Editorial 1: Healthcare in India has made great progress, but challenges remain\
Context:
- Over the years, the Indian health system has overcome seemingly insurmountable problems, long considered hopeless.
- At a time when we are the envy of the world for having the youngest population for more than three decades to come and if we are to redeem that advantage fully, some tough health challenges will need to be confronted.
Statistical health situation of India:
- As the recent National Family Health Survey (NFHS-5) results have shown. In 2007, national and international demographers concluded that even under the best-case scenario, India would achieve a total fertility rate of 2.1 (replacement level) only by 2041. India achieved this by 2020.
- Likewise, high maternal and infant mortality seemed destined to persist as late as 2010. Despite evidence showing the crying need for women to deliver in a hospital, the reaction was always the same — “sadiyon se humare dai yeh kaam karti arahi hai. Isse hum badal nahi sakte.” (For centuries, the traditional dais have delivered babies and we cannot change that.) Ten years later, the latest NFHS-5 findings show how even in the so-called BIMARU states, hospital deliveries have soared to 89 per cent.
Five interrelated health challenges which are pervading the population:
- Today’s macro picture shows at least five interrelated challenges which are pervading the population.
- Cardiovascular diseases (CVDs), cancers, chronic respiratory diseases (CRDs) and diabetes are spiralling and they all share four behavioural risk factors an unhealthy diet, lack of physical activity and use of tobacco and alcohol
- A report, ‘India: Health of the nation’s states’, estimated that the proportion of deaths due to non-communicable diseases (NCDs) has increased from around 38 per cent in 1990 to 62 per cent in 2016. Obesity has increased from 19 per cent to 23 per cent between NFHS-4 and NFHS-5, in both urban and rural areas.
- Large sections of the population are obese which increases the risk of diabetes, hypertension, and CVD.
- Building awareness and exhorting people to lead healthy lives will save millions from illness and decelerate premature death. Unspectacular as it sounds, governments must keep millions away from ill health — more cost-effective than eventually treating chronic medical conditions in hospitals.
Health infrastructure is prerequisite for better health facilities:
- The state of infrastructure matters. Since 2018, governments at the Centre as well as the state have been trying to bolster primary healthcare by establishing health and wellness centres (the new incarnation of primary health centres and sub-centres.)
- But a 2022 report by the Centre for Community Medicine in AIIMS, which covered selected districts in 18 states, found huge variations between states.
- Some northeastern states like Mizoram, Arunachal Pradesh and Nagaland were found to have better arrangements followed by Gujarat and Chhattisgarh.
- The lowest proportions of primary health facilities with full institutional capacity were in Jharkhand, Karnataka and Uttar Pradesh. An idea announced in 2018 ought to have got more traction by now. States must step up efforts.
- In urban areas, the challenge is to bridge the gap in hospital services between large urban agglomerations and tier II and tier III cities.
- A recent Lancet publication (2023) found that the provision of core health services is far from uniform across state-run district hospitals.
- Just 16 per cent of the district hospitals in Tamil Nadu offered all key services. In states like Assam, Punjab, Madhya Pradesh, Mizoram and UP, it was found to be just 1 per cent. Whether it is wanted or not, people have to bank on the private sector, which owns two-thirds of the country’s hospital beds.
- Though these institutions provide a much-needed service, they are unable to provide multi-specialty, leave alone tertiary and quaternary care.
- The gaps between services available in the metros and big cities and in districts must be bridged. Making the centrally-run hospitals (where a 40 per cent vacancy was reported only a few months ago) and the district hospitals fully functional is imperative
Issue with low health insurance penetration:
- The other problems centre around low health insurance penetration and the very high personal outgo on healthcare. But over the past three years, more than four crore Indians have bought health insurance.
- From 2018, the Ayushman Bharat insurance scheme for 10 crore poor families has been undertaken to provide insurance against hospitalisation for up to Rs 5 lakh per year per family.
- Taken together with the state-run insurance schemes, the Employees State Insurance (ESIC), group insurance and CGHS, nearly 74 per cent of Indians are either covered or eligible for health insurance coverage, which even if it is only insurance and not healthcare, is a game changer from the pre-2018 situation.
- However, millions remain uninsured. Out-patient doctor consultation costs, diagnostics, and drugs account for the biggest chunk of out-of-pocket (OOP) personal expenditure.
- Presently this is pegged at 50 per cent of the total health expenditure. It is, therefore, essential to provide insurance for the unorganised middle class and to include identified out-patient costs.
Conclusion:
- An emerging concern is the use of Artificial Intelligence (AI) and digital technology. Surgery assisted by robots, the use of genetic codes, clinical judgements based on AI, and even pandemic forecasting are already widespread and are to be welcomed.
- However, ethical and regulatory concerns abound, which recently prompted the Indian Council of Medical Research to release guidelines foreseeing the problems of a lack of accountability for machine-made medical decisions.
- When medical malpractice in substandard institutions and by unqualified medical practitioners is still not regulated, a new dimension has been added making the regulation of healthcare even more compelling.
- India has shown how the impossible can be achieved. What is needed is out-of-the-box thinking and the resolve to steer the ship before a storm arrives.
Editorial 2: What is an IMF bailout, when is it provided to a country, and what are the lending conditions?
Recent Context:
- The International Monetary Fund (IMF) executive board approved a nearly $3 billion bailout plan for Sri Lanka last week, of which about $333 million was to be disbursed immediately to alleviate the country’s humanitarian crisis.
- Meanwhile, Pakistan Prime Minister Shehbaz Sharif said the IMF wants his country to fulfil commitments from friendly countries on external financing to release bailout funds. The lender has been negotiating with Islamabad since early February to resume $1.1 billion funding held since November, which is part of a $6.5 billion bailout agreed in 2019.
What are IMF bailouts?
- In a general sense, a bailout means extending support to an entity facing a threat of bankruptcy. Countries seek IMF bailouts when they are facing macroeconomic risks, currency crises and need assistance to meet external debt obligations, to buy essential imports and push the exchange value of their currencies.
- According to the IMF website, inappropriate fiscal and monetary policies, which can lead to large current account and fiscal deficits and high public debt levels; an exchange rate fixed at an inappropriate level, which can erode competitiveness and result in the loss of official reserves, and a weak financial system, which can create economic booms and busts are among factors that lead to economic crises. Political instability and weak institutions also can trigger crises, as can insolvent financial institutions.
- Both Sri Lanka and Pakistan witnessed a sharp rise in domestic prices and the exchange value of their currencies plunged. Currency crises are usually the result of mismanagement of the currency by its central bank. Sri Lanka’s economic crisis can also be partly contributed to bad timing, as it saw a fall in the flow of US dollars into the country due a decline of foreign tourists during the Covid-19 pandemic.
- The IMF was set up in 1945 with the aim to bring about international economic coordination to prevent competing currency devaluation by countries trying to promote their own exports. It later went on to become a last resort lender for countries facing severe economic crises.
How is an IMF bailout provided?
- The IMF lends money to the economies in peril in the form of Special Drawing Rights (SDRs), which is a basket of five currencies — US dollar, Euro, Chinese Yuan, Japanese Yen and British Pound. It can be executed in the form of loans, cash, bonds, or stock purchases.
- The lending is done through programs designed according to purpose. According to the IMF, these include standby arrangement, standby credit facility, extended fund facility, extended credit facility, rapid financing instrument, rapid credit facility, flexible credit line, short term liquidity line, precaution and liquidity line, resilience and sustainability facility, staff monitored program, policy support instrument and policy coordination instrument.
Five steps of IMF lending
- First, a member country in need of financial support makes a request to the IMF.
- Then, the country’s government and IMF staff discuss the economic and financial situation and financing needs.
- Typically, a country’s government and the IMF agree on a program of economic policies before the IMF lends to the country. In most cases, a country’s commitments to undertake certain policy actions, known as policy conditionality, are an integral part of IMF lending.
- Once the terms are agreed upon, the policy program underlying an arrangement is presented to the IMF’s Executive Board in a “Letter of Intent” and detailed in a “Memorandum of Understanding.” The IMF staff makes a recommendation to the Executive Board to endorse the country’s policy intentions and offer financing. This process can be expedited under the IMF’s Emergency Financing Mechanism.
- After its Executive Board approves a loan, the IMF monitors how members implement the policy actions underpinning it. A country’s return to economic and financial health ensures that IMF funds are repaid so that they can be made available to other member countries.
What are the conditions applicable to an IMF bailout?
- Among the conditions laid down for a country seeking financial assistance from the IMF could be certain structural reforms, such as fiscal transparency, tax reforms and reforms in state-owned enterprises. Critics say these reforms can be tough on the public and may be driven by a geopolitical influence, since they are often decided by officials of various countries.
- these conditions are necessary to ensure successful lending by the IMF, as countries with policies that stem economic growth and stability would not be able to pay back their debts.
- Conditions for IMF lending also relate to macroeconomic variables, like monetary and credit aggregates, international reserves, fiscal balances, and external borrowing, as per the IMF.
Pros and cons
- An IMF bailout ensures the survival of a country amid economic turmoil along with IMF can also provide technical expertise to the affected country on how to implement reforms to strengthen the economy and institutions
- On the downside, the IMF’s conditions can result in reduced government spending and higher taxes, measures which have been historically unpopular with the people and often resulted in public unrest. It can also create a sense of dependency on external funding, while also harming the country’s reputation in the eyes of investors.
Where does IMF get its money?
- IMF funds come from three sources: member quotas, multilateral and bilateral borrowing agreements. Quotas are the IMF’s main source of financing, wherein each member of the IMF is assigned a quota, based broadly on its relative position in the world economy.
- The IMF’s current total resources of about SDR 977 billion translate into a capacity for lending of about SDR 713 billion (around US$1 trillion).
- Besides members of the Paris Club of creditor nations such as the United States, France and Japan, other lenders include China, India, Saudi Arabia, South Africa and Kuwait.