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Government-Sponsored Health Insurance in India
hospital-seeking behaviors, hampering analyses of the potential for public hospitals to reap revenues from GSHISs.
Public Hospital Governance and Accountabilities in India Under current governance and institutional arrangements, most public hospitals are in no position to compete with private facilities. Few have the autonomy or flexibility to manage their own affairs (box 3.1). They can neither perceive the incentive signals inherent in a payment mechanism, nor are they able to respond to them effectively. They are entirely dependent on the hierarchical control of state health authorities for nearly all budgetary and input decisions. Budgets bear little or no relation to volume, quality, or efficiency of care. Unless part of a GSHIS network, these hospitals do not face market pressures. Staffing and budget norms—often related to civil service, budgetary legislation, or public health codes—restrict managers’ freedom to marshal resources to improve quality or achieve efficiency. In
Box 3.1
India: Alternative Organizational Arrangements of Public Hospitals Two categories of alternative organizational arrangements have emerged in India. The first involves a subset of public hospitals that have been granted autonomy through special legislation. These are often tertiary hospitals affiliated with medical colleges. The second is an emerging arrangement in which committees consisting of local politicians, community members, and medical staff are granted decision rights over the spending of a limited amount of revenues. Autonomous hospitals. A small number of public hospitals have been established as “autonomous institutions” under special central or state legislation. Examples of such autonomous hospitals include the Post- Graduate Institute of Medical Education and Research (PGIMER), Chandigarh; Sri Venkatesvara Institute of Medical Sciences, Tirupati, AP; Nizam’s Institute of Medical Sciences, Hyderabad, AP); the All India Institute of Medical Sciences, New Delhi; and the National Institute of Mental Health and Neuro Sciences (NIMHANS), Bangalore. These hospitals have broad decision-making authority to manage their inputs and receive grantbased financing. However, the internal rules created by these institutions often (continued next page)