NextBillion - An Initiative of the William Davidson Institute at the University of Michigan

Wednesday, March 11, 2015

At first sight, the cheerful-looking red and white painted building looks like a quiet public rest house in the din and bustle of Hajipur, a fast developing town in India’s northern state of Bihar.

But look closely and you see a stream of people entering Aastha Hospital, run by an enterprising doctor couple who left lucrative jobs in India’s private sector to set up a facility offering quality treatment at affordable prices.

In the process, surgeon Atul Varma, and ophthalmologist Jayashree Shekhar, have upended the widely held notion that you cannot get quality healthcare in India unless you are affluent.

After all, India spends a paltry 1% of its gross domestic product (GDP) on health, which is among the lowest in the world. At 69% of total household expenses, private spending on health is among the highest in the world. Millions of Indians become bankrupt meeting medical expenses. Although the state provides free treatment, only 22% of people in villages, and 19% of people in cities access government-run outpatient facilities.

Shambolic

Things are worse in Bihar.

The public health system is in a shambles although the state has some 800 government hospitals and primary health centres, and about 2,000 private nursing homes or clinics. Federal laws regulating private facilities are routinely flouted.

Just one doctor for every 18,000 patients makes for overworked physicians and suspicious patients. Reimbursement for a modest state-funded health insurance for the very poor is difficult to raise without paying a bribe. By one estimate, two-thirds of medicines in the wholesale market are spurious.