Private Health Care Is Higher Quality

Indians love to boast about the quality of Indian doctors. “The best in the world! And now India is becoming a center for world class health care, even Americans are flying to India now!” But just between us brown folks, we also know the other side of the story. Many of the best doctors leave the country, and if they come back, they come back only to some high end establishment. The quality of the average doctor in India is … well … rather hit or miss.

As a matter of public policy, what should be done? A study of doctors in Delhi finds that increased training helps, but even then the quality of health care remains sensitive to the right incentives:

The quality of medical care received by patients varies for two reasons: Differences in doctors’ competence or differences in doctors’ incentives.  We find three patterns in the data.

First, what doctors do is less than what they know they should do-doctors operate well inside their knowledge frontier.

Second, competence and effort are complementary so that doctors who know more also do more.

Third, the gap between what doctors do and what they know responds to incentives: Doctors in the fee-for-service private sector are closer in practice to their knowledge frontier than those in the fixed-salary public sector. Under-qualified private sector doctors, even though they know less, provide better care on average than their better-qualified counterparts in the public sector. These results indicate that to improve medical services, at least for poor people, there should be greater emphasis on changing the incentives of public providers rather than increasing provider competence through training. [cite]

Although doctors love to tell you that they work out of a sense of seva, and that the quality of care has little to do with the fee structure, it simply isn’t true. Surprising as it seems, the researchers find that you’re better off with a less trained private doctor than a better trained public doctor. Why? Because the private doctors try harder. The difference in quality was significant:

Public sector doctors did less than a third of what they knew to be important in terms of diagnosis, taking about fifteen percent of the time required to fully diagnose complaints. Over-prescribing and mis-prescribing were also rampant. [cite]

It’s still not clear to me how you channel these better doctors to the poor. The best tactic would be to give poor people vouchers, but that gets tricky. If you subsidize the private doctors directly, will they still provide good service? Does health insurance decrease the quality of coverage? Given the relative shortage of doctors in India, how do you provide higher quality private health care to the indigent?

Disclaimer: One of the researchers, Jishnu Das, is a friend of mine, although he might not recognize me by the handle I use while blogging.

Hat Tip: via PSDBlog

28 thoughts on “Private Health Care Is Higher Quality

  1. Unfortunately, I don’t seem to be able to read the original document.

    I can’t say this comes as much of a surprise. Both the PSDBlog and AdamSmithee put their collective fingers on it by using the phrase ‘for-profit’. Doctors always take better care of private patients. I don’t know a great deal about the nuances of healthcare in India to consider informed responses to your questions, but as you seem to have hinted at already realising Ennis, vouchers for the poor will surely not work.

    Subsidising private doctors, too, seems unrealistic. Even in a country as small as the UK, with an ailing National Health Service, the growth of private insurance is changing the architecture of healthcare dramatically. I think the poorer elements will inevitably receive a lower standard of medical care. If this seems the case in the UK, what hope is there for a country with 20 times the population?

    Pessimistic though it may be, I doubt there will ever be a way to ensure a good standard of healthcare is bestowed upon the needy in India. At least not for a while.

  2. Although doctors love to tell you that they work out of a sense of seva, and that the quality of care has little to do with the fee structure, it simply isnÂ’t true. Surprising as it seems, the researchers find that youÂ’re better off with a less trained private doctor than a better trained public doctor

    Maybe I am misreading this but if incentives (based on fee structure) were an issue, the public sector doctors would move over to the private sector. Nothing is holding them back. If the public sector doctors were indeed more qualified it would easy for them to displace doctors in the private sector. Incentive based on number of patients served or quality of service provided for further promotions and retainment would perhaps cause public sector doctors to pay more attention to the ‘softer’/cultural aspects of patient care. Quite frequently employment in public sectors are seen as sinecures, this might be attractive to more ‘lazy’ minded doctors to park here without exerting any effort. So, at the least doctors in public sectors might have to be on a probationary period where the number of patients and quality of service is judged by senior doctors before ‘tenures’ are given (I am thinking of university professorship models). If this structure causes bolting of people from the public sector (the ‘lazy’ doctors might as well struggle hard in private sector), the govt can keep raising the salaries of public sector doctors (maybe provide better plans on tenureship) until some sort of equilibrium is established. Also, there could be provisions to allow of some private practice to doctors who get tenured.

  3. This may be a bit off topic, but Indians are really in need of better nutrition. While there is noone really starving to death in the country (thanks to the country’s green revolution in the 60s). There is a lot of malnutrition, there are a lot of poor homeless kids with distended bellies and skinny limbs.

    I am a big fan of India’s new Meals in Schools program as a means of solving many of the country’s problems.

  4. Money is not the only incentive in taking a job (private/public). There is always the lok seva angle, but there are other factors too, like proximity to home, for instance.

    As far as solutions go, throwing money after the problems doesn’t always work. Plus its sort of an unrealistic panacea. I suppose the government could pay every public sector doctor a crore and the quality of health care would improve, but its not realistic.

    One thing is for sure, though, if it werent for the brain drain, the level of health care in India would be MUCH better. The self-described “conservative” doctors on this board (basically MD) might object, but its hard to argue against the brain drain idea.

    In my view, the Diaspora should feel some level of collective guilt about this situation, and not just in the medical field. Too many desis (especially first generation immigrants) have a “damn, I’m glad we made it out alive” attitude.

    So back to the point, another possible solution is ratcheting up the patriotic, jai hindi ethos at AIMS and other Indian medical schools.

  5. In my view, the Diaspora should feel some level of collective guilt about this situation, and not just in the medical field. Too many desis (especially first generation immigrants) have a “damn, I’m glad we made it out alive” attitude.

    In my view, the desi politicians (and by extension all desis in desiland) should feel some level of collective guilt about this situation, for creating this crummy economic situation, that forced the doctors to leave in the first place.

  6. Why is it that its always the doctors graduating from Indian medical colleges have to bear the brunt of the brain drain guilt? How come nobody blames the thousands of engineers/software techies/IITians turned MBAs for the poor service/infrastructure in their professions?

  7. “its hard to argue against the brain drain idea”.

    No it’s easy. there was no significant difference between the brain of the desi doctors who left india and those who stayed back (at least at the time these desis left India). The difference in brain power occurred AFTER the desi doctors landed in america/uk and got trained in modern techniques. It’s the system that has made a big difference. Had these guys stayed back in India, they would have been just like any other famous indian doctor. It’s the same thing in other fields –desis are able to achieve more in western societies because of better systems.

  8. Malnutrition? HA- have you seen some of them aunties?

    I always found it hilarious when desis would be all like, “Did you know 30 percent of doctors in the US are Indian??” hahhaha

  9. (and by extension all desis in desiland) should feel some level of collective guilt about this situation, for creating this crummy economic situation, that forced the doctors to leave in the first place.

    Epoch, we’re sorry.

  10. (and by extension all desis in desiland) should feel some level of collective guilt about this situation, for creating this crummy economic situation, that forced the doctors to leave in the first place.

    Or perhaps, it was only by leaving, and by being successful in a more laissez-faire environment, that we gave desi’s back home one more argument for abandoning Nehru statist socialism….

  11. Maybe I am misreading this but if incentives (based on fee structure) were an issue, the public sector doctors would move over to the private sector.

    Well, that might not be the case given the prevalent attitude in India. A lower paying private job might be more attractive to many than a higher paying private sector job due to a sense of security. Contradictory as it might seem, but many would take up a low paying private job due to the less taxing job requirements. That probably explains the lack of efficiency in the Govt sector since many of them joined in the first place to escape the ruthless demands of the private sector.

  12. A lower paying private job might be more attractive to many than a higher paying private sector job due to a sense of security. Contradictory as it might seem, but many would take up a low paying private job due to the less taxing job requirements. typing error there…replace the private by public sector.

  13. I am going to agree with siddarth when he says that

    “..there was no significant difference between the brain of the desi doctors who left india and those who stayed back…”

    ; and along these lines stop looking at this from a diasporic perspective – for it is neither the cause nor the solution. The real issues facing healthcare in India are (i) provider accountability – u cannot sue a doctor in India for malpractice; it has its benfits and disadvantages at the same time, (ii) National Health Program – a sort of insurance program is absent. How are the poor going to afford treatment, and in light of the WTO prices of prescripton drugs are going to go up ( so far India’s benefited from generic versions), and (iii) with medical tourism in boom, in time even the rich may find it hard to obtain services when Indian doctors in India will be be busy providng care to the overseas medical toursits – due to economic disparities. The Indian government will need to come up with some regualtion here.

  14. “”its hard to argue against the brain drain idea”.

    Brain drain is a bogus theory. There are plenty of brains in India. Those who have moved are people with “OPTIONS” excersizing their options. Those who have options will always go where the most wealth (intellectual/plain old) to be had. Market 101.

    Atanu Dey has a good explanation on brain drain.

  15. MD (oh, I am now speaking of myself in the third person, classy, eh?) was raised and trained in the US. I’m an American, so I got nothing to say regarding the brain drain argument. Wait, I do. Silly argument. Were there enough good jobs for the best and brightest, the best and brightest would have stayed. Poor management leads to this in any situation. You walk if you don’t get treated well. You don’t work as hard if you can’t see getting compensated for said hard work. Which is not just a monetary argument, but an emotional one. (It’s not fair, say the workers of the world. It’s not fair! The feeling of fairness is a motivator too, and related to the money, promotion argument. Kiddies, I have techs around me who tell me this, just passing it on….)True of anyone. Even doctors.

    *As someone practicing in a teaching hospital, I’m staying out of this one for political reasons. Not being paranoid. Prudent. I have strong opinions about it, though. If ya wants to email me, we can talk about it that way.

    **And just why do I stay when I could get paid literally, twice as much more in the private sector? I wonder sometimes. I really do wonder. I am no good as a Republican, eh?

    ***If I do leave, it won’t be for the money, but for the freedom. In the private sector, I can make the decisions instead of some beaurocrat. That’s one of the problems with having a large organization. I have no control over the computer systems, couriers, techs, PAs, capital equipment, secretaries, etc, etc. That’s the real problem. That is one of the reasons care delivered in the private sector is better. You can actually fire someone who is no good, promote and give a raise to someone who is, make efficient decisions how and when you want. I’m talking about a well run, small organization here. Obviously, the larger the business, the more the same beaurocratic inertia.

  16. Oh, and I didn’t read the study, which may all just be bogus anyways. No time today, no time…

  17. VM – the government could try training more doctors and health care providers if it wants to help out the poor…….regulation rarely leads to the outcome said regulator intends.

  18. The difference between private and public doctors is the difference between captalism and communism.

    If the market is allowed to play freely in the market of health, obviously the rich will get the best ones and the poor the worst.

    The only way around is intervention by the state, by absorbing the cost of the high quality doctors using the taxes of rich.It is an indirect funnelling of money from rich to poor. The argument is this needs to be done for catering to atleast the basic needs of citizens like health. If no intervention happens, there would be systematic weeding out of the lower strata as they wouldnt have enough money to live.

    So effectively a welfare state in its manifesto should provide every citizen the “Right to Health” or indirectly “Right to Life”.

  19. I wonder how many of you have visited a public hospital in India. Besides broader issues outlined here – http://www.sepiamutiny.com/sepia/archives/002003.html#comment19823 – by VM, I would like to share my personal experience.

    You would find the problem lies with facilities, infrastructure, hygiene, labs, equipment etc.. To talk of ‘skill level’ of doctors is a different issue. Most of my mates who went to medical schools find it hard to qualify for jobs in public hospitals. The everyday drill is rigorous, taxing and very strict. I have often visited public hospitals for second opinion on serious issues and have found those doctors to be very helpful. True, they won’t spend time with you to discuss every detail. But they sure know what they are talking about and have no financial gains in doing so. They won’t discharge you untill they find you fit. I have seen patients almost fighting for discharge slips.

    Private sector doctors get a cut on every day they keep you on bed. I have seen private hospitals trying to attract docs from public hospitals by paying double salaries. No wonder fresh grads try to do govt job first, some of them later migrating to private sectors.

  20. I agree with Harsh. I’m an Indian, I trained to be a Dentist in Bombay, in one of the largest government hospitals. Some of the leading medical and dental practioners both in India and overseas have trained for a large amount of time in these Government Hospitals.You cannot pay your way into most of these hospitals you only get to train here if your amongst the best.So in terms of competence, both public and private sector doctors are similar. The problem is not with the quality of doctors in these hospitals, its with the infrastructure. We see a huge volume of patients using our limited resources, crappy infrastructure, and loads of bureaucracy.We were not any less dedicated or competent than our private sector counterparts, we were just understaffed and underpaid. We never had the luxury of time, equipment, materials etc…we make the best of a bad situation and still provide excellent healthcare. I also did a lot of community work during my training period and I found resources in rural areas lacking, basic amenities like a fully kitted hospital or dental surgery would be missing. People needed to travel into bombay from around maharashtra to get basic treatment, which increases the load in our hospital. Many of my classmates, were from some of these rural areas and were unwilling to go back there and practice after graduation. So I do agree that we need to increase incentives in the public sector, but thats a very small part of the problem. If you want to provide a uniform level of care in the public sector especially in rural areas, you need to make those areas economically viable. You need some kind of economic regeneration inorder to coax people back.

  21. Or perhaps, it was only by leaving, and by being successful in a more laissez-faire environment, that we gave desi’s back home one more argument for abandoning Nehru statist socialism….

    If anything, this situation teaches the opposite lesson. Let the market dictate the supply of medical service, and you’re left with tons of rich desi doctors in the US, and wanting hospitals in India (unsatisfied demand). Maybe a perfectly competitive market MIGHT come about in India from laissez faire, but to paraphrase Keynes, by the time that comes about we’d all be dead.

    I am no good as a Republican, eh?

    By definition. snicker guffaw…sorry, heh

    In my view, the desi politicians (and by extension all desis in desiland) should feel some level of collective guilt about this situation, for creating this crummy economic situation, that forced the doctors to leave in the first place.

    Its easy to blame India’s problems on politicians. Heck, politicians do it and sit on their asses. There is more at work than just that.

  22. RC the article you link to admits there is a “resource drain” if not a brain drain.

  23. I am beginning research on the presumed shortage of physicians in India – thus far I have read only one decent article. If anyone can point me to an article or book, or to a source where I can look further into this issue, I’ll be grateful. Thanks – James Girsch

  24. Poor Indians! I tell you one thing. Self praise is not a recommendation. Stay out in real world dear. Russian doc. are suppose to have good reputation in the field of medical.

  25. Hey Jazzy!! No offence, but please do not pity on Indians – they are above all that. Russian doctors are not better in any way. Do you know that MBBS from Russia is not accepted in most of the countries??? Check out the trend on Medical Tourism in India at [a]http://www.indian-medical-tourism.com[/a] People from all round the world are coming to India for treatment. Please learn about the world around you before making comments.

  26. I feel that talented desi doctors should stay in India, work out a profitable scenario where they can survive the odious bureaucracy and practice their profession besides lending help to the growth of India and Indians, at the same time ensuring their profits. I know its not easy but better than be subject to practicing in a small hospital (at a very subordinate position) in a remote Southern or Midwestern US town where the quality of social life ranges between zero and negative. I’ve seen doctors doing that, struggling hard to come here, passing through the gauntlet of enrolling for multipe (unrelated to the medical profession) degrees to stay afloat within the tyrannical immigration system and then just staying put in a particular post. It is very much possible to earn a decent amount of money in India too, though it might be less in absolute terms . Why contribute your energies to a foreign land all your life which overutilizes you and underpays you(think overall quality of life in the US as an INDIAN, vs life in India). If you think capitalistically too, India is a land of a billion people who might someday need your skills!!!