The Economic Survey 2021 has highlighted the need for a healthcare regulator to undertake regulation and supervision of the sector.
"Given the information asymmetries that make unregulated private enterprise suboptimal in healthcare, a sectoral regulator that undertakes regulation and supervision of the healthcare sector must be seriously considered," Economic Survey said.
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"This is especially pertinent as regulation has grown in importance as a key lever for governments to affect the quantity, quality, safety and distribution of services in health systems," it added.
Around 74 per cent of outpatient care and 65 per cent of hospitalisation care is provided through the private sector in urban India
The report highlights that a large proportion of deaths in India manifests due to the poor quality of healthcare than due to insufficient access. It also points out that 1.6 million deaths in India in 2018 were due to poor quality of care, while 0.84 million deaths were on account of non-utilisation of healthcare services.
The Economic Survey also expressed concern about significant asymmetric information that's leading to market failures and draws parallels from banking and financial intermediation – another industry that suffers from significant market failures due to asymmetric information – to design policies for mitigating these market failures.
On the lines of banking and finance industry - that mitigates the information gap through credit rating agencies and credit bureaus, the Economic Survey suggests creating agencies to assess the quality of the healthcare providers – both doctors and hospitals; and patients.
It mentions the Quality and Outcomes Framework (QOF) introduced by the National Health Service (NHS) in the United Kingdom as an example.
"The NHS quality assessment practices included national standards for the major chronic diseases, annual appraisal of all doctors working in the NHS, and widespread use of clinical audits to compare practices, sometimes with the public release of data. These should be evaluated carefully and considered for implementation," the Economic Survey says.
In addition, the Economic Survey also ask the government to have information utilities similar to credit bureaus that assess the quality of individual borrowers by assigning them credit scores, thereby mitigating the information asymmetry faced by a bank or financial institution in lending to the individual borrower.
"In the healthcare context, insurers, as well as healthcare providers, suffer from similar information asymmetry about the patient," it says.
Economic Survey says National Digital health mission can be utilised within the framework of data privacy for this purpose.
"By utilising such data with the aid of artificial intelligence and machine learning algorithms, the predictive aspects can be used to mitigate information asymmetry with respect to the patients," the Survey suggests.