Lessons for India from the German healthcare system
VS Saravanan | October 7, 2016 | Germany
The world will observe the fourth universal health coverage day on December 12, urging governments to ensure universal access to quality healthcare without financial hardship. India, a signatory to the Sustainable Development Goals (SDGs), has a challenging task ahead to universalise its healthcare. In spite of several strides in health services, the country is still reeling under heart-wrenching stories like that of the poor man of Odisha who carried his wife’s body on his shoulders for kilometres due to lack of transportation facilities. Basic healthcare services are inadequate and almost inaccessible to the poor in India.
As India marches towards the universal health coverage day, it faces a daunting task to reduce the burden of diseases and child deaths. India accounts for 20 percent of the global burden of diseases, 27 percent of all neonatal deaths and 21 percent of all child deaths (younger than five years) in the world (as on 2013) (Patel et al., 2015). It embarked on a new draft national health policy in 2015 that endorses the goal of universal health coverage on three objectives: equity, quality and that people are protected against financial hardships. Achieving these targets is ambitious and requires strategic incremental approach. The Indian government must draw insights from the healthcare systems in Germany and strengthen its healthcare system as a nation-building activity to expand health coverage, rather than joining the bandwagon of expanding coverage through health insurance.
How Germany does it
The healthcare system in Germany is comprehensive and one of the oldest in the world. It has remained intact over the past century, in spite of wars, political upheavals and global hurdles. A historical assessment remains crucial for cross-national health policy lessons, as it takes into account the short-term and long-term factors, and helps to embed the approaches to socio-political and cultural contexts.
Healthcare system in Germany is built on the principles of social solidarity and communitarian values. All residents in Germany (including migrant workers) are covered under its healthcare system where most people seem to be satisfied with healthcare services. Health insurance is part of the state social security system, which combines pension insurance, unemployment insurance, long-term care insurance and accident insurance. In fact, the statutory health insurance (SHI) or sickness funds, where most of the Germans have been insured, is less of insurance but rather a fund deposited by each member based on their ability. Social solidarity among different actors (public, private, churches, faith-based and secular organisations) to remain committed to the preservation of equitable access to quality medical services has been crucial.
Looking back at the history of healthcare in Germany, Otto von Bismarck, the chancellor of Germany and a dictator in his own right, is credited for the sickness fund in 1883. But it covered only a certain segment of society. It was Adolf Hitler who actually imposed this to cover all sections of the population (like universal health coverage). This collective universal healthcare concept was called ‘racial hygiene’, whereby certain sections of the population were allowed to procreate and others were not with an intention to promote the characteristics (of Aryans) that is deemed desirable. Hitler expanded these policies even to occupied neighbouring countries that he wished to ‘Aryanise’ and eliminate ‘physical/mental defects’ in the population (by medical killing). This was supported with massive investment for medical education by establishing curriculum and training medical workforce. Though he used this concept with the intention of conquering the world; after the 1940s, the government, churches, secular-based organisations and educational institutions transformed this towards a benevolent act of nation-building.
It is this social solidarity in healthcare which is ingrained in the current German healthcare system. This does not mean that the social solidarity was uncontested. Starting with highly state-controlled (during Bismarck and Hitler’s time) system, there have been constant negotiations and compromises, finally resulting in a highly devolved form of healthcare system. This is reflected in the membership in the insurance committee, where the contributions are based on income, but everyone gets the same services and at a similar cost. The sickness fund, which takes care of the health services, is jointly managed by the employer and the employee. “SHI is financed by members’ contributions which are paid as payroll taxes by the employer and the employed. For the unemployed, the employment agency makes the payment” (Obermann et al.). People with higher income opt for private health insurance.
Initiated by the business leaders in their own self-interest for their workers, Otto von Bismarck made sickness funds centrally controlled. However, in 1883, when regional forces were against this central control, its management was organised regionally. Finally in the late 19th century, it resulted in joint management, but not without mediation. Initially, the workers represented two-third of the seats in the board of individual sickness funds, but later got equal seats. During the Nazi regime it was totally controlled by Berlin, and after 1945 it was reverted back to the worker-business joint management in West Germany and subsequently across Germany after 1993.
Overall, the federal agency asserts more regulatory role in passing legislations and policies. Thus allowing self-administration of the sickness funds by the state government, which is responsible for hospital planning, managing state hospitals and supervising funds. The local government implements these jointly through private organisations and churches. The people are given various choices amongst hospitals and private providers. Even though the country witnessed several shifts in the ruling party, namely Christian Democrats and the Social Democrats, neither of them relaxed control of the healthcare system.
The German healthcare system represents one of the successful implementation of communitarian values over a century through political compromises and negotiations. These have emerged with the sole purpose of ensuring health for all.
What India can do
Social solidarity in the Indian health sector is almost absent. In 2013, a workshop was organised by the municipal corporation in Ahmedabad on urban health. One of the medical officers from the corporation acknowledged that this is the “first gathering where the health department and city engineering department were jointly discussing urban health. In the past whenever there was outbreak of water- and vector-borne diseases, the department of health officials were called, but never involved the department of city engineering or any other department”. The health sector remains at the back seat in India. It is never considered by city planners, water or housing sector. This is worsened by decreased allocation to the health sector by the national and state governments. Overall allocation for the health sector has decreased since India’s independence. World Bank data shows that in 2014, the government expenditure on health in India was only 1.4 percent of the gross domestic product (GDP) – one of the lowest in the world. Instead of increasing the allocation for healthcare, the new draft national health policy 2015 plans to involve and seek investment from the private sector, without realising the trust and confidence that people have reposed in the public health system.
For people, though pharmacies and private clinics remain the first point-of-contact, public health centres are crucial for diagnostic testing, pregnancies and for screening and prevention of communicable and non-communicable diseases. This is especially the case of the poor, who depend on government subsidies and incentives and cannot afford high-cost from private hospitals. In recent years, the expansion of health infrastructure have been associated with increase in institutional delivery and decrease in infant mortality rates in most Indian states (Patel et al., 2015). Further, opening government health centres during early morning hours or till late evening hours can significantly boost high facility utilisation and improved coverage. With increased allocation and few changes in the public health system, the healthcare coverage can be significantly increased.
Secondly, like in Germany, India has to keep profit-motive out of the health sector or it should be kept to a minimum. Investment in the health sector should be considered for a healthy future. National and state governments have to come out with legislations and policies to regulate and monitor the private sector, before offering them a preferential treatment with incentives and subsidies.
Third is to improve its sources of information on health for informed decisions. Currently, India has multiple sources of information on health statistics (national sample survey, sample registration system, civil registration system, national family health survey, information reported in local government, project-based information systems). The poor quality and coherence of this information, poor coordination among these institutions, and failure to comprehensively assess the health scenario (non-communicable diseases are completely neglected) have been a major hindrance to developing adequate health improvement measures.
Fourth is to strengthen the health workforce and research institutions. The existing health workers (such as multiple health workers, link workers, aanganwadi workers, auxiliary nurse midwives) play a prominent role in screening and monitoring health status of the people. Unfortunately, they are the ones who are paid the least or some of them are considered as voluntary labourers. It is important for the government to strengthen their role, offer financial security, build their skills and create synergy among healthcare workforce. The existing educational institutions largely rely on clinical-based curriculums. These curriculums primarily cater to curative healthcare rather than preventive. Further, graduates are offered opportunities in the private sector only.
India has to also harness the potential of diverse forms of health systems – namely, Homeopathy, Ayurveda, Siddha and other forms of medical systems. In recent years, the government has taken efforts to strengthen these niches by establishing specialised universities. However, they remain as silos. These institutions need to be strengthened and integrated with medical education and healthcare practices.
Finally, India has to evolve appropriate financing of healthcare. The national health accounts for the year 2013-14 reveal high out-of-pocket expenditures (OOPE) (about 65 percent of total health expenditure) of the people. Also, over 35 percent of the current healthcare expenditure is spent on pharmacies and a large proportion of the amount is spent on curative care. This offers potential for government to strengthen its public health centres and pharmacies. Weakened governance arrangements, poor collection of tax revenue and large prevalence of the informal sector make universal coverage through health insurance challenging. International experience suggests private insurers create powerful incentives to avoid sick and poor people and attract the healthy ones. This questions the inability of the insurance providers to address equity issues. It is important that the government takes a gradual approach in combining public and private sectors to expand the coverage of health insurance. It should first focus on strengthening its public health systems.
On this universal health coverage day, it is important that the government steps up measures to ensure a healthy future of every Indian citizen.
Saravanan is with the Centre for Development Research (ZEF), University of Bonn, Germany.
Obermann K., Müller P., Müller H-H., Schmidt B., Glazinski B. (2013) Understanding the German Health Care System. A concise overview. Hamburg: Der Ratgeber Verlag.
Patel, V., Parikh, R, Nandraj, S., Balasubramanian, P., Narayan, K., Paul, V.K., Shiva Kumar, A.K., Chatterjee, M and Reddy, K.S. (2015) Assuring health coverage for all in India. Lancet, 386 (10011) Pages 2422-2435.
(The article appears in the October 1-15, 2016 issue of Governance Now)
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