NOTES Economic & Political Weekly EPW october 31, 2020 vol lV no 44 59 Analysis of Private Healthcare Providers Chetana Chaudhuri, Pritam Datta India’s health system is dominated by the private sector and as a result, out-of-pocket expenditure is very high. To provide financial risk protection and avoid catastrophic health consequences, policy emphasis is on the Ayushman Bharat programme which targets to cover 50 crore people. Such a large-scale insurance scheme needs huge infrastructural and administrative support. Unincorporated private healthcare providers comprise 99% of private health providers in India, the majority of them being small scale, employing less than 10 workers and having a strong urban bias. To better promote universal health coverage, policy emphasis on better monitoring, administering regulations, transparency in system, and ensuring quality in delivery of service is needed. The authors are thankful to an anonymous referee for useful comments on an earlier draft of this article. The authors are also thankful to the discussants and participants of the 7th Annual Conference of the Indian Health Economics and Policy Association, held at GIFT, Thiruvananthapuram, Kerala, for their valuable insights. Chetana Chaudhuri ( chetana.chaudhuri@gmail. com) is senior research associate, Public Health Foundation of India, Gurugram. Pritam Datta (pritamdatt@gmail.com) is fellow, National Institute of Public Finance and Policy, New Delhi. T he 2019–20 interim budget pro- poses a hike of `4,000 crore against the previous year’s budget alloca- tion to India’s flagship insurance-based healthcare programme Ayushman Bharat Pradhan Mantri Jan Arogya Yojana (hence- forth Ayushman Bharat). There has not been any increase in budget allocation in real terms in state-sponsored programmes like the National Rural Health Mission ( NRHM) while there is a marginal increase for the National Urban Health Mission ( NUHM). Clearly, the government is shift- ing focus from a state-based social secu- rity system for health to an insurance- based mechanism. But is the country’s health system ready to accept the leap? Public spending on healthcare is his- torically low in India. Federal and state governments together spend only 30% of the total spending on healthcare in India ( NHSRC 2017). As a consequence of such low public spending on health- care, out-of-pocket ( OOP ) expenditure covers most of the healthcare cost in India. Most importantly, healthcare infra- structure is not sufficient in terms of staff strength as well as institutions (hospitals, etc). Across the country, the available hospital beds per thousand population is 0.7 1 and average govern- ment hospital beds per thousand popu- lation in India is 0.4. One government hospital on an average serves a popula- tion of 90,000. In low- and middle-income countries, a large private sector is often found in parallel to a feeble public sector and India is not an exception. Private providers not only serve the economically better-off classes, but also 20% of hospitalisation cases in the private sector are from the vulnerable section. 2 Some studies have found that the growing size of the private sector has often led to regional disparity in healthcare services, poor condition of the public health system and low public expenditure on health (Drèze and Sen 2013; Sengupta 2012). But it is often emphasised ( WHO 2008) that tax- funded public delivery of health is not sufficient to achieve universal access to healthcare. According to the National Sample Sur- vey Office ( NSSO) 71st round survey on social consumption relating to health, the private sector dominates both in the rural (58%) and urban (68%) sectors in providing inpatient care ( NSSO 2016). 3 Though the footfall of the poorest two income quintile groups is higher in public sector providers for inpatient hospitali- sation in rural areas, for outpatient care, both rural and urban population across all income quintile groups depend more on the private sector (72% in rural and 79% in urban sector). 4 A deeper analysis of the unit level data of the survey shows that for states like Uttar Pradesh, Bihar and Jharkhand, the share of private providers in inpatient care is 80%, 57% and 60% respectively in rural areas; while for the same states, the share of private providers in providing outpatient care in rural areas is 86%, 86% and 68%, respectively. Thus, in countries like India, the private sector carries a lot of importance in terms of reaching healthcare services to the far-flung corners of the country and to the poor population, who cannot afford to travel long distances to reach govern- ment health facilities. India is gradually inclining towards a universal healthcare system following a universal health insurance model. Along with several federal as well as state government-sponsored health insurance schemes, Ayushman Bharat, providing coverage up to `5,00,000 per family per year for secondary and tertiary care hospitalisation, was started in 2018–19 for poor, deprived rural families and it identified the occupational category of urban workers’ families, with a target of covering 50 crore people. Following the data of the Socio-Economic Caste Census ( SECC) 2011, 8.03 crore families in rural and 2.33 crore in urban areas would be entitled to be covered under this scheme.