Like all of the other major industrialized countries, India also have a Universal Health Care System^[1] run by the state and central government. The governmental hospitals provide health care to the masses at the tax-payer expense. Most important drugs are often provided free of charge. Obviously, on papers, nothing can seem any better than the universalized health care system. Universal Health Care system is the proposed health care facility for all the eligible residents of a political region, and the costs of the treatment and care are borne by the government funded program, that is by the tax-payers money.
Somehow, government establishes the idea that the health care is a sort of fundamental right for the citizens and it is governmental duty of the system to provide health care facilities; obviously, the tax-payers need to pay for that duty.
In 1981, there were approximately four medical practitioners per 10,000 citizens, in late 80’s that number fell to 3 medical practitioners per 10,000 citizens. One can assume that as a reflex of population increase. In late 90’s there were approximately 10 hospital beds per 10,000 individuals.
The abysmal data further deteriorates when one look at the geographical distribution of medical facilities and hospitals. Uttar Pradesh, with a 1991 population of more than 139 million, had 735 hospitals as of 1990, while Kerala, with a 1991 population of 29 million occupying an area only one-seventh the size of Uttar Pradesh, had 2053 hospitals. The data suffices the evidences of failure of the government planning of health care system.
Yet, it would be wrong to criticize or blame the government for the failure because it is not the failure of government itself; rather it is the failure of the corrupt idea that health care is some sort of fundamental right. It is the failure of our own perception that there is a need of a governing body to regulate our most personal orders of life.
Here is a proposal for improvement.
>The major problem of Indian Health Care System is the terribly low number of medical practitioners’ available for the citizens.
In order to improve and increase the number of available medical experts we need to eliminate all licensing requirements for medical schools, hospitals, pharmacies, and medical doctors and other health-care personnel, that is, we need to industrialize the health care sector. There is a huge demand for medical professionals, yet Indian government is not able to provide them, the only reason is the governmental regulations. Once such regulations are removes or eased out, their supply would almost instantly increase, prices would fall, and a greater variety of health-care services would appear on the market.
One may ask that without any governmental regulating body, how will it be possible to discriminate between an eligible and efficient medical practitioner and a “Neem Hakim”?
The solution is within the market premises; competing voluntary endorsement agencies would take place of the compulsory government licensing. Obviously, these endorsement or accreditation agencies would be run by the same social organizations and NGO’s that keep promoting the causes of citizens and society welfare.
Why would a medical college or hospital look for any such accreditation or certification from a NGO?
The health care providers will look for such accreditation if they believe that such recognition would enhance their own reputation, and that their consumers care about reputation, and are willing to pay for it.
Furthermore, as there won’t be illusion in the consumers mind that there is any thing like “national standard” of health care, they would be more cautious, will increase their search costs for better facilities and make more discriminating health-care choices, and that trend would further the need of the health-care providers to have some certification from some reputed NGO to bank on that.
Won’t the Health-Care Providers bribe the Competitive Endorsement Agencies and corrupt the market?
Governmental licensing system is already corrupt, the only problem is, there is no other way out to get rid of the corruption. In a free market, once a health-care provider commits a mistake, it would loose its market. In addition, the certification provider agency will also loose its reputation and credentials to provide any further endorsement.
> The other major problem of the Indian health care system is the huge prices of medicines and medical devices. Would the free market be able to cater all those costs? Will the medicines be further costly due to the lack of governmental subsidies?
Governmental subsidies are not the solution for the high costs of medicines and medical facilities. The solution is to eliminate all governmental restrictions on the production and sales of pharmaceutical products and medical instruments that currently hinders innovations and increases costs.
In absence of governmental interference and restrictions, costs and prices would fall and a wider spectrum of better products would reach the consumers faster.
The free market would force the health care providers and the consumers to act in accordance with their own risk assessment. The competitive drugs and medical instruments manufacturers and sellers, in order to safeguard themselves against product liability cases and also to increase their customer belt, would provide increasingly better product descriptions and guarantees.
>The other important issue in the Indian health care market is the presence of alternative health care facilities such as Ayurveda and Unani herbal medicinal practices. Should government restrict or ban someone like Baba Ramdev or private institutes like Patanjali Ayurvedic Hospital services? Should government devote further more resources and tax-payers money to scientifically verify the validity of Ayurveda and Unani medical practices?
In reality, governmental interference always causes deterioration, corruption and wastage.^[2] The market itself provides checks for any such stream of medical practices. Any such institute that stands on its own credentials and the reputation it gains within the consumers’ belt itself remains enough self-cautious and answerable. The free market would obviously promote the alternative health care systems freely to innovate and invigorate.
>Another issue in the urban Indian health care sector is the rising prices of the medical insurances. The solution is the deregulation of health-insurance industry.
Insurance agencies can provide insurance against the events over whose outcome the insured has no control. Since a person’s health or lack of it lies within his own hands, many of the health risks are basically uninsurable. Furthermore, for the insurable health risks also, better pooling system free of governmental restrictions should be provided. Because the current system (which obviously is a huge failure) is only partly concerned with insurance, rather it is more concerned with the corrupt idea of Universal free medical facilities for all citizens, it restricts the right of the insurer to refuse or to exclude any individual risk as uninsurable, and the industry cannot discriminate freely amongst different groups’ risks.
This is a case where egalitarianism holds no worth. Health-care insurance is a case where discrimination is justified and necessary. As for example, anyone can have heart problems, but the risk with an alcoholic consumer are surely much more than the risk with a non-alcoholic consumer. Obviously, the non-alcoholic consumer should not be pooled in the same group of the alcoholic consumer, the insurance agency should discriminate the two consumers and the heart health risks involved with the two on the premises of one being alcoholic and other being non-alcoholic.
Deregulation of health insurance industry will remove such discrepancies.
Deregulation of the industry means to restore it in an unrestricted manner. It means to allow the insurers to offer any possible contract whatsoever for the consumers, to include or exclude any risk, and to discriminate among its consumers to pool them in different groups based on any criteria including their hereditary conditions, health habits and addictions. In deregulated health insurance market, the uninsurable risks would lose coverage and the individuals will become further more cautious. The variety of insurance policies for the remaining insurable risks would increase and prices will fall drastically. The most important thing is, the individual responsibility of the consumer in health care will gain more emphasis and that would provide an environment for better habits and proper living attitudes amongst the citizens.
We have further discussed this particular issue of health insurance here -^[3]
India has a huge demand of medical services and as discussed earlier, governmental restrictions cannot supply the much required services.
Until the governmental restrictions are not removed, the health-care system of India will have serious problems and we, being the consumers will suffer those problems. Furthermore, we being the tax-payers will keep paying for the same problem

1. Universal Health Care system, Wikipedia [↩]
2. Separation of Science and State, Reason For Liberty [↩]
3. Indian Insurance System and Free Market., Reason For Liberty [↩]