JANUARY

INDIA
How are costs contained?
There are no comprehensive policies to hold down costs. Most cost-containment strategies are limited to costsharing
and use of generic drugs. There is limited evidence with respect to use of cost-effectiveness
assessments, monitoring for financial performance, improvement in operational efficiency, and health
technology assessments.
As the public health care system is financed through taxes, costs are contained in the first instance by
allocations made to the health sector, which currently amount to less than 2 percent of GDP. Most government
health facilities have to operate within the yearly allocated budget. Where there are public–private partnerships,
government negotiates prices with private providers and reimburses accordingly.
What major innovations and reforms have been introduced?
A key goal of the 12th five-year plan is to move toward universal coverage to provide universal access to equitable,
affordable, and quality health care, with supplementation from the private sector (MOH, 2014 and 2015a). Toward this
end, the National Health Mission and its two Sub-Missions—the National Rural Health Mission and the National Urban
Health Mission—was approved by the Cabinet in May 2013. The main components include health system
strengthening in rural and urban areas; the Reproductive, Maternal, Newborn, Child and Adolescent Health strategy;
and control of communicable and noncommunicable diseases (MOH, 2015a).
A number of initiatives are being introduced with respect to quality of care, as described in the section on
quality, above.
An example of health system integration reform is the RSBY scheme. This scheme, now under the Ministry of Health
and Family Welfare, is helping the state and central ministry move to a tax-financed, single-payer system (MOH, 2014).
Reforms also have been introduced to ensure equity in resource allocation. Allocation decisions are to take into
account financial ability, developmental need, and high-priority districts, targeting specific population subgroups,
geographical areas, health care services, and gender-related issues. A risk equalization formula based on health care
need could be developed, with built-in financial incentives for facilities providing a certified quality of care (MOH,
2014).
Other initiatives being introduced include the India Newborn Action Plan, to reduce preventable newborn deaths and
stillbirths; the provision of providing free drugs and diagnostic services; the aforementioned National eHealth
Authority; and a new health rights bill to ensure health as a fundamental right (MOH, 2015a).
The author would like to acknowledge the input provided by Elias Mossialos and the LSE editorial team for
editing the previous draft.
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The Commonwealth Fund