The Hindu : Kerala News : Privatisation of health services ruled out

Online edition of India's National Newspaper
Friday, Nov 19, 2004

Kerala

Kerala

Privatisation of health services ruled out

By Our Special Correspondent

THIRUVANANTHAPURAM, NOV. 18. The Health Minister, K.K. Ramachandran, said here today that there was no question of privatising any services now being offered by the Government hospitals under pressure from the World Bank.

Talking to presspersons after a conference with a World Bank team on the Kerala Secondary Health Systems Development Project that is to be funded by the bank, Mr. Ramachandran said the Government would not take any decision against the interests of poor patients. ``The existing services available to them will not be curtailed.''

However, during his introductory remarks at the conference, the Minister told the World Bank team that certain innovative modalities like using the resources in the private sector, also for the benefit of the poor, would be looked into for accepting the loan proposal. ``We have to identify the areas where such linking and effective public private service could be achieved.''

The Director of Human Development for South Asia, Julian Swedger, who headed the team, told The Hindu that the bank proposed only private participation in health service delivery. The issue had not been discussed with the Minister, he said.

Expert panel soon

The conference decided that an expert committee should be set up to finalise the project proposals by February. Various studies and other works would be completed in six months.

The project proposes upgrading and expanding the physical capacity of the secondary-level hospitals at a cost of about Rs. 810 crores. The Minister proposed that the project should cover the referral hospitals, besides peripheral hospitals.

Discussions had been held with the bank officials in October 2003 on the project proposals. The bank insisted that a substantial portion of the funding should be used for promoting the private sector. This was not agreeable to the Government and this caused a further delay in processing the proposal. Recently, the Government had initiated steps for introducing a mechanism for regulating the private health institutions. The bank has appreciated this, as that could be a prelude to privatisation of services such as diagnostic services in Government hospitals.

Regulatory mechanism

The Minister told the team that the Government had mostly agreed to such suggestions such as setting up of a regulatory mechanism from the bank's side. Funds released by the bank for road safety under the Sector Reforms Project would be used in the health sector.

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