on the debt was equal to about 16% of the total revenue expenditures. This was higher than Karnataka, but lower than West Bengal or Punjab. 6.35 What emerges is a mixed picture among the states for which this analysis was undertaken. Karnataka appeared better-off than the other states in terms of its overall financial situation, but by no means in a situation deserving complacency. Given the outstanding debt situation of each state, the interest payment on that debt and the still high expected fiscal deficit in coming years, it appears quite clearly that it will be difficult for the states in general to substantially increase their contribution to the health sector. Tulasidhar's (1996) analysis of health sector expenditures, which includes expenditures beyond those included by the Department of Health, provides a more positive picture than the one presented above for health services alone. Nevertheless, the increase in resources to the health sector would have to result from a diversion of resources from some other sector. Such a change will have to have strong political support and will on the part of each state government. 1. Recommendations 6.36 The public expenditure situation in the health sector facing individual states differs as does the response. Expenditure levels and patterns in the health sector, however, are sometimes not the most desirable. This may occur by default or through pressures outside of the sector. By making them explicit there is a greater possibility that decisions will be taken to increase the congruence. Despite the differences in the financial situation and public sector financing of the health sector among the states, the following general recommendations may be considered by most states. - States must take credible steps to improve their overall finances by: increasing tax revenue as a share of state domestic product, increasing the buoyancy of tax and non-tax revenue; and reducing overall public expenditures on subsidies, salaries and poorly targeted welfare programs. By improving their overall financial situation, the states would be better equipped to address specific sectoral resource needs. * State health and family welfare expenditures are well below the international levels that are considered adequate to meet public health priorities as defined by the WDR (1993) and below the levels required to achieve the service norms set by the Government of India. The size of the gap varies from state to state, but appears to be larger in the financially worse off states. State governments on average need to provide 50 percent more resources to fund their basic health care package. This amount may be difficult to provide in the present fiscal situation faced by the states. At a minimum, state governments should maintain the share of health sector allocations in the overall budget to redress the share of declining resources to the sector in most states. * The state governments need to reevaluate the priorities within the health sector budget, especially with regard to resources for the primary, secondary and tertiary levels. Secondary level hospitals, particularly rural and community hospitals have received a low share of resources by comparison to tertiary hospitals. The share of primary and secondary level health care, which provide the basic package of public health and clinical services, needs to be increased within the overall envelope of 53 state government resources for the health sector. Over the next 3-5 years, state governments would need to allocate 75 percent of incremental resources allocated to the health sector to the primary and secondary levels of care. This would imply a lower level of allocations for medical education and the existing social insurance schemes which are poorly targeted. The state governments also need to re-evaluate their priorities with regard to non-salary recurrent inputs such as drugs, essential supplies and maintenance budgets. With some minor variation between states and the level of health care services, it appears that 75 percent of the health budget is absorbed by staff salaries and wages. State governments need to allocate adequate funds for drugs, essential supplies and maintenance budgets in accordance with established norms. The health budgets of the panchayats also need to be enhanced, in order to allow them to carry out their maintenance function and newly provided responsibilities. 54 CHAPTER 7 A SUPPLEMENTARY HEALTH FINANCING MECHANISM: USER CHARGES A. Introduction 7.1 This chapter focuses on user charges and cost recovery in the health sector. It reviews cost recovery as a means of supplementing budget allocations for the health sector, especially with respect to operating or recurrent expenditures. The important questions on user charges raised in this chapter relate to mobilization of supplemental funds and their allocation within the health sector. These issues have taken on increased importance as a result of the financial constraints faced by the states and the competition for budgetary resources from other sectors. The rationale for user charges arises partly from the need to provide sufficient resources from the state budget, and the need to provide the correct incentives to address health care needs. The chapter does not, however, cover other financing options, such as private and social health insurance or community financing, which were considered beyond the scope of the present study. B. User Charges: Operational Issues 7.2 The level of cost recovery in medical and public health services is generally regarded as low in India. The data behind such generalizations are based on reported revenue collection at public facilities, and underestimate actual cost recovery. They do not take into account services such as private nursing and diet support that families provide to patients during their hospital stay. Although, it is difficult to say how much higher actual cost recovery is compared to reported revenue data, it is still considered low in India. Table 7.1 below shows the percentage of cost recovery in the medical and public health budget in the 15 major states of India, based on revenue data. Table 7.1: Cost Recovery in Medical and Public Health Services (Non-ESIS) (in percent) l State l 1975-76 1980-81 1984-85 1988-89 Average | iMajorStates 6.4 4.1 3.04 1.6 3.8 AndhraPradesh 2.9 3.4 3.8 0.8 2.7 Assam 3.9 3.5 -- 1.6 2.2 Bihar 17.0 8.5 3.3 -- 7.2 Gujarat 3.7 5.0 1.9 2.6 3.3 Haryana 6.4 3.9 7.7 1.5 4.9 Karnataka 11.0 3.2 2.7 6.6 5.9 Kerala 3.8 4.1 3.7 1.6 3.3 Madhya Pradesh 4.9 2.4 6.4 2.4 4.0 Maharashtra 12.9 3.5 1.7 1.7 5.0 Orissa 2.6 3.0 4.3 1.1 2.8 Punjab 15.6 5.6 4.3 5.4 7.7 Rajasthan 4.0 3.9 2.5 0.8 2.8 Tamil Nadu 4.0 9.5 3.2 1.6 4.6 Uttar Pradesh 5.3 1.9 1.3 0.5 2.3 West Bengal 2.2 2.1 2.1 -0.8 1.4 Source: Tulasidhar, 1992; p.85 55 7.3 Of the 15 major states, the average level of cost recovery in the health sector, based on reported revenue collection, for the period 1975-89 was the highest in Punjab at 7.7%, and lowest at 1.4% in West Bengal. In Karnataka it was 5.9% and in Andhra Pradesh it was 2.7%. The average for India was about 3.8%. This compares unfavorably to several developing countries with somewhat higher per capita income levels than India, and where performance of the public health sector has been better. These countries collect about 15-20% of the revenue for the health budget through cost recovery. The low level of cost recovery in India implies that state governments will continue to depend for most of their resources from the government budget. A large portion of Govemment funds, in turn, are directed to salaries (75-80%) and little money is left to spend on investment and non-salary recurrent expenditures. As a result, health facilities face operational deficiencies, including under-funding of drugs, supplies, and other consumables; shortages of diagnostic facilities and laboratory equipment; and general deterioration of the physical infrastructure. These factors have all added to the state governments' inability to deliver health services of adequate quality. 7.4 It is appropriate to recover a part of the costs of inpatient hospital services from those patients who can afford to pay, while protecting the poorest sections of society. As such, the setting of user charges should: consider ability-to-pay criteria; view user fees as a signal for allocative efficiency; reflect the quality of services provided; and take into account externalities. In India, the low level of income generated through cost recovery currently is due to the low structure of fees, the narrow range of services for which fees are charged and the inadequate mechanism for enforcing the collection of fees. These are discussed below. 7.5 Low structure offees. The fees charged to out-patients and in-patients at various health care institutions are highly subsidized and do not reflect demand or user welfare. The cost of services provided and the demand for such services indicate that the structure of fees are significantly below the market rate or the fee structure in the private sector. As such, fees are not used as a pricing mechanism to improve allocative efficiency by reducing the use of hospital services, removing excess demand or providing appropriate incentives to providers and patients. 7.6 Narrow range of services for which fees are charged. The Government's policy is not to charge for services provided at the primary level. This includes those services provided at subcenters, primary health centers and community health centers serving up to 100,000 people. Fees are charged for services at the level of the community hospital and above, including secondary and tertiary hospitals. However, the range of services for which fees are charged is limited and many diagnostic and treatment services are not charged at all. 7.7 Inadequate mechanisms for collecting user fees. Although government orders are in place in most states specifying the level and range of eligible charges, the mechanism to ensure that such charges are collected is weak. As a result, there are plenty of leakages constraining the collection of funds. The weaknesses are both at the hospital as well as the state DOI-IFW. At the hospital level, the system of account keeping is outdated, and at the DOHFW the finance and audit wings are poorly staffed to carry out this function. The fee collection system needs to be concurrently strengthened along with a revision of the fee structure. Exemptions from User Charges. All states are committed to exempting the poor from most of the fees for hospital services. However, adequate mechanisms are not in place to target the poor appropriately. Leakages occur on both sides: those who should be eligible to receive free services are paying, while many who are not eligible to receive free services 56 benefit from the existing system. This is partly due to the complex task of identifying and targeting the poor. See Annex 4 for mechanisms that have been put in place in the four states. 7.8 Retention and use of revenue collected at the institutional level. Administrative and financial responsibilities at the hospital or institutional level are diluted. Funds collected at the hospital level go to the Finance Department of the state Government, where they become part of the general revenue. They are not retained by the institution collecting the charges, nor are the revenues generated by them provided to these institutions by the Finance Department in proportion to the level of revenue collected. As such, there are no incentives for these institutions to collect such fees. Under the State Health Systems Development Projects the four state Governments have undertaken to retain the funds collected at either the institution level or at the district health committee, to be reallocated to institutions on the basis of need and level of revenue collection. C. User Charges: Existing Practices 7.9 The existing system of user fees in each state is based on a combination of partial fee-for- service, voluntary payments and targeting of the poor for exemption. Analyses in the four states show that increased revenue can be achieved through strengthening institutional mechanisms for revenue collection and preventing leakages, putting in place adequate targeting mechanisms, and revising the structure of fees periodically. User fees will be easier to implement politically once improvements in quality of services are provided and adequate targeting measures to protect the poor are put in place. The level of user fees and the range of services for which fees could be collected are politically sensitive issues and the state governments need to sensitize the public to the need to increase user fees. Full cost recovery at public health care facilities is neither feasible nor desirable. 7.10 Current Government practice in India is to provide free services up to a specific income and service level in public health care institutions. This implies that user fees are not charged for primary health care services including preventive and promotive care services nor for people whose income level is below the poverty line. As a result, the impetus for adopting user charges in hospitals for those sections of the population above the poverty line has become increasingly important given the difficulty of securing adequate resources for the health sector from the general public revenue of the states. User charges are expected to provide additional revenue for under-funded public programs, while recognizing the patients' ability to pay and be targeted specifically for direct health care utilization. Implementation of these general guidelines is expected to strengthen the quality and efficiency of services provided and thereby increase acccess. 7.11 While these general principles apply to all states, the policies on user fees do not go far enough and are unlikely to substantially increase supplemental revenue for the health sector. The state Government's policies need to take account of the quality of services to be provided; a significant enhancement in service quality would provide a strong rationale for enhancing the level of charges and broadening the services for which user fees can be charged. More importantly, each state has to create a suitable environment through adequate administrative arrangements and analytical work that would provide a framework for a continuous review of user fees. The involvement of the Bank has been catalytic in setting up a framework for reviewing user charge policies and practices in the four states where a health system project is in place. Opportunities for enhancing the level of these charges and the scope of services for which charges can be levied need to be reviewed within the newly established administrative mechanism. The existing policies and practices on user charges such as outpatient and 57 inpatient charges, criteria for exemption for the poor and revenue administration, in the four states are described in Annex 4. 7.12 Each of the four states -- Andhra Pradesh, Kamataka, Punjab and West Bengal -- has adopted a system of user charges at secondary level hospitals that continues to subsidize the cost to the patients. This implies that patients pay only part of the costs of health care services. However, they will now pay more often than they have in the past, and revenue collected will be substantially higher. These states are also improving the mechanisms for revenue collection by strengthening the finance and audit wings of the implementing agencies, appointing finance personnel at the hospital level and implementing a more effective targeting mechanism. They present important lessons for other states. 7.13 Willingness to Pay. Despite the political sensitivities noted above, there is willingness-to-pay for better quality of services and considerable opportunity exists at the state level to enhance revenue collection through user fees, especially to finance some of the non-salary recurrent cost expenditures such as drugs and supplies at the facility level. The low level of user charges in government facilities does not fully reflect the actual expenditure per illness episode paid by the patient. Beneficiary assessment studies in the states show that considerable costs are incurred by patients and their families per illness episode, such as for transportation, medicines, clinical tests, under the table expenses, special diets and rituals. Out-of-pocket expenditure, even among the poor and tribal populations, is an indication of the willingness to pay in times of acute illness. More detailed analysis is needed to obtain more precise estimates of the actual expenditures incurred by households, beyond the official fees charged. Despite the willingness to spend more out-of-pocket funds, the ability of patients and their families to pay for such services is limited. The government should, therefore, take into account equity considerations. The increase in the structure of fees can adversely affect access of health care services to the poorer sections of society, who are the most frequent users of public hospital services. D. Recommendations 7.14 The following actions with regard to the implementation of user charges at the state level are recommended: * The states should set up an institutional framework for periodically reviewing the structure of user fees and pricing policy. This could be one of the functions of the Strategic Planning Cell, established in the health sector in the four states studied. * Collection mechanisms should be strengthened. State governments should increase cost recovery from an average of about 3 percent to about 15-20 percent in the next 3-5 years. This can be achieved by concurrently strengthening collection mechanisms at the facility level and by periodically reviewing and revising user charges. * Adequate targeting mechanisms to identify the poor should be implemented. It is preferable to strengthen the existing system for targeting the poor rather than create a new mechanism because of the administrative costs involved. The existing JRY system, which identifies families below the poverty level, with minor adjustments appears to be the most efficient way to implement a targeting policy. However, there can be variation, as in West Bengal, where exemptions are based on an 'indigent certificate' given to families below a defined income level by the local elected representative. 58 * Revenue collected should be used for non-salary recurrent expenditure items such as drugs, essential supplies and record keeping. All outpatients could be charged a nominal fee as in Punjab and West Bengal, and such charges could be concentrated on voluntary services such as private rooms or wards and on medical services with a relatively low cost-effectiveness. * Increased charges should be introduced in a phased manner and matched to higher quality levels of services. In the absence of quality improvements, new or increased charges could lead to reduced demand for hospital services with an overall reduction in revenues. * Hospitals should be allowed to retain all of the revenue collected, or district committees and state level health systems corporations (e.g., as in AP and Punjab) should be empowered to retain such revenues and redistribute them among hospitals within the district according to both need and level of collection. 59 CHAPTER 8 THE COST-EFFECTIVENESS OF HEALTH INTERVENTIONS A. Introduction 8.1 This chapter extends the discussion on the allocation of resources for the health sector and the financing of health care at the state level by highlighting the cost effectiveness of some key health interventions and their implications for policy-making. Understanding the cost effectiveness of alternative interventions, the relative burden of disease and health risk factors is critical for improving the allocation of resources and the planning of financing systems. Health policy analysts in India are increasingly aware of the inadequacies and inertia of the existing system, the potential for improvements and the increasing costs of health care in an environment that is rapidly changing the mix between manpower and technology used to provide health services. The challenge is to seek improvements by introducing a more medically and economically rational approach to health service provision. As a result, there is a need to estimate the burden of disease and study the cost effectiveness of alternative health intervention strategies. Cost effectiveness of alternative strategies and formal economic analyses of health care programs are relatively new approaches facilitating policy-making in India. Annex 2 provides a detailed analysis of unit costs at different levels of the health system and shows how, providing the quality of treatment can be maintained, an intervention at a lower level facility can result in substantial cost savings. B. Burden of Disease and Cost-Effectiveness Study 8.2 Following the Global Burden of Disease analysis undertaken as part of the WDR (1993), which measured the combined losses from both premature death and a less healthy life resulting from disability, National Burden of Disease analyses were undertaken in several countries, including Mexico, Columbia, South Africa and India. While in other countries these studies have been at the national level, in India, considering the vast population and reported diversity in disease pattern, the analysis has been undertaken at the state level. Andhra Pradesh was chosen as the first state for such an analysis to support the preparation of the first health systems project in India. 1 Detailed results and a description of the methodology are available in the Administrative Staff College of India (ASCI) study. The Burden of Disease (BOD) part of the study was repeated separately for the states of Kamataka, West Bengal and Punjab by ASCI. Some of the main findings with respect to interstate comparisons of the disease burden are summarized in Chapter 3. This Chapter focuses on the cost effectiveness analysis. The Andhra Pradesh Burden of Disease and Cost Effectiveness of Health Interventions Study (1996) was undertaken by the Administrative Staff College of India in Hyderabad in conjunction with the Harvard Center for Population and Development Studies, under guidance from the Bank. 60 C. Cost-Effectiveness Analysis 8.3 Applications of economic analysis to resource allocations in the health sector must choose whether to value outcomes in terms of economic benefits or in terms of some proximal measures of effectiveness. Since outcomes can be measured in deaths or disability averted, the challenge is to devise a measure that will allow comparisons to be made across the sector. The cost effectiveness approach, by focusing on choosing between mutually exclusive health interventions, provides such a measure. The choice of interventions is a necessary condition for designing a delivery system and influencing government policy towards effective delivery. In India, as in other countries, much of the choice of intervention has not been based on rigorous analysis. The key elements of a health care delivery system, including the planning of human and physical infrastructure, logistics for drugs and supplies, appropriate management structures and financial instruments, depend in important ways on the composition of the mix of intervention. As a result, these are factored into the cost-effectiveness analysis reported in this chapter. The cost-effectiveness methodology, however, does not allow intersectoral comparisons which are possible when cost-benefit analysis is used. Cost-benefit type analysis is not often suitable for assessing health interventions due to the controversy in quantifying the monetary value of life and better health. The cost-effectiveness of health care interventions varies widely for different diseases. Similarly, different interventions aimed at curing the same disease will vary in the degree of cost-effectiveness. Even the same intervention may be less or more effective when applied in different localities, depending on the incidence of the disease, the efficiency with which it is implemented and the precise form of the intervention. In a large and highly populated country such as India, it is important that such analyses are conducted state by state. 8.4 The basic assumption of cost effectiveness analysis in the health sector is that the health outcomes of interventions can be measured quantitatively, allowing comparisons of the relationship between costs and outcomes to be made between different types of health interventions. Though several measures of effectiveness of health interventions such as deaths averted and years of potential life lost have been used by different researchers, several difficulties in measuring effectiveness remain. Certain diseases may cause more disability, while other diseases may result in higher mortality. Recent efforts by Christopher Murray et. al. (1992), to calculate the burden of disease and develop the concept of Disability Adjusted Life Years (DALYs), have moved the analysis forward. DALYs combine duration of life lost due to premature mortality with duration of unhealthy life lived with disability, and express this as a single index, which can be used as a measure of effectiveness. This provides a unique opportunity not only to compare the effectiveness of different interventions for the same disease but also between interventions for different diseases. D. Andhra Pradesh Burden of Disease and Cost-Effectiveness Study 8.5 The Andhra Pradesh Burden of Disease and Cost Effectiveness of Health Interventions study used the BOD approach to estimate the burden caused by 96 diseases, including injuries and accidents. It undertook cost effectiveness analysis using cost per DALYs gained as a measure of attractiveness of interventions. The incremental cost effectiveness of about 200 preventive, curative and promotive health interventions has been estimated and we have reported on 65 of these interventions in this chapter. The specific situation and examples are 61 exclusive to Andhra Pradesh, but with appropriate modifications, the analysis could be extended to other states in India. The study provides an example of how health policy can be shaped and influenced as a result of such analysis, especially for the choice of interventions. 8.6 Based on the BOD and fine tuning the procedures to the specific situation in AP, an innovative approach was used to address many of the data problems. The methodology involved: (i) analysis of input costs by fixed, variable and infrastructure categories; (ii) expressing the cost of non-tradable goods such as managerial skills in terms of "full-time equivalents"; (iii) assessing both the amount of services and infrastructure required for an intervention and the intensity of use; (iv) using as the source of cost data, depending on the type of intervention evaluated, program experience, rapid assessment and expert opinion; (v) extensive use of expert opinion in the disciplines of epidemiology, internal medicine, health economics and health policy to develop an exhaustive list of 200 interventions after reviewing the current state of clinical, epidemiological and technological information; and (vi) developing a typical course of event framework for undertaking detailed cost estimation of an intervention using as a starting point the entire population group to be covered by an intervention rather than a specific group. Following the calculations of cost, DALYs saved were then used as an indicator of the outcome of a specific health intervention and as the measure of effectiveness. An important assumption in the calculations is an evaluation of the efficiency of the existing program of treatment. 8.7 Tables 8.1-8.4 classify sixty five of these interventions by level of facility and rank them by cost per DALY gained, as estimated by the AP study. The first column of each table lists the disease for which the estimates were made. Sometimes, several interventions for a specific disease were estimated, which are shown in the second column. The third column gives the incremental estimated total cost, which includes fixed, variable and infrastructure costs. It is calculated as the product of average cost per person covered by intervention and the population at risk. The fourth column on efficacy is the probability that a particular intervention will provide a 100% protection rate, i.e., it is a fraction denoting the protective value of a particular treatment. For example, if it is a vaccine, the number denotes the protective value of the vaccine; if it is a treatment or therapy, it denotes the therapeutic efficacy by taking into account the expected outcome. The fifth column denotes DALYs lost if there is no intervention. It takes into account the current epidemiological situation, general mortality and prevalence, incidence and remission of the specific disease. The sixth column denotes DALYs gained because of the specific intervention and is a product of DALYs lost and efficacy. The last column denotes the cost per DALY gained -- the lower it is, the more cost- effective is the intervention. 62 Table 8.1: Cost - Effectiveness of Interventions -- Outreach Level Disease Intervention Total Cost Efficacy DALYs DALYs Cost/DALY l____________ ___________ (Rs-) (%) Lost Gained Gained (Rs.) Cataract Camp Surgery with Spectacles 54,597,400 0.85 127,164 108,089 505 Intestinal Helminths Mass Chemotherapy for Intestinal Helminth 41,832,527 0.30 150,564 45,169 926 Cataract Camp Surgery with intra-ocular lens 155,893,729 0.95 127,164 12,0806 1,290 Diarrhea Oral Rehydration Therapy 1,548,905,068 0.65 1,207,987 785,192 1,973 Malaria Active Screening & Treatment for Malaria 89,220,273 0.30 49,654 14,896 5,989 Rheumatic Heart Primary Prophylaxis for Rheumatic Heart 769,966,059 0.70 169,503 118,652 6,489 Disease Disease I Protein Energy Supplementary Feeding for Pregnant 2,164,297,528 0.60 374,260 224,556 9,638 Malnutrition Women and children l Trachoma Mass Treatment for Trachoma 619,293,214 0.30 24,501 7,350 84,254 Table 8.2: Cost - Effectiveness of Interventions -- Primary Health Center Level Disease Intervention Total Cost Efficacy DALYs DALYs Cost/DALY (Rs.) (%) Lost Gained Gained (Rs.) Filariasis Anti-parasitic drug for Filariasis 2,185,467 0.70 39,766 27,836 79 Epilepsy Out-patient Treatment for Epilepsy 9,303,466 0.70 152,529 106,770 87 Rheumatic Heart Passive Screening & Treatment for 17,078,818 0.50 169,503 84,752 202 Disease Rheumatic Heart Disease l_ll Universal Universal Immunization Program 107,135,209 0.74 505,394 372,318 288 Immunization Program l Maternal Attended Low Risk Deliveries in Urban 30,865,306 0.60 86,281 51,769 596 Areas ______l Tuberculosis Active Screening, short-course 666,034,817 0.80 1,370,483 ,096,386 607 chemotherapy for Sputum +ves & -ves Acute Respiratory Treatment for Acute Respiratory Infection 280,971,371 0.30 1,363,428 409,028 687 Infection in Rural Areas l _ _ Tuberculosis Passive Screening, short-course 473,080,358 0.50 1,370,483 685,242 690 chemotherapy for Sputum +ves & -ves l_ll Intestinal Helminths Screening & Treatment for Intestinal 31,485,512 0.30 150,564 45,169 697 Helminths I_n Tuberculosis Active Screening, short-course 717,781,428 0.75 1,370,483 ,027,862 698 chemotherapy for sputum + ves and long- course chemotherapy for sputum - ves Cerebro-Vascular Antihypertensive & Antiplateletto Prevent 435,390,018 0.75 622,440 466,830 933 Accident Cerebro-Vascular Accident l _ _ Tuberculosis Passive Screening, short-course 534,190,297 0.40 1,370,483 548,193 974 chemotherapy for Sputum +ves & long- course chemotherapy for sputum - ves Acute Respiratory Treatment for Acute Respiratory Infection 144,779,759 0.30 400,927 120,278 1,204 Infection in Urban Areas Diabetes Active ScreeningatOutreach,Diagnosisan 153,850,449 0.75 118,907 89,180 1,725 Treatment at Primary Health Center l__ _ Chronic Obstructive Domicilary Treatment for Chronic 14,793,009 0.05 155,604 7,780 1,901 Pulmonary Disease Obstructive Pulmonary Disease l_U Matemal Attended Low Risk Deliveries in Rural 91.463,888 0.60 41,182 24,709 3,702 Areas Asthma _ Out-patient Treatmentfor Asthma 157,794,926 0.25 135,737 33,934 4,650 | yLepro Active Screening& Treatment for Leprosy 203,268,470 0.80 39,510 31,608 6,431 Protein Energy Screening and Treatment for Protein Energy 1,909,016,877 0.60 374,260 224,556 8,501 Malnutrition Malnutrition Anernia Treatment for Mild, Moderate and Severe 287,777,984 0.32 97,980 31,354 9,178 Anemia in Pregnancy _ _11 Trachoma Screening & Treatment for Trachoma 72,994,191 0.30 24,501 7,350 9,931 Filariasis Anti-parasitic drug Prophylactics for 424,805,781 0.50 39,766 19,883 21,365 ________________ Filariasis 1 11 63 Table 8.3: Cost - Effectiveness of Interventions -- First Referral/Secondary Level Disease Intervention Total Cost Efficacy DALYs DALYs Cost/DALY (Rs.) k%) Lost Gained Gained (Rs.) Meningitis Hospitalization & Treatment (above 5 years 2,141,905 0.50 207,971 103,986 21 Maternal Referral Care for High Risk Pregnancies 15,860,636 0.60 493,540 296,124 54 Diabetes Treatment for Diabetic Foot 1,795,849 0.25 118,907 29,727 60 Rheumatic Heart Secondary Prophylaxis for Rheumatic Heart 10,203,179 0.80 169,503 135,602 75 Disease Disease l Hepatitis A Hospitalization and Treatment for Hepatitis 42,737,967 0.60 152,601 91,561 467 A l Cataract Hospitalization with Spectacles 67,976,033 0.85 127,164 108,089 629 Meningitis Hospitalization & Treatment (less than 5 43,751,202 0.30 207,971 62,391 701 years) Acute Respiratory Treatment for Acute Respiratory Infection 396,530,742 0.37 1,363,428 504,468 786 Infection at Secondary Level (Rural) Diphtheria Hospitalization & Treatment for Diphtheria 3,879,569 0.50 8,503 4,252 912 Measles Hospitalization & Treatment 235,288,715 0.70 4,498 348,714 939 Cerebro-Vascular Hospitalization for Cerebro-Vascular 254,502,953 0.4 622,440 248,976 1,022 Accident Accident Ischemic Heart Aspirin Treatment for Myocardial Infarction 248,872,783 0.25 796,479 199,120 1,250 Disease Acute Respiratory Treatment for Acute Respiratory Infection 196,600,529 0.37 400,927 148,343 1,325 Infection at Secondary Level (Urban) Cataract Hospitalization with intra-ocular lens 203,736,954 0.95 127,164 120,806 1,868 Perinatal Conditions Neonatal Care 2,407,775,889 0.60 1,778,021 1,066,813 2,257 Eclampsia Treatment for Eclampsia 2,080,713 0.15 4,623 693 3,002 Diarrhea Hospitalization & Treatment for Diarrhea 1,761,793,173 0.60 934,168 560,501 3,143 (less than 4 years) Asthma Inhaler Therapy 342,389,567 0.75 135,737 101,803 3,363 Tetanus Hospitalization & Treatment for Tetanus 61,632,355 0.05 2,377,060 11,853 5,220 Diarrhea Hospitalization & Treatment for Diarrhea 1,507,673,805 0.80 273,820 219,056 6,883 (above 4 years) Cervical Active Screening and Treatment for 1,162,553,859 0.80 84,364 67,491 17,225 Cancer Cervical Cancer Protein Energy Hospitalization & Treatment of Protein 2,220,502,549 0.30 374,260 112,278 19,777 Malnutrition Energy Malnutrition Bipolar Affective Treatment for Depression 173,998,034 0.50 17,122 8,561 20,324 Disorder Peptic Ulcer Hospitalization of gastro-intestinal bleeding 1,188,450,407 0.50 94,457 47,229 25,164 cases for peptic ulcer Peptic Ulcer Medical Treatment for Peptic Ulcer 1,940,911,468 0.75 94,457 70,843 27,397 64 Table 8.4: Cost - Effectiveness of Interventions -- Tertiary Level Disease Intervention Total Cost Efficacy DALYs DALYs Cost/DALY (Rs.) (%) Lost Gained Gained (Rs.) Chronic Obstructive Hospitalization and Treatment for Chronic 1,342,749 0.05 155,604 7,780 173 Pulmonary Disease Obstructive Pulmonary Disease Cerebro-Vascular Rehabilitation for Cerebro-Vascular 103,716,746 0.70 622,440 435,708 238 Accident Accident Epilepsy Hospitalization & Treatment for Epilepsy 34,580,172 0.28 152,529 42,708 810 Rheumatic Heart Surgical Valve Replacement for Rheumatic 123,697,508 0.70 169,503 118,652 1,043 Disease Heart Disease Diabetes Hospitalized Treatment for Severe Diabetes 113,234,272 0.65 118,907 77,290 1,465 Ischemic Heart Hospitalization and Treatment 601,089,068 0.40 796,479 318,592 1,887 Disease for Acute Myocardial Infarction with streptokinase Ischemic Heart Coronary Artery Bipass Graft for Ischemic 1,211,173,633 0.60 796,479 477,887 2,534 Disease Heart Disease Mania Hospitalization & Treatment 3,851,091 0.05 49,654 856 4,498 Ischemic Heart Acute Myocardial Infarction - Intensive 1,682,300,511 0.40 796,479 318,592 5,280 Disease Cardiac Care Unit Cancer - Hospitalization & Treatment for Stomach 73,359,030 0.05 59,861 2,993 24,510 Stomach Cancer E. Results 8.8 As expected, estimates of cost per DALY gained vary considerably in range, depending on factors such as incidence and prevalence of a specific disease, probabilities of remission and dying from it, total costs associated with treatment and the efficacy of the program. The estimates can form a basis for making deliberate choices for subsidizing specific interventions and/or setting user fees where feasible. It should be noted that some of the interventions presented in Tables 8.1-8.4 are offered at multiple levels of the health system (see Annex 3 for services offered at various levels of institutions). Some of the results shown in Tables 8.1 - 8.4 are summarized below: * The cost/DALY gained in general is lower for interventions related to most communicable diseases than it is for non-communicable diseases. * At the outreach level, cost-effective interventions include treatment for cataract blindness through camp surgery with spectacles and camp surgery with intra-ocular lenses; oral rehydration therapy for diarrhea; and the treatment of intestinal helminths. * At the primary health center (PHC) level, cost-effective interventions include antiparasitic drugs for filariasis; out-patient treatment for epilepsy; passive screening and treatment for RHD; universal immunization program (UIP); attended normal deliveries in urban areas; screening and treatment for tuberculosis; and treatment of ARIs in rural and urban areas. * At the first referral/secondary level, cost-effective interventions include hospitalization and treatment for meningitis; referral care for high-risk pregnancies; treatment for diabetic foot; secondary prophylaxis for RHD; hospitalization and treatment for Hepatitis A, ARI, diphtheria and measles; hospitalization for CVA; and aspirin treatment for MI. 65 * At the tertiary level, cost-effective interventions include hospitalization and treatment for COPD; rehabilitation for CVA; hospitalization and treatment for epilepsy; and surgical valve replacement for RHD. * The cost/DALY gained tends to be lower for early diagnosis and prevention than for treatment of a more advanced stage of the disease. However, since this is not universally the case -- as, for example, diarrhea and matemal conditions -- analysis needs to be related to specific conditions. * The cost/DALY gained is higher for hospital treatment than for ambulatory care. For example, treatment of diarrhea when hospitalization is involved is about two times more costly than outpatient treatment per DALY gained (given that most of the cases occur before age 4). * The costlDALY gained for the universal immunization program at about US$8 equivalent confirms the high cost effectiveness of this intervention. The high degree of cost-effectiveness of UIP in India is due to the under-nourishment of children which increases the probability of dying without the intervention. - The data are inadequate to make any conclusive comparisons between rural-urban differentials in cost-effectiveness of interventions. For ARI, treatment in rural areas is more cost-effective; while for matemal conditions related to normal delivery, treatment in urban areas appears to be more cost-effective. -- Some treatment of non-communicable diseases is cost-effective at all levels. These include cataract operations; and anti-hypertension and anti-platelet treatment for CVA; aspirin treatment for myocardial infarction and treatment for COPD. F. Recommendations - The cost-effectiveness of health intervention is an important analytical tool to aid and inform policy and better decision-making in the health sector, in terms of resource allocation for priority diseases, development of a basic package of services, rationalization of services by levels of health care institutions, and for establishing a basis for the charging of user fees. * As stated in the WDR (1993), the most justified public measures combine a rationale for public action with a cost-effective intervention. In general, the comparative cost/DALY gained should not be the only factor considered for determining public spending levels. Interventions that are low in cost/DALY gained provide high retums and may be included in a basic package of services if they contribute heavily to the overall disease burden. In general, though, expenditures on diseases should be guided by those that contribute a large share of the disease burden and for which the cost/DALY gained is low. Other considerations include: the possibility of eliminating a disease as a public health problem, such as leprosy; those interventions that have positive externalities beyond health such as family planning; and those interventions that have high poverty reduction benefits. Many such interventions also demonstrate high levels of cost-effectiveness. 66 Comprehensive cost-effectiveness analyses indicate the relative desirability of interventions from an economic viewpoint. They do not necessarily indicate the priority for the public sector's resources. Public finance arguments suggest that the government should concentrate on those interventions which cannot be administered to a single individual and those where the benefit is not limited to the person directly receiving them; and on interventions justified on ground of equity. Some curative interventions may be more cost-effective than some preventive interventions, particularly those which are community-based. However, from the viewpoint of the efficiency of total level of resources for health, it may be desirable for the government to focus on the less cost-effective preventive intervention. Households are more willing to pay for curative care than for preventive interventions. This example illustrates the need to consider the pattem of private expenditures when designing the public sector's health expenditure program. * A basic health care package should take into account state level variations in epidemiology and burden of disease, public expenditure considerations, the extent to which the private sector is providing some of these services, the extent to which poverty alleviation is part of the government's strategy in the health sector, the cost- effectiveness of health interventions, and programs that create large externalities. The package of services needs to be developed through a consultative and collaborative process, involving leading health practitioners and policy makers from the different levels of the health system, private and NGO sectors for social input, and the Finance Department of the state government to assess the financial ability of the state to provide the recommended package of services. * Based on the above, the package of services would consist of: communicable disease prevention and treatment; limited clinical services; essential and emergency obstetric and pediatric care within easy access of people living in rural areas; capacity building for prevention and health promotion programs to cope with non-communicable diseases and their risk reduction; prevention and treatment of injuries; and limited treatment of non-communicable diseases which is cost-effective, such as cataract operation and basic medical treatment of heart attacks and strokes. * The Burden of Disease and Cost-Effectiveness of Health Interventions study undertaken in Andhra Pradesh has been a useful analytical exercise to inform policy- making. The BOD part of the analysis in Kamataka, West Bengal and Punjab has allowed cross-state comparisons. Similar exercises need to be repeated in several other Indian states so as to take account of the regional variations and the differential health transition that is taking place across Indian states. * The development of local institutional capacity at ASCI to undertake such analysis has been an important capacity building exercise. 67 CHAPTER 9 SPECIAL ISSUES IN MANAGEMENT AND ADMINISTRATION IN THE HEALTH SECTOR: DECENTRALIZED GOVERNANCE UNDER THE PANCHAYATI RAJ SYSTEM1 A. Introduction 9.1 In addition to a basic package of services, adequate resources and appropriate technical paradigms, strengthening overall management arrangements is a critical input towards the effective implementation of health programs. Concomitant with the change in disease pattern in India, noted in Chapter 3, is an increase in the diversity of the client populations, since the health transition is occurring at different rates in the different regions of the country. Depending on environmental conditions, urbanization, and societal dynamics of different populations, the burden of disease is likely to vary from one community to the next, with poorer people in 2 remote and rural areas bearing the heaviest burden. The evolution of decentralized administration in India in this context is an appropriate mechanism that can potentially address the main health problems arising from the health transition. 9.2 This chapter focuses on the implications of the decentralization process on the health sector, and provides an outline of the broad structure of health administration at the state level with particular focus on heaith administration at the district and lower levels. The power, functions and responsibilities of the panchayati raj administration vis-a-vis the health and family welfare departments is the main theme of this chapter. In particular, the chapter addresses: * the capacity of state level implementation and supervisory agencies; * the increased emphasis on decentralization in the overall management of the health sector and the enhanced responsibilities of Panchayati Raj histitutions (PRIs); and * the increased coordination between different tiers of PRIs, technical departments and state level agencies. The issue of management and administration in the health sector has been addressed in other reports. This chapter focuses only on the operational relevance of this topic within the health sector at the state level in India However, it address the issues regarding the linkages between PRIs and the health sector in detail. This chapter is based on a background study conducted by Dr. D. Gupta, Institute of Economic Growth, University of Delhi. The chapter does not address all forms of decentralized administration, or the issue of decentralization of administration in urban centers through municipal bodies. 2 Heaver, Richard. Managing Primary Health Care: Implications of the Health Transition. World Bank Discussion Papers, No. 276; 1995. 68 9.3 Strengthening overall management of the health sector is cntical. First, states need to strengthen the implementation and supervision capacity of the implementing agencies. Andhra Pradesh and Punjab have established autonomous implementing agencies at the secondary level to improve management and administration capacity and provide financial and workforce related autonomy. However, this is not the only approach to improving the implementation and supervision capacity of the states, and the issue of management authority with regard to finance, personnel matters and effective implementation needs to be addressed. It is possible for the states' DOHFW to perform these functions, but they need to be given greater authority and flexibility with regard to finance, supervision and workforce related issues. Second, the planming process for the health sector needs to be strengthened and better coordinated with the implementation and monitoring functions. For example, each of the four states of AP, Kamataka, Punjab and West Bengal has set up strategic planning cells to address planning issues in the health sector and provide management with policy options, undertake relevant research, organize relevant seminars, and monitor the overall development of the health sector. 7hird, rationalizing service norms throughout the different tiers of the health system, as has been done in the four states, will facilitate administrative functions and result in substantial improvements in management arrangements. B. Rationale for Decentralization of Administration 9.4 The rationale for decentralization of administration is discussed below: * One answer to the difficulty of appropriate targeting of policies and programs, which has important implications for the design and management of health service delivery in the future, is decentralization. Many governments, including GOI, have tried to devolve health planning, budgeting and spending authority to district and lower levels, in order to increase program responsiveness to local needs.3 People from disadvantaged communities such as the Scheduled Caste and Scheduled Tribes (SC/ST), and women, have a forum to speak out, be heard, and to act. * Examples abound of local involvement improving both the efficiency and effectiveness of programs. One example is of the construction of a small bridge in Purulia, West Bengal, where involvement of the local population decreased the construction costs and time.4 Similarly, a study of local self-government in West Bengal shows that Panchayats have helped, among other things, in efficient and cost effective implementation of several programs of rural development including the construction of local health centers. * Decentralization offers an opportunity for communities to impose greater transparency and accountability on development administration. An example of community involvement concerns the provision of health care in Kerala. The involvement of local institutions has resulted in better attendance of health functionanes in rural hospitals, and in the construction of health 3 ibid., pg. 10. 4 According to the documentation, the official estimates were that it would cost Rs. 21 lakhs and would take 2 years to construct. The project was handed over to the local population with the condition that it would be constructed without any outside technical or other help. The local population agreed, and not only did they construct it in one year but it cost only Rs. 6 lakhs. 69 centers. A study in Karnataka noted that the creation of elected councils (at local levels) has helped to reduce absenteeism and enhance employees' work rate when they were on job. * Decentralization acts as an effective political education campaign, leading to the emergence of younger and more dynamic leadership through the PRIs, and resulting in a fairly high degree of satisfaction among the people with the working of the PRIs. Undoubtedly, the PRIs have given a boost to the emergence of local leadership by creating new seats of power to be filled by the competitive mechanism of democratic elections. In addition, a large number of women have been elected into the PRIs. Elected women representatives have been drawn from a wide cross- section of society -- many rural administrators who had previously worked with NGOs and women's empowerment programs are now elected PRI representatives. 9.5 In India, the notion of local involvement was institutionalized with the establishment of a 3- tier panchayat raj (local self-government) system: the village panchayat as the lowest tier, the Panchayat Saniiti at the block level as the middle tier, and the Zilla Parishad (ZP)/District Development Council at the top. Panchayats were established in all parts of the country by the mid- 1960s. Though there were variations from state to state, broadly the functions entrusted to the Village Panchayats included village roads, community wells, maintenance of public parks, tanks, irrigation works, public hygiene, drainage, and other civic services. In some states the ZPs were made responsible for primary education and the functions relating to rural industries, primary health care, medical relief, women and child welfare, maintenance of common grazing grounds and other commurity lands and properties and provision of inputs for agricultural production. The extent and tempo of the involvement of the PRIs in basic planning and implementation of development projects was also subject to wide variations from state to state and even within the states. 9.6 The government introduced a comprehensive amendment bill and enacted the Constitution (73rd Amendment) Act, 1992, effective on April 24, 1993. As a result of the 73rd Amendment, there has been a proliferation of activity on the part of the state Governments with regard to modifying their existing Panchayati Raj acts, or in creating new ones. Among other things, the primary role of the panchayats is visualized in the area of development, planning and implementation of programs of economic development and social justice. State governments are required to take appropriate steps to (a) complete legislative procedures for the creation of panchayats; (b) constitute panchayat bodies by conducting elections, while ensuring that 30% of panchayat members are women; and (c) take appropriate steps to entrust powers and functions, as well as necessary resources so as to enable the PRIs to perform their assigned functions.5 9.7 The analysis of the issues with regard to the Indian experiment with local self-govemment relies upon the experiences of four major states of Punjab, Karnataka, Andhra Pradesh and West Bengal. The varied social, political and economic environment in these states provides a unique opportunity for preparing a typology of the problems and solutions in different politico-economic Jain, S.P. et al. Panchayati Raj Institutions in India: An Appraisal. National Institute of Rural Development, Hyderabad; 1995. 70 environments. For instance, West Bengal has a strong Panchayat system with an active party cadre at the grass root level. It is also a state which has been politically stable for a long time. Karnataka, on the other hand, has essentially two major parties in the state both of which are more or less evenly balanced. It has had experience of a decentralized system of administration since 1973. Punjab is at the moment the most prosperous state in the country, with some experience of Panchayati raj. C. Three Models of Decentralization 9.8 The legal framework establishing PRIs has been interpreted and implemented differently in different Indian states. Figures 9.1, 9.2 and 9.3 provide details of three dominant models of PRI in the country, from which useful lessons could be drawn by other states. A detailed description of the three models is provided in Annex 1. A common model for the country as a whole would not really be appropriate in the federal political system prevailing in India In the first model presented, the Maharashtra-Gujarat model, the district, or ZP, is accepted as the main unit for devolution of powers. The administrative bureaucracy at the district level (the IAS) is kept out of the panchayat structure altogether. The District Rural Development Agency (DRDA) is an independent organization, but the ZP and the DRDA collaborate to implement rural development programs at the district level through the panchayat saniti and gram panchayats. In the West Bengal model, all levels of PRI have been appropriately staffed and empowered, and most development programs have been channeled through them. Another important feature of this model is that the DRDA is headed by the Chairperson of the ZP. As a result, the DRDA is an administrative arm for the implementation of the development programs of the ZP ( the reverse of the previous model). All centrally sponsored programs and programs financed by intemational agencies are also implemented by the different tiers of PRIs. The third model, the Kamataka - AP model, is characterized by a devolution of powers and functions at each tier of the PRI, with a prime place given to the taluk (or sub-district) level panchayat This has been strengthened both financially and administratively, and has assumed the lead in the planning and implementation of development programs.f 6 National Institute of Rural Development, Hyderabad; 1995. 71 Figure 9.1: The Maharashtra - Gujarat Model Zila Parishad (ZP) - District Level * Consists of- 40 - 60 Councillors directly elected by the people. * Administrative leadership rests with CEO who is appointed by the state. * Is divided into subject committees: Standing Committee, Finance Committee, Agricultural and Animal Husbandry Committee, Works Committee, Health Committee, and Education Committee. * Has full executive authority with respect to development functions which were earlier discharged by the state govemment and has some revenue collection responsibilities. Panchayat Samiti - Block Level * Functions as a link between the ZP and the Village Panchayats. * Consists of elected, nominated, and coopted members. * Chairperson is elected from among its members. * Has a Block Development Officer who is sent on deputation by the state government. This person is also the Executive Officer of the Samiti. * The Samitis have been given functions in the spheres of sanitation, rural health and communications, education and culture, social education, agriculture and animal husbandry, small industries, cooperation, and community development. * The Samitis are responsible for primary education, running of dispensaries, maintenance of certain roads, and the Community Development Programs. Gram Panchayat - Village Level * Consists of 7 to 15 directly elected members (include. 2 women and SC/ST). * Is headed by a Sarpanch (Chairperson) who is elected from amongst the members. The Sarpanch is assisted in his work by a Gram Sewak (viflage level worker). * Responsibilities include implementation of activities in agriculture, animal husbandry, education, sanitation, public works, and social welfare in addition to land revenue collections. Figure 9.2: The West Bengal Model Ziha Parishad - District Level * The ZP consists of the presidents of the Panchayat Samitis within the District and two members to be directly elected from each block. Members of the State Legislature and the members of the Parliament within the districts are also members of the ZP. * Chairperson and president is elected by members from amongst themselves. * District Magistrate is the CEO of the ZP. Another senior officer of the State Civil Services serves as additional executive officer. 4/T Panchayat Samiti - Block Level * Consists of all the chairpersons of the Gram Panchayats within the Block, persons elected from each Gram Panchayat within the Block based on population, and the members of the State Legislature from the Block area. * As with the ZP, the govemment has the power to nominate two members each from SCs and STs and two women if their number in the Samiti does not come up to two each. 41 Gram Panchayat - For a small group of viDlages * Consists of 5 - 25 members directly elected by the people. * The chaiperson is elected by the Gram Panchayat members from amongst themselves. * As with the Samiti, the state govemment, on the recommendation of the Gram Panchayat has the power to nominate to make up the number of SCs and STs and women members in the Panchayat to a minimum of two each. 72 Figure 9.3: The Karnataka - Andhra Model ZiDa Parishad - District Level * Its members are all directly elected. * It functions as the head of the district development and welfare administration. It administers schemes and programs transferred to it or evolved by it, maintains cadres for manning the ZP and Mandal staff formulates the district plan, and frames and approves its budget and that of the Mandals. * Reservations are provided for women and vulnerable sections of the society. it Block Panchayat Samiti - Block Level * This is a nominated body which consists of all the chairpersons of the Mandal in the Block, all the member of the legislature from the Block, and any members of the Zilla Parishad representing any part of the block. * It is entrusted with advisory, supervisory, and reviewing of the intra-Mandal coordination functions vis-a-vis the Mandals of the Block. Mandal Panchayat - Group of Vilages * Each Mandal covers a group of villages with a population of about 10,000 on average. * One seat represents 400 people out of its population. * 25% of the membership is reserved for women and 18% for the more vulnerable members of society. * It is entrusted with all civic functions, powers, and responsibilities for development and welfare programs and has a inter- Mandal orientation. ~1, Gram Sabha - Vilage Level * Consists of all eligible voters (i.e. all village members above the age of 18 years). * Is required by law to meet no less than twice a year. * Is responsible for reviewing all development problems/programs of the village, selecting beneficiaries, plannming for local improvement, and constitutes the land army. D. Key Linkage between State Health Administration and PRIs: District Level Organizational Structure of Health Administration 9.9 The district level is the most crucial in the chain of command of the public health department. Many of the decisions beanrng on day to day operation of health centers are made at this level. The effective implementation of various health policies and programs, therefore, largely depends upon the supervision and control exercised by the district officers over the management of health centers in the district. It is also at this level that coordination and liaison with other departments and agencies of the Government takes place under the overall supervision of either the District Collector (DC) or ZP President. This is particularly necessaxy for ensuring the successful implementation of national health programs which require inter-departmental coordination. 9.10 In districts, in various states, the District Health Officer or Chief Medical Officer is in charge of managing medical, health and family welfare. The district hospitals are usually under the charge of civil surgeons, while district family welfare officers look after the family planning program. 9.11 In Andhra Pradesh, the District Medical Officer (DMO) is responsible for implementing all national and state health programs. The DMO is not concemed with the management of the district hospitals and is assisted by one additional district medical and health officer exclusively in charge of 73 family welfare programs and two deputy district medical and health officers. Separate district program officers are also appointed for such programs as the National Malaria Eradication Program. 9.12 In Karnataka, the district health and family welfare officers are responsible for supervision, guidance and prompt and effective implementation of various national and state health programs in their respective districts and all Primary Health Units (PHUs) and PHCs are under their control. At the district level all hospitals in the secondary level (i.e., district, sub-district and CHCs) report to the district surgeon. The district health and family welfare officers are assisted by the district leprosy officers, district malaria officers, district TB officers, medical officers of district health laboratories, medical officers (FW & MCH) and regional assistant chemical exarnminers in the implementation of various health programs. Further, in Kamataka, at the sub-divisional level, the Assistant District Health & Family Welfare Officers are responsible for the supervision and provision of guidance to the medical officers of the PHUs and the field staff for implementation of various national and state health programs including family welfare and MCH schemes through the network of various types of health and medical institutions within their respective jurisdiction. 9.13 In West Bengal, the Chief Medical Officer (CMO) of health is the district level head and is assisted by Deputy and Assistant CMOs. The secondary level hospitals are all headed by superintendents from the medical cadre. For proper management of the hospitals and health centers, committees have been formed with representatives from all levels of the Panchayat System and the administration. 9.14 In Punjab, at the district level, the district civil surgeon is in charge of the district supported by functional officers such as the assistant civil surgeon, senior medical officers (PHC/Hospitals), district family welfare officer, district MCH/Ir/munization officer, district health officer and district training officer. 9.15 At the district level and below, the Revenue Department and the Zilla Parishads play a crucial role in the provision of medical and health services to the citizens in several ways. As the Chief Coordinator at the district level, the DC or the Chief Executive Officer of the Zilla Parishad acts as the link between the Health Department and all other public agencies. As the Development Commissioner of the district, it is also the responsibility of the DC to ensure the Welfare of the rural masses. The DC also exercises considerable influence in the location of the primary health centers in the district. The Revenue Department plays an important role in helping acquire land for PHCs. The Revenue Department is also concemed with the collection and transrmission of vital statistics to the health department. It report the outbreak of the epidemics. Similarly, in case of famine relief works and at the time of fairs and festivals, the Revenue Department or the Zilla Parishad extend their cooperation to the Health Department. The DC/CEO can also exercise authority in respect of public health by, for example, ordering mass inoculations and the destruction of infected food or drugs. 9.16 Mechanisms for Strengthening Links between State Administration and PRIs. A mechanism that would bring the PRIs and health officials together at the district level and below would significantly enhance the effectiveness of health programs. In the State Health Systems Development Project IA for example, District Health Committees/District Steering Committees have been created in each state, with both the chairperson of the ZP and the district level medical officers as members (among others). These District Health Comrnittees will be responsible for planning and 74 implementing several of the components of the project, such as referral and medical waste management; managing and supervising many activities such as equipment maintenance, collection of user fees and provision of consumables; and monitoring and evaluating all activities at the district level. The ZP and district health officials will coordinate their activities in order to accomplish these goals. 9.17 Links at the sub-district/taluk level could also be considerably strengthened, as in Kamataka. The DOHFW in Karnataka intends to improve the access to health care of SC/ST populations in rural areas through a program of annual check-ups. The program would be implemented at the PHC level, and the Medical Officer of the PHC, with the assistance of the ANMs under his/her jurisdiction, would conduct health camps according to a timetable. In order to facilitate this process, the Govemment has proposed to set up a committee chaired by the CEO, ZP. Members of this committee would include not only district level medical officers, but also the newly designated taluk level medical officer, who will be responsible for overseeing the work of the PHC doctors. In this way, the grassroots involvement and commitment of the PRIs would be brought to bear on programs implemented at the village level. E. Role of PRIs in Health Delivery: Two Examples 9.18 WEST BENGAL: The West Bengal government is trying to decentralize the functioning of the health department and involve the PRIs in health care delivery at various levels. The state Government disburses 50% of its developmental budget to ZPs, which in tum allocates 50% of their funds to Gram Panchayats (GP) through the Panchayat Sanmities (PS) for their own development project. The remaining 50% of the funds are spent by the state, where two or more ZPs and PSs are respectively involved. Thus the planning and its implementation are effected from the bottom. 9.19 To overcome the problems related to two parallel administrations, namely, the elected three- tier Panchayat and the Secretariat/Directorate, the district magistrate (DM) and the block development officers (BDOs) are made the chief executive officers of the ZP and PS. These Panchayats function through several comnittees including the one concerned with public health. Since the Government of West Bengal is comrmitted to a policy of running the administration in a non-bureaucratic manner, it has instituted a number of committees -- consultative and advisory -- to help the administration from the state to CHC board. 9.20 Greater involvement of Panchayats in health administration is expected to result in better performance with fewer resources. It is suggested that financial, administration and decision making functions should be assigned to the Panchayats. 9.21 KARNATAKA: Unlike other states, the Panchayati Raj model of Kamataka is not just an administrative innovation aimed at improving the efficiency of program implementation through administrative decentralization but has a much deeper goal concemed with the transfer of function of governance from state level to the district and lower levels. In Kamataka, PRIs are seen as units of government enjoying a great deal of autonomy but at the same time ensuring greater accountability through the proximity of elected representatives in these bodies. Also because of the intimate knowledge of local resources, these institutions are in a better position to create realistic development plans. In addition, an important extemality is the possibility of a more efficient administration through clear supervision and accessibility of the local bureaucracy to the elected bodies. 75 9.22 The PRIs in Karnataka depend almost wholly on grants transferred by the state government through the annual budget voted by the legislature. The scale of transfer is considerable and is about one-third of the state budget. This shows a genuine effort on the part of the state government to make PRIs truly function as a viable unit of the government through transfer of both powers and functions with corrmensurate support of financial resources. Table 9.1 provides some idea of the extent of decentralization in rural health administration. It will be noted that about 4/5th of the health budget meant for the rural areas is now controlled by the ZPs. Table 9.1: Karnataka - Share of Allocations to PRIs in the Total Health Budget Plan Non-Plan Total Rs. crores Rs. crores Rs. crores i) Total revenue budget for medical and public health: 40.69 174.93 215.62 ii) Provision for urban health services & medical education: 10.86 95.45 106.31 iii) Total provision for rual 29.83 79.48 109.31 health services: Of which transfer to ZP: 20.71 65.63 86.34 (69.4%) (82.6%) (79.0%) 9.23 While assessing the role of the PRIs in Kamataka, due allowance should be made to various unforeseen developments, such as, for example, the political situation and financial strategies. In the context of the performance of the health sector in the districts, the report of the Evaluation Committee (1989) on the working of the ZP and Mandal Panchayats mentioned the significant progress in the functioning of medical and public health facilities. It found a big improvement in the attendance of doctors and other medical personmel, and similarly in the supply of drugs and medicines. Another significant achievement of the ZPs related to modifications effected by the State government in its medical stores purchase policy, enabling the ZPs to secure a larger proportion of their supplies locally in a timely manner and at lower prices. To summarize, PRIs were instrumental in (i) mobilizing local resources for strengthening the infrastructure for health services; (ii) greater accountability of the doctors and paramedical workers; and (iii) improvement in the supplies of drugs and medicines. 9.24 Despite the positive role of the PRIs in Karnataka, there is ample evidence of transitional difficulties in rural health management owing to the nature of organization within the PR bodies. (a) As mentioned earlier there are instances of friction between the state government and ZPs over issues such as personnel management including recruitment, transfer 76 and overall disciplinary control. These frictions impact negatively on the functioning of health department. (b) Implementation of the health program has suffered due to gaps in proper understanding between the officials and the elected representatives. (c) In some areas the ZPs have been excessively concemed with petty details and issues with transfers and postings making administration highly bureaucratic. This causes delays in the process of health improvement either by postponing implementation of health development plans and schemes or by delaying the training of health personnel. (d) The Panchayat representatives (ZP, MP) are influenced by caste, clan and religious affiliations. These parochial affinities have a negative impact on development schemes including health development schemes. 9.25 The real aim of the establishment of Panchayat has been to take power to people and not to establish an elite rule in local areas parallel to the one at the state level. Hence the role of the Panchayat has to be a positive one, with a positive impact on the implementation of health programs. For the moment, the role of PRIs in the health sector has generally been positive as far as Karnataka is concerned, but there is further potential provided a serious attempt is made to identify and isolate factors obstructing the smooth functioning of the health department withiin the context of decentralization. F. Recommendations Strengthening Overall Management Authority. Management arrangements at the state level and below need to be strengthened to ensure that health programs are implemented effectively. States need to strengthen the capacity of implementation and supervisory agencies. Andhra Pradesh and Punjab have established autonomous implementing agencies at the secondary level to improve management and administrative capacity and provide financial and workforce related autonomy. Although, this is not the only approach to improving the implementation and supervisory capacity of the states, the issue of management authority with regard to finance, personnel matters and effective implementation needs to be addressed. It is possible for the states' Department of Health and Family Welfare (DOHFW) to perform these functions, but they need to be given greater authority and flexibility with regard to finance, supervision and workforce related issues. Decentralized govemance and local level participation can contribute importantly to improving the health care system, through better monitoring and supervision of the functioning of the health system at the local level, and by assisting in developing plans which take care of local perceptions and local needs. There are many viable models for decentralized govemance operating in different Indian states. Notwithstanding this, some general recommendations for strengthening the effectiveness of the PRIs in the health sector follow: 77 Table 912: Decentralization Matrix -- Scope for Change in Grassroots Administration in the Health Sector Areas and Scope of Decentralization Current Scenario Proposed Scenanio Legislation Revenue raising Limited in most states/ dependent on Should be able to raise resoures state grants Policy making Very little at the moment Scope should be expanded Regulation/Supervision Varies from one state to another - at Large scope present weak to average Planning Process has been set in motion - Should be given greater scope in some particularly in choice of location and selected areas construction of SC/PHCs Resource allocation In some states, this is being done as Should have more freedom part of the district planning exercise _ Management - Personnel Except recruitment transfers outside For effective implementation, vast districts, and punishment, PRIs are powers to PRIs are needed for personnel exercising control over line dept. related matters personnel Budget allocation Most PRIs doing it More needs to be done Supplies/Equipment Limrited operations Greater involvement/freedom to order (local procurement is more cost effective) Property maintenance Hardly any funds - thus limited More funds - greater scope - PRIs to put operations more effort Intersectoral collaboration At present very limited Much greater need for best results Interagency collaboration Reasonably good Greater scope Trainin No sustained effort Highjv desirable Enhancing the Responsibilities of PRIs. In order for the PRIs to be more effective, more power should be given to them in the areas of budget allocation, resource use, revenue raising, planning, policy making, supervision, maintenance and training. The notion of decentralised governance would be more meaningful only when the PRIs' responsibilities are enhanced and their access to untied resources becomes more substantial. PRIs could raise resources locally through various methods which have been attempted successfully in some states, such as reward for tax effort, incentive outlays and donations from private citizens and institutions. A process of consultation between the Department of Health at the state level and PRIs needs to be initiated on these aspects, and structures and systems need to be worked out to facilitate implementaion. * Increasing Coordination between Administrative Agencies. Important features emerging from the study of the Panchayat Raj Acts of different states include: (i) linkages between the three tiers of the PRI need to be improved in order to enhance implementation of health care programs. Not all the states have provided for inter-tier linkages between the three tiers of Panchayats. Moreover, various political parties will have to arrive at a consensus on the 78 working of PRIs at different levels and on the relationship of state government with the various tiers of PRIs; (ii) co-ordination between PRIs and the tecniucal departments needs to be improved, particularly for the appropriate training of PRIs by technical departments, in order to strengthen the implementation of health programs at the grassroots level; and (iii) since the Panchayats have been entrusted with a number of development and other functions, coordination between PRIs and state level agencies needs to be strengthened by developing a viable mechanism which would facilitate the effectiveness and efficiency of program implementation. This aspect is also important when, for instance, a scheme requires the interaction and cooperation of several line departments. 79 BIBLIOGRAPHY Abel-Smith, Brian. 1995. "Compulsary Health Insurance. Research project on Strategies and Financing for Human Development. 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South Asia Country Department II (India), Population & Human Resources Division, Washington D.C. P.2 World Bank. 1996. "India: Country Assistance Strategy-Progress Report." IDAIR96-154/1. WHO: 1996. "Investing in Health Research and Development." Report of the Adhoc Committee on Health Research Relating to Future Intervention Options. Geneva. 83 Annex 1 Page 1 of 25 DECENTRALIZED ADMINISTRATION IN THE HEALTH SECTOR A. Decentralization in India: Recent Developments 1. In order to better understand the impact of decentralization on the health sector, it is useful to briefly review the development of PRIs as entities integral to the implementation of rural development programs in India. The village communities in India have been in existence for a long time. They were called 'panchayats"'- a council of five persons in a village. Though the autonomy of these panchayats gradually disappeared owing to the establishment of local civil and criminal courts, revenue and police organization, increase in communications and the growth of individualism, the Constitution of India recognized the need to revive these institutions. Article 40 of the Constitution therefore states that "the State shall take steps to organize village panchayats and endow them with such powers and authority as may be necessary to enable them to function as units of self government". 2. The fate of PRIs was uncertain, with declining financial and political support at the central and state levels, until 1977, when the Governnent of India reaffirmed its commitrnent to the notion of local self-government. An awareness of the need for reforms in Panchayati Raj System was created at that time. In addition, attempts in Karnataka and Andhra Pradesh to create new PRIs pointed to the need for the revival of the PRIs all over the country, and highlighted the need to transfer power to democratic bodies at the local level. The Government of India then set up a committee to prepare a concept paper on the revitalization of PRIs. Among other things, the Commnittee recommended that local self-government should be constitutionally recognized, protected and preserved by the inclusion of a new chapter in the Constitution. It also recommended a constitutional provision to ensure regular, free and fair election for the PRIs and suggested that the task be entrusted to the Election Committee of India. 3. The Constitution (73rd Amendment) Act, 1992 has broken new ground. The PRIs that are being set up under this Act would serve as principal vehicles of rural development. However, both political will and administrative back up would be needed to ensure the success of PRIs. Much would depend upon the initiative of various state Governments, since the states are expected to take follow up action. It is significant to note that, while Article 243 G of the Constitution visualizes the panchayats as institutions of self-government, it subjects the extent of devolution of powers and functions to the decision of the state Legislature. With regard to the 73rd Amendment, the state Panchayat Acts have been amended within the prescribed time frame through a process of consensus. Many states are in the process of amending their Acts and also constituting various commnittees as required under the Act to carry out various tasks. Devolution of powers and assignment of functions are also under way. A new challenge has been posed in the on-going experiment with PRIs and in testing whether PRIs are indeed ideally suited for effective implementation of the programs entrusted to them. 84 Annex 1 Page 2 of 25 B. Three Models of Decentralization 4. The legal framework establishing PRIs has been interpreted and implemented differently in different Indian states. The following section provides details of three dominant models of PRI in the country, from which useful lessons could be drawn which could be utilized by other states. It must be kept in mind that a common model for the country as a whole would not really be appropriate in the federal political system prevailing in India. In the first model presented, the Maharashtra-Gujarat model, the district, or ZP, is accepted as the main unit for devolution of powers. The administrative bureaucracy at the district level (the IAS) is kept out of the panchayat structure altogether. The District Rural Development Agency (DRDA) is an independent organization, but the ZP and the DRDA collaborate to implement rural development programs at the district level through the panchayat samiti and gram panchayats. In the West Bengal model, all levels of PRI have been appropriately staffed and empowered, and most development programs have been channeled through them. Another important feature of this model is that the DRDA is headed by the Chairperson of the ZP. As a result, the DRDA is an administrative arm for the implementation of the development programs of the ZP ( the reverse of the previous model). All centrally sponsored programs and programs financed by international agencies are also implemented by the different tiers of PRIs. The third model, the Karnataka - AP model, is characterized by a proper devolution of powers and functions at each tier of the PRI, with a prime place given to the taluk (or sub-district) level panchayat. It has been strengthened both financially and administratively, and has assumed the lead in the planning and implementation of development programs. The appointment of a senior officer as the Executive Officer of the taluk panchayat has also improved its effectiveness. Interestingly, in Karnataka, a clause in the PRI Act has given Government officials the power to scrutinize resolutions passed by the PRIs.' 5. The Maharashtra - Gujarat Model. Immediately after the inauguration of Maharashtra State on May 1, 1960, the Govemment of Maharashtra set up a Committee to suggest ways for the more efficient implementation of PRIs in the State. Following the enactment of the Panchayat Samiti and Zilla Parishad Act 1961, Panchayati Raj in Maharashtra was inaugurated on May 1, 1962. Following a similar pattern, the three-tier Panchayat structure under the Gujarat Panchayats Act, 1961, which was based on the recommendations of the Democratic Decentralization Committee, took office in Gujarat on April 1, 1963. 6. The Maharashtra Act provided for a three-tier system with the top tier, namely, the ZP, as the key level of decentralization. The ZP has a minimum of 40 and maximum of 60 Councilors directly elected by the people. There is also a provision for coopting representatives of co-operative societies in addition to members from the SCs, the STs and women. For the convenience of its day-to-day working the ZP is divided into several subject Committees, namely, Standing Committee, Finance Committee, Agricultural and Panchayat Raj Institutions in India: An Appraisal. National Institute of Rural Development, Hyderabad; 1995. 85 Annex 1 Page 3 of 25 Animal Husbandry Committee, Works Committee, Health Committee, Social Welfare Committee and Education Committee. The ZP elects a president, vice-president and the chairperson of the Subject Committees from amongst its members. 7. The ZP has been entrusted with full executive authority with respect to development functions which were earlier discharged by the State Government at the District level. The ZPs have also been entrusted with some responsibilities in the sphere of revenue collections. The District Collector has been kept outside the ZP and another officer equal to the rank of the Collector has been assigned to head the ZP so that developmental activities may receive adequate attention. It is argued that the Collector is already overburdened and overworked and cannot be saddled with further work. The suggestion of the Naik Committee, namely that by keeping the Collector outside the local body, the Government will have in him an independent officer who can also evaluate impartially the functioning of the local body and can keep the Government informed on any matter which is of sufficient importance, was agreed to and the Collector was invested with certain controlling powers which he already enjoyed in regard to the then existing local bodies. 8. Administrative leadership of the ZP rests with the Chief Executive Officer (CEO). Generally, the CEO belongs to the state cadre of the Indian Administrative Service and is appointed by the State Government. The CEO exercises all the powers specifically vested in the person and attends the meetings of the ZP and all its Committees. The CEO can call for any information, returns, statement of account or report from any officer of the ZP. On request from two-thirds of the total number of ZP members, the CEO would be withdrawn from that ZP by the State Government. 9. The middle tier, namely, the Panchayat Samiti (at the block level), consists of elected, nominated and coopted members. It functions as a link between the ZP and the Village Panchayats. The members of the Panchayat Samiti elect a chairperson and a deputy chairperson from among the elected members. The chairperson of the Panchayat Samiti is given the power to call for any information or report from any officer or servant working under the Panchayat Samiti. The chairperson is also given powers to inspect any movable property in the block or any work or development schemes in progress in the block undertaken by the ZP or the Panchayat Samiti. He or she presides over the meetings of the Samiti and controls the discussions in the meeting. In fact he is the person on whose imagination and dynarnism depends the development of the block. The post provides the chairperson with an opportunity to establish leadership in his or her area. 10. The Block Development Officer, who is an officer of the State Government sent on deputation to the Panchayat Samiti, is the Executive Officer of the Samiti. He or she also acts as the Secretary to the Committee, All important papers and documents connected with the proceedings of the Samiti meeting are kept in the Executive Officer's custody. The officer draws and disburses money out of the grants. The Samitis have been given functions in the spheres of sanitation, rural health and communications, education 86 Annex 1 Page 4 of 25 and culture, social education, agricultural and animal husbandry, small industries, co- operation, and community development. They have been entrusted with responsibilities for primary education, of running dispensaries, maintaining certain roads and of carrying out the Community Development Program. They have also been entrusted with certain land revenue powers and functions and execution of relief work and other measures during natural calamities like scarcity and floods. 11. The lowest tier in the Panchayati Raj structure is at the village level, called Gram Panchayat. Each Gram Panchayat has a minimum of 7 and a maximum of 15 members, all of whom are directly elected. Generally 150-200 voters elect one representative. Each Gram Panchayat is required by law to have at least two women members and seats are reserved for the SCs and STs on the basis of their population. The members of the Gram Panchayat elect a Chairperson (who is called Sarpanch) from among themselves. The list of functions entrusted to the Gram Panchayat covers a wide range of activities relating to agriculture, animal husbandry, education, sanitation, public works and social welfare. The function of land revenue collections is also entrusted to the Gram Panchayats. The Sarpanch is made directly responsible for the fulfillment of the duties imposed upon the Panchayat. In his or her capacity as Sarpanch, he or she presides over the meetings of the Gram Panchayat. The Sarpanch keeps the records and registers in his or her custody and exercises supervision and control over the action taken by the officers and servants of the Panchayat. He or she is authorized to operate the village fund and issue receipts under his signature for monies received. The Sarpanch is assisted in his or her work by a Gram Sewak (village level workers) who acts as the secretary to the Panchayat office in the village. The District Collector has been given powers to suspend a Sarpanch against whom criminal proceedings are instituted. 12. The West Bengal Model. The West Bengal Panchayat Act, 1973 also provided for a three-tier system consisting of Gram Panchayat (for a small group of villages), Panchayat Samiti (at the Block Level) and ZP (at the District Level). The Gram Panchayat had between 5 and 25 members directly elected by the people. Though no constituencies were reserved for the SCs and STs or women, the State Government, on the recommendation of the Gram Panchayat, had powers to nominate to make up the number of SCs and STs and women members in the Panchayat to two each at least. The Chairperson of the Gram Panchayat was elected by the Gram Panchayat members from among themselves. 13. The Panchayat Samiti, under this Act, consisted of all the chairmen of the Gram Panchayats within the Block, such persons as may be elected from each Gram Panchayat within the block based on population, and the members of the State Legislature falling within the area of the Block. As in the case of the Gram Panchayat, the Government had the power to nominate two members each from SCs and STs and two women members, if their number in the Samiti does not come up to two each. The President of the Samiti was elected by the members of the Samiti from amongst themselves. 87 Annex 1 Page 5 of 25 14. The ZP consisted of the Presidents of the Panchayat Samitis within the District and two members to be directly elected from each block. There was a provision for nomination of up to two members from the SCs and STs and two women, as in the case of Panchayats and Panchayat Samitis. The members of the State Legislature and the Members of Parliament within the District were also members of the ZP. The President of the ZP was elected by the members from amongst themselves. 15. The Left Front Government in West Bengal, elected in 1977, decided to continue the three-tier structure as against the two-tier system proposed by the Committee. The Panchayat elections under the amended Act were conducted for the first time in June, 1978, on party basis. A number of changes were brought about at the organizational level most notably: (a) the merger of the community development department with the Department of Panchayats; (b) making the District Magistrate (who is the equivalent of the District Collector in other States) the Chief Executive Officer of the ZP and providing another senior officer of the State Civil Services to work as additional executive officer; (c) statutorily associating all the District-level and Block-level officers of the different Development Departments with the corresponding Standing Committees of the ZP and Panchayat Samitis respectively; (d) making the block Development officer, as the executive officer of the Panchayat Samiti, work under the Chairperson of the Panchayat Samiti; and (e) the creation of a new accounts and audit organization in the Department of Panchayats and Community Development to assist the new Panchayati Raj leadership in budgeting, accounting and audit work. The political will to increase the prestige of PRIs was reflected through various schemes of program devolution that followed. Most of the development programs with necessary financial resources were assigned to the PRIs; and in as early as 1978-79 the Gram Panchayats were on an average handling Rs. 150,000 each (approximately $15,000 then) and the ZPs Rs. 45 million each (approximately $4.5 million then). 16. The financial positions of the PRIs also improved under this dispensation. To help the Panchayats build up their own funds, the State Government decided to give to the Gram Panchayats a matching grant equivalent to the total cess collected by them every year. In addition, the Government gave away a certain percentage of land revenue collected by the District administration to the Panchayat Samitis. It also agreed to empower the Panchayat Samitis to control haats (local markets), bazaars and ferry services, and levy rates upon them; to credit the entire collections of road cess, public works cess etc. direct to the funds of the ZP concerned without any deduction of collection costs; and to merge the Darjeeling Improvement Fund and such other area development funds with the funds of the ZP concerned. Through an amendment to the Act of 1973 the Panchayat Samitis and ZPs were empowered to borrow money from the State Government or with the previous sanction of the State Government, from the Banks or other financial institutions on the basis of specific schemes. 17. The Karnataka-Andhra Model. Karnataka's Panchayat Raj system has been recognized as the most far-reaching effort in democratic decentralization in the country. 88 Annex 1 Page 6 of 25 The Karnataka Zilla Parishads, Taluk Panchayat Samitis, Mandal Panchayats and Nyaya Panchayats Act, 1983 which came into effect on 2nd August, 1985, with the Gram Sabha or the Viliage Council as the basic tier of the system. The Gram Sabha comprised of eligible voters under the Panchayati Raj system, i.e. all members above the age of 18 years of that village. There was a Gram Sabha for each of the villages in the State and it is required by law to meet not less than twice in an year. It discusses and reviews all development problems/programs of the village; selects beneficiaries for all beneficiary- oriented programs transferred to the PRIs; plans for local improvement including minimum needs, welfare and production oriented programs including cropping pattern for the season for the village, and constitutes land army consisting of all able-bodied persons. 18. The Mandal Panchayat was the first elected tier of the system. It was entrusted with all civic functions and powers and responsibility for development and welfare programs with an inter-mandal orientation. The number of seats was one for every 400 population. 25% of the membership was earmarked for women and 18% for the weaker sections of the society. The mandal covered a group of villages with a population of about 10,000 on an average. 19. At the next higher level was the Block Panchayat Samiti which was a purely nominated body comprising ex-officio all the chairpersons of the Mandal in the block, all the members of the legislators representing any part of the block, members of the Zilla Parishad representing any part of the block etc. This body was entrusted with advisory, supervisory and reviewing and intra-mandal coordination functions vis-a-vis the Mandals of the Block. 20. The Zilla Parishad was the third directly elected tier of the Panchayat Raj system. Its functions, responsibilities and powers were formulated to render it unambiguously the head of the district development and welfare administration. It administered schemes and programs transferred to it or evolved by it; maintained cadres for manning the Zilla Parishad and Mandal staff, formulated the district plan; framed and approved its budget and also approved the budgets of the Mandal. Reservations were provided for women and the weaker sections as in the case of Mandals. 21. The system also provided for devolution of schemes to the PRIs. In deciding detailed devolution of schemes, the principle observed was that all the schemes with a Mandal orientation would have to be transferred to the Mandal, all schemes with an intra- mandal, intra-blocl- or district orientation were transferred to the Zilla Parishad, schemes remaining in the State sector being strictly those with a pronounced inter-district orientation and the externally assisted programs. The transfer of provisions/schemes to the Zilla Parishads and Mandals from the State Plan, and non-plan budget was, perhaps, the most massive sharing of the state budget by transfer to the PRIs. The transfer of staff to the complete control of the PRIs had been the unique feature of the Karnataka system. 89 Annex 1 Page 7 of 25 22. Andhra Pradesh Model is also very similar to the Karnataka model except that the size of the Mandal was kept comparatively bigger in Andhra Pradesh. On the average a population of the mandal in Andhra Pradesh was kept at around 50,000 against 10,000 in Karnataka. It therefore, necessitated a three-tier system with an elected village panchayat for a group of villages, at the lowest level. C. Organizational Structure of Health Care Administration at the State Level 23. This section provides a brief description of the organizational set up of health administration at the state level. The administrative set up at the district, Taluka/Block and village levels are also outlined. This system applies to items such as public health and sanitation, hospitals and dispensaries which are included in the state list; and items like population control, medical education, adulteration of food stuffs, medical profession, registration of births and deaths, and mental health which fall under the concurrent list. The report, 'India: Policy and Finance Strategies for Strengthening Primary Health Care Services" provides a complimentary discussion of health administration in India at the Union level. 24. Organizational set up for Health at the State Level. The broad administrative structure for health in most states is more or less the same, with some minor variations. At the headquarters in a state capital, there are two levels, the secretariat and the Directorate of health services. Secretariat level: Generally at the highest level, there is a department of health and family welfare located in the Secretariat which is headed by a Minister, generally of Cabinet rank, as health is considered to be an important state subject. At the official level, the department is headed by a Secretary who usually belongs to the Indian Administrative Service. Assisting him are Additional Secretary/Joint Secretary (IAS), Deputy Secretaries, Under Secretaries and other office functionaries. The department of health at the secretariat level is concerned with the formulation of policies, besides dealing with all legislative matters including the making of rules and regulations on matters of health and administration. The secretariat also helps the health Minister in the discharge of his responsibilities to the legislature by providing necessary information and assisting in answering questions raised by the legislators. 25. All important proposals or schemes relating to health are submitted by subordinate agencies for approval and sanction of the Secretariat. It also broadly supervises, regulates and controls the activities of the notifications and the issue of circular memoranda and Government Orders. The Department, besides receiving periodic reports and returns, reviews the progress of work through inspection and other ways. The Secretariat exercises considerable authority both in personnel and financial matters. In some states there are separate Secretariat Departments for Health and Family Welfare (eg. Tamil Nadu and Karnataka) while in others (as in Andhra Pradesh) they have a Health, Medical and Family Welfare Department as these subject are related. 26. Directorate level. The directorates function as technical wings of the state departments of health services. These directorates are responsible for implementing the health policies of the state Governments by maintaining proper technical standards. The precise administrative arrangement at the level of the directorate however varies slightly from state to state. For 90 Annex 1 Page 8 of 25 instance in some states (eg. Tamnil Nadu) there is more than one directorate separating medical care and medical education from public health. Some states have even gone further by creating separate directorates for the primary health centers. The underlying rationale for moving away from one single directorate to more than one directorate is the expansion of health services in the country in the last couple of decades. 27. In Andhra Pradesh, for example, there were several instances of bifurcation and integration of medical and health services unit 1978 when a single directorate emerged, although with two directors, one each for Medical education and administrative and health and family welfare. In Kamataka until 1978, the directorate was looking after both medical and health and family welfare, but in order to improve the standards of medical education, two directors in charge of medical education, and health and family welfare services were appointed while retaining the system of single directorate. It is the Directorate of health and family welfare services in the state that is responsible for providing health care services to the community through implementation of various national and state health programs including family welfare and MCH services in the state. 28. In West Bengal, the Director of Health Services who is also the ex-officio Secretary iieads the Directorate and is the Chief Technical Adviser in the State Government on all matters relating to medicine and public health. He is responsible for the organization and director of all health activities. The teaching institutions are however under the purview of the Director of Medical Education. The Director of Health Services in the state is assisted by an appropriate number of personnel as Additional Director, Joint/Deputy/Assistant Directors and other officer and staff. 29. Regional Organization. The field organization functions at the district, and the taluq/mandal/block levels. For administrative reasons the states are divided into a number of zones or regions through which the directorates supervise and control the field operations. For instance in Andhra Pradesh, there are six regional Directors for six zones. This came into effect in 1978. Each regional director has the responsibility for the management of health and medical programs in his jurisdiction. He also looks after the personnel and establishment matters in his assigned area. In Karnataka also there is decentralization of supervisory authority at the divisional level, with four divisional directors with Bangalore, Mysore, Belgaum and Gulbarga to look after all health and family welfare activities in the respective divisions. The large hospitals are excluded from their purview. 30. It should be noted that, in practice, decentralization to the regional level is inadequate in all the states. In several respects sanction or approval of the Directorates has to be obtained even for the decisions made by the Regional Directors. It is also true that the regional officers are reluctant even to exercise their limited authority. It appears to be more convenient for them to pass on the papers to the Directorate rather than take a decision and accept responsibility for the same. 91 Annex 1 Page 9 of 25 D. Subdistrict, District and State Level Organization and Functions 31. The following charts, based on the analysis of the states of Andhra Pradesh, Karnataka, Punjab and West Bengal, provide information with regard to: (i) the composition of PRIs at the village level, intermediate level and district level; (ii) the functions of different levels of panchayats; (iii) the committees proposed, with their composition and functions at different levels of panchayats; (iv) obligatory and discretionary sources of revenue; (v) control exercised by the state governments over panchayats at different levels; (vi) composition of the state finance commission; and (vii) District Planning Committees. Also included are charts showing the organization of the government administrative structure for health at the state and district levels in West Bengal. 92 Annex 1 Page 10 of 25 STATE-WISE POSMTION OF PANCHAYATI RAJ: COMPOSITION A. PANCHAYATAT THE VILL4GE LEVEL State Nomen Minumum Number Chairperson Reserva- No confidence cla-ture size for of tion for motion against of the constituting a members Nomen- Mode backward the Pancha Panchayat to be clature of classes Chairperson -yat area elected Election Andhra Gram A revenue 5-21 Sarpanch Direct One-third Notice by not Pradesh Pancha- village of the total less than half of yat irrespective of seats the total its size members Motion carried by 213 members. No motion within first two years and it can be moved only once against the same person. Karnataka Gram Village(s) One Adhyak- Indirect About one- Notice by 1/3 Pancha- with a member sha third of the members. yat population for every total seats Motion carried between 5 & 7 400 by 2/3 thousand popula- members. tion Punjab Gram A village 5-13 (A Sarpanch Direct One seat of Notice by 2/3 of Pancha- having a Gram member Panchas. yat population of Sarpanch where the Motion carried 200 or more Sabha to population by majority of be treated of voters of the a multi- backward Gram Sabha. member classes is No notice single over 20% within first two Consti- in the years. tuen-cy) Gram Panchayat area. West Gram A mauza or of 5-30 Pradhan Indirect No Motion carried Bengal Pancha- mauzas reservation by majority of yat irrespective of total elected its size members. No notice within one year after its election. Not more than one resolution within six months. 93 Annex 1 Page 11 of 25 B. PANCHA YATAT THE VILLAGE LEVEL Nomencla- Nomencla Reservation No confidence State ture of the Composition of the -ture of for Backward motion against the Panchayat Panchayat the classes Chairperson Chair- _________ ~~~~~~~person ________ Andhra Mandal Directly elected President One-third of Notice by not less Pradesh Parishad members. Mps and the total elected than half of the MLAs One person members. total members. belonging to Motion carried by minorities to be 2/3 members. coopted. The No motion within Sarpanches of all first two years and Gram Panchayats it can be moved shall be permanent only once against invitees. the same person. Kamataka Taluka Elected Members Adhyak- About one-third Notice by 1/2 of the Panchayat (One for every 10,000 sha of the total elected members. population) Mps, seats Motion carried by a MLAs & MLCs. One- majority of the fifth of Adhyakshas of elected members. the Gram Panchayats by rotation. Punjab Panchayat a) Directly elected Chairman Only one seat Notice by one-fifth Samiti members 6-10 (one for in such members. every 15 thousand Panchayat Motion carried by population) Samitis where 2/3 elected b) Representatives of the population members. the Sarpanches to be of backward elected (Ratio of classes is not a:b/40:60) less than 20%. c) MLAs and MLCs West Panchayat Directly elected Sabhapa- No reservation Motion carried by Bengal Samiti members (not ti majority of total exceeding three from elected members. each Gram). No notice within All Pradhans of gram one year after its Panchayat MPs and election. Not MLAs. more than one resolution within six months. 94 Annex 1 Page 12 of 25 STATE-WISE POSITION OF PANCHAYATI RAJ: COMPOSITION C. PANCHA YATATTHE VILLAGELEVEL State Nomencla- Composition of the Nomencla- Reservation No confidence ture of the Panchayat ture of the for motion against the Panchayat Chairperson Backward Chairperson classes Andhra Zilla Directly elected Chairman One-third of Notice by half of Pradesh Parishad members (one the total the total member from each elected members. Mandal Parishad) members. Motion carried by Mps & MLAs. Two 2/3 members. coopted members No motion within belonging to first two years minorities. All and it can be Presidents of moved only once Mandal Parishads against the same shall be permanent person. invitees. Kamataka Zilla Elected Members (at Adhyaksha One-third of Notice by 1/3 of Parishad the rate of one for the total the elected every 40 thousands seats. members. Motion people) Mps, MLAs carried by a & MLCs. majority of the All Adhyakshas of elected members. Taluka Panchayats. Punjab Zilla Directly elected (qo Chairman One seat Notice by one- Parishad to 25) at the rate of shall be fifth members. one for every 50 reserved in Motion carried by thousand population, Zilla 2/3 elected All chairmen of Parishad members. Panchayat Samitis where the Mps, MLAs & population of MLCs. backward classes is not less than 20%. West Zilla Directly elected Sabhadhi- No Motion carried by Bengal Parishad members (not pati reservation majority of total exceeding three from elected members. each block). No notice within All Sabhapatis of one year after its Panchayat Samitis. election. Not MPs and MLAs. more than one resolution within six months. 95 Annex 1 Page 13 of 25 FUNCTIONS OF DIFFERENT LEVELS OF PANCHAYATS IN WEST BENGAL - I Head Gram Panchayat Panchayat Samiti Zilla Parishad Obligatory TYPE-A: Gram Panchayat 1. To undertake schemes or 1. All functions of Functions shall provide: adopt measures including Panchayat Samiti 1. Sanitation, the giving financial 2. In addition, conservancy, drainage assistance relating to the undertake schemes & prevention of public development of agriculture, or adopt measures nuisance. livestock, cottage industries, (including giving 2. Prevention of co-operative movements, financial epidemics rural credit, water supply assistance) to the 3. Supply of safe drinking irrigation, public health and development of water. sanitation, establishment of industries and 4. Maintenance, repair, hospitals, and dispensaries, secondary construction and communication, primary education. protection of public and adult education, welfare assets. of students, social welfare 5. Management of public and other subjects of tanks, grazing grounds, general public utility. burning ghats and 2. To undertake execution of public graveyards. any scheme, performance of 6. Supply of any local any act or management of information to higher any institution or authorities. organization entrusted by 7. Organising voluntary Government. labour and community 3. Management of any work of works. public utility. 8. Control and 4. To make grants in aid to administration of Gram any school/institution of Panchayat fund. public welfare institution. 9. Imposition, assessment and collection of taxes, rates and fees. 10. Maintenance and control of Dafadars and Chowkidars. 11. The constitution & administration of Nyay Panchayats. 96 Annex 1 Page 14 of 25 FUNCTIONS OF DIFFERENT LEVELS OF PANCHAYATS IN WEST BENGAL - II Head Gram Panchayat Panchayat Samiti Zilla Parishad Other duties TYPE-B I f State Government 1. To make grants to 1. Coordination and may assign Gram Panchayat, Zilla integration of the shall perform: 2. Parishad or Gram development plans 1. To undertake primary, 3. Panchayats. and schemes prepared social, technical or 4. To adopt measures by the Panchayat vocational education. for the relief of Samiti. 2. Management of rural distress. 2. Examination and dispensaries health cares, 5. To contribute sums sanction of the budget maternity and child towards the cost of estimates of the welfare centers. water supply or anti- Panchayat Samitis. 3. Management of public epidemic measures 3. To contribute such ferry undertaken by a sums as may be 4. Management of irrigation municipality within agreed upon towards works. the Panchayat. the cost of 5. Grow more food 6. Coordination and maintenance of any campaign. integration of the institutions situated 6. Care of infirm and development plans outside the district destitute. and schemes which are beneficial to 7. Rehabilitation of displaced prepared by the inhabitants of the persons. Gram Panchayats. district. 8. Animal husbandry. 7. Examination and 4. Establishment of 9. Acting as a channel sanction of budget scholarship or award through which estimates of Gram stipends for further Government assistance Panchayats. more of technical or should reach the village. other special forms of 10. Wasteland/fallow land education. improvement. 5. To make grants to 11. Plantation Panchayats Samitis 12. Assistance in and gram Panchayats. implementation of land 6. To advise State reform works. Govermment on all 13. Schemes entrusted by matters relating to Government. development work 14. Field publicity of among Panchayat development Samitis and Gram works/welfare programmes Panchayats. undertaken by the State Government. Annex 1 Page 15 of 25 FUNCTIONS OF DIFFERENT LEVELS OF PANCHAYATS IN WEST BENGAL - III Head Gram Panchayat Panchayat Zilla Parishad Samiti Discretionary 1. The maintenance of lighting of 1. A Panchayat 1. Zilla Functions public streets. Samiti may Parishad 2. Plantation on public streets undertake or may and public places. execute any undertake or 3. the sinking of wells and schemes if it execute any excavation of ponds and tanks. extends to schemes if it 4. To introduce and promote more than one extends to cooperatives. Gram more than 5. Construction and regulation of Panchayat. one block. markets, melas, hats and exhibition of local produces. 6. Allotment of places for securing manures. 7. Sanitation work. 8. Managing the distribution of State loans. 9. Promotion of cottage industries. 10. Destruction of rabies and stray dogs. 11. disposal of unclaimed cattle, corps and carcases. 12. Construction and maintenance of Sarals, d&armasalas, rest houses, etc. 13. Establishing of libraries and recreation places. 14. Statistics. 15. Fire protection. 16. Prevention of burglary and dacoity. 17. Any other works of public utility. 98 Annex 1 Page 16 of 25 A. PANCHAYATSAT VILLAGELEVEL: COMMITTEE SYSTEM State Name of the No. of Mode of Major Functions Remarks, Committee Members Election of if any incl. the Chairman Chairman Andhra Beneficiary committee As may be Execution of works Pradesh for the execution of prescribed of Panchayat works of the Gram Agriculture, Public Panchayat and Health, Water functional committees Supply, Sanitation, for agriculture, public Family Planning, health, sanitation and Education, etc. communication in every Gram Sabha. Karnataka 1. Production 3-5 Adhyaksha Agriculture One Committee Production, Animal representative Husbandry, Rural, from co- Industries, Poverty operative Alleviation societies. Programmes. 2. Social Justice 3-5 Upadhya- 1.Promoting major At least one Committee ksha interest of member form SCs/STs/BCs. SC/ST and 2.Protesting them one woman from social injustice. 3.Welfare of women and children. 3. Amenities 3-5 Adhyaksha Education, Public Committee Health, Public works. Punjab I. Production 3-5 Sarpanch Agriculture A Representa- Committee production, Animal tive from Husbandry, rural cooperative industries, Poverty societies shall Alleviation be co-opted. Programme. (Farmer II. Social Justice 3-5 Sarpanch l.Promotion of Clubs, Yuvak Committee major interests of kendra & SCs/STs/BCs. Mahila 2.Protecting them Mandals). At from social least one injustice and member form exploitation. SC/ST 3.Welfare of women One woman and children. III. Amenities 3-5 Sarpanch Public Health, Committee Education, Public Works. West No mention in the Act Bengal _ 99 Annex 1 Page 17 of 25 B. PANCHAYATSATINTERMEDIATELEVEL: COMMITTEE SYSTEM Name of the Committee No. of Major Function/ Remarks, State Members Chairman Functions if any incl. Chairman Andhra A Mandal Panchayat may and if so required by the Government shall, join with other Pradesh local authority in constituting a joint committee for any joint purpose. Karnataka 1. General Standing Not more Adhyaksha 1.Establishment No member to Committee than six matters, serve on more communications, than one rural housing, committee 2. Finance Audit and Not more Adhyaksha relief works, etc. Planning Committee than six 2.Finance, Budgets, Account 3. Social Justice Not more Upadhya- Savings, etc. Committee than six ksha 3. Securing Social Justice to weaker Sections of the society Punjab 1. General Committee Not more Chairman Establishment No member than six matters, except chairman communication, shall serve on Rural Housing more than one 2. Finance Audit and Not more Chairman Water Supply, etc. committee Planning Committee than six Finance, Budgets, Accounts, Small 3. Social Justice Not more Vice- savings, etc. Committee than six Chairman Securing Social justice to weaker sections West 4. Arth Sanstha, 7-9 Sabhapati Finance, 1. Out of all Bengal Unnayan, Establishment members Parikalpana Sthayee Development and a) 3-5 shall be Samiti Planning elected members 5. Jan Swasthya 7-9 Elected Public Health b) Sabhapati Stjayee Samiti shall be ex- 6. Purt Karya Sthayee 7-9 Elected Public Works officio Samiti member. 7. Krishi Seeh 0 7-9 Elected Agriculture, Three members Samataya Sthayee Irrigation and shall be from Samiti cooperation officers of State 8. Shiksha Sthayee 7-9 Elected Education Govt. (not Samiti having right to 9. Khudra Silpa Tran 7-9 Elected Cottage Industries, vote) Jankalyan Sthayee relief works and 2. No person Samiti social welfare shall be allowed 10. Samanvay Samiti 7-9 Elected to serve on more than three committees. Annex 1 Page 18 of 25 C. DISTRICTPANCHA4YAT: COMMITTEESYSTEM Name of the No. of Function (Other than Rema- State Committee Members Chairman delegated functions) rks, incL if any Chairman Andhra 1. Standing As may be Vice- Agriculture, Animal Pradesh Committee for prescribed Chairman Husbandry, Forestry, Soil Agriculture Reclamation, Seri culture. 2. Standing As may be Chairman Poverty Alleviation Comnittee for prescribed Programmes, Area Development Development Programmes, 3. Standing As may be Chairman employment, Housing Committee for prescribed Cooperation, Small Education and Industries, etc. Medical Services Education, Social education, 4. Standing As may be Chairman Medical services, drainage, Committee for prescribed Relief works. Planning & Budget, Taxation, Finance, Finance Co-ordination of works 5. Standing As may be Chairman relating to other committees. Committee for prescribed Women and Child Welfare Women Welfare Welfare of SCs/STs BCs, 6. Standing As may be Chairman Cultural activities. Committee for prescribed Communication, Water Social Welfare Supply, Power Irrigation. 7. Standing As may be Chairman Committee for prescribed works. Karnataka 1. General Standing Not more Adhyaksha Establishment matters, No mem- Committee than five communications, ber to 2. Finance Audit building rural housing, serve on and Planning Not more relief works, etc. more than Committee than five Adhyaksha Finance, Budget, one com- 3. Social Justice Accounts, Expenditure mittee Conmmittee Not more Upadhya- and Revenue, Planning, 4. Education and than five ksha Evaluation, etc. Health Committee Not more Elected Securing Social Justice 5. Agriculture and than five to weaker Sections of the Industries society Committee Not more Elected Education activities, than five development planning, survey, literacy programmes health services, etc. Agriculture production animal husbandry, cooperation, village industries and industrialization Punjab 1. General Not more Chairman Establishment matters, No mem- Committee than five communication, ber shall building, relief works, serve on etc. more than 2. Finance Audit Not more Chairman two com- and Planning than five Finance, Budgeting, mittees 101 Annex 1 Page 19 of 25 Committee Plan priorities, 3. Social Justice Not more Chairman evaluation review Committee than five programmes. 4. Education and Not more Elected Securing interests of Health Committee than five weaker sections of the society. 5. Agriculture and Promotion of Education Industry Not more Elected planning, survey and Committee than five evaluation, literacy, health medical and welfare. Agriculture production, animal husbandry, cooperation, village, cottage industries and industrial development. West 1. Finance, 9-11 Sabhapati Finance, Establishment 1. Bengal Establishment, 3-5 elected Development and Nominated Development and 5 members Planning (by state Planning nominated Govt.) 2. Public Health and one ex- Elected member 3. Public works officio have no 4. Agriculture, member Elected right to Ihrigation and Co- same as vote. operation above Elected Public Health 5. Education same as 2. Term of 6. Cottage Industry, above Public Works a member Relief and Social same as Elected is 55 years. Welfare above Agriculture, Irrigation Elected and Co-operation 3. The Secretary of Silla same as Elected Parishad above Education shall be same as ex-officio above Cottage industry, Relief Secretary and Social Welfare to all the Sthayee Samitis. 102 Annex 1 Page 20 of 25 STATE-WISE POSITION OF PANCHAYATI RAJ: RESOURCES A. PANCHA YATSAT VILLAGE LEVEL State Obligatory Sources Discretionary Sources Remarks Tax revenue Non Tax revenue Tax revenue Nn. T.R. Anrdhra I.House Tax 1.Payment by Market 1. Vehicle tax. A Taxes are Pradesh 2.Tax on village Committee 2. A tax on agriculture land fees yearly produce sold in 2.Payment made by for a specific purpose for the village. Mandal Panchayat and 3. A land cess at the rate of use 3.A duty on Zilla Panchayat for share two per cent. of transfer of in income derived from 4. A duty in the form of com property. markets and ferries. surcharge on the seigniorage mu- 4.Tax on 3.Fees for temporary fees on materials other than nity advertisement occupation of village minerals. land. 5.Vehicle tax sites, roads and other 5. Surcharge on tax leviable 6.Special tax on public places. on education and land. houses for 4.Income from providing endowments and trusts. facilities. 5.The net assessments on service income. 6.Income form village fisheries, woods, reeds. 7.Unclaimed deposits etc. 8.Income from lease of Govt. property. 9. Grants from Mandal Panchayat. 10.income from investment of amount taken from Panchayat Fund. 1 1.One-tenth of the gross income derived by Government from fines imposed by Magistrates in the village. Kamna- l.Tax on 1. Transfer of amount by 1. Tax on entertainment other 1. Water taka buildings @ Govt. on account of than cinematography (shows rate 10% of annual collection from local cess @ Rs.25 per show) 2. Fee on letting value. levies on land revenue 2. tax on vehicles other than buses, 2.Tax on lands 2. Grant of one lakh Rs. motor vehicles. taxies, (not subject to (annually) 3. Tax on Advt. and Hoarding autostands agricultural 3. Rent/Sales proceeds. 4. Pilgrim fee for assessments) @ 5. Market fee providing one Re per 6. fee on registration of cattle facilities annum for every 7. Surcharge on tax (as may 3. Fee on one hundred sq. be directed by Govt.) grazing km. of area. cattle in grazing __ __ _ ____lands. 103 Annex 1 Page 21 of 25 A. PANCHAYATSAT VILLAGE LEVEL Punjab l.Tax on lands and 1. Sale proceeds of 1. Free on 1. Fee on buildings produces, dust, registratio sanitary 2.Tax on profession, dung etc. n of arrange- trades, callings and 2. income from vehicles ments employment other than village fisheries 2. Special tax 2. Water agriculture 3. Income from on adult rate 3.Duty in the shape of an common land male 3. Lightin additional stamps duty 4. Promotion of land members g rate for all payments for revenue (not less for Conser- admission to any than 10% of conununit vancy entertainment. revenue realized y work. rate. 4. Surcharge on stamp duty related panchayat (not exceeding 2 % ) by area) by State state Govt. for Gram Goverrunent. Panchayats. West 5. Tax on Land and 5. Income form 3. Fees on 4. Fee for Bengal buildings (a) @ one schools/hospitals/ registratio sanitary percent of the value is other institutions n of arrange- less than Rs. one and works under vehicles ments thousand control of 4. Fees on 5. Water 6. Tax on professions, Panchayat complaints rate trades callings (subject 6. gifts and and 6. Ligh- to a maximum of Rs. contribution and petitions ting rate 250 per annum income from in suits 7. Conser- 7. A duty in the shape of trusts and and cases. vancy additional stamp duty endowments. rate for transfer of property @ 2 %/6). 8. A duty in the shape of additional stamp duty for all payments for admission to any entertaimnent @ ten per cent. 104 Annex 1 Page 22 of 25 STATE-WISE POSITION OF PANCHAYATI RAJ: RESOURCES B PANCHA YATAT THE INTERMEDIATE LEVEL State _ Obligatory Sources Discretionary Sources Remarks Tax Non Tax Revenue Tax Revenue Non Revenue T. R. Andhra 1. Share of the land revenue, Proceeds from 1. Such Pradesh state taxes or fees. taxes, surcharge or contributions 2. Donation and contribution fees which the as the parishad from Gram Panchayats or parishad is may levy from from public empowered to levy Gram 3. Annual grant @Rs. 5/- per under laws. Panchayat person (based on the last 2.Any other census) from Government. income from 4. Grants to cover expenses remunerations, of establishment matters enterprises and by Govt. the like. Karna- 1. Grants to cover expenses of Surcharge on stamp taka establi-shment matters by duty Government. 2. Rent 3. Sales Proceeds Punjab Local Rent/profits from 1. Tolls on persons, vehicles rate @ property managed animals, etc. , for using road 25 paise by Samiti and bridge under Samitis per Rs. control of land 2. Tolls on ferry revenue 3. Fee for registration of vehicles other than those registered under motor Act, 1986 4. Fee for licence for a market Fee for any other licence West l.Contribution and I.Toll on persons, vehicles 1. Water rate Bengal grants from Govt. and animals (for roads and 2. Lighting rate including part of bridges) land revenue 2.Toll on account of ferry 2.Income from 3.Fee on registration of schools, hospitals vehicles. & other institutions & work 3.Gifts and contributions 4.Income form trusts & endowments 5.Fines/Penalties 105 Annex 1 Page 23 of 25 C DISTRICTPANCHA YAT State Obligatory Sources Discretionary Sources Remarks Tax Non Tax Revenue Tax Revenue Non Revenue T. R. Andhra 1. Income from endowments for trusts 1. Share of the Such Pradesh administered by Parishad. land cess, State contribu- 2. Income of Dist. board as Govt. may taxes or fees as tion as the allocate to it. may be Zilla 3. Donations and contribution form prescribed. Parishad Mandal Parishad or public. 2. Taxes or fees may levy 4. Any income form remunerative which parishad from the enterprises. may levy under Mandal 5. Annual Gran gRs. 2/ per person any law. Parishad (based on last census data) from with the Government. previous approval of Govt. Karna- 1. Grants to cover expenses of All fees, taka establishment matters, by Govt. imposed, 2. Grants, assignments, loans, if any contribution made by the Govt. 3. Fines/Penalties 4. Interests, profits, gifts, etc. Punjab With the 1. Contribution and grants by Road cess and permission of Central/State Govts. including the part of public work cess. the State Govt. Land revenue. on the 2. Contribution and grant by Panchayat recommenda- Samiti. tion of the 3. All receipts on account of taxes, rate SFC, the Zilla tolls, etc. Parishad shall 4. All receipts in respect of levy any tax, schools/hospitals, building, institutions, duty fee toll works etc. which has not 5. Gifts and contributions. been levied by any Panchayat. West Proceeds of 1. Contribution and grants by Panchayat 1.Tolls on persons 1.Water Bengal road cess Samiti or other local authority. vehicles rate 2. Loans granted/raised 2.Tolls in respect of 2.Fee for 3. Income from management of schools ferry sanitary hospitals and other institutions or work. 3.Fee for arrange- 4. Gifts, contribution registration of ments 5. Income from trusts and endowments vehicles. 3Lighting 6. Fines/Penalties. rate 106 Annex 1 Page 24 of 25 STATE-WISE POSITION OF PANCHAYATI RAJ --STATE CONTROL A. PANCHAYATAT THE VILLAGE LEVEL State Control Over Chairperson Control Over Panchayat Arrangement in Case of Dissolution Power of Power of Power of Power of Power of Suspension Removal Inspection Suspention Dissolution Andhra District Collector District Collector Commissioner/Go Government Governmnent Government Pradesh vernment Karna- Commis-sioner CEO CEO (with Comrnis-sioner A person/ taka confirmation of persons Commissioner) empowered by Zilla Parishat of Govt. Punjab Director (at any Director Govermnent Director Government time) Dy. Commissioner /DDPO during enquiry West Government Govermnent Inspector of Government Bengal Panchayats R PANCHA YATATINTERMEDIATE LEVEL Andhra Government Government Governnent Government Governnent A person/ persons Pradesh empowered by _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ __ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ G ovt. Karna- Government CEO Conmnissioner Government A person/ persons taka appointed by ZP or Govt. Punjab Government Government Government Director Government A person/persons appointed by ______ ___________ Govt. West Govemment Inspector of Government Government A Bengal Panchayat person/persons/au thority appointed by Govt. C. DISTRICTPANCHAYAT Andhra Government Government Govermnent Government Government A person/persons Pradesh appointed by Govt. from time to |__ _ _ _ _ _ _ l__ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ |__ _ _ _ _ _ _ _ _ _ _ tim e Kama- Government Commissioner Government Government A person/persons taka appointed by _ _ _ _ _ _ ___i______ Govt. Punjab _ Government Government Director Government | _| West Government Inspector of Government Government Bengal _ Panchayats l I I _I 107 Annex 1 Page 25 of 25 DISTRICT PLANNING COMMITTEE (DPC) State Whether the Composition Secretary Chairperson provision of the comm. (in the Act) is made or not Andhra Pradesh No mention in the Act Karnataka Provided Mps, MLAs, MLCs. CEO To be chosen as Adhyaksha, Zilla Parishad, prescribed Mayor/President of the Municipal Corporation/ Municipal council having jurisdiciton over the H.Q.s of the district Elected members as prescribed under the Amendment. Punjab Provided Details not mentioned in ____ ____ ____ _ __ ____ ____ ____ the A ct._ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ West Bengal Provided Details not mentioned in the Act. STATE FINANCE COMMISSION State Number of Members Chairman Qualifications Including Chairman Prescribed for Members Andhra Pradesh five Experience in public 1. Special knowledge Affairs of finance and accounts in govermnent or 2. Wide experience in financial matters/ administration or 3. Special knowledge of economics Karnataka three As may be prescribed As may be prescribed Punjab To be constituted in accordance with the provisions of Articles 2431 of the Constitution. West Bengal Not exceeding five Selected from justice, economics, administrators and social and political workers of eminence. 108 Annex 2 Page 1 of 28 COST EFFECTIVENESS ANALYSIS: UNIT COST ANALYSIS AT DIFFERENT TIERS OF THE HEALTH CARE SYSTEM 1. This annex estimates the cost effectiveness of treating patients at a secondary hospital compared to a tertiary hospital using different unit cost measures. These estimates are achieved by comparing the overall unit costs related to specific inputs for in-patients and out-patients at secondary versus tertiary hospitals and by giving cost and efficiency comparisons of secondary versus tertiary level hospitals in terms of costs per case equivalent. Section A estimates costs at a secondary versus a tertiary level hospital in Andhra Pradesh, in terms of cost per case equivalent, which is arrived at by taking into consideration the number of inpatient (IP) and outpatient (OP) services and recurrent and capital costs. Section B provides a more detailed analysis and summarizes a time-motion study in which 1 PHC, 7 secondary hospitals, and 2 tertiary hospitals in AP were compared in order to estimate unit health care costs in terms of bed day, OP, IP, Level I and II tests and x-rays. 2. Analysis comparing cost-effectiveness between different types of hospitals is limited in India, because of the non-availability of data and due to variations in the case-mix. Moreover, even when data is available, it is difficult to compare certain services because for example more serious and complicated cases are admitted at tertiary hospitals, and the length of stay and treatment costs tend to be higher at tertiary hospitals. Previous analysis has shown that between 25-40% of costs could be saved by treating patients at secondary facilities rather than at tertiary hospitals. The data used in such analyses have been more broad-based and have tended to overlook some of the problems noted here. Moreover, such analyses did not compare similar services. 3. One of the rationales for focusing on providing services at the secondary level, from an economic efficiency point of view, is that the unit costs of treatment can be reduced considerably by providing health care services at lower level facilities where unit costs for comparable services are lower. The analysis in this annex will approximate the magnitude of cost savings if diagnosis and treatment of conditions that could be addressed at secondary facilities are indeed taken care of at that level, rather than at the tertiary level. Section A 4. Irl this section, a preliminary analysis is presented which estimates cost savings of treating patients at a secondary hospital compared to a tertiary hospital in Hyderabad. Hospitals in Hyderabad were chosen because of the availability of accurate cost data and the comparability of the services provided. The chosen hospitals were the Suraj Bhan hospital, a secondary facility, and the Sultan Bazaar Maternity hospital, a tertiary hospital attached to the Osmania Medical College in Hyderabad. Both hospitals provide antenatal, intranatal and Family Planning Services in addition to gynecological care. The case-mix at the two hospitals is more or less similar: a large percentage of the in-patient facility is utilized by obstetric and family planning cases, which have constituted about 40% and 109 Annex 2 Page 2 of 28 30% of in-patients, respectively during the past 2 years patients admitted for gynecological problems and procedures comprised about 11% of the in-patients; and a roughly equal proportion of in-patients had complicated obstetric care. One difference, however, was the higher utilization of out-patient services at Suraj Bhan (first referral) Hospital, with a much higher number of out-patients per in-patient (6 to 1) compared to the Sultan Bazaar Maternity Hospital (1.2 to 1). 5. Estimation of Costs. The recurrent costs for the Sultan Bazaar Hospital were taken from the budget books, and the recurrent costs of the Suraj Bhan Hospital were taken from hospital records and grants received from the government. The recurring expenditure, under different heads for three financial years for both the hospitals is presented in Tables 1 and 2. Since both hospitals come under different administrative systems, cost heads do not exactly match, and information on some heads is not being routinely compiled by these institutions. However, at an aggregate level, both data sets represent average recurring costs. Table 1: Recurring Costs of Suraj Bhan Hospital (Rs.) l Head of Account 1992-93 1993-94 1994-95 Average 1993-95 Pay & Allowances 1,641,124 2,397,259 2,656,855 2,527,057 Rent rates and 50,263 80,419 69,214 74,817 Taxes Water and 23,776 17,514 17,534 17,524 Electricity I Cleanliness 5,274 3,624 2,650 3,137 Charges Stationary, Imprest 13,687 15,496 12,111 13,803 & other Contingents Maintenance 10,869 9,935 19,143 14,539 Electrical Goods 73,709 65,037 57,247 61,142 Drugs and 1,326 1,973 5,632 3,803 Medicine Drugs & Supplies 425,000 467,500 514,250 490,875 Provided from Headquarters l Diagnostic and Lab 2,812 2,532 4,999 3,765 Material Surgical 1,380 3,060 767 1,914 Instruments Uniform 48,648 40,855 39,578 40,216 Diet 0 91,250 91,250 91,250 Total 2,297,868 3,196,454 3,491,230 3,343,842 110 Annex 2 Page 3 of 28 Table 2: Recurring Costs of Sultan Bazaar Hospital (Rs.) Head of Account 1992-93 1993-94 1994-95 Average 1993-95 Pay & Allowances 5,055,000 5,862,000 7,110,000 6,486,000 Service Postage 0 0 3,000 1,500 Water and 0 0 597,000 298,500 Electricity _ Other Office 33,000 0 90,000 45,000 Expenses I Rents and Taxes 70,000 29,000 112,000 70,500 Publications 15,000 50,000 15,000 32,500 Machinery and 172,000 1,546,000 150,000 848,000 Equipment Motor Vehicles and o 157,000 _ 78,500 Other Expenses Maintenance o 581,000 9,000 295,000 Materials and 1,450,000 1,397,000 1,400,000 1,398,500 Supplies Diet 0 220,000 220,000 220,000 Total 6,795,000 9,842,000 9,706,000 9,774,000 6. Estimation of Capital Costs. Capital costs, however, were more difficult to estimate, since both hospitals are located in old residential structures that were converted several decades ago. In addition, the equipment is relatively old. Hence, it was not possible to arrive at precise capital costs. An approach suggested by WHO for estimating capital costs' was used. This included a detailed listing of existing capital resources of both hospitals, namely building (area), equipment (major, minor and surgical) and furniture. The current costs of these capital resources were applied to the existing facilities of both hospitals. For each capital facility the mean duration of utility was arrived at by obtaining expert opinion. Examples from the Indian context were taken to arrive at a capital facility with a mean duration of use and the annual capital cost component. Andrew Creese & David Parker; Cost Analysis in Primary Health Care: A Training Manual for Program Managers; WHO, Geneva 1994. 111 Annex 2 Page 4 of 28 Table 3: Estimation of Annual Capital Costs (Rs.) Capital Description Current Costs Mean Estimated Capital Facility Duration Costs or Use in per Annum Years Sultan Suraj Sultan Suraj I Bazaar Bhan Bazaar Bhan Equipment Major 4,287,100 1,050,100 10 428,710 105,010 Minor 187,000 90,000 5 37,400 18,000 Surgical 230,000 67,000 1 230,000 67,000 Furniture @ Rs. 1,395,200 436,000 10 139,520 43,600 8720/bed Building @ Rs. 400 per 15,290,000 6,960,800 50 305,800 139,216 Area Sq. Feet 2 3 Total Capital Costs per Annum 1,141,430 372,826 1 Sultan Bazaar Hospital: Total Building Area 38,225 Sq. Feet 2 Sultan Bhan Hospital: Total Building Area 17,402 Sq. Feet 7. Estimation of Unit Costs. Since the hospitals studied provide both in-patient and out- patient services, a comprehensive index which captures both types of services was applied to arrive at a unit cost figure. The day equivalent method which equates the cost of one in-patient day with four out-patient visits was used. Using the case equivalent method, the unit cost for each hospital was calculated. The results are shown in Table 4. 2 Andrew Creese & David Parker; Cost Analysis in Primary Health Care: A Training Manual for Program Managers; WHO, Geneva 1994. 3 Howard Barnum & Joseph Kutzin; Public Hospitals in Developing Countries, published for the World Bank by The John Hopkins University Press. 112 Annex 2 Page 5 of 28 Table 4: Estimation of Unit Costs for 1993-95 (Rs.) Description Sultan Bazaar Hospital Suraz Bhan Hospital Average IP 52,516 12,199 Average OP 62,150 79,962 Case Equivalents 68,054 32,190 Annual Recurrent Costs 9,774,000 3,343,842 Annual Capital Costs 1,141,430 372,826 Total Annual Cost 10,915,430 3,716,668 Cost per Case Equivalent 160 115 8. Since data on in-patients and out-patients were available only for two years (1993-94; 1994-95), the analysis applies only to this period. The results indicate that day unit cost equivalent at the Suraj Bhan secondary hospital is about two-thirds that of the Sultan Bazaar Maternity Hospital. The results are similar to other studies which found that services at secondary facilities can be provided more cost effectively than at tertiary hospitals if it is technically possible to provide these services at the secondary level. In other words, there can be considerable cost savings if services that can be provided at secondary level facilities are provided at those facilities rather than at tertiary hospitals. The main reason for the savings from our study of at the two hospitals was largely due to the greater unit costs of infrastructure and overheads at tertiary hospitals. 9. A review of several studies undertaken by Barnum et. al. also concluded that within a country tertiary hospitals tend to have higher average costs than the less technically complex district level hospitals. However, since they did not analyze unit costs for similar types of services provided, these results are merely indicative, and apply only for two hospitals. Nevertheless, they do illustrate the fact that streamlining and rationalization of services can result in considerable cost savings. Section B: Time Motion Study -- Costin2 at Different Levels of Health Facility 10. Cost effectiveness can also be measured for specific interventions at the primary, secondary, and tertiary levels. This section summarizes the results from the Andhra Pradesh Burden of Disease and Cost Effectiveness Study.4 This study is a time-motion study which used the BOD to estimate the burden caused by 96 diseases including injuries and accidents. It provides a unique opportunity to undertake cost effectiveness analysis using DALYs gained as a measure of effectiveness of interventions. While the data, specific issues, and examples presented are specific to the situation in Andhra Pradesh, with a few modifications the results are applicable to other Indian states. Level I in this study refers to blood picture, urine exam, and sputures for TB, while Level II refers to blood sugar, blood urea, electrolyte, and urine and blood culture and sensitivity. 4Administrative Staff College of India. 1996. "Andhra Pradesh Burden of Disease and Cost- Effectiveness of Health Interventions." Report Volume II. Center for Social Services, Hyderabad. 113 Annex 2 Page 6 of 28 Out Reach: Health worker's Contact A health worker (HW) on an average will visit 10 houses per day. Salary/month =Rs. 2813 Salary/day = 2813/26 =Rs. 108. Cost/Contact = 108/10 =:Rs. 10.82 Sub center: Health worker's contact: On an average a HW will contact 20 patients per day. Cost/Contact = 108/20 =Rs. 5.4 Cost of building for one contact = 1.37 Cost of furnishing for one contact = 1. 63 Total Cost/Contact = Rs. 8.4 Primary Health Center: Bed Day: 11. The cost per bed day at PHCs was determined by taking into account furnishing & other equipment, 40% cost of staff room, 60% cost of OT, 40% salary of staff (excluding MPHWs), 40% cost of Medical Officer Room, 40% cost of refrigerator, 50% cost of building. OP Contact: 12. An ideal PHC on an average will have at least 50 OPs a day. The cost per OP contact included the cost of OT (40%), examination room, visiting hall, 60% cost of staff room, 60% salaxy of staff (medical officer, staff nurse, pharmacist, attendee), 60% cost of medical officer room dispensing room, ante natal check-up room, verandah dressing and injection room, 60% cost of refrigerator, 50% cost of building. Level I Test: 13. The cost of lab equipment for 20 minutes was calculated. Salary for 20 minutes time of lab technician and an additional cost of Rs. 5 for reagents was taken. 114 Annex 2 Page 7 of 28 X-ray: 14. 20 minutes time of equipment, salary for 20 minutes time of radiographer, dark room assistant and an additional cost of Rs. 30 for X-ray film was taken. Vehicle: 15. The distance from PHCs to secondary level hospitals was assumed to be around 120 km, the time taken to cover this distance to be 3 hours, and the cost of one hour's time of the vehicle therefore turned out to be Rs. 3.42. Casual Labor: 16. Here the driver's salary for 3 hours was taken. Fuel: To cover a distance of 120 kmi, 12 liters diesel will be needed. The cost of 12 liters of diesel = Rs. 96 Operational costs = Rs. 4 Total Cost =Rs. 100 Cost/Km =Rs. 100/120 Table 5: Costs at the PHC Level Cost/day Cost/day/bed Cost/hr Furnishing and other equipment 12.23 2.04 l Lab Equipment 1.11 Minor OT 17.16 2.15 Examination Room 1.45 Visiting Hall 1.68 Labor Room 6.06 Staff Room 1.56 Manpower 1,623.04 202.88 Medical Officer Room 3.55 l Dispensing Room 1.06 A.N.Check Up Room 2.42 l Verandah 2.92 Building 85.61 42.81 _ Refrigerator 5.48 Vehicle 82.19 3.42 115 Annex 2 Page 8 of 28 Table 6: Final Costs at the PHC Level Unit Cost (Rs.) Bed Day 73.18 OP Contact 9.65 Level I test 12.88 X-ray 48.45 Table 7: Final Costs at the PHC, Secondary, and Tertiary Levels (Unit Cost: Rupees) .______________ PHC Secondary Tertiary Bed Day 73.18 69.52 52.7 OP Contact 9.65 2.45 14.24 Level I test 12.88 11.95 27.21 Level II test 24.86 38.28 X-ray 48.45 55.45 76.66 Major OT 55.67 125 Calculation of Manpower Component of Bed Day and OP Contact: 17. This was done by: * Determining the staff involved in IP as well as OP care; - Obtaining the salary devoted towards the staff, * Find out the percentage of time devoted for IP and OP care; * Multiplying the cost per day by percentage of time towards IP and OP care for finding out the total cost of the time devoted; and * Dividing the cost per day devoted towards IP by number of beds in the hospital and OP by number of OPs for OP contact. Calculation of the Equipment component of IP Day and OP Contact: 18. It was assumed that 80% of the time is devoted to IPs and 20% to OPs (collected from expert opinion). Multiplying the total day cost by the percentage of time devoted per IP and OP gave us the total cost per day devoted towards IP and OP. Then the cost by number of beds available in the hospital for IP and number of OPs was divided in order to arrive at the cost of the equipment devoted for their care. 116 Annex 2 Page 9 of 28 Table 8: Cost of Different Equipment included in OP contact and in IP day Bedded Furnishing & Minor Equipment Administrative Hospital Plant Refrigerator and A/C Hospitals Hospital and Furnishing Equipment (generats etc.) Equipment 30 CH IP OP IP OP IP OP IP OP IP OP 30 CH 4.04 0.25 1.31 0.08 0.19 0.012 1.24 0.08 1.19 0.07 50 CH 2.42 0.15 0.78 0.05 0.12 0.007 0.75 0.05 0.71 0.04 100 AH 3.82 0.24 0.81 0.05 0.40 0.025 0.59 0.04 0.96 0.06 200 DH 4.54 0.28 0.85 0.05 0.52 0.032 0.42 0.03 0.76 0.05 250 DH 3.63 0.23 0.68 0.04 0.41 0.026 0.33 0.02 0.6 0.04 300 + DH 2.79 0.17 0.53 0.03 0.32 0.02 0.26 0.02 0.46 0.03 50 MCH 2.42 0.15 0.80 0.05 0.12 0.007 0.75 0.05 0.71 0.04 100 MCH 3.82 0.24 0.82 0.05 0.40 0.025 0.59 0.04 0.98 0.08 50 Pediatrics 2.42 0.15 0.80 0.05 0.12 0.007 0.75 0.05 0.71 0.04 Table 9: Costs at Different Sizes of Secondary Hospitals Components included Bed day OP Level I Level II X-ray OT Contact test test 30 Bedded Communitv Hospitals Man Power (excluding doctors) 47.52 1.38 7.25 18.98 38.98 Building Space 4.53 Minor Equipment & Furnishing 1.32 Hospital Plant 1.24 Refrigerator & AC 1.19 0.07 Lab Equipment (Lab I & II, X-Ray) 0.24 0.48 3.88 Administrative Equipment 0.2 Total 60.04 1.7 7.49 19.46 42.86 50 Bedded Communitv Hospitals _ Man Power (excluding doctors) 46.84 1.49 7.25 18.98 38.98 _ _ Furnishing and Hospital Equipment 2.42 0.15 _ T I T I Building Space 3.76 Minor Equipment & Furnishing 0.79 0.05 Hospital Plant 1.24 0.07 Refrigerator & AC 0.71 0.04 _ _ _ _ _ Lab Equipment (Lab I & II, X-Ray) T 1 0.24 0.48 3.88 T I Administrative Equipment 0.11 0.01 Total 55.87 1.81 7.49 19.46 42.86 | 100 Bedded Area Hospitals Man Power (excluding doctors) 46.12 1.28 9 18 38.98 10.52 Furnishing and Hospital Equipment 3.82 0.24 | Building Space 5.42 _ _ _ _ _ Minor Equipment & Furnishing 0.82 0.05 T T I I Hospital Plant 0.59 0.05 Refrigerator & AC 0.96 0.06 | Lab Equipment (Lab I & II, X-Ray) | _ 0.69 1.39 21.24 | Administrative Equipment 0.4 0.02 _ _ _ _ Total 58.13 1.7 9.69 19.39 60.22 10.52 117 Annex 2 Page 10 of 28 Table 9 (continued) Components included Bed day OP Level I Level II X-ray OT Contact test test l ______________________________ 200 Bedded District Hospitals Man Power (excluding doctors) 75.18 11.51 14.95 29.9 44.07 10.52 Furnishing and Hospital Equipment 4.53 0.28 Building Space 4.79 Minor Equipment & Furnishing 0.85 0.05 Hospital Plant 0.42 0.03 Refrigerator & AC 0.76 0.05 Lab Equipment (Lab I & II, X-Ray) 1.26 2.53 25 Administrative Equipment. 0.52 0.03 Total 87.05 11.95 16.21 32.43 69.07 10.52 250 Bedded DH Man Power (excluding doctors) 74.88 12.56 14.95 29.9 44.07 10.52 Furnishing and Hospital Equipment 3.63 0.23 I Building Space 4.36 Minor Equipment & Funiishing 0.68 0.04 Hospital Plant 0.33 0.02 _ Refrigerator & AC 0.6 0.04 Lab Equipment (Lab I & II, X-Ray) 1.26 2.53 25 Administrative Equipment. 0.41 0.03 Total 84.89 12.92 16.21 32.43 69.07 10.52 300+ Bedded (325) _ Man Power (excluding doctors) 70.94 7.7 14.95 29.9 44.07 10.52 Furnishing and Hospital Equipment 2.79 0.17 l Building Space 3.91 l Minor Equipment & Furnishing 0.53 0.03 l Hospital Plant 0.26 0.02 l Refrigerator & AC 0.46 0.3 Lab Equipment (Lab I & II, X-Ray) 1.26 2.53 25 Administrative Equipment. 0.32 0.02 l Total 79.21 7.97 16.21 32.43 69.07 10.52 50 Bedded MCH l Man Power (excluding doctors) 59.04 2.29 11.4 22.81 39.98 l Furnishing and Hospital Equipment 2.42 0.15 l Building Space 4.29 l Minor Equipment & Furnishing 0.8 0.05 l Hospital Plant 0.74 0.05 l Refrigerator8&AC 0.71 0.04 l Lab Equipment (Lab I & II, X-Ray) 0.24 0.48 3.88 Administrative Equipment. 0.12 0.01 l Total 68.12 2.58 11.64 23.29 42.86 l 100 Bedded MCHI l ManPower(excludingdoctors) 59.63 2.24 16.06 32.11 38.98 10.52 Furnishing and Hospital Equipment 3.82 - 0.24 L_ I_l_L_I Building Space 4.3 | | l l_l _ l Minor Equipment & Fumishing 0.82 0.05 118 Annex 2 Page 11 of 28 Table 9 (continued) Components included Bed day OP Level I Level II X-ray OT Contact test test ll Hospital Plant 0.59 0.04 __ Refrigerator & AC 0.98 0.08 l Lab Equipment (Lab I & la, X-Ray) 0.9 1.39 21.24 Administrative Equipment. 0.4 0.02 l Total 70.54 2.67 16.96 33.5 60.22 10.52 50 Bedded Pediatrics Man Power (excluding doctors) 54.44 1.85 9.65 19.3 38.98 Furnishing and Hospital Equipment 2.42 0.15 Building Space 3.68 Minor Equipment & Funiishing 0.79 0.05 ll Hospital Plant 0.75 0.05 Refrigerator & AC 0.71 0.18 Lab Equipment (Lab I & II, X-Ray) 0.69 1.39 3.88 Administrative Equipment. 0.12 0.01 Total 62.91 2.28 10.34 20.69 42.86 19. Costs which are not included in IP day or OP contact are given below. Table 10: Electro Medical Equipment: (Specifically the Cost of Specialists Equipment; expressed in terms of hours) Type of Hospital Community Area Hospital District Hospital l __________________________ H ospital Cardiologist Equipment 0.19 1.15 2.63 ENT Equipment 0.97 Ophthalmic Equipment 0.49 0.66 Neonatal Equipment 0.75 1.43 AMC 0.23 0.46 4.39 GE 0.022 2.31 General OT 1.11 8.12 29.771 Table 11: Pneumatic, Hydraulic and Sterilization Equipment Community Area Hospital District Hospital Hospital |Cost Per Hour 7.95 8.58 13.44 119 Annex 2 Page 12 of 28 Table 12: Vehicle time (expressed in hours) | Types of Vehicle Community Hospital Area Hospital District Hospital Ambulance _ 3.99 3.99 7.99 Pick Up Jeep 3.42 0 3.42 Total 7.42 3.99 11.42 Table 13: Costs of Specialists' Time (expressed in hours) Specialist Category Cost per hour Civil Surgeon Specialists (Medicine, Surgery, Obst.. & Gyn. Pediatrics, Anesthesia, Orthopedics, Ophthalmology, Cardiology, Pathology, Radiology, 34.54 etc.) Civil Surgeon RMO 34.54 Deputy Civil Surgeon 31.49 Deputy Dental Surgeon 31.49 Civil Asst. Surgeon (Medicine, Surgery, Obst & Gyn., Pediatrics, Anesthesia, Orthopedics, Ophthalmology, Cardiology, Pathology, 28.97 Radiology, ENT, and other category) I Operational Cost 20. These costs mostly include the recurrent expenditure of the hospital. The cost per day could be easily derived from the Table 14 below. The same-table can be used for secondary as well as tertiary level hospital. Table 14: Recurrent Expenditure Total Cost (in Millions) Contingency account (for soaps 0.7 disinfectants etc.) Diet (Patient/Food/Drinks) 19.9 Toilet maintenance and Supplies 1.8 Stationary 4.6 Electricity and Water Bills 4.6 Night duty meal allowance for MOs 0.2 Hospital POL and Servicing 4.4 Incinerator Fuel / Power 0.7 Library materials and Journals 0.58 Total 38.59 Telephone Bills 0.9 Telephone Bills for Consultants 1.1 Total 2 120 Annex 2 Page 13 of 28 Table 15: Final Cost Estimates at Secondary level Hospitals Unit Cost Bed Day 69.52 OP Contact 2.45 Level 1 11.95 Level II 24.86 X-ray 55.45 Major OT 55.67 Tertiary Level HosDitals 21. In order to arrive at different components of the infrastructure at a tertiary level hospital a survey was conducted at Gandhi hospital (1012 bedded), Secunderabad. Based on the information obtained from the survey the unit cost was derived for different components. The data is given in the following tables. The components are: bed day, OP contact, OT Hour, Level I test, Level 11 test etc. The costing procedure for the tertiary level hospital is same as secondary level hospital with the exception that in the case of tertiary level hospital the costs have been presented department wise. A. Estimation of IP Day and OP Contact: 22. The following points were considered for calculating the IP day and OP contact: * Staff (excluding doctors) time was calculated in the same way as secondary level hospital. * First, the total salary of the staff for a each department was found. * The percentage of time spent per day for IP and OP care depending upon the categories of staff was determined. For example some nurses are exclusively meant for IP care where as others are for IP and OP. For those nurses whose time is used for IP as well as OP we assumed that they spend 90% of their time for IP and 10% for OP. * The result was then divided by the number of beds available in each department in order to find out the cost per day per bed. B. Other staff involved in patient care: 23. Under this category, the staff included were security guards (100% IP), other clerical and official staff who work for IP and OP (90% IP, 10% OP), drivers and cleaners (90% IP, 10% OP), Dhobi, Mali and Electrician (90% IP, 10% OP), Cooks (100% IP), Pharmacist and Refractionist (50% IP, 50% OP), Staff on power supply (90% IP, 10% OP). The cost of the above staff for IP and OP care was calculated as follows: 121 Annex 2 Page 14 of 28 * The cost of percentage of time devoted for IP and OP. * All categories of staff time were then added separately (by taking into account the cost of percentage of time). * The total cost of time devoted for IP was divided by the total number of beds to arrive at the cost per bed per day and time devoted per one OP contact by the total number of OPs. C. Estimation of Building Space: 24. Taking cost per square feet as Rs. 300, Life expectancy as 20 years, and 400 square feet per bed, the cost of building space per bed per day was calculated as follows: * Cost per Square feet = Rs. 300/- * Given the life expectancy of 20 years the cost per square feet per year is Rs. 15 * Cost per day per square feet is Rs. 0.041 * Cost per day for 400 square feet is Rs. 16.44 D. Furnishing and Other Equipment: 25. This includes cots, mattresses, bed sheets, saline stands and other accessories in the ward which varyfrom department to department. The cost of ward furniture was calculated asfollows: C The total cost of the equipment was found. * Assuming a life expectancy of 5 years, the total cost was divided by 5 in order to arrive at the cost per year. * Cost per day = Cost Per Year / 365 * Cost per IP day = Cost per day / Number of beds in respective departments. E. Generator & Lifts, Other Electrical Equipment, and Minor Equipment and Furnishing: 26. All the equipment were considered for inpatients only. F. Furnishing and other Equipment for OP: 27. These equipments are exclusively meant for OP Services. * The total cost of these equipment was obtained. * Taking their life expectancy to be 5 years, the cost per year was obtained by dividing the total cost by 5. * Cost per day = cost per year / 365 days * Cost per OP contact = Cost per day / (No of beds in the hospital X 4) 122 Annex 2 Page 15 of 28 28. In tertiary level hospital the Level II tests are done at different departments. They are Biochemistry, Radio Diagnosis, Microbiology, Serology and Pathology. For calculating the cost of Level II test the following components were considered. 1. The cost of equipment time used for the test. 2. The cost of man power involved. 3. Any additional expenditure on x-ray films, different chemicals etc. Table 16: Costs of Different Departments at Tertiary Level Hospitals Salary Component { Bed/Day OP Level I Level II X-Ray l_____ J ___ Contact Test Test Radiology Department (IP) Staff _ 3.5 Machinery Cost 43.16 Operational Cost 30 Total 76.66 Radiology Department (OP) Staff l l l _ 3.5 Machinery Cost T 15.75 Operational Cost l 30 Total l 49.25 Biochemistry Department StaffJ 26.31 Machinery Cost 1.42 Operational Cost 10 Total 37.73 Microbiology Department Staff r 18.67 Machinery Cost 1 49.57 Operational Cost 1 10 Total j 1 78.24 Serology_Department Staff I Machinery Cost | 13.14 Operational Cost | 10 Total 1 23.24 Clinical Pathology Staff r _ 13.14 A Machinery Cost I 9.08 1 1 Operational Cost l l 5 1 _ Total T 1 27.22 l l 123 Annex 2 Page 16 of 28 Table 16 (continued) Salary Component Bed/Day OP Level I Level II X-Ray Contact Test Test Blood Bank I Staff 8.01 ll Machinery Cost 1.28 Operational Cost 5 I Total 14.29 Medicine Staff excluding 24.39 0.68 Doctor Other Staff 14.75 0.39 Building Space 16.44 Furnishing and other 3.38 equipment _ Generator and Lifts 0.01 _ Other Electrical 0.32 Equipment Minor Equipment and 0.04 Furnishing Furnishing and 0.16 Hospital Equipment. OP Block Total 59.29 1.231 Acute Medical Care Staff excluding 94.21 2.08 Doctor I I I I Other Staff 14.75 0.39 Building Space 16.44 Furnishing and other 2.21 equipment Generator and Lifts 0.01 Other Electrical 0.32 Equipment Minor Equipment and 0.04 Furnishing Furnishing and 0.16 Hospital Equipment. OP Block I Total 142.26 2.63 124 Annex 2 Page 17 of 28 Table 16 (continued) Neurology Staff excluding 23.56 0.65 Doctor Other Staff 14.75 0.39 Building Space 16.44 Furnishing and other 2.55 equipment Generator and Lifts 0.01 Other Electrical 0.32 Equipment Minor Equipment and 0.04 Furnishing Furnishing and 0.16 Hospital Equipment. OP Block 11 Total 57.66 1.2 Cardiolo Staff excluding 35.37 0.98 Doctor Other Staff 14.75 0.39 . Building Space 16.44 Furnishing and other 6.94 equipment Generator and Lifts 0.01 Other Electrical 0.32 Equipment Minor Equipment and 0.04 Furnishing 11 Furnishing and 0.16 Hospital Equipment. OP Block Total 73.86 1.53 Dermatolo_ _ r Staff excluding 5.83 13.13 Doctor Other Staff 14.75 0.39 Building Space 16.44 Furnishing and other 2.21 equipment Generator and Lifts 0.01 125 Annex 2 Page 18 of 28 Table 16 (continued) Other Electrical 0.32 Equipment l Minor Equipment and 0.04 Furnishing l Furnishing and 0.16 Hospital Equipment. OP Block l Total 39.6 13.68 l I______ STD I Staff excluding 131.26 3.65 Doctor l Other Staff 14.75 0.39 Building Space 16.44 l Furnishing and other 2.79 equipment l Generator and Lifts 0.01 L l Other Electrical 0.32 Equipment Minor Equipment and 0.04 Furnishing l Furnishing and 0.16 Hospital Equipment. OP Block . _ I Total 165.6 4.2 l______ GE Staff excluding 60.18 1.67 Doctor Other Staff 14.75 0.39 Building Space 16.44 Furnishing and other 2.93 equipment Generator and Lifts 0.01 Other Electrical 0.32 Equipment NMinor Equipment and 0.04 Furnishing Furnishing and 0.16 Hospital Equipment. OP Block Total 94.63 2.22 126 Annex 2 Page 19 of 28 Table 16 (continued) Pediatrics Staff excluding 14.84 0.41 Doctor Other Staff 14.75 0.39 l Building Space 16.44 l Furnishing and other 2.1 Equipment l Generator and Lifts 0.01 l Other Electrical 0.32 Equipment l Minor Equipment and 0.04 Furnishing 11 Furnishing and 0.16 Hospital Equipment. OP Block I Total 48.45 0.96 l_________ Surgical Staff excluding 32.17 0.89 Doctor l Other Staff 14.75 0.39 Building Space 16.44 l Furnishing and other 2.32 Equipment Generator and Lifts 0.01 _ Other Electrical 0.32 Equipment Minor Equipment and 0.04 Furnishing Furnishing and 0.16 Hospital Equipment. OP Block I Total 66.05 1.44 ________ Orthopedics Staff excluding 36.78 1.02 Doctor Other Staff 14.75 0.39 Building Space 16.44 Furnishing and other 2.14 Equipment Generator and Lifts 0.01 127 Annex 2 Page 20 of 28 Table 16 (continued) Salary Component Bed/Day OP Level I Level II X-Ray Contact Test Test Other Electrical 0.32 Equipment Minor Equipment and 0.04 Furnishing Furnishing and 0.16 Hospital Equipment. OP Block Total 70.47 1.571 Urology Staff excluding 60.05 1.67 Doctor Other Staff 14.75 0.39 ___ Building Space 16.44 Furnishing and other 2.67 Equipment Generator and Lifts 0.01 Other Electrical 0.32 Equipment Minor Equipment and 0.04 Furnishing Furmishing and 0.16 Hospital Equipment. OP Block Total 93.28 2.19 ENT Staff excluding 59.05 1.64 Doctor Other Staff 14.75 0.39 Building Space 16.44 Furnishing and other 2.67 Equipment Generator and Lifts 0.01 Other Electrical 0.32 Equipment Minor Equipment and 0.04 Furnishing Furnishing and 0.16 Hospital Equipment. OP Block 128 Annex 2 Page 21 of 28 Table 16 (continued) Salary Component Bed/Day OP Level I Level II X-Ray _ _ lContact Test Test Total 93.28 2.19 Neuro Surgery Staff excluding 39.37 1.09 Doctor Other Staff 14.75 0.39 ____ Building Space 16.44 Furnishing and other 8.2 Equipment Generator and Lifts 0.01 Other Electrical 0.32 Equipment Minor Equipment and 0.04 Furnishing Furnishing and 0.16 Hospital Equipment. OP Block L Total 79.12 1.64 _ Cardiothoracic Staff excluding 34.74 0.97 Doctor Other Staff 14.75 0.39 Building Space 16.44 Furnishing and other 6.92 Equipment Generator and Lifts 0.01 | Other Electrical 0.32 Equipment _ _ _____ Minor Equipment and 0.04 Furnishing _ _ _ _ _ _ Furnishing and 0.16 Hospital Equipment. OP Block I I I I I Total 1 73.22 1 1.52 l 1 Pediatric Sur ery Staff excluding 44.67 1.24 Doctor _ _ _ _ _ _ Other Staff 14.75 0.39 Building Space 16.441 Furnishing and other 2.54 129 Annex 2 Page 22 of 28 Table 16 (continued) Salary Component Bed/Day OP Level I Level II X-Ray Contact Test Test Equipment Generator and Lifts 0.01 Other Electrical 0.32 Equipment Minor Equipment and 0.04 Furnishing Furnishing and 0.16 Hospital Equipment. OP Block Total 78.76 1.79 Dental I Staff excluding 268.75 14.93 Doctor _ _ Other Staff 14.75 0.39 Building Space 16.44 Furnishing and other 1.64 Equipment Generator and Lifts 0.01 Other Electrical 0.32 Equipment . lMinor Equipment and 0.04 Furnishing Furnishing and 0.16 lHospital Equipment. OP Block 11 Total 301.94 15.481 Ophthalmolo WY Staff excluding 134.37 3.73 Doctor . l Other Staff 14.75 0.39 Building Space 16.44 Furnishing and other 2.56 Equipment Generator and Lifts 0.01 Other Electrical 0.32 Equipment Minor Equipment and 0.04 Furnishing Furnishing and _ 0.16 130 Annex 2 Page 23 of 28 Table 16 (continued) Salary Component Bed/Day OP Level I Level H X-Ray I__________ Contact Test Test I Hospital Equipment. OP Block Total 168.49 4.28 Traumatolo Y_ I Staff excluding 134.37 3.73 Doctor ll Other Staff 14.75 0.39 Building Space 16.44 Furnishing and other 9.8 Equipment ll Generator and Lifts 0.01 ll Other Electrical 0.32 Equipment ll Minor Equipment and 0.04 Furnishing Furnishing and 0.16 Hospital Equipment. OP Block I Total 133.33 0.55 _ l '~~~~~~~~lastic Surge Staff excluding 55.77 1.55 Doctor Other Staff 14.75 0.39 Building Space 16.44 Furnishing and other 2.24 Equipment I_I_I_I_I Generator and Lifts 0.01 Other Electrical 0.32 Equipment Minor Equipment and 0.04 Furnishing Furnishing and 0.16 Hospital Equipment. OP Block Total 89.57 2.1 Obst & Gyn I Staff excluding 17.1 0.47 Doctor j _ ____ __ l Other Staff | 14.75 0.39 T | _ I 131 Annex 2 Page 24 of 28 Table 16 (continued) Salary Component Bed/Day OP Level I Level II X-Ray Contact Test Test Building Space 16.44 Furnishing and other 2.15 Equipmentl Generator and Lifts 0.01 Other Electrical 0.32 Equipment Minor Equipment and 0.04 Furnishing Furnishing and 0.16 Hospital Equipment. OP Block Total 50.8 1.02 Family Planning Staff excluding 12.68 0.35 Doctor . - Other Staff 14.75 0.39 Building Space 16.44 Furnishing and other 2.25 Equipment Generator and Lifts 0.01 Other Electrical 0.32 Equipment Minor Equipment and 0.04 Furnishing Furnishing and 0.16 Hospital Equipment. OP Block III I Total 46.48 0.9 I __________________ Paying Cubicles Staff excluding 74.44 Doctor Other Staff 15.14 Building Space 16.44 Furnishing and other 2.62 Equipment Generator and Lifts 0.01 Other Electrical 0.32 Equipment Minor Equipment and 0.04 132 Annex 2 Page 25 of 28 Table 16 (continued) Furnishing and other 1.74 Equipment l Generator and Lifts 0.01 Other Electrical 0.32 Equipment Minor Equipment and 0.04 Furnishing Furnishing and 0.16 Hospital Equipment. OP Block Total 100.01 2.4 1 1 Nephrolo_ Staff excluding 80.1 2.23 Doctor Other Staff 14.75 0.39 Building Space 16.44 Furnishing and other 3.27 Equipment Generator and Lifts 0.01 Other Electrical 0.32 Equipment Minor Equipment and 0.04 Furnishing_ Furnishing and 0.16 Hospital Equipment. OP Block Total 114.93 2.78 Causality Staff (including 2,242 doctors) Building Space 16.44 Furnishing and other 3.38 Equipment Generator and Lifts 0.01 Other Electrical 0.32 Equipment Minor Equipment and 0.04 Furnishing Total 2,262 133 Annex 2 Page 26 of 28 Table 16 (continued) ICcU Staff 225.3 ; Lab Equipment 4.48 Ward Furnishing 176.12 Total 402.9 _ Calculation of Cost of Equipment used in Operation Theater by Different Departments 29. The method applied for arriving at these figures is same as for secondary level hospitals: The cost of the equipment per year is obtained by dividing the total cost of it by the life expectancy of the equipment used. The cost/day and cost/hour is then determined. 134 Annex 2 Page 27 of 28 Table 17: Equipment used by the Specialists for different activities expressed in hours (Not included in IP or OP day) OT Cost Per Hour General 46.72 Dental 16.75 ENT 64.37 Ophthalmology 49.39 Urology' 80.97 Gynecology OT 48.26 Cardio thoracic 425.14 Labor Room 6.48 Neonatal Equipment 166.54 Surgical Equipment Pack 37.58 Specialists Time: 30. In almost all the departments the specialists are professors and assistant professors. Their salary is the same for all the departments. In addition there are also specialists in ICCU. The results have been given in Table 18 below. Table 18: Specialists Costs per Hour l Specialists Cost per hour Professors of all the Departments 34.54 Asst. Professors of all Departments 26.97 Medical officer in ICCU 26.92 Vehicle Hours: 31. There are 2 ambulances and 1 jeep in a tertiary level hospital. Assuming that the life expectancy of the vehicles to be 10 years and working hours as 24 hours the following are the hourly costs of vehicles available in a tertiary level hospital. Table 19: Vehicle Cost per Hour Type of Vehicle Cost per Hour (Rs.) Ambulance 7.99 Jeep 3.42 135 Annex 2 Page 28 of 28 Table 20: The Final Cost Estimates at Tertiary Level Hospital ,_____________________ Unit Cost (Rs.) Bed Day 52.7 OP Contact 14.24 Level I Test 27.21 Level II Test 38.28 X-ray 76.66 Major OT 125 Summary Findinis of Section B 32. The focus of this analysis was to show that substantial cost savings can result if health care services are provided at the lower tiers of the health care system. This is particularly true between the tertiary and first referral/secondary tiers where the range of services provided are similar. Comparisons between secondary and primary tiers are more difficult since the services offered at these two levels are quite different. 33. The summary table shows that except for bed day, where unit costs at tertiary facilities are somewhat lower, unit costs for all categories are considerably lower at the secondary level. For example: In terms of unit costs, the cost of outpatient contact at the tertiary level are almost six times more expensive than at the secondary level, level I tests are twice as expensive at the tertiary level compared to the secondary level, level II tests are 50 percent higher, x-ray costs are 40 percent higher, and major OT is more than twice as expensive as at the secondary level. Costs are higher at the tertiary level because infrastructure costs and some recurrent costs such as buildings and facilities are much higher at the tertiary level. 34. As noted above, it is not possible to compare unit costs between primary and secondary levels since the services provided at the PHCs are preventive in nature, while those at the secondary levels are often more curative. However, some comparisons are possible. These show that unit costs per bed day at the primary and secondary levels are similar, while the costs for outpatient contact and level I tests are lower at the secondary level. Table 21: Final Costs at the PHC, Secondary, and Tertiary Levels (Unit cost: Rs.) PHC Secondary Tertiary Bed Day 73.18 69.52 52.70 OP Contact 9.65 2.45 14.24 Level I test 12.88 11.95 27.21 Level II test X 24.86 38.28 X-ray 48.45 55.45 76.66 Maior OT 55.67 125.00 136 Annex 3 Page 1 of 46 CLINICAL AND DIAGNOSTIC SERVICE NORMS The analysis of cost savings as a result of streamlining and rationalization of service norms is shown in Annex 2. This Annex presents the clinical and service norms at the different tiers of the health system that were developed in each of the four states of Andhra Pradesh, Karnataka, West Bengal and Punjab through a participatory approach and based largely on the major disease burden. They provide examples of how decisions with regard to a basic package of services can be developed at the state level. The basis for rationalizing the range of clinical and diagnostic service norms appropriate for the primary, first referral and tertiary level of health care is based on the burden of disease (BOD) and the evolving epidemiological pattern in each state. Service norms for the four states in this study were arrived at through a consultative and collaborative process involving leading health practitioners and policy-makers from different levels of the health care delivery system, including the private and NGO sectors. Workshops were held to determine a specific set of service norns suitable for each state. These proposed norms were subsequently provided to the Department of Health and Family Welfare (DOHFW) in each state. The DOHFW reviewed the technical norms through a further consultative process and estimated the associated costs of providing these services. These were then reviewed by the Department of Finance to assess the financial implication of providing the package of services. The World Bank provided technical assistance and advice, particularly with regard to cost-effectiveness analyses and analysis of financial implications for the state. The final result was a specific set of service norms for each of the four states, as shown in Tables 1-4 below2: Table 1: Andhra Pradesh Service Norms Surgical Services SECONDARY C..diuon J Proodit Primary Hemth Cart TLery kvtl fadclita Ccm-it Haspi*aJ Arm HaaPtal DWrici Hspitat t. Bmic Iu=iaqu Ir0".a & Draitnq Ircis,On & drainagc Suan Ls CH Spli okin gruh N/A Wound dcorcmdent,m 80psy of skin 2. Truu a eLi RAAc,. &Ldue ead Srrc as PHC 1 S= as cu ua CH + Same u Cli + Lilw uap Scvcw bcnd injur i Support rarer airway: cirruaory nlcigaie & utnauIc muugernca. specialist injuries of Sp.Ua cord Upp¶OnI. -Expioraory Ispoanuomy onhop cd.cian uabailiason or fnacutcs 2 For AP, service norms shown are for primary, first referral and tertiary level facilities. For Karnataka, Punjab and West Bengal, service norms are shown for first referral level facilities. 137 Annex 3 Page 2 of 46 Table 1: Andhra Pradesh Service Norms Coztinued Surgical Services SECONDARY Cealbo I P.oeedure Psitnary Health Care Tertiary level fadlities Communlty Horpitai Aro Ilo pital Disrlt HspCIal 3. Eye lnfcaiots Remo' of foreign Samc u CH Managemnt of coreal Corar grzhsng Community eye care bodses abtralon. uicer: * R0ancal di- progrunntc eatract & glaucOata Vitreous surgery surgery Insra-ceulM foreign bodics 4. EAr Nose & Tbhat Remowea or foreign I & D of perswaiillar & As AH + Laryagoacoic All rwiuuwSg bodies rurophatryrgeil rero,,ai of FB & macmu mgery Epilsas control abscses. ionillccsomy dranage ol IraoioId abscecs. S. Toe c Jaw NA Cooservuave dsuistry am a CH As Ali + me anagen NIA Too251 liehs a) Ilp1FI rfe3spalairy rsifeclsoss Malsage Maaa'age Manaj.. Masrsje hi Lower lesbpratury isalecilao, I reat hroscisilts & plIeussaosasa 1 sCal brostciihis & pneunsonia l seal rclesscld sev%c cise 1 se.a seferred sevcse .ascs c) Aslislas hlmasge asild cases sysaaplomsa- KI.llage n1ild cases symnisilu- ICvi1.4.sJc & tIW.1 ,cV..e LaSCS hlvcNtilgle & tic.l SCVcsC c45sc alically Pelel sevele C asesally ltdcsSveoe cases d) luberculosis Sputum tlesl. X-ray and ESI. Sputum^ csl. X-ay anid ESR. Spunidis icsc, X ray ai,d l:SR Spuruass tesi, X-say amid :Sit, nlalwsge & luaa m5s55! e & nwriag. m;cag ni flan.ge l Ircal c) Ppetl durcs: . 11 Pleura1 aspiratIon btliuxgC & areal s N8i.ssea~.. &: is.aI Mi. c l & IIC.II M.141st & ltAIt - isl rluFal biopsy No No * No Manage & treat niU lironciotosopy No No No Manage &trieal n) (Ol'D Supponsive & symplomnaiec S,,ppoflive & sympiomalic hivemsigate. iianagc & follow-sip lasesris'ale. am mnage & follow-up I5e;sIssalst lim e's fer Isdei: lloncl irels rer_ _ I Is): l'sactiiaries a) ARI Treat & refer if no isnprovement Trea & refer if no ssispfovernent laivesligaie & aanasge investigate &c manage bl IUI Maid symsptOmalo e tealiaaent, Wefer Mlid symplomalic ircalnenl. ocerki ivesiogaie & rmanzge invesrlgale & msanage if si a IMp1o0e 5ew ilt 'o stspu osetn c) Chdidhood asthma c i Ito tespifalory ditsess. sianage 11iio setp* atuoy distress. 1a1sasgc 1i no oespsisaury dastress. nsanage It sacs respialrosy dlsltess. massage si allerg5ic brouchntis 15 d) Tulctculaosis ' Suspected cases to be referred Woshout lespafatory disiress: Investopae &isar Invsestigate lo teal .because of no psus) masage t O .r Arugswu of awfiArs&ssv eqmo.-.& pan a.l,, s.ur V.d.-v 1a lWpsme- Table 2: Karnataka Service Norms (continued) I (c) Medical conditions & pmcedures (cont"l) Cofitdoulhocedume | Communiny hospital Community hospital Sub-district hospital Distdel hospital 30 beds 50 beds 100 bedls >2511 Ueds a) rcedures 11 Pericaidial 1a1) No Nu YVs .t' :Ii IUIII `g Cs tp.lu IaII) oil Forewil body renmoval Do simple cases Do sample cases Do sinple e,mes Vcs (perforama) ii) Luimbhar punicture Yes (perform) Yes (perform) Yes (pellto0ail Yes (pelforzal) iv) Pliysioalierapy No No V es Yes bI Malimnancy / Neoplasm Symptomaie itreatment & refer Sympomatic Ireatment h refer Syimaplomalic Ireatment & refer Symptomatic treatmieni & refer cj Rheumlialic fever including Treal liical treat I e(al prilphyl;axes 0 d) Essential hypertension ltreai tIrcat Treat hI {eal el Maliginanit hypertcilsioln Re:fer RJCr Hefei Illeai fn Stable/unstabic/post myo- Refer R(erel Refer Refer tu tertiary level if Iaecessiry - cardial infactilooi angaaa 1j) Actite mnyocardial infarction lreat & manatge I'reat & marnage T reat & Manaage I rCJt & Illallage hl RlaC1imnatic heart diseas e Rel;r Depending on advice, Refer Depeaidiio on advice, Reter l)c1amaidg oin advice, Treal Refcr if necesary to i tili plael.l i ll,wv ills .t se oiaidaii y level tt.llow III) atl set oidary level Ilaluw IaI) .in sca011thl y levl tatli tlevel D ealeildill; oil advice. Iitlow upa at secoodiry level il (Congenital heant disease Symptonmatic treatment and refer Symplomalic treatment and refer Symptomatic treatment and refer Symplomalac treatimlent amid iefer Is) terilary level jl ctt'1: Syaaa1amotaaatmc Uceattaict aimd rfer Syafapmploalaat tecallallemi aiud refcr Symaplotlloaltc ttCetjlaeill allnd r*er 'icat I lalecessamy refer to t_rtiary level > k) toovolsions includinu Treat &emaanage fIreat &#manage Treat Liamaase Treatc maianage epilpsy _ , X Table 2: Karnataka Service Norms (conuinued) I (c) Medical condidons & pncedumts (cont'l) Condiduall"rocedum, Comimunity hosptial Comemunity hospital Sub-district hospital District hospital 30 bcds 50 beds 1011 beds >25tl Ilcdis I) Cioim Inwilal ic.aiim.clgl glaid $0.:( Insisal icill. will ilia ,lef,d niiamal ij,:.iw,w .ud cier Initial I A1c1ia, --ll 41.II"' 5S If li0 t IIlp(VCltl.:l., IAt,:i to te0 laly ul) PoiOsingISR Treat Treat TIca I t inl:I1cepiallils Sy niplotlmallc treamenit Syrinplolianlc uleaumcilt Synpmolilaatic llailaona Sy lXlliosliJIc llcatiililai o) Nleiniigilis Syniptomatic ireatineng Symptoimialic Irealnienl Symploalialic iucailticia Reter if Syuitillolitilie tlic.ill KeRel eif complicatiolb complicatiols * Nrjer dwiliic hew,t Jiseaws touea frt.,n , e-el I (d) Medical conditions & pmceduNes (conl'd) .oudiilioaIPwmecdw Comt unity hospital C9(omamnhuanity 1ospitil f Sub-districl hospital | District hospital 30 ieds 50 bOedsj I Otl bads :>2511 lIells 1 lilad injuries ,uliial ireatmenti Obs.crvC & refer if Initial Ireaiittctil Observe & rteer if Invesligaitc & mmilai:e Investigate & milanagc llecC%.a§y lCkcss llY C ( V accidtents aimagiI t,elicielit. Observe & refeii l liam ,l liel leail Obselrve & lefic of tim sctigA.i & imidalage Iliv.Sii&JW & iIli;id (u Ileessary lc5S.ll__ _ e) I'sychoses * I real. niimor caxs, refer olhers -le.il millitor cases, refer otlers I real minlor caws. iefer others Itreal mio cases, Iier others Neurosis rceal minor cases. rcier others treat minlor cases, rcfer others hIeat nfinof cases. wefer otiers reat nmitor cases, trer olels -cs ) Leaprosy *' neat k manage neal & manage freat & manage [rest 8 nage XpAf Table 2: Karnataka Service Norms (continueul) I (d) Mcdical condlitions & pmcetluws (conl'd) (:osidiiioi/*nicctldun.* Cnantmnity hspibiCl ('ummneunity lIoslNita; Sulb-diblrici hospitkal D)istricl htusipital 30 bLds 50 Ieds l0l1 bels >2511 lledls I I'eaaagaIaa;ia> miaii ireaitacsi, &L i:l ei IuIiz.11Cs scainen. & icfei I lea i) Collagen diaeascs Itcler (clcr Itler Ii,vcssi.gamc & c I Slia allergy rica f[reat I reat I'leal ) Sarcoidosis R.cfe Rrfl Rtefer isvestigatle & eal :) Psoriasis [real [rial I real I'seai STDs rieat [Ical lIeal I ical mi) Illood screening Yes Yes Y es Yes I) IIIV leSing No No YeS (pedIoiaii Yes Ilpellorel) il Gasroitesimnal bleedinS Iltesuscitalion & conservativc IResusci.ation & conservative i)lagnosilc aalvesiagaaosal & treaiteiit Iaadoscopy. trcat & oialiage ianaegentni ir bleeding is lanagemeni if bleeding is inialinmuna Rel.rci ifecsaoy naminum (AHiis 100- 200.iiii will .boii 100-2001n1l) with good vital ;xood vital signs If bleeding is nioo. isgii 1I bluedmig is mioie ihan 50s1s rhai. S Osi. tefis for enidoscopy icier 1o1 enidoscopy a) (iGaomi-ailnrsiis & dyseiirely lieat & 1n.:maje I'leai & inmis;Cs 1'reat & maiage Ireal & maliage 1- liepatilts Less than onc nmonth duraison: ueat i-ess ilan one month: treat with More than osic ilinhit, atavesiagale & More thasi one ntstoll. Invesia;ice & wiid steroids siefolds tC3 lealt 3 Ilepatme coma itiate Ireatment & lefer lIniiate tieatislent & refer invesligalc. reat & nianagC Ilivesligaie. lieai J: lianage . A Amocbiasis [real & manage rfeal & nianage [ & Inatmage f teat & manage t X. q&i. .Vjas&5 Jrqug. ru guailr.eS, lqt.arinu I.rjsl _r A,j/ uns. ~~r Iter a. knu Ies.lfws.r .a.u*rewv_ *uerw. Table 2: Karnataka Service Norms (continued) I (e) Mcdical conditions & glnocttIuais (cotI'd) tt4j11hion/0 icedUm 1 (UMnUUtY h1spibi lunsutlunitm l osispitl Sab-ilbafictlms hspit;al D)istrict lhospital 30 licds 50 beds 101l beIds >2511 4lles a) (aukceysilt.t S ym,plonlalimc nipInialiIcii refcr S ymuiptomiauic tt.1.i1IIIc,ei & scrct Iflvesi i ; 5 O.i investigalc & Iw.a P I'anicreattils flgzio.licioliailic licalment & recfr ymnploinal*ac sicaIealni & ficir lii sligal I AIa.ig. si11&uage 1ol, cile)ic Clidascop)y of5 sla!:'VIV . __ fer lo I.: ia:1:1 1:c.:l I ('rhosms ynmplonlalic treatment & refer ymnplomatic Irealment & refer . Invesisgate & 1ailage tlnlesnag.aie S ni.iia.l, c iI _ ...... __ ....... . . _ ,~~~~~~~~~~~~~~~~oulplixcalIls111 I) Abdominal lappimg Yes Yes Yes Ycs ui) lvet biopsy No %to No Yes co iii) l bte-oplbc endoscopy Nu No Yes Yes ivl llolt m;tritow ;tswsy O Y\s Yes D ilabetes Mlanage *lanage Nlanage Manage with complicalloaas liff yonpiornatic iteatncii & refic syuipuoiaaic Irealtent 1 refer Invesilg3aie & mawaage iiiVeSii1ale &: InaniIage I Acute aaeplra;lis Manage if no comiplicauioln Misuage if no complicatlon livestigale & Lai.iiiage 3iieshigme & manage )Itgetwise: ief,l )IlM.:wise iefcs 1 Nephrotic syndtrome mtitale lratnient & imanage for one alinate ltcalmelil & manage for one nvesiagale &; mlaiu.e Iavesilgale &: iaiaage iaonilh If disease pessists. refer amadth i'disease persists. reret I Renal failure stablizae & rrer iabIliee & efcr Slabaliae &: alee Invesigale aind ianag.ge * aSililg P':11<411C.6 1;1 YlIos it C111 04 Refeslz^ IVs Anaeia lanage & lheat Refew if no Manage & leat Rcefr if no tnvesugatc alnd uianate severe lIvesuigate and nisai:ge seveic S imnplovement impaovemient inaemia Refcr if necessaiy. nlaemia Refer il ISccssi_jy. I.Culacamia Rtefcr suspect cases tefer suspecl cases Investigate & mailage Refet if no Invesiigaic & maanage Refer if no nigH aiemeet a ~mpluvticnt t lbabsssaemia Liivc blood Iranisfusion and refer jive blood iransfusion and refer I eat refer [hcal & tefcO Table 2: Karnataka Service Norms (continued) 2 (a) Surgical condidons & picedurms .o"ditIow/lPmeedume Conmatyoni spital ('omnsunity hospital Sub-district hospital Disinet hospital 30 beds SO beds 100 bedls >250 lieds ,:1 Abdomnbal injuries stabilize & rehcr Stabilizc h refel Manage Mlanage (cilnersesicy) ) Abdominal suwgeies efer Ycs (if anaesthetist available) Yes Yes (planned) | | g) Appendectomy o Opimonal Yes Ycs I) llaecaorrhioids Cfer lptional (if anaesthetist available) Maniage Manage -) Anal rissure lanage danage Manage Manage A cutc retcntion of utmi ni athlelense frert -atlicirise & refer NIaelage olallage I Circumcision Yes Ycs Yes Yes p llydrocele Yes Yes Yes Yes a) I cinmorshaphy tefer Yes Yes Yes I1 Irethifal dlilaation tele| Refer Ycs Yes In Kuptule of bladder & urelhra tefer tefer Refer Manage i) Major urological procedures Refer Rerer Reler Manage if nccessary I) IFactuted spine labilize & refer Slabiliz: & refer Refer if necessary NI1ina.iae Ophthalmic procedures * tleioval of forcoin bodies teimioval of forcign bodies Management of coineal abertation, MIanagemient of comneal abecration, die[ & cala ici milce, & calaiaet. and glaucoma i) Dental surgery onscrvative dentistry, sooth onservative dentistry tooth 0onse,vatave dentistry, toolt I tyIypes of exiracioiis. ilipaiciions xtraction. all types of fillings xlraction. all types or fillings xlraction. all iypes of rillings X j Iw fraciures . .. i. _ ..... Table 2: Karnataka Service Norms (continued) I (e) Medical condidons & pmcedusts (cont'l) .onddtioo/Pcedum | Communaity hosgital Comiually hospital Suldistrice lhospital Distriet hospital 30 beds 50 beds lOI bds >25 tllcl I (I) Neonatal Im Nornal New Born Mansage anage Manage Manage ) 1'rcniaiurc >2kg \lanage Refer if any complicalions lanatge Rcfes at any complications NMaliage Nlaalage I lPeaialure c 2 kg tefer tRelf Mliaage MNanage J) aundice withimt 24 hours. Refer teter _ nvestigate & manage lnvestigaic & maniage o Co (onvulsions niallae trcatnhcug and reter if not itinale lieatmen and refer If not h)aaglose & hc.t D):ag,iosc & tecal lonitolled ,onuolled 2 (a) Surgical con(litions & pinedalures Condition/Pireedutr Community hospital Community hospital Suib-districl hospital District hospital 30 beds 50 beds 101 beds >25tl flcs ) Abscess including breast & incision & diainage Incision & drairmge Incision & drama.age Incision & diamige Q peuianal W1 W,riad debrideaiuitu Sigiitc wounds Simple wounlds Major & comiposind wounds lajor & compound wounds _j lrauma & life support Rcsusestate, stabilize L rcfcr Resuscualta stabilize & refer Invesfigaie & manage. if needed reter liivesaigaie & naisae maaW I Miuisculo-skeletal *imple. minage Conplicated: iniple managc Complicated. serer anag.c sitfer ifneccesiay lianage Table 2: Karnataka Service Norms (con,itiued) 2 (b) Surgical conditions & pmccslunts 'n08dilion/1'n ceumir (:Comninmunity hospit Al | Cunasuniay bospital Sub-delisricl liospilal DIisirict hospiital ,30 beds 50 beds I101) bels >250 llels I Gasl o-Eimterology Refer llefe: Signmoidoscopy oesophago -gs s 4 " " op n (emiilostoliy) 1 nIs- ioscopy I Anaesuhcsrology [arc of airway Cquipmeni ac of airway equipmeni Managmunesi of gcneral &: regional M.ailgemaicii of gCiIeIJi rciponal M nagemnent of genetal & Fegional inaestlicsia .inacsillesia il' Possible 2 (cj 'Ilaauull cic saargzcy ) Simple fraclure ribs sanage Manaj e Manage Manage E Inicrcosial under-waget seal Yes Yes Yes Yes draisnDge. I lail chest Clksuscilage & rferr Iesuscilall & refer tesruscliaie & refcr Manage witli vcntilatory suppOll ) Mediasilnal injury Iltc5ssclatec & refer Rcstesscilagc & refer Resuscliale &icer Nlanage. refer if 111r.acolollmy Iieedcd I Acute empyeina laniage by innercosial drainage lanage by ICD Manage by l('D Manage by IlCI) ICD) ) Chronic cimpycman (dl *cel It(efer Kib resectiol, & drainage Refer if decalcificalio,l presen. I Thoracotoany Yes, only in emergency Yes, only in emergency iorth cnrcrecy & elective hoils serijlency & cticIIvc Ij Oiler CICCtive Choracic Refer fecl.er Refer l;ilase, rcfer it necessary plvioCeilarrS 9 _t F oreign b odie5ms iiiC ttc(cf R(efer iltek anage,. efer if 1icess,Aly ocjioliagus iind _ > tracho-bronchial lice * ' , . -~~~~~~~~~~~~~~~~~~~~~~~~~~~to Table 2: Karnataka Service Norms (continued) 2 (t): Ear, Nose & Tlnasua o,dtion/Pmcedume Community hospital Commtunity liaspital Sulb-district hospitall District hospital 30 beds 50 beds 100) belis >2511 lleds Ioreagn bodies in nose & Noserenovec. Lar refer Nose h ear. remoiuvc Manage 1l LN I wpica;.iso available Manage cars U' ) Episiaxis Manage lianage M anage anase I l'entonsillat abscess Kefcr NtanagM aagc Manaac I\ Tonsallectoasay {Cfefr R elar Niiage Nla c I Tracheiostomy Yes (perftorm an emergency) Yes (perform in emergency) Y es Ycs ) Mastoid abscess Iterel M;allat;'e if LN I sp)>xihSl avallalle |Malat;ig 2 le): Neuusurgety a llead bIjury *ntiaie. observe refter anag.. saabilize, 4erl faa aadvanced Manage. %laboluc. aefer for advaned Managc stabilze reef * ~ ~ ~ ~ ~ ~ ~ ~ un6mn U.laelcl idvante enuleee..kiclV.-fnm:r.w n.th It,In. rdJIt 4WwJ* r t-w.. t.h- f. De'kt H.j t.ae l-.war 1'.teI N.J.' he,e It, nn, Itrd . ,, a I ,. ,d0 , i "s fl,*4.. n104*frrn i -jp. -Is, Table 2: Karnataka Service Norms (continued) 3.: Obsittaics & Cynaccology otioftPrucedutc Community hospital Cormmuity hospital | Sulbdistrict hospital District hospital 30 Ix ds SO bed$ I Oitl beds >2511 lleds ) hligh tlsk ptegnancies Early diagnosis & efer Refer it necessary Investigate & aii itg if possible Manage including APII. PET. eclanipsia ) I pasiolmy RKpair Repair Repair Repir1 I ( rana0otomy Yes y.es Yes Yes (ldead 4o31tus. sydIrocMCClilus ) IJ I.ow forceps delivery |'es Yes Yes Yhes : Vacuteit cxtxiiwoon Yes Yes Ycs Yes - Dreach delivery lefcr Rcfer if coniplicated Mjanagc .Maalage M Manual removal of placenta Rtefer MtInage (if anaesilrelosi availableJ Manage %lanage 1) Inversion of ihe uterus Refer Itefer IRefer if complicated Manage I Rupiure of the uterus Rlefe lefcr Mant1age Manage I Thcalened or incosilpleic Conservative D&C onaservallve D&C Cowwcvaliv: l)&C Coilse(vative D&C abtirlitnin I Ruptuted ecropic piegpiancy Stabilige & reler itabinlue L. refe, Lapagolumy Iapih)0iitury I lFcnalC sterilizaton. IIJD Yes Arrangc special progtammes Yes Arrange special prograuimses )Yes Arramge 5special pliogramnes Yes Aiiange spCcial piogiamnies all Laplroscopic stcrilizaaaon Yes Ariange specal programmes Yes Asrange special programames Yes Airani;e silecial prograinmies Yes Armange special pioguainries ) Menstiual irregularities Refer kRcf O)aliaosis & n.iimagelikerul Diagnosis & inaswagemeut *) aeil'iity ltRefer Rtefel Diagnosis &: ranagenment t)eagnosis & nina2cnlienrl *) Planned surplay or efer ltefcr Manage Manage prculapscd U1. DIJIi etc ________1__ -8 Ew Table 2: Karnataka Service Norms (continued) 3.: Obstelrics & Cynaccology .oadisiufin/lucedum (Community hospital Comimtunity hospital Sub-district hoslitial District hospital 30 hds 50 hcds IOil betis >2511 Ileth ) (.:evIcal crossoll Reter Rcefr I'AP snca., bwj)p,) IAP smcai. bumjsy, & *mnulagc P I 0 anage & refer Nialiage & rer elaIeaeR Malignancy I Neoplasm Refer for diagnosis; o italiary level tefe (oa diagnosis; to tertiary level OIragnosas Rcf.r to Icuitary level for Diagnosis & nranagemirenIt Rcler So fr. surgery & radiotherapy of stijrely & ladiothelapy sawjcey & radiolheu.py lesitary level for suigery & .adiolthelapy 3 colpose hytueroscopy itucr efe r .t1ul Ye% I1lCIomll) .! Reconsiructive surgery Refe Rr _. . Macrn Msage If possIble ~ S baN 155 Annex 3 Page 20 of 46 Table 2: Karnataka Service Norms (continued) 4 (a) : Diagnostic services Specialty Tests Communitv Sub- Dist- I Hospitaul Dist rict beds: |30 50 100 >'250 Clinical Padholoey | | | a) Haemamiogy Blood haemoizobin Yes Yes Yes Yes | WBC. Dilfferentiats. ESR. BT S CT Yes Yes Yes Yes Perionerai blooct smear No No Yes |Yes Absolute eosinoonil count No\ Yes | Yes Yes7 Platelet count and PTT No No Yes Yes Clot retraction ntme | . | | * Yes PCV j I , Yes Yes Blood Grouo and Rh typing I Yes Yes j Yes Yes Blood smear for mataria i Yes Yes Yes Yes microfilaria - e I|Retcuiocvte count Yes Yes LE cell phenomenon Yes Blood bank (cross matching) HIV. - Yes bA H'Ag, VDRL. malaria Daracytes b) Urine anaiysis |Unne for sugar, albumm. micro. bile Yes Yes Yes Yes sait and bihrubin.pi rment Urine for ketone bodies | Yes Yes | Specific graviry and pH Yes Yes c) Stool analysis For parasites tova and cvstsl Yes Yes Yes Yes or occut blood . Yes Yes Hanging drop tX Vib Cholerai Yes Yes Yes Yes d) Semen ana*vsts Morphology, reaction and count | * Yes Yes ) CSF anats Yes Yes f) Aspirated fluid anaisS's (Pleural. peritoneal. etc. Cell count Yes Yes & sedimennon cytology malignanr ceils. Pihology I a) PAP smear | | * | * Yes Yes b) FNAC & guides Yes aspur teo fluids c) Sputum cvuology Malignant cells | . | e 156 Annex 3 Page 21 of 46 Table 2: Karnataka Service Norms (continued) 4 (b) Diagnosric services (contd) Specialty - Tests Communiry Sub- Dist- Hospital Dist rict beds: 30 50 100 >250 Hbematooyaematoloer Ye a) Bone marrow aspiration 1 | * |_*_j_._Yes b) Immuno haematolou! | * | Yes c) Coasulation disoraer | | * | 1 Yes d) Sickle ceil anaemia | *_|_-_|_-_|_Yes - e) Thalassaemia | I ' - Yes Hist_patholo_y of all 1 _ . _ _ Yes specimens : Mi_Tbioloty Direct smear exam AFB. ZN. KLB) Yes Yes Yes Yes CIS of ail specimens (blood. urine. Yes pus. etc.) I Direct exam of specimen for funyal Yes Yes infections Bacter:oiogicai anaivsts of water es Stooi culture or V Cholea Yes Preparation and .upply of proper Ys transport mecia for all peripneral levels (VR. Cary Blair) serIloy DRL Ys Yes Yes Yes WIDAL -Yes Yes Yes Yes Also: C-Reactive protein. RA Yes Yes Yes Brucelia. Weilfelix. Coombs test . * Yes HbsAg tSIV. Preg.test. ANA and DNA I Biochenttsnv Blood sugar, BUN. urea. creatinine Yes Yes Yes totai and direct bilirubin Y Y CSF anaivsis (protein & sugarl - Yes Yes LFT. S. cholesterol. GTT. lipid | * Yes profile I _ - - Blood gas analvsis * Yes CPK. CPK-MB. SGOT. SGPT. Yes Serum electrolytes. acid phosphatase. alk.phosphatase. lithium carbonate level in blood Estimation of residual chlonne in Yes Yes Yes Yes dnnkine water at all levels 157 Annex 3 Page 22 of 46 Table 2: Karnataka Service Norms (continued) 4 (c) Diagnosric services (cont'd) Speciairv Tests Communirv Sub- Dist- I I Dist net _________________ beds: .30 50 100 >2j4 0 Cazdiac invesnearion | a) Stress - test system Yes | b) E. C.G. Yes Yes Yes Yes | Ophthaimoioey Snellen's Test Chart Yes Yes | Yes| Yes Audiometet 1 Yes Radiology Chest. sKull. PNS. bones. spine. KUB Yes Yes Yes Yes | and abdomen Con,sct rndiology Barium swallow. barium meal. Yes barium enema. cholecvstogram. IVP. HSG. siaioeram. sinoeram. myeio6raphy. an;toeraphv _ _ Endoscopy OesoDnagus. stomacn. colon. Yes duodenum Y Broncnmal tree and CVStOSCODV . Yes Sigmoidoscopy . Yes Yes Ultmsonographv Ob.Gv. and abdomen Dortable Yes LinearuSectoral Ob.Gv. abdomen - Yes Yes ._________ .__ __ I LOb.Gv. abdomen A: cardiac | Yes 1. blood ei aolo estzmauo,e. cidemecal analavu of .a,,r rforfluondes, diagroos of KFD. oroa. .E anfeenon, CS of Tub. bacilie a idtflm ltvei Foealines tor collecwno of appropriae tpertmelJ,,d Jltd'ipar:dmet to rite rie,ni lob. in a mefilodwcol u o should be av-aliable ot all ene rs. Table 3: Punjab Service Norms 1. Diseases of Central Nervous System Diseases CHCs Sul-Divisioal tllspijats Distict Level llospitals *) Coaa/ccrebro Maintain vital signs & airway (Anibu bag. oxygen). Same as CIIC Carry on ireatimmen.1 4nd sm,mgical vasculat accideiit Exclude diabetes & renal failurc deconipressiomt Ilasc facilities Ior tracheusioomy & larys ;osc pc tin mitubatiomi. If mcpUIMed1 lmlvcti%ulgac aild .u.i1imiiu ljxchide hlamd iujuiy by doing X-ray skull. di.ignosis ul (V accideni Brain Huisour Staut medical decouipressioin ireatment cases tfcr tor te miiamy level it utdicated Treai conia case caused by poisoniiig But if coina does not improve. refur to District hospital W b) Meningitis Iniiiate symnpbonlatic ireatueil and refer to distuict hospital for Do CSF examination slal Itreatment. To do culture and sensilivity test. luttlher iuvesiigation But if no improvement afier 48 bours, diagnose asid treat icfer to District hispl c) Epilepsy hiitiate medical tieatmentand first aid treatment, rcfer to District Same as Cl IC M1aiiage, investigate, refer to teniary hospital for funher investigation levcl for EEG and surgery if reqnliicrl d) I'olio anud other Ililialc medical reatmnenl. mainiain vital signs. remove discomfort. Saine as CIIC InveNtigatc anid tie.it acute flaccid Rlefer u l)isiiict bospital for (CSF examinalion and stool culture. paralysis 2. Psychialric Ailmenis a) Psychotic patients Start crisis munagmecnt & refCr to psychiatrist At District hospilal Sallie as CHiC Treat h) Depression & Sedatc anid refer to psychiatrist and follow up action on Same as CIIC Regular psychiatrlc tre.italiint ailhed disoldels psychiitis s adv icc. cl Addictioiu piobleins Scdate it patient is sliow vil a witdrawal syimptoimi, t1hea refer to Saiiie CI IC I lovide legiilal licatileal Distiici hospital dl Mestal Syniptomatic trcatlent antd coulnselling, and lcif% to psychiatrist Sate as C*IIC Provide r(eitar ircalililnl retardation anid/or neumphysician. Table 3: Punjab Service Norms (continued) 3. Respiratory Diseases Diseases CiICs Sub-DivisbOnal Iu13pitals Distict Level . llo~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~1spzit;als a) llrosiciial asuhna Initiate mncdical tlcatmeat, but of iao icdef. send to District hospital Same as (IlIC Iivesilgatc & a,.:. fin fiuriller invasligation ,) (I lIm)Lm miid luw.e lmtIilaI;ec iiidical Iieti t & sy 1ipmJoCaaaamamm1 Ir Ajamueu1 Smauel ;2s ( i l( Iiivij S.11 & 'a S C respratory tract Observe ror 48 hours, but ir no ielief, tefer to Distract hospital. I infectionl. \ c) Tuberculosis Investigate by sputum examination and/or X-ray chest. Same as CHC Investigate & Ireat Initiate anti-tuberculosis treatment. Review alter 15 days; but if no relief. icfer to D)istiLt lIospital. (NID. I)UPiIUal;Un of fxahics wVad equipamcsma pmrriJed under NuatOnal Tit Ps nalule sU kld be asidCed ) d) Lung cacer Initiate symptomatic treatmcnt & other supportive Iterapy, and Same as CHC Sanme as CHIC refer to lecriary level institution c) Plural effusion Iniliate symplonlauic trecatnent do X-ray chcst & diagaaostic tap. Salle as Cl IC 'lo coifiriaa diag nosis stalt ticanteni, if sk.ul Itreatmea & rcfer to district hospltal, to confirmn diagnosis malignana Fefer lo terliary level hospilal n Poisonous gas Start first aid trealmen,l give respir2tory support Sallie as CIIC Sallie atS (Ctc inhalation SI lForeign boy Give fimst aid, ficlm to District hospital wli.ae : lmlomcoscopm c SautleI as CIR SamiC .is ClIIC I idhalatmaua facilities are available t P. Cs C N Table 3: Punjab Service Norms (continued) 4. Cardio Vascular Diseases Dieasees CHCs Sub-Divisional llospilals District Level _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ __ _ ______ospitals _ a) llyperwclasaon Initiate medical Ircranene of maId auid mnoderalc hypcnension. Rcfer lnvesliga ue aaud ticai lnvcs,agate asnd1 ii,w to sub-divisional Icvcl for treatment of acceleraied hypenension bl Coronary articry Initiate medical ireaiment on clinical suspicion of disease, refer to Sauie as ClIC Inivesag.aie & aiaaniain iherapy Rcefr to diseases distaict liospital Fr., oilicr iesi! eg tread-iiltl bircss tertiary level lto i i Joe 1aciivc iiiturveilitin, if i c(juII cJ (el Colu 0.11) "aSiiaphta) xIJi;iopt;ast) cl and by-pass H7N _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ __ stirgery I; c) Myocwrdial Initiate trestmenm by sedation. vasodilator. thrombolytic therapy Manage myocagdial infarctioan Investit.ie anid lre.i infarction (SIFrptokinasC). If within 24 hours lhere is no improvement or thert If evidence of heact block. refer lo ; re cuaiIl,hctao,is. a l.r to suib,di vb,ol.al ICee .)sa,act laaap..ld fir po.uc. i1 f.r dl Congestive heart niiiate trcaiiient and observe If deconipensalio n persists, rcler tu Same as CIJ(' Investigate anid itrea failure D)isirict hospilal c Actile pulmtionary Initiate Ircatment with broicho dilator. diutetics, oxygun If no Same as C1IC Iavestigate aiid tueit oedeainacardiac inkpwuvenent, Tefer to district hospital. asrhnia n Rheumatic fcver Slarl initial medical Irealmenl, and refer to district level for Same as CHC bivestigate and treat and rheumatic confirmation of diagnosis. heart disease g) Dysrihymia Maiiniain vital signs, and refer stable cases to sub-divisional hospital Medical trealment including Medical ateati ient including .rO cardioversion (with defibrillator). defibrillation defibrillation h) Shock Initiate ireatment, maintain vital signs and functioins. IV fluids, Sanme as CIIC Investigatc aii il eat uiiygen. aml obscive If n. iipiuiverment within reasonable time. ref;r lo DLsatiict losptiIl tr> oJ PX Table 3: Punjab Service Norms (continued) 5. CGaset Inlcstinal Diseases I)letat DcIICs Sub-Divisional Iluspitar ls District Levdl _________________________________________________________________________ ___________________________ _________ ________________ llo spiita ls a) GtAsut-Iniesisnel Star nwedical ireatment and suppoiatve therapy If no improvement Same ss ( 'iC Investigate and nic.ai bleedin g and ulcer vadiln reasonable imei refer to District level lospital for endoscopit invesligatlion b) Jaundice /I epalilis Clinically diagnose and initiate medical trcatment Refer so Diusict Same as CHC Investigate and Ireat hospital tor investigation, especially if patient is in coma cj GasitoenteritisI Start oral rehydration iherapy Syslemic antibiotics if indicated Sagile as CIIC Invcsiigtdi .rrd ircai Dehydration Mtanage G(rades I & 2 dehydratioll If cundition does nol improve. or if thele is supiciron of cholera or otli epideiric disca.e, case should be immedwiely reletred to District hospiial dl Amoebic inrection listestiral iirfcscioin to be investigated & treated If liver Investigate and Ireal Investigatc and Ireat i- illvoilveilleim stispie le rcI rt in Si ll i D rblial I p ilpaial fot ultrasournd scan 6. Renal Disonicis DISeCa11 CiiCs Sul-livisional lloslritals District l.ecvl . ~~~~~~~~~~~~~~~~~~~~~~lloslitals a) Urinaty itact Initiate symptomatic treatment and rcefer o Disitict hospital for Same as ClIt Ilivestigate aiod lleal infection further investigation b) liacmaluatri Synaptoinatic tieamient (alkaliser, pain reliever cic) and investigate. Sanite as CIIC Inivesigalc asid isICt If caluse is riot idenlified, refer to Disitric hospital d) Acute and chronic Maintalin vital sigiss, and refer to dialysis facility (at iertiary level) Samile as CI*IC liveslig.riC dId tre;t by peraioneal renal failure dialysis Refer s ocitiary level for hlacituodrilysis tlQ S)> Arthritis StarI palliativa therapy, refer lo Disirict llospiial for investigation |Same as CHC | invesigatic arid Ireat (eg physiotherapy) o astnd pbyVsiolherapy. I ,_X Table 3: Punjab Service Norms (continued) 7. 1laematology Disbea CIICs Sub-Divisional lluspiitls District level ~~~~~~~~~~~~~~~~~I Iosjaitals _ _ _ _ _ _ _ a) Anaceia I Treat nuitrilional anaemia. Sante as CIIC Invesisgate alad Ireat Infestation Treat worms. 11 no rcspolse. refer 10 D)istrict hospital for anvesilgallon b) L.eukacmia and RE Gavc symplpomatic tealmenlt, and refer lo Disirict hospital for Same as CIIC Ilivesligatc amid licat system disorder invesfigalion c) llleeding disorder Trcat anaemia and give haemostatic agenis Same as CIIC aimvestigate aaad llcal Reeft to Disirict hospital for investigatioln 8. Infecfons Dlseases CliCs Sub-Divisional llospitals Disirict tcvcl Hlospitals a) Mala ia Diagnose and ireat malaria. If complications develop, or fever does Sante as CI IC investigate amid Itrat not respond. or G-G-PD deficiency is suspecied, the tefer cases to Distuict hospital for invesligalion b) srDs Give Ircalnit for Ile symploms Same as CIIC investigate amid trcat, If no re±sponsc, refer to District hospital. c) LpqroSy Give Ireatment for the syniplotsms; but if no response, refetr o Sallie as CIIC livesiijatc asid uLe District hospital (NiIt I 1aa1,hatajrI,, aJA faaaa/alaa's auid c4/au. /'saascii IpmaraadI .i il N,ivi,auI L.c,.rzy Ilt'igv rmeu s/nnula d ahe ided) d) IIIV I AIDS All patients suspecied of IIIV iaifeciion should bc refeticd to Distric Same as CIIC iivestigatc aiid diagnose Manage as pcI t hospital and/or IIIV 1 estimag Ccaatre foa diagnuasis arid counselling NACO giaiiacliaies r (NO. Ilupleasrua affinilines anvd :qnijau.ena pnn idJd unJer 3 Nariamd A IAlV C( iml /'nigrva arc lnneaJld bc aa oidc ) .15 Table 3: Punjab Service Norms (continlued) I0. Paediat,ics D)iseascs CIICs Sub-Divisional Hospitals District ltvel Iospitals F a) Aculc ;cspimatory Treat & refer if no amprovenacsr Samc as t C11C lvestigale & sl;sasi!:s anfechlon b)) lm.wIv rLsp)lialol'ry 1Mild1 SymplioIiialiac lrcillcll I, iefer if no II)mproveLment1 Same is IC hwvesit a s.ln & anasiaas;i liact infection cJ Childhood aslhlmia Niaiiag cascs widliou respiraIory. dsliess Sairlc as ('11 SameI: as (i1( & allergic d) Tubimcwlosis Suspected cascs lo be investigated by spuium exam and radiography Sanic as C1iC Invesilalac & trcat Nlanage (A'BI IMqdwJ ams elI ji/ wli.tic aid1 * djipsIlm -iwl wids-'1 ,s,,.i.i NaU,tiosal I'I P',sgrirusaw shilduI be .urilcd ) 0N 0 r.dJ 164 Annex 3 Page 29 of 46 Table 3: Punjab Service Norms (continued) 11. NeonaLal Services Diseases ClCs Sub-Divisional District Level I I Hospimas Hospitais Resuscitason of New Born Babies a) \ogar score > 4 | Resuscitation to oe done & mana2ect.1 Same as CHC Same as CHC b) Apgar score < 4 Resuscitation to be done. If vitais Same as CHC Manage in Special maintained. manage, otherwise refer Care Nursery (SCN) to District level. Uncomolicated low biith-weight babies a) Nlore inan I 8kg Manawie wth rooming-in service ana |Same as CHC Same as CHC I obser% e I b) L *ss man i 8kg Resuscitation. Nlasntain vitais. |Same as CHC Manage in SCN I Refer to Disrtrct level Uncomwlicaied pirmarumt babies a) Gestation iess Resuscitate, maintain vitals ana refer Same as CHC Care in SCN than 34 weeks to Distnct level I b) Gestation more Manage and keep uner observation. Same as CHC Same as CHC than 34 weeks Ir anv oroblem. refer to Distnct level Complicated LBW and |Manage and observe. Refer if Sa me as CHC Manate in SCN ptamatuie babies problem is unmanageable. Neatl Jaundice a) Within 7 days Treat %m photomerapy Same as CHC Same as CHC ani serum bilirubmn iess than I OOmg lclinicaliv) b) Early deep Photomnerapy, then review. Phototnerapy and Investizate and manage jaundice Refer to Sub-Divisional hospital. montonng of serum in SCN bilirubin. If this increses by more than Smgyhour requinng exchange transfusion, then refer to Distnct hospital Septicaenua Clinicaalv assess & start therapy Same as CHC Manage in SCN If no response or condition detenorates after 24 hours. refer to Distnct hospinal. For sepriaemza Iiriate preliminarv treatment. Same as CHC Manage in SCN associated %vih serious managze vitals. and refer to SCN at problem like meningtis. Distnct level. Congemtial Defects a) Not life Manage and advise Same as CHC Manage & refer to thremtening tertiarv level b) Life threatenung Try to mauntain vitals, avoid Same as CRC Mange in SCN. eg. defects like hypothermia then refer to SCN at Refer to tertiarY level cardiac Distnet level. pulmoiav problems 165 Annex 3 Page 30 of 46 Table 3: Punjab Service Norms (continued) 12. Mlisceilaneous medical conditions and procedures Diseases CHCs | Sub-Divisional i District Level ___________________ | ____________________________H ospitals H ospitals a) Pleural aspiration Yes pnerform | Same as CHC TSame as CHC b) Pericaratal tao No Same as CHC Yes (perform) c) Foreign body |UndenaKe simple cases. Same as CHC Yes (undertake operationsi removli d) Lumbar puncture Yes toerform) Same as CHC Same as CHC e) Neoplasm / Sympromatic treatment d. refer. Same as CHC Investigate ano drug Malignancv treatment. Refer to tertiarv levei for specialist services. 0 Oreanic brain |Treat sv-mptoms as far as possiole Same as CHC InvesriL'ate and refer to svndrome termiarv level faciiitv. el Pempnicus !nitiate treatment : refer. Same as CHC Treat. g) Collagen aiseases Refer Same as CHC I lnvestigate &- treat. h) Skin allersy Treat. Same as CHC Investigate cause &- treat. I_Refer for specialist services. i) Sarcoiaosis Refer. |Same as CHC Ilnvesticate & treat. j) Blood screening Refer to testing centre at District Same as CHC Perform tests leveiI kt) Cholecvstitis Symptomatic treatment & refer. _Same as CHC Investigate & treat. I) Pancreattts Symptomatic treatment & rtfer. Same as CHC Investigate & manage. For therapeutic endoscopy or surgery, rerer to tertiary level. m) Cirrhosis Symptomatic treatment & refer. Same as CHC Investigate & manage. |__________________ |_Refer if complications. n) Abdominal tapping Yes (perform, iSame as CHC Same as CHC nl Congenital hean Svmptomatic treatment & refer Same as CHC Symptomatic treatment: 8 diseases refer to tertarv level for . specialist investigation and treatment. 0) Head injuries Ininai treatment and observation. Same as CHC Investigate & manage. Refer if necessarv. S 166 Annex 3 Page 31 of 46 Table 3: Punjab Service Norms (continued) 13. General types of surgicatl services Problem Area j CHCs Sub-Divisional I District Level Hospitais Hospitals a) Surgicai procedures Basic iecnnzques | Same as CHC Same as CHC Incise eL drain |same as CHC |Same as CHC Wounc debridemens |Same as CHC |Same as CHC Biopsy of skin ana subcutaneous Same as CHC Same as CHC lesions b) Sui:c s> -arrinz, | No. rerer No. rerer Yes wDerrormi c) Trauma and life Resuscitation and stabilisation Same as CHC Same as CHC suppon Securinn airwav Same as CHC Same as CHC Circuiatorv suoport Same as CHC Same as CHC d) Reducuon and No, reter Yes Iperform) Same as Sub-Division staibtisation of level fractures e, Exo)oraorv j No, reter No. reter |Yes (periorm) laparotorrv c) Chest Tracheosromv Yes | Yes Stabilzsation of pneumothorax s Yes Yes refer Breast aoscess Yes |yes d' ~ . centesis No, refer Yes (perform) Same as Sub-Division level c o .danagement of No, reter Yes (performn Same as Sub-Division haemochorax I levei f) Acute empyema No, reier Yes (perform) Same as Sub-Division I~ ~ level g) 410anagement of rib No. refer Yes (performi Same as Sub-DLvision fracture level h) Stabilise mediastinal No. reter No Perform and/or refer _nju__es 167 Annex 3 Page 32 of 46 Table 3: Punjab Senrice Norms (corltintued) 14. Summary of surgicai procedures CHCs Sub-Di% isional Distnct L2vel Hospitais Hospiisa | a) APDenciccC!0nIv Yes Yes Yes b) lnguinaa herima Yes Yes yes c) Umbrlicai he-ma Yes | Yes Yes d) Rectai orozaose Yes Yes Yes e) ProcsoscoDv Yes Yes Yes f) Pe-tanat aoscess Yes | Yes Yes g) Anal fissure Yes Yes Yes h) Cholecvstecornv No Yes | Yes t) Clhest tuse I No Yes Yes j) Acute cowet ruorure No No Yes k) Drainawe of abdominai abscess No No Yes I) Acute intestinal ocstruc-ion No No Yes m) Inrussuceition No No Yes n) Volvuius No No Yes a) Vagotomv No INo Yes j 15. Summan of uro-genital procedures a) Management of acute urinary rete-ntin Yes Yes Yes k b) Cystotomv | Yes Yes Yes c) Hydrocele I Yes r Yes y| Y d) Vancocele Yes Yes Yes e) Vasectomv | Yes | Yes Yes f) Circumcision Yes Yes Yes g) Manaeement of ructure uretnra j No Yes Yes h) Neohrectomv J No No Yes 16. Summanr of anaesthetic procedures a) NMaintenance of airway Yes Yes Yes b) Locai anaestnesia Yes Yes Y c) Use of drugs causing analgesia I) UM ' Yes Yes Yes II) WIN Yest Yes Yes d) Blockt anesutnesta Yest Yaes Yes c) Endtracheal mntuoation Yes Yes | Yes f) Regional anaestnesia 1) Spinal Yes Yes Ya ut) Epidural Yes Y; Ya 8) Genertl Anaesthesia 0 UM | No Yae | Yes it) >W No Yae | Yest h) Inhilanon atnaestmesa No Yes | e i) Open ether iatnesthesia j No Yes Ye Annex 3 Page 33 of 46 Table 3: Punjab Service Norms (continued) L-- - 17. Additional details of surgical acrivities and referrlis Conditions PrDcedures CHC Sub-DisL Hospital District Hospital I 30 Beds S0 Beds 100 Beds 100 Beds & I } Above 1. Surgerv a) Abscess including oreass Incision & drainage [ncision & drainage Incision & drainage Incision & drainage and perianal II I I_ I b) Wouna debriaement Simpte wounds Simpie wounds Major & compound Major &: compounci Resite. |iabie' wounds wounds c) Trauma &: life support ' Resuscitate. stabilise Resuscitate, siaDiiise Investigate & Investigate & & reter 8 refer manage. if needed manage, if needed refer refer dl )Nluscuto-skeietai Simpie: manage Simpie: manage Manage, refer if Manage ComDiicated: refer Compiicatem: r-f-!r necessarv e) Abdominal injuries Stabilise & refer Stabilise & refer Nlana2e | Manage f) Abdominal surgeries Refer Yes. if anaestnetzst Yes Yes (planned) _ available I g) Haemorrno:ds Refer Optionat, if Manaee Manage anaesthetist avaiiable h) Urethral dilation Refer Referives Yes Yes i) Rupture of bladder & Refer Refer Refer Manage, if necessarv urethra j) Major uroiogicat Refer Refer Refer Manage, if necessary procedures k) Fracture of spine Stabilise & refer Stabilise & refer Refer if necessary Manage Z. Ophthalmology Removai of foreign Removal of foreign Management of Management of § I~~~~~ ~ ~~bodies bodies. manage comeal abrasions, comeal abrasions. comcal abrasions. ulcer & cataract ulcer & cataract. I } ulcer glaucoma surgery 3. Dental Conservative Conservative Conservative All types of dentistrv, tooth dentistrv. tooth dentistry, tooth extractions. extraction, all types extraction. all types extraction, all types impactions & jaw lof fillings of fillings of fillings fractures 169 Annex 3 Page 34 of 46 Table 3: Punjab Service Norms (contillued) 17. (contdi .Addiftonal detaiis of surtical activities and referrais Conditons I Procedures CHC Sub-DisL Hospital District Hospital 30 Beds 50 Beds 100 Beds 100 Beds & Abovel 4. Gastm EntervloRy a) Endoscopy Refer Refer Sigmolcoscopy Oesopnrago- gastroscoov. colonoscoo'y S. Anaesthesiology Care or airway Care of airway .\Management of Management & equipment equipment. generai &: regional ,-neral regional manacement of Anaestnesia Anaestnesia. and generat &2 regional Pain Clinic. blocks for pain relief anaestresia 6. Thoracic a) Simote fracture nns | ananage |Manaae b\ lniercostai under-water s Yes *a YYes Yes Yes- drainaee ilCD) Y c) Flazl cnestr Resuscitate & refer Rtsusc(atCe &- efer Resusc;rare e rCfer Manawe wich _________________ _________________ I ventilatorv support d) Mediastinai injury Resusci3te & refer Resuscitate & rete Resuscitate & reer jManaze, refer if I I e thoracotomv needed e) Acute empyaema Manage oy [CD I.Manage ov ICD |Manage by ICD Manage oV [CD n Chronic empyaema Refer Refer Refer Rib resection & drainage. Refer if decalcification present. s) Thoracotomy Yes, oniv in Yes oniy in Both emergencY & | Both emergency & emergency emereecv elecnve lelective hi Tnoracotomy & procedures Refer Refer Refer |Manage. refer if .necessatv \ Foreign oodies in ine Refer Refer Refer Manage. i necessary oesophagus and tracheo- bronchial tree *- 7. EN.T a) Foreivn bodies in nose &. Nose: remove Ear: Nose & Ear: remove Manase Manage ears |remove retr lMaag b) Epistaxis Manaye Manarte Manage 7 Manage c) Perfionsiilar abscess |Refer I Manage IManage |Manage di Tonsillectomv IRefer Refer. Manage. if ENT |.\Manage specilst available I e\ Mastoid abscess Refer Refer Manage. if ENT Manage I I ____________________ |specialist available 8. Head Injuri Initiate & refer Managte. stabilise. Manage, stabilise. | Manage. stabilise. | refer for advanced refer for advanced refer for advanced manaeement | manacement management If trainca in thoracic suruerv for one or two months | Refer to tertiarv level Refer all major thoracic procedures to tertiarv level | Refer to tertiary level for advanced management 17n Annex 3 Page 35 of 46 Table 3: Punjab Service Norms (continued) 18. Details of Obs.,Gvnae problems. prDcedures and refermis Conditions i Procedures CHC Sub-DisL. Hospital District Hospital 30 Beds 50 Beds 100 Beds 100 Beds & Above| a) High risk pregriancies. Eariv diagnosis & Refer if necessarv Investigare & Manage including APH. PPH. refer manage if possible eclampsia b) Generai obstetric Repair Same as CHC Same as CHC Same as CHC procedures eg. episioromzesjl I II c) Craniotomv (dead foerus. No No Yes Yes hvdrocconal us I I I I I d) Forceps celiverv Yes (performi |Same as CHC SSarr es CHC Same as CHC el Vacuum exrracnon 4 Yes (oerformi | Same as CHC Sar. - CHC Same as CHC g) Breach deliveries Refer Refer if compiicatedl Manage | Manace h) Manuai removai of Refer Manaee if Manage Manage placenta anaesthetist I _available i) Inversion of uterus Refer Refer |Refer if compiicated$ Manage j) Ruoture of uterus Refer Refer Manaee Manage k) Threatened or incomplete Conservative D&C Same as CHC Sane as CHC Same as CHC abortion I) Ruptured ectopic Stabilise & refer Stabilise & refer Laparotomy Laparotomv pregnancv m) Female sinrilsation ILD Yes: arrange special Same as CHC Same as CHC | Same as CHC programmes n) Vasectomv, laparoscopic Yes: arrange special Same as CHC Same as CHC Same as CHC sternlisation programmes. o) Menstrual irreguharities Refer Refer Diagnosis &- Diagnosis A& management management p) lnfemlitv Refer Refer Manage Manage q) Planned surgery for Refer Refer Mantage Manage prolapsed UT. DUB. etc, r) Cervical erosion |Refer Refer PAP smear. biopsy. PAP smear. btopsy, & manage & manage s) Malignancies Refer Refer Diagnose &: refer Diagnose. manage & (NB. Refer to tertary level refer surgery & radiotheraDy 1) Colposcopy & iRefer Refer Refer Yes (perform hysteroscopy u) Reconstructive surgery Refer Refer Refer Manage if possible Table 3: Punjab Service Norms (continued) 18. (cont'tl): Gynaecological and obstetrical dlisoules lPmblcna CllC Sub-I),4jOvibioal 11o1spilalb D)istrict Level a) Ciomplied dieliveries Normal deliveries Forceps deliveries, inducinig laboisi I.SCS Iorceps R vacuum exilachioll obsigueted labour, Forceps delivery Extraction of retained placeula. C-Section. induced laboull. cLicualonll of ietainred pre-eclanimpsia severe \'acimuum extracion Coioniplicaled cases to be referred jila.cil t maternal focial distress, ec Iefel all caes of- eC;Ilrlplssl with coli0irrlc.itn0irs. HllIestis Incompatibility, unctiii[rolled diabetes, Y scvele hep)aillits b) F:amily plannit4s IUD, tubectonry, laparoscopic Yes Y es lubectomy' cI Ectopic pregnancy Refer i.aparolomy L.aparolomiiy d) Vaginal. external genitalia Abscess drainage Yes. Excision of cysis, suture of vaginal vaults Yes EtJA e) High risk and conaplicaied Refer Niedical iai.agemerie and delivery Yes and LSCS pregnlanicy 'I lilap)eulic abortion. Pelvic Inllammi atory disease D)iagnosis & drug therapy Yes Yes I:l Merist iiregulaiiiies D&tC Yes Yes I:tloillreir nil blurrlo)y Nty oirrecltlnily I )lg 1tC.i e1tiile. I i)yterecltolly II) l'ri nary & seconidary Counselling, drug trealment, refer Yes Yes lPropei Ireatiient and diagnosis i,fer.ility complicated cises i) Cervical erosionll Caitery biopsy Yes. Refer for furiter diagnosis Y e Reife foi iritalijeill ol (Ci %r.ail canlcer t . l~~~~~~~~~~~~~~~~~lealiliesit o : t aw 172 Annex 3 Page 37 of 46 Table 3: Punjab Service Norms (continued) 19. Laboratorv invesrigations Tests Community | Sub-Divisionai District | -Health Centre Hospital Hospital a) Routine haematology Yes Yes Yes b) Routine urine and stool Yes Yes Yes C) Semen examination Yes Yes Yes d) Urine for pregnancy Yes Yes Yes e) Sputum exanminanzon Yes Yes Yes f) Basic biochernisnr- Yes Yes Yes Sugar. urea. creatine. cnoiesseroi & biltrubin I Seroloev ASO. CRP. VDL. HhAg. RA factor. Widal. No Yes Yes etc. h) Other biochemisMrV Calcium. phosphorus. uric actd No Yes Yes i) Haemogram (complete) No Yes Yes j) Other serology' Toxopiasma. Coomb's test. etc. No No Yes k) Coagulation strudies No No Yes I) Advanced biochemistry- Lipid profile. liver function test. CP'. Nio No Yes CPKM-NB. electrotvtes. etc m) Culture and sensitivitv No No Yes n) Histopaitiology including FNAC No No Yes o) Cytoloa'y eg. PAP smear No No Yes Table 4: West Bengal Service Norms (linical Services miated to: ltural loslital (1til) Sub-Divisional llosptal I State Distict llospital Cener.l Hlospilal Gastio-Intestional tract disorxcn Gastrocnierats, bacillary All cases relvrred irom Rif level All cases reltened 1'rom RH & dysciitery, (iO disorder (withotit and patacius flrom catclineni area, SDII/SGII levels and p.illints 'uiii coilipliciatiot), iucomiplicated and GI &iortlIciz, willi Catcliniiiei .11Ct.i cni-liOiis V iral licL),iiIs., nalaria, complication) Jiamdic, hii aUilc citentec fevcr, alooliolic hepalitis, active helatill:, liver ab!.ess, (il amoebic liver aibscesz haeniurrihage, liepato cellild,ir failtirc. Respiratory disonlers Pleural cffusion. pneumoihorax, . All cases rel'red lfrom Rif level All cases refcrrcd fromil Rhl & hydro-pneumogihorax, pulinonary and patients from calehinent area SDII/SGII levels and fioin .TB, pnieuiioiiia. hbronclio- and empyenria chlst. rtipialed catclinieitl .uea pneumonia, lun_ abscess. broncilal oesophi.tgeal vaiices, ('O)1') ashnia Canliovascular disonien llypcutension, rheumatic fever, All cases referired flroin RII level All cases referred from Rll & rheumatic valvular diseases. and patients from catchinent area SDII/SGII levels and from .unt 1iiy.cirdlial i.lliJctioii. caitlhinciit irc.m ar iisd ca.IsL k lu Ie hypertcilsive encephi.iluopail1y, TIA managed in eiiiical'ri.eovery care lisewatological disorders Deficciency. anacmia All cases referred 1roin Kll level All cases rel'en-ed froin Ril & and from catecmeni area anmd SDHI/SGII levels and froin pUttirira lctukaemi a. aIplastic Cachilil'iir ;Uc.I I alliaciiii, Imacnlm.i mc anad imili1 U 00 Cs .~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~4 ..__. a Table 4: West Bengal Service Norms (continued) Clitical Services mtated £o: Rumi llosprtal Sub-Divi3lomal Hlospitals I SGII Distriet Hospital Viial l)isoniers Fruiptive fevers: clickenpox. All cases referred from Rif levcls All cases referred from Rhl and ffi:asik:, II(i(Iiil)5 aiad iron) caidililji a; i. SI)II/SGII levtls and fioin catclileiill area Reans Disondkns UTI, pyclonepbiritis. acute All cases rcferred from R I evels All cases referred from RH and glomerulonephritis, nephrotic and from catcliment area SDH/SGH levels and from syndrome Refer acute renal failure cases to caclhinenit area Refti aciic icsal tertiary level lIor hiacainoialysis failure cases eqntilililg haenilodialysis tco tetiar) hospital Endloere disonienu Diabetes (uncomplicated) All cases referred from Rli levels All cases referred fiumni Rif anJd and from catclimcnt area, and SDH/SGII levels and fioin thyrotoxicosis, iiyxoedenia. catehiieit area Addison's diseasc - to be trea.cd at Ol'D after investigations at tertiary level hospital l'sychological disonleas Actc psychosis, obscssion, All cascs releried fliomn R1ll lcvel All eases rlekrced from Rif and depression, phobia, anxiety, and from catcliment area. SDH/SGII levels and fioin neiosis. Cmisis maliagement due to cateiinejit area po)soniOg, intoxication and drug withdrawal cases Muculoskeletal disordegs Osteo-aitliritis Uncomplicated All cascs referred fi-om RIl level All cases referred from Rl & eases of rheumatic origin and from catchment area SDH/SGti levels and froin m catehmnenit area and rcqtiliiiig l physiolhelapy. CD so t: Table 4: West Bengal Service Norms (continued) (linical Services mlated to: Runal 1loslital Sub-Divisional 1ospitals / SCII District Hospital Sexually Transnittied Discascs Syphilis, gonorrhoea, AIDS All cases relerred fiomil RI] level All cases cleitred from RIf & (supportive) anid from catchircni arca SDII/SGII Ilvels .ind flomn IIIV testilig cjrclrrncrir .re.i ill\V les!,wwr Dcrmaologicasl disoi.ers Scabics, etc Drug indiced allergy, All cases referred Irom RJi levcl All cases referred Ir oin Rll & fungal infection, etc anid from catchment area SDIi/SGiI levels and hor| cjiiiihririr 'rrc.i Pisoning ca4es (orgino- Reler complicated cases to All cases rcfcrred 1rom Rli lcvcl All cases rckciicd from RI] & phosphomws etc.) SDH/SGH and teraiaiy level when aird from catcliment area SDII/SGII levcl and from hIacinodia l) sis r, requlired Refer to lteiiaiy level ca.1cs cathiliu ciiire, itc cr tt ici rriay .reiiii iil)g haclnludi.ll) ss le\cil lot haenriodlysv, Envimnnment related disoidem licat stroke, chemical & oilier All cases referred from Rl level All cases reterred from RIf & poison. Snake bite, dog bite & and from catclmena area SDI/SGII lcvels and fioin oilier airirmial bite I lecitrical injury Refer cases lfr alicirodiiil) sis it catehmneiri aire Case: reliminig Cases requiring hisemodialysis refer tertiary level haemiodialysis fclii to lertiary to teniary level level ED Of CD 451 Table 4: West Bengal Service Norms (continued) (linical SeFvices related lu: IIural 1os5pital Sub-Divisional llospitals / SGII District llospital Paediatinc disorders Gastroenieritis cases to be treated All cases refcrrcd ltoin RH level All cases relcrre±d from Rll & in Diarrihoca Treatment Unit and from catclment aica, aiid SDII/SGII levels and fioin (D'Ll) ln-patient trealtnientcare nepihrotic syiidroine, illrieingiais, catchillenit alrea, and actite nelphritis Ibr cases of ARI, low binh weight, encephalitis, poisoning. AR I and gastiocnterilis with iciial nalnutrition (complicated wilh stirlddor, failire wheezinig and inal)lilay to h'ced or drink), and Uineoisciowl patmeniis Mledical cases to be mefened for specialist diagnosis and treatment to.tertiaiy level facility fi(m secondary level hosliials I All cascS 01 ollgnmligncy 2 Ne urological cascs which require sophisticaied investigation and surgical intervention. 3 Endocrine disorders requiring sophisticated investigations and ilien referred back to secondary level OPDs lor follow-up 4. Strokc cases for patients below 40 years of age and unconsciotis 5 Termiinal ltng disease, 6 Acute hepatic failure 7. Acute pancrcatiaas 8 Jaundicc withl unconsciouisness. 0 ') Seconidary hypertncisiont - cndocriic, rcnal. 10- Resistant cases of kalaazar, II All cases requiriig hacmnodialysis. Table 4: West Bengal Service Norms (continued) Clinical Services rmlated to: Rural lospital (RIh) Sub-Divisional llospital / State District liospital General hlospital Basic lecliniques hicision & drainage, Excision & All cases ieltired 1ronil Rhl and All cases rctcrred from RHl and biopsy, emergency Ir3ulna patients froiii catchnicni aica SDII/SGII levcls and fioimi cic for resusciiation aind Camni,ucau are.a stahilisation Gastr-lancstinsal disonlers leniioniliapihy, emergency All cases referred Irom Ril and All cases referred 1rom Rif and appendicectomy. Surgery on from catchment area, and SDI-HSGII levels and froin fistula, piles, fissure, anorectal exploratory laparotomyr,0 ob0niicwtd catchimiciiu area abscusscs, rectal piolapse hernia, clironic &: acuiec appendicitis, peptic pcr1i .111011 intestinal obsrutctioii. illiussusceptiomi %olvillkis, gasllO- jejunostomy, diama,,e of abdominal abscess, haenmorihoidectomy, clholecystectoniy Surgery oii pneumo-pyo and haeniotiorax Pioctoscopy, sigmoidoscop), c.edoscopy, Genito-tlnnary disordeis Acute urinary retention, supra- All cases referred froin Rli & from All cases referred from RI] and public cystoslomy, hiydrococle, catclnient area, and prostatectuniy. SDII/SGII levcls and paticnts fioum ureithral dilalationi, eirietiirncision, hypospadias cases rcqini inil cateliciuctii are.i, and riiptiiied vasectomy cysioscopy uretiri J bladder, riepliuctcoiny m 4 ______ r Table 4: West Bengal Service Norms (co ... i.ed) (linical Servics related to: Runt Hlospital Sub-Divisional Hlospitals / SCII District Hospital (CIest disurdems Emergency tracheostomy Rcecr, if All cases rfcerred toioii Rif and All cases refeai-ed from RH and required, all pcneiraling injutries lo from cabchment alea and SDH/SGil levels and in adliIoni SDH/SGI/IIDH or lzi-tiary lccl pneuinotliora, lhacinothora\. patiellis troin catcliuii:.ii alca. and fIacility penctraling inpili its rcha to icitiary iiinasiecttily iCa hicastl Reer- all level peleti aiinlg injiiiics 0(I lt'A to [eiliary level hospital llend injuries Refer to tertiary level Refer to tertiary level lec o tcitwlai hospital Ihim injuries Treat if buirris less tihan 20% of As for Rif lFrcat (in Bu3nis W\'aaid cascs witli skin area, refer orlicr cases to DH. >'2Ohof skin arca afiected Cancer cases Refcr Refer Surgery with clicniutllciapy Rcfer to tertiary level hospilal for tadiotlherapy Odhopacdic disonren Simple fractinte, plastering & All cases referred from RH and All cases referred from Rhl & rcduction uluel genieral anaestlietic from catchment area, and laccrated SVII/SGII levels and in addition ((iA) Shock resusitmatlon, linger inijury of linibs, am )iulatIO(n, pIua 8 palteili Ilon ian cCalliilitl ilea amlptitat ion & dislocatimn ll ider plating ai id screw olh 1l )1 bn I clg PI let iatilig i alt liac ii ic aefe it ) (A Daiid laiaids Piostihcsi, op)en tertialty lcCl hoilrlill Spinal redtictioni of elba iw. patI. lciomiy. t r.itiai a (ck)loll)lec[ liallse( a 1ll I)t sklcital ii acit,ol, ieedle a;pirallon m ai iagedl at DIl I ieiincml et cc of.joint & synovlal fluid ti iaiiscclion, re(ll,lriii, si -ery, relfr lo Ctei3tay level -0 l _. ._ . _ 08 s~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~.5 Table 4: West Bengal Service Norms (continued) Clinical Scmices mlated tu: Rural Ilospiul (RIu) Sub-Divisioaial llospitals / Slate Disitict llosplital General Ilosp)ild __ Dental Surgcey Constriictive deniistiy filling & As for Rll, anrl jawv, diaginosis of As lor RII/SI)I etc, and artificial preservationi of all caries teeth oral cauicri .ind tilher ncopl.sins puosuliesis Oral Surgery tootl extaction, Refer lo teiliai) level lot impaction & othlr minor surgery radiolhcrapy c g l/D under local aiuaestlictic. All periodontal diseases, scaling & curettage of tilce 5s of oral origin. Suqgical cases to be iafefm(u to teltiary level fmm secildil;ly level I All casws o m il ig li.laicy 2. Spimal trauma requiring surgery 3 icad injury wish S 0 L. 4 Pcnctrating injtiics of chest & brain. S All opltlialmological cases if patients arc at risk through complications associated with ageing, diabetes, respiratory disease, hypenension, enlarged prostate, retinal detachmenit Also vitreous humour haemorrhage, cases requiring cryoplasty, retinal hge, and cases requiring flioro-angiograpihy. USG, intra-oculai, F B opthlalnoplasty 6 D)ental All imalignanit cases, complicated tumours of lfcial bone Onlhodontic, endodontic and pertodutilic ireatnitiil (in children e g clett lip, clelit palate) Table 4: West Bengal Service Norms (continued) (linical Seivices related to: Runi llospital (Rif) Sub-Divisional Hospital / State Distnct Hospital Gcneral Ilospilal Uasic services mrlated lo Care ol' ante-natal imtotliers, normal All cases refeiied 1rom Rif amid All cases relCiTed from RH & delivcry, neonatal care fromii catciL1icicm area SDII/SGII levels and floirm ci1flte cniii area Complicated delivery : obstructed Emergency Caesarean section, All cases referred from Rif and All cases recleTed Itomii Rf & labour, pm-eclampsia, severe forceps delivery, evacuation of from catchment area, and SDII/SGII levels and froin maternal & foetal disirmss, etc. retained producis, iniduced labour, laparotomny lor celopic pregi.inI)Cy catcliinciit area 00 management of rciained placenta & ruptured uteius 'Ifestened & inconmpletc abortion Conservatic tIcalinenn, 1) 5 C All cases rel'circd fjomn Rl &- from All cases referred from Rll & catchment area SDII/SGII levels and fiom catJiclhmmit area Vaginal & extrgenitalia Abscess drainage, Excision of All cases referred from Rll & from All cases relerred from Rit & Bartholin's cyst. Repair of vaginal catchment area SDH/SCII levels and froin vailt, L ll A catlCillIc ll ilt'mc lligb usk & complicated pregnancy Rcl'ec to SDII/SGII level Mcdical management witli All cases rclcired 1roii Rif & Inclu ging preeclaI1plia, eclanupsia, delivery, therapcitic abortiim SD)H/SGII levels and troin liaibetes & otber medical pmblenus catclhmncmi a rca clenstnmal irmgulaiity Diagnosis, D&C, dmug thcrapy, All cases rcl'erred from RII and All cases rcl'erred from Rll & (amenontioen, oligomenontuoea, endometrial biopsy from catchment area; anid SDI-I/SGH levels anid froin llolymnenonhoea, menonbagia, myoinectomy, lhysicieclomimy, catcliinci i area tlunourn of the mpinuductive oigans, cervical polypcctomy, o-am iotoiny, 4. ;> pmlapse of utenis, ovarinn tunour pelvic floor repair Table 4: West Bengal Service Norms (continued) Cainial Sevices nimaed to. Rand lIlspial Sub-Divisional HospItals / SGII Disitdc Hospital Pumasy & secondary Infeniliqy Dilatation, mnsumation, curettage All cases rcferred from R11 and All cascs referred from RH & (DIC) from catchment area. and SDII/SGII levels and p.ticnts 1roin N laparoscopic investigation catchincimi arca Cervcal emion PAP smear, biopsy. cauterisation All cases refcrrcd from RH level All cascs refefred from RH & and from catchment area SDH/SGII levels and paticnts fromi . r caicliieiii ,s ca Fthk l.Aammastuy disease Minalgetncit with drug therapy All cascs rclfcrrd liomn Rl1l level All cases rclcn-cd Irom Ril & (P.LD.J . and from catchment area SDII/SGI lcvels and patieits from catcelincikt arca Tubal ligation (mini lap & All cases referred from RHi level All cases referred from RH & Faily pimlung & welfam and laparoscopy) IJU.C.D - Cu T and from catchmcnl area. SDH/SGH levels and patienis from mcmtnmscdve surery catchinciut area kefec all cases requiringi mterourgical reconstructioni of Fallopian tiube and vas deferis to teatiary level Caes Bmach - Gym. & ObsL to be afrered to Tediiry Level Hospitls fmm Seconda.y Level llospitals. I All cascs of malignancy. o 2. lnfatility - requiring sophistikated investigations and microsurgery to be referred to terniary level. 3. Recons5trctive surgery. 182 Annex 4 Page 1 of 10 USER CHARGES: EXISTING PRACTICES IN THE FouR STATES AND POTENTAL REVENUE GENERATION A. Existing Practices 1. Current Government practice in India is to provide free services up to a specific income and service level in public health care institutions. This implies that user fees are not charged for primary health care services including preventive and promotive care services nor for people whose income level is below the poverty line. As a result, the impetus for adopting user charges in hospitals for those sections of the population above the poverty line has become increasingly important given the difficulty of securing adequate resources for the health sector from the general public revenue of the states. User charges are expected to provide additional revenue for under-funded public programs, while recognizing the patients' ability to pay and be targeted specifically for direct health care utilization. Implementation of these general guidelines is expected to improve access to health care services and strengthen the quality and efficiency of services provided. 2. While these general principles apply to all states, the policies oni user fees do not go far enough and are unlikely to substantially increase supplemental revenue for the health sector. The state Govemment's policies need to take account of the quality of services to be provided; a significant enhancement in service quality would provide a strong rationale for enhancing the level of charges and broadening the services for which-> user fees can be charged. More importantly, each state has to create a suitable environment through adequate administrative arrangements and analytical work that would provide a framework for a continuous review of user fees. The involvement of the Bank has been catalytic in setting up a framework for review of users charge policies and practices in the four states where a health system project is in place. Opportunities for Zrnhancing the level of these charges and the scope of services for which charges can be levied need to be reviewed within the newly established administrative mechanism. The existing policies and practices on user charges in the four states are described below, followed by illustrative examples in two states that estimate the potential revenue that would be generated by implementing the, types of user charges the state Governments will implement. Karnataka 3. Outpatient charges. Currently, there is no charge for outpatient services. A recommendation is before the Government to implement an annual Rs. 2 registration fee. The intention is both to encourage patients to keep a record of their treatment and to raise revenues. There is a charge of Rs. 5 for issuing health certificates. Half the revenue raised as a result is retained by the doctor and half retained by the Government. Such charges 19 3 Annex 4 Page 2 of 10 represented 40 percent (Rs. 41 million ) of total revenues collected by the Department of Health and Family Welfare during 1992-93. 4. Inpatient charges. The last revision of charges was made in 1988. A patient who is a member of a family with an annual income of above Rs. 8,000 a year is to be charged Rs. 2 per day for a bed in a general ward. Daily charges for four, two and single bedded rooms are Rs. 5, Rs. 7.5 and Rs. 15 respectively. Of total hospital beds, paying beds currently constitute only around 4 percent (600 out of 17,500). Fees for medical services are listed and they are also graded. Patients in special wards pay full fees while those in paying general wards pay 50 percent of the fee. Patients in general wards pay no fees. Average annual revenues from all charges over the period 1990-93 were Rs. 66 million -- equivalent to under 2 percent of total DOHFW expenditure. If all the charges were in practice being levied, revenues would be greater than those actually collected. Recommendations are before the Government to introduce a small registration fee (with no exemption), to revise the charges for paying beds and to increase their number through the designation of 20 percent of all additional beds as paying beds. Revisions of charges for treatment is to be undertaken shortly, but the immediate priority is to increase the collection of existing charges. 5. Exemption for the Poor. The Government has proposed a new criterion for exempting the poor. It proposes to use the existing green/tricolor card system within the Public Distribution System (PDS) in the state, which is used to provide nutritional support through issue of subsidized grain, as a basis for exemption from user fees. Green card holders are also entitled to subsidized cloth and kerosene. All poor families with an annual income level of Rs. 11,850 or below (i.e., the nationally accepted norm under the JRY program) are entitled to such green cards. Comprehensive surveys of the rural population were undertaken in the past for identifying the beneficiaries. As of now, the rural population with an annual income of Rs. 11,850 or below has been provided with green cards. This includes special categories of underprivileged populations like landless agricultural laborers, village artisans, small and marginal farmers, old-age pensioners, widowed pensioners as well as the urban poor. The green card facility has recently been extended to the non-notified slums. The number of green card holders in the state are about 5.3 million compared to the 9 million ration card holders of the PDS system. The Government proposes to carefully monitor the green card system as a basis for exemption from user fees and ensure that leakages are minimized. 6. Revenue administration. An important reason why charges are under collected at hospitals is that the revenues currently revert to the Government treasury, where they become part of general revenues. There is no direct incentive for collection at the institution level. The Government is taking necessary action to ensure that the receipts will be fully transferred to District Health Committees and be reallocated between hospitals in the district on the basis of both need and level of revenue collection. 184 Annex 4 Page 3 of 10 Punjab 7. Outpatient charges. Currently, there is a charge of Rs. 2 for outpatients. A Government Order (GO) giving notification of (among other things) Rs. 5 registration fee was prepared in early 1994, but is still pending. The Government proposes to implement the enhanced outpatient charges as quality improvements are effected through the World Bank funded State Health Systems Project. In addition, it has proposed to establish 'pay clinics' in Government hospitals to be operated after regular hospital hours by Government doctors. Of the fees, 50 percent would be retained by the doctor and 50 percent retained by the institution. 8. Inpatient charges. The GO also established sets of fees for in-service medical facilities. These included charges for special wards in district and sub-divisional hospitals, daily visiting charges by doctors and for laboratory investigations such as X-ray, diathermy, ECG, CT scan and ultra sound and for various categories of surgery. The proposed charges are higher than those proposed in some of the other states, but given Punjab's higher per capita income and lower incidence of poverty, these charges are not out of line; moreover, the coverage of treatment is wider. 9. Exemption for the Poor. Exemptions to the charges noted above include state Government employees and members of families holding yellow cards which signify a family income of below Rs. 11,850 based on the JRY norms. New lists of families eligible for these cards are under preparation. Total revenue raised by DOHFW in 1993/94 was Rs. 25 million or just over 1 percent of expenditure. According to the National Sample Survey 1987/88, almost 50 percent of hospitalized cases are in non public hospitals. The average payment per case in these institutions was Rs. 1,200, indicating a willingness to pay among the general population. Because of the higher income level in Punjab, the ability and willingness to pay for services is greater than in the other two states. As a result, there exists considerable opportunity to increase revenue collection through increased charges and better collection methods. 10. Revenue administration. The Government has determined that for secondary level hospitals, the Punjab Health Systems Corporation will ensure that revenues will be retained by the collecting institution and be used for the purpose of non-salary recurrent expenditures. West Bengal 11. Outpatient charges. A structure of hospital charges was implemented with effect from November 1992. Among the changes implemented was an outpatient charge of Rs. I per prescription slip (an OPD ticket, which is used on average 3 times) for teaching and district hospitals. In 1995, a GO was issued to cover all subdivisional hospitals in the Calcutta Municipal Corporation and all polyclinics in Calcutta. There are no exemptions for these OPD charges. Charges for most tests and diagnoses exist -- in the range of Rs. 10 to Rs. 50 -- but few are collected. A review body is currently considering some new 185 Annex 4 Page 4 of 10 charges. The Government proposes to extend user fees to state general hospitals upon improvement of services under the State Health Systems Project. 12. Inpatient charges. The review of 1992 also resulted in an upward revision of charges for private beds, diagnostic services and surgery in district and sub-divisional hospitals. Fees are charged for 10 percent of beds (mostly in special wards). As a result of several perceived anomalies in the structure of fees, these were again revised and extended in early 1995. Paying bed charges in general wards are Rs. 10 a day in most tertiary teaching hospitals and Rs. 6 in state, district and sub-divisional hospitals. Separate room charges are Rs. 30 and Rs. 16 respectively. Charges are made for diagnoses and for surgery for those in private beds and wards. The majority of charges are below Rs. 50 apart from those for endoscopy and CT scan. More recently, another review has been initiated which, in addition to surveying the levels of charges, is attempting to rationalize them across both the secondary and tertiary sectors. Regarding paying beds, the Government proposes to enhance these to 30 percent of all beds at district, state general and sub-divisional hospitals. A further extension to rural hospitals will also be considered. Another avenue for the collection of user charges are the polyclinics in urban centers staffed largely by doctors of teaching hospitals. These provide mainly outpatient services and charge Rs. 16-20 per visit. In 1994/95, the largest of the polyclinics generated almost 15 percent of recurrent costs with a similar amount being paid to the doctors. Revenues generated by all charges are currently equal to just under 3 percent of total DOHFW expenditure. 13. Exemptions for the Poor. The existing system for exempting the poor in West Bengal is based on an 'Indigent Certificate' from the local elected representative, given to families with an income level below Rs. 1,500 per month. The West Bengal Government proposes to use this criterion rather than the JRY criterion because the latter does not apply to large portions of the urban population of West Bengal. 14. Revenue administration. Provisions exist for the Government, through the Finance Department, to reallocate 50 percent of the incremental funds collected through user charges to the collecting institution. The procedures, however, are said to be very tortuous and are rarely used. The Government has recently issued an order that it will take necessary actions to ensure that all revenues collected through user charges at the district, state general, sub-divisional and rural) hospitals will be retained at the district level by District Health Committees, to be reallocated amongst hospitals in the district based on both need and level of revenue collection. Andhra Pradesh 15. Outpatient charges. Currently, no fee is charged for outpatients, but there is a voluntary stamp which can be purchased at APVVP hospitals for outpatient registration. A recommendation is before the Government to implement an annual registration fee for those whose income are above the poverty line. If 50% of outpatient visits are exempted, and Rs. I is charged, an additional Rs. 12.5 million could be collected annually. 126 Annex 4 Page 5 of 10 16. Inpatient charges. At the secondary level, APVVP has sets of charges for in- service medical services. For paying beds and wards, three types of services are offered, single rooms (category A), shared rooms (category B) and cubicles in general wards (category C). The Government of AP and APVVP are commnitted to dedicating 20% of all beds at district and area hospitals as paying bed by the year 2002. In addition, patients opting for paying beds in categories A and B are also charged for major and minor surgeries. Charges for drugs, disposables and x-rays and ultrasonography tests are not included in this package and are charged separately. The Govemment also proposes to set up special outpatient clinics and offer diagnostic services for the private sector for fees set at about the market rate. 17. Exemption for the poor. The Government has a system for exempting those below the poverty line on the basis JRY norms. There are some leakages in the system resulting from the inability of hospital management to determine the income status of patients. If these leakages are not addressed in a better manner by the Governrnent's present criterion of targeting those below the poverty line, APVVP will then consider several options for exemptions such as women with high risk pregnancies and children under 5 years of age. 18. Revenue Administration. The Government has determined that for secondary level hospitals, the APVVP will ensure that 40% of revenue collected at the institution level will be retained by the collecting institution and be used for the purpose of non-salary recurrent expenditures. The remaining funds will go to APVVP, not the Finance Department, and be distributed by APVVP to remote hospitals where the needs are great but which are not able to collect fees because of localized poverty situation of the population. B. Potential Revenues From User Charges: Examples from Karnataka and AP 19. In each of the four states, review committees have been set up to consider the structure and implementation of user fees in hospitals. These review committees will be actively considering new proposals for both enhancing charges as well as widening the range of services for which fees will be charged as improvements in the services provided by the hospitals take place over the next few years. Here, indicative examples are developed of the potential revenue that would be generated through the implementation of the types of user charges now being discussed and implemented. Sets of alternative assumptions are used. The examples are based on information from Karnataka and AP. Karnataka 20. Paying beds and wards. Currently, the total bed strength is 14,858 at secondary hospitals. Of these there are around 400 paying beds in the district hospitals and 200 in the tertiary, teaching, hospitals. The project will add 3,832 additional beds. Another 1,400 beds will be added through a planned KfW project. Of the additional beds it is proposed that 20 percent will be paying beds. In secondary level institutions, the total number of paying beds will increase from around 400 to almost 1,450. As was described above, 1&%7 Annex 4 Page 6 of 10 there are different bed charges depending on the number of beds per room. Currently, the average charge is Rs. 6 per day. It is intended to increase the charges considerably. Assuming that charges for 2 and 1 bedded rooms average Rs. 50 per day and for 4 and 6 bedded rooms, Rs. 20 per day, that one quarter of the beds fall under the first category and two thirds under the latter and that occupancy rates remain at around the current level of 85 percent, the increase in revenue would be: Table 1: Project Revenue from Paying Beds and Wards Current: 400 beds x 310 days x Rs. 6 = Rs. 0.7 m. Future: 362 bed x 310 days x Rs. 50 = Rs. 5.6 m. 1088 beds x 310 days x Rs. 20 = Rs. 6.7 m. Total Rs. 12.3 m. Increase Rs. 11.6m. 21. Charges for Diagnostic Services and Surgery. A proposal is currently being considered by the Government to charge a registration fee (Rs. 5) for each in-service case. The most recent estimate, for 1992, is of 900,000 cases a year. The fee (if applied with no exemptions) would raise Rs. 4.5 million. The charges being discussed for diagnostic services and surgery in Karnataka tend to vary according to whether the patient is in a special ward or the general ward. It is proposed that one set of charges would apply to all those in paying beds while those in general wards (but with an income of over Rs. 11,850 a year) would pay half that rate. Obviously, in setting charges for patients in special wards, care will need to be taken to ensure that the combined higher quality of room and services can justify the additional charge. Otherwise, patients will either opt for the general wards or for private sector treatment and the paying beds will be underutilized. Currently, while there is a schedule of charges, last revised in 1988, few are collected owing to the lack of institutional incentive previously described. The charges in Karnataka, similar to those being proposed in West Bengal, suggest a level of Rs. 45 for minor surgery and Rs. 100 for major surgery. Charges for some forms of diagnosis are higher but apart from scans etc. few are above Rs. 300. 22. Those inpatients below the defined poverty line and therefore to be exempted from charges are estimated at 30 percent of the total number on inpatient cases -- 270,000 patient cases. Of the remaining 600,000 or so cases, six percent or 36,000 will be in paying beds. The remaining 564,000 would be in general wards. Assuming that one- quarter of patients require major surgery and the rest require minor surgery, the annual revenue from the charges would be: 138 Annex 4 Page 7 of 10 Table 2: Projected Revenue from Major and Minor Surgery Patients Major Suvgery Minor Surgery Revenue 36,000 in paybeds 9,000 x Rs. 100+ 27,000 x Rs. 45= Rs. 1.3 m. 564,000 in general 141,000 x Rs. 50+ 423,000 x Rs. 23= Rs. 17.0 m. wards l _____________________ ____________________ Total Rs. 18.3 m . 23. Overall, increased revenues from inpatients might be around Rs. 11.6 million for bed charges, Rs. 4.5 million for registration fees and Rs. 18.3 million for diagnostic services and surgery: a total of Rs. 34.5 million. 24. Outpatient charges. A recommendation to charge a registration fee (covering a year or until the registration card is filled up) of Rs. 2 for outpatients without exemptions is being considered by Government. In 1992, roughly 10 million cases were registered. Revenue would be about Rs. 20 million. 25. Other charges. Forty percent of departmental revenues are currently generated through charges for health certificates. The charge is Rs. 5. A proposal to double the charge is being considered. This would increase revenues from this source from Rs. 41 million to Rs. 82 million a year. 26. Potential revenue from user charges in Karnataka. The measures described above could generate around Rs. 136 million. This would be equivalent to about 9 percent of the Rs. 1,560 million annual recurrent expenditures for secondary health services by the year 2002 or over 29 percent of all non-salary recurrent expenditures. This amount of additional resources could have a significant effect on the levels of service quality provided by secondary health care institutions. Revenues generated from these would provide only one quarter of all revenues and are much less than revenues arising from increased charges for certificates, etc. The charges of Rs. 45 and Rs. 100 for minor and major surgery respectively might be compared to the average private expenditures of an episode of hospitalization in a rural private hospital in 1986/87 of Rs. 733 (NSSO). There remains considerable opportunity to review and enhance charges for minor and major surgery, while making sure that appropriate mechanisms for protecting the poor are in place. 27. These calculations are mainly illustrative. However, the estimated revenues from user charges are at the low end of the potential range, as they include only existing charges for treatment. They indicate the potential which exists to augment supplemental resources for health services through a few relatively simple measures. The immediate priority is to implement the existing patterns of charges more effectively and to monitor the use and effects of the revenues on health services. 189 Annex 4 Page8of10 Andhra Pradesh 28. Paying beds and wards. The plan is to allocate 20% of all beds at district and area hospitals as paying wards. Currently, total bed strength is about 9,650 at secondary level hospitals. This is to be increased to 14, 000 beds by the year 2002. Three types of paying beds will be offered at district and area hospitals. Category A comprises single rooms with attached toilet; Category B shared rooms with or without attached toilets; and Category C comprises cubicles in general wards which provide some privacy to patients. Projected revenues calculated below are based on the assumption that 35 percent of paying beds are classified as Category A, 45 percent as Category B, and 20 percent as Category C. Patients opting for paying wards would have to pay bed charges; those opting for A and B categories would also have to pay for treatment costs for surgery and diagnostics. 29. Revenue collections from bed charges in paying wards under alternative assumptions of bed occupancy rates are presented in Table 3. The annual collection assuming 70% occupancy is expected to be about Rs. 17.2 million; assuming 80% occupancy, it is expected to be about Rs. 19.6 million. Table 3: Annual Collections from Paying Beds Bed Charge Number of 70% 80% occupancy (Rupees/day) beds occupancy (Rs. (Rs. mill.) mill.) Category A 50 735 9.39 10,73 Category B 30 945 7.24 8.28 Category C 5 420 0.54 0.61 Total 2,100 17.17 19.62 Revenue 30. Table 4 presents projected revenues generated by surgery for patients in paying wards. The total revenue generated by surgery charges, under the above assumptions, is expected to be Rs. 11.8 million for 70% occupancy and Rs. 13.4 million for 80% occupancy. Surgery charges have been assumed to be Rs. 700 for major surgeries and Rs. 200 for minor surgeries (data provided by APVVP) and are inclusive of expenditures on suturing material, anesthetics drugs and OT charges and routine pathology tests. Drugs, disposables, X-rays and ultrasonography tests are not included in this package and are expected to be charged separately. 190 Annex 4 Page 9 of 10 Table 4: Projected Revenues from Surgical Procedures (Paying Ward Patients Only) Major Revenue Minor Revenue l ~~~Occupancy Inpatient Surgeries (Rs. m) surgre R.m Category 70% 18,780 4,695 3.29 9,390 1.90 A 80% 21,460 5,365 3.76 10,730 2.1 Category 70% 24,145 6,035 4.22 12,070 2.41 B 80% 27,590 6,897 4.83 13,795 2.76 Total 70% 42,925 10,730 7.51 21,460 4.31 J________ 80% 49,050 12,262 8.59 24,525 4.86 Notes: 1. The number of inpatients has been calculated using a 70% or 80% of bed occupancy rate to get total number of bed-days in a year and dividing by an unexpected average length of stay of 10 days (which is the current average). 2. The number of major and minor surgeries has been calculated by assuming that 25% and 50% respectively of inpatients will undergo each type of surgerv. Data provided by APVVP for recent years show that currently about 15% and 30% of inpatients undergo major and minor surgeries respectively. It can be safely assumed that the proportion of such patients will be higher in paying wards. 31. Additional revenue will be generated by charging for X-rays, ultra-sonography, and consumables. Since data are not available on the per patient use of these services and consumables, a rough estimate of prospective revenues can be made by assuming a flat rate of Rs. 200 per inpatient. A sum of Rs. 8.59 million for 70% occupancy and Rs. 9.81 million for 80% occupancy can be generated in this manner. Table 5: Revenue Collection from Paying Beds (Rs. million) Surgical Drugs and Total Bed Charges procedures consumables 80% Occupancy 19.6 13.4 9.8 42.8 70% Occupancy 17.2 11.8 8.6 34.5 32. Table 5 summarizes the recoveries from paying bed patients. These calculations, indicate that between Rs. 35-43 million can be recovered through paying room charges. The gross revenue collections are discounted for additional costs that would be incurred to provide higher quality service in these wards (such as higher nurse to bed ratio, additional attendants and extra amenities such as electricity and water). Assuming that extra costs for providing these services are 20% of gross collections, net revenues generated will be between Rs. 2.8 million and Rs. 3.4 million. 33. Outpatient charges. The number of new outpatient visits is currently about 10 million. Improvements in quality which are envisaged in the project and the normal 191 Annex 4 Page 10 of 10 growth in population would probably result in an annual turnover of about 12.5 million new outpatients. Data on the number of outpatients by gender, age, and type of case are not available. However, an estimate of the gross revenues can be made under different assumptions. Assuming an outpatient charge of Rs. 2 and that 30% of outpatients fall in the non-exempted categories, the gross revenues collection is Rs. 7.5 million. On the other hand, if only 50% of the outpatients are exempted, Rs. 12.5 million can be collected annually. 34. Additional services. APVVP proposes to set up special outpatient clinics and offer diagnostic services for the private sector. The market for the latter is estimated to be large. The decision to offer these services would have to follow a more precise estimate of demand. Preliminary estimates indicate that about as much as Rs. 10 million can be raised through the sale of these services. 35. Potential revenue from hospital charges in AP. The few simple measures outlined above can raise revenues to the order to Rs. 65 million, representing about 24% of the annual non-salary recurrent costs when the present phase of upgradation is completed. The assumption used in the above calculations are fairly cautious. Different pricing rules, for instance a larger differential between Category A and Category B charges, can lead to the generation of additional revenues and also create possibilities for a greater degree of cross-subsidization. The simple simulations indicate the possible levels of revenue collections. A details analysis would involve the effects of prices on efficiency, equity and revenue generation and their effects on the optimal level of user charges. 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