As the Government is setting up new AIIMS, and given that public funding is increasing, it is pertinent to raise some questions around their efficiency and performance
last month, when Prime Minister Narendra Modi laid the foundation stone for the All India Institute of Medical Sciences (AIIMS) in Gorakhpur, Uttar Pradesh, little did one realise that it was exactly 13 years ago in July 2003 that the then Prime Minister Atal Bihari Vajpayee laid the foundation stone for the first new AIIMS in Bhubaneshwar under the Pradhan Mantri Swasthya Suraksha Yojana (PMSSY) that sought to establish AIIMS-like institutes in several States and to upgrade Government medical college institutions. Although the scheme was announced by the then NDA Government, the real push was given by the Congress-led UPA Government that got six new AIIMS established and paved the way for more AIIMS by bringing amendments to the AIIMS Act. The current NDA Government is giving it a further fillip by announcing to establish 12 new AIIMS. As with a few other public programmes, PMSSY shows not only the political salience of development priorities, but also of public programmes designed to achieve those priorities.
Is the setting up of new AIIMS a good strategyIJ Well, protecting households, especially low-income households, against the financial burden of hospitalisation expenses makes good sense. As per the latest National Sample Survey Organisation health survey data, for every 1,000 population 35 persons in rural areas and 44 persons in urban areas get hospitalised every year, and hospital expenses are known to have impoverishing effects on the households. Replicating AIIMS is only one of the strategies to protect households against hospitalisation costs. There are other competing strategies too.
From public financing perspective, the strategy of setting up a new AIIMS in the country contradicts, in some sense, with the strategy of running subsidised health insurance programmes such as the Rashtriya Swasthya Bima Yojana. In creating tax-financed new healthcare capacity within the public sector, the Government is essentially making healthcare available either free of cost or at a highly subsidised rate to the general public. But when the Government also runs a large-scale subsidised health insurance programme, in parallel, it provides financial protection to the insured from wherever they seek healthcare, public or private hospitals. When public funding supports both the supply side and demand side strategies for the same set of population in a given context, there is a contradiction. Still, one can live with this kind of contradiction if one of the two methods of public financing were to be dominant and the other method plays second fiddle. But when both the methods run full steam, this contradiction becomes apparent.
However, there is an added dimension in the Indian context that makes this contradiction somewhat palatable. India has a huge shortage of healthcare providers, including doctors and specialists. The key objective in setting up of new AIIMS is not only to correct the regional imbalances in availability of affordable/reliable tertiary level healthcare in the country, but also to speed up production of doctors so that their shortage gets wiped out in a span of few years. When setting up of new AIIMS is viewed from this lens, the strategy contradiction seems less stark.
The new AIIMS are declared as institutes of national importance, and so the cost of setting up as well as of running these institutions is to be fully borne by the Union Government. The States, in which these medical institutes are established, only provide the land, ensure water and electricity supply as well as road connectivity to the hospital site. The Health Ministry is to provide annual block grants to these institutions and these institutions themselves, through its various committees, are to decide how and where to spend those funds. In other words, funding and performance are not that closely linked, if at all.
Unlike any commercial sector, defining a performance metric in a social sector is not that straightforward. Therefore, paying closer attention to performance assumes added importance in a social sector, and funding needs to be linked to it rather than treating funding and performance as two separate streams. Fortunately, we have the benefit of learning from other countries that have moved away from annual block grant method of funding hospitals and towards introducing performance or results based financing methods.
Now that India has embarked on setting up scores of new AIIMS, and the quantum of public funding going to AIIMS is increasing, it is legitimate to ask questions around efficiency and performance and build these in the design itself.