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Privatising district hospitals: Health ministry, states, experts had little say in Niti Aayog plan -Menaka Rao
-Scroll.in

RTI documents show that Niti Aayog largely worked with World Bank and top private healthcare industry.

The Niti Aayog’s blueprint to increase the role of private hospitals in treating non-communicable diseases in urban India by handing district hospitals over to the private sector on 30-year leases was built largely on a template provided by the World Bank. The template was fine-tuned in close coordination with top private healthcare industry representatives. State health officials and the Union Ministry of Health and Family Welfare had a limited role in developing the blueprint, and public health experts outside the corporate world had an even smaller role, show government documents reviewed by Scroll.in.

A meeting chaired by Prime Minister Narendra Modi last year gave Niti Aayog the mandate to build model contracts for public-private partnership in the health sector. Much of the discussion in the Niti Aayog in drafting the blueprint was limited to tweaking model contract agreements to ensure buy-ins from private players.

Towards the end of the discussions, one senior officer within the Niti Aayog warned against the discussions being led by private players in the health sector and the consequent template. The officer noted that the template did not focus on final health outcomes but only on inputs to get industry interested in the proposal. The consequences of such an approach would not be good, she warned.

Her advice was ignored.

Instead, Niti Aayog Chief Executive Officer Amitabh Kant ordered that there was no need to ensure proof of the model’s efficacy through pilot projects or for the Union cabinet to approve of the idea – both of which had been proposed initially.

The Niti Aayog eventually proposed that district-level hospitals be leased out to private sector players for 30 years to provide secondary and tertiary level care for non-communicable diseases such as cancer and respiratory ailments at rates prescribed under government schemes. The document was leaked to the media in June and eventually released by the government think tank in August.

Under the proposal, there is to be no free treatment or separate beds in privatised district hospitals for those who are not covered by government health schemes. State governments are required to direct ill people from community health centres and primary health centres for higher treatment to these privatised hospitals to ensure customers. But patients without government health insurance will not get free treatment beyond primary and community health centres. The scheme allows the government to have people covered by its schemes treated without having to administer the services itself.

District hospitals are supposed to provide the private partner with building space and also share back-end infrastructure facilities such as ambulance services and blood blanks with them. The agreement also offers private hospitals a chance to set up 50- or 100-bed hospitals in towns other than India’s eight largest metropolises. The state government will provide private partners with some of the viability gap funding (a one-time grant to set up the hospital).

Scroll.in used the Right To Information Act to access the official documents with the government on the privatisation of district hospitals in order to reconstruct how the Niti Aayog reached its controversial conclusions.

The trigger

On March 14, 2016, Modi chaired a meeting at his residence reviewing the state of healthcare in the country. Union Health Minister JP Nadda, health secretary CK Mishra and other health ministry and Niti Aayog officials attended the meeting, the minutes of which show that Amitabh Kant made presentations on the health sector.

On the subject of infrastructure, it was decided “to promote private players partnering with government to ramp up infrastructure and improve quality”. It was decided that “Model Concession Agreements for PPP in health (across primary, secondary, and tertiary sectors)” would be prepared and a new central body would be set up to promote innovative ideas for public private partnership in health. The health ministry was given six months to take action on this decision.

However, officials of the Niti Aayog had already begun work on the plan a month earlier in February, when they met an health sector investment officer of the International Finance Corporation and a health specialist and senior economist of the World Bank. They discussed developing “a model concession agreement chronic disease units co-located with district hospitals in PPP mode”.

On March 4, Kant approved the note to involve the World Bank for technical support to develop the blueprint. On April 4, after the meeting at Modi’s residence, a Niti Aayog official noted that the proposed blueprint would first be tested at a couple of district hospitals as a pilot study. “Thereafter, it has been planned to seek the approval of the Union Cabinet for sharing the MCA [Model Concession Agreements] with all the States for rolling out across the country,” the official noted.

By May 19, 2016, the finance ministry approved the World Bank as the sole technical consultant to prepare the blueprint.

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