CHAPTER II

REVIEW OF LITERATURE

To understand the problem precisely and to focus on the rationale of the study,
it becomes urgent to have an idea about the studies conducted so far related directly or
indirectly with the problem.

The present chapter reviews some available empirical studies regarding

different aspects of health status in India and its respective states. The review of these
studies provides a broad scenario of various dimensions of health status. For this
purpose, the whole chapter has been divided into three sections.

Section I

Health Status in India and its States

It covered articles relating to health status in India and of its different states.
The reviews of studies covered in this section are as follows:

According to Aggarwal (1977) persistent high fertility caused important health

problems not only because economic improvements which were essential for good
health get restricted, but also because it posed an immediate health problem for the
mother and the child. In the most developing countries married women aged
between17-37 were characterized by continuous nutritional drain from repeated
pregnancies and lactation resulting in material depletion and measured risk of
maternal mortality which increased with every pregnancy beyond the third. Study
concluded that in recent years there has been a growing concern about the widening
gap between population growth and food supply in developing countries in view of
rapid population growth. Available food supplies were inadequate in nutritive
quantity for a healthy and active life. Retarded development and poor health were
responsible for low stamina and low physical activity. Low physical activity resulted
in low productivity, which in turn caused more poverty and more inadequate food
supply. Unless this vicious circle is broken, future generations will have reduced
stature, lower body weights, and lower level of physical capacity and consequently
reduced working efficiency.

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 Sharma, (1978) in his study on “Assessment of Medical Manpower Needs of
the CGHS” (Central Government Health Services) have attempted to find out the gaps
between the available manpower and manpower needed to provide adequate medical
care to the beneficiaries. Study examined the workload of four sampled dispensaries
in terms of number of cardholders, number of beneficiaries, number of attendance per
day etc. The standard time required for providing adequate medical care has been
derived on the basis of Delphi technique wherein experts provided the estimate of
time for medical care service for old and new patients and for different income
groups. The medical manpower requirement was derived with the help of these
estimates and workload was found using the approaches of norm for hours of work
and work load norm. Study found out that the gap between available manpower and
actual requirement varied from one to seven medical officers in the sampled
dispensaries. The norm derived for medical officer on the basis of the second
approach was estimated to be six medical officers for 10,000 beneficiaries.

The study on “Global Strategy for Health for all by the year 2000” conducted
by World Health Organization (1981) showed that nearly 1000 million people were
trapped in vicious circle of poverty, malnutrition, disease and despair that saps their
energy and reduced their work capacity. It was stated that most deaths in many
developing countries resulted from infections and parasitic diseases. In many
countries the health personnel were not appropriately trained for the tasks they were
expected to perform. The proportion of GNP spent on health ranges from far less than
1 percent in many developing countries. Empirical evidence regarding world health
and socio economic situation was presented by means of a number of indicators like
infant mortality rate, life expectancy, adult literacy rate, coverage of safe water supply
and per capita public expenditure on health.

Walter, Breeze (1985) study focused on strategies for the monitoring of the
performance of National Health Services. They recognized three major components
for evaluation: economic efficiency, social acceptability and medical efficacy. They
had used different indicators and data set to achieve each of its objectives. As a means
of monitoring the quality of curative services which were based on routinely collected
statistics they selected 14 disease groups for which mortality was taken as an outcome
indicator for the study. Age Standardized Mortality Ratios (SMR’s) were calculated in

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98 areas for age ranges in which medical care was most likely to be effective. The
indicators appeared to be effective and stable overtime and also identified significant
variation between areas. The major problem while attempting this study regarding the
performance of the health services was regarding the accuracy of information. The
study observed that UK and USA has achieved similar reductions in mortality.

Khan, M.E. (1987) study aimed at analyzing peoples' perception about the
functioning of the PHC / Sub center and the reason for its non-utilization. The study
was conducted in Bihar, Gujrat and Himachal Pradesh. Within each state 2 districts
and within each district one PHC was selected. One PHC in one district of each state
selected was a tribal or a remote primary health center. A multi disciplinary approach
was adopted. The data for the study was collected using anthropological approach as
well as through intensive in-depth discussion with state and district level officials,
PHC doctors and field staff, village health practitioners, and community members.
The study concluded that in all the states excessive emphasis was given to the
achievement of family planning targets by the district and PHC level authorities, at
the cost of other health care programmes. In all the three states, the performance of
workers was evaluated by her/his sterilization target achievements and those who
were not able to achieve the target have to pay bribes. Corruption and weak
administration, inadequate logistic support in the form of material and manpower
training, inaccessibility of healthcare services, absence of proper monitoring system
and overemphasis on achievement of sterilization targets, were some of the obstacles
in the healthcare system in all the three states. In Bihar, it was found out that PHC
doctors were primarily busy in private practice as government had allowed them to
practice privately during their off-time. Doctors were available at PHC’s only for two
hours a day in Bihar, in Gujarat three hours a day. Government health care services
were worse in Bihar followed by Gujarat.

Ram and Mohanty (1989) in their paper attempted to access the variation in
human progress and human deprivation among the major states of India like Punjab,
Tamil Nadu, Bihar, Orissa, Kerala etc. The study has examined the nature and linkage
between human resource development and demographic parameters at state level.
Two indicators of human resource development namely Human Development Index
(HDI) and Capability Poverty Measure (CPM) had been constructed at state level. It

23
was found that there was wide variation in human progress and human deprivation
across the country. Study found that greater investment in human resources with
particular attention to poor states was essential for reducing poverty and population
growth of our country. Human development brought together the production and
distribution of commodities and expansion and use of human capabilities.

Rao (1991) in his paper "Estimation of Community Health Status Index on the
Basis of MIMIC Model" presented a multiple Indicators Multiple Causes (MIMIC)
model, which treated the health status of the community as an unobservable variable.
On the basis of this model, a community health status index (CHSI) has been
estimated for 15 states of India using cross-section data on health indicators and
health causes separately for the year 1971 and 1981. The index used by him was very
useful in ranking the states in terms of their health status and in monitoring their
progress. The estimated values of the structural coefficients in the model throw light
on the differential marginal impact of improvement in health causes on the CHSI and
also on the different indicators.

Soman Krishna (1992) studied the family dynamics of women’s health and
illness and their interaction with the larger social processes. For this study the
complete census of the socio-economic status of households was conducted. The
sample was taken of 272 households. There were 971 individuals in the specified age
group of 15 and above and 456 were women. The study found out that women
continued to stay within the boundaries of households, performed labour without
actively participating in decision making process. Estimates of annual reported illness
of women showed direct differentials in socio-economic categories. For illness,
women were dependant upon the private practitioners in the village who did not have
any medical qualification. Women in the poorer section mostly used government
services for immunization and iron supplementation. The reasons for women’s
restraint in seeking medical treatment were their perceptions severity, sense of
responsibility towards family, its economic conditions and priorities of men. At the
larger level, it was the balance of power within the patrilenial structure of the society
that kept women away from the quality health.

Nandraj (1992) study aimed to find out the conditions of private nursing
homes/hospitals in the city of Bombay and to find out the functioning of private

24
nursing homes/hospitals. This study was undertaken for the committee set up by the
Bombay High Court to go into the regulation and the laying down of minimum
standards for nursing homes and hospitals. The nursing homes/hospitals were selected
on a random sample basis from each of the wards in the Eastern zone of Bombay. The
researcher visited twenty-four nursing homes/ hospitals and physical verification was
done along with a checklist and an interview guide. The study found out that fifty
percent of the nursing homes were either in a poorly maintained building or they were
in dilapidated condition. Most of the nursing homes were congested, lack adequate
space. The passages were congested, and entrances were narrow and crowded.
Seventy-seven percent do not have scrubbing rooms. Less than a third had qualified
nurses. Seventy-seven percent of the nursing homes that had an Operation Theatre did
not have a sterilization room, while 66.7 percent did not have a generator. None of the
nursing homes incinerate infectious waste material but instead dump it in municipal
bins. None of them keep records of notifable diseases.

Medico Friend circle (1993) study aimed to understand the patient’s views on
present healthcare system to look at their experiences with the various health systems
and to study their perception on various aspects of present healthcare system in
Maharashtra state. A short questionnaire was prepared and the results depicted that
nearly 77 percent of total respondents of 208 reported approached private health care.
Among these 69.7 percent suffered from acute illness, 34.6 percent of respondents
received consultant care. With regard to waiting period 61.1 percent of respondents
felt that they have to wait for 20 minutes. With reference to the information on side-
effects, 53.4 percent reported that they were not given any information. Question on
the reliability of charges, 44.2 percent felt the charges were unreasonable. An equal
no, 45.2 percent felt the charges were reasonable. The main expenditure per acute
respondent for non-hospital cases was Rupees 182.

Juncari, Bhushan (1993) study objective was to understand the state of

Medicare facilities provided by medical practitioners in the city of Agra. It also
examined the emerging trends such as commercialization and malpractice in the
Medicare system by exploring the conditions under which these practitioners operate.
A quantitative research design was used in which a sample of 25 qualified
practitioners was selected out of 870 practitioners from three localities of Agra viz.

25
Shahagany, Kharia and Sadar areas. The study came to the conclusion that the lower
classes in the city were unable to meet the high cost of medical services prescribed by
the medical practitioners. Medical care provided by the private sector had become
very commercial and as a result malpractices were common. These practitioners
possessed an MBBS degree as their academic qualification, and none of them had
post graduate degrees. About 50 percent of them had undergone specialized diploma
courses and post graduate diploma courses. More than 50 percent of practitioners
were general practitioners. More than 75 percent of the respondents also dispensed
medicines as their mode of practice. The obvious reason was that dispensing ensures
greater patient load and thereby more income. A compounder supported each of these
doctors. The compounders were not illiterate but their employment with the doctor
was temporary in nature. Only 32 percent of the respondents provided their services in
their respective clinics. Some of these doctors were permanent employees of the
government hospitals. All of them provided first aid facilities at their clinics, none of
them provided anti rabies or anti toxic treatment, and very few of them provided
immunization services. More than 80 percent of the respondents charged consultation
fees below Rs. 35/-, which they perceived as affordable by the patients. None of these
practitioners referred their cases to other professionals. These professionals served
mainly lower and lower middle class patients. This study gave some insights into
those who practice as qualified general practitioners, and these were mainly MBBS
doctors. Their practice was mainly curative and they provided very little preventive
input. This study also showed that some government doctors had a private practice.
These qualified practitioners cater mainly to the lower middle classes and their role in
providing preventive medical care was minimal.

Uplekar (1996) study attempted to understand the nature of the social and
operational constraints affecting TB control and identified ways to remedy them. The
study was conducted in the rural and urban areas of Pune district, Maharashtra. Data
collected was both qualitative and quantitative in nature. Interviews were held of 605
households in 12 villages (in 6 primary health centre areas) and 408 households in
urban areas in 42 census blocks, a total of 1013 households. Informal interviews with
299 TB patients in 6 PHCs and 3 urban TB clinics were conducted. Data was
collected from the healthcare providers such as the health functionaries at different
levels of PHCs and urban clinics and private medical practitioners in selected rural

26
and urban areas. Data was also collected from the supervisory and administrative staff
at the district TB center and the state TB directorate. Other sources of data collection
included observations, informal interactions and focused group discussions, case
studies with both the users and providers of health services.

The study found out that the people who developed symptoms of TB generally
went to private medical practitioners for treatment. The patients were rarely subjected
to sputum examination. The emphasis always was on diagnosis based on the x-ray of
the chest. Patients of TB preferred the services of private doctors for 2 reasons- less
waiting time and convenience of clinic timings. But patients did end up in the public
health services either by themselves or referred by private doctors chiefly due to their
inability to pay for prolonged care in the private sector. Non-adherence to treatment
by patients is known to be a major impediment in controlling TB. The reasons for this
were high cost of care, disappearance of most of the troublesome symptoms on partial
treatment, and also non-availability of services, low image of public services in
people's mind. According to the study, about a third of the patients had incurred debts
in order to bear the expenses of their treatment. Rural patients had spent almost
double the amount spent by their urban counter parts. In the private sector, drugs and
doctors were the main item of expenditure. In rural and urban areas, all kinds of
private medical practitioners entertained patients of TB. They were oblivious to the
detrimental effects of their management practices like x-ray based diagnosis, use of
multiple irrational drug regimens, lack of education of patients, lack of patient follow
up and total absence of maintenance of any kinds of records. These practices were due
to inadequate basic training and lack of continuing education. So, training must be
done and it must be made simple, demonstrative, on-site, periodic and cover not only
the technical and managerial aspect but also the social and behavioral dimensions to
help them tackle effectively the problems of non-adherence to treatment at the field
level. PHCs have to be strengthened by providing them with adequate resources, and
this need proper monitoring and surveillance from the levels above.

Kabra, Patni (1998) collected and analyzed a representative sample of baseline

data of private healthcare facilities in Jaipur. The objectives of the study were: to
study the rate and extent of privatization and to study the use of the private facilities
by both the inpatients and outpatients in the hospitals. To conduct this study a list of

27
all private nursing homes was compiled from various institutions, doctors,
pharmacists etc. Sample of 50 private health institutions were selected. Study found
that the number of patients who visited the out patient departments per annum was 6
lakhs. The Indoor Patient Department (IPD) figure per annum was approx 60000.The
total beds strength of all the hospitals was 1283 beds. The cumulative growth rate of
the bed strength over the period from 1960 to 1992 was 95.64 percent. Thus, it grew
9.5 times over this period. The cumulative growth rate in IPD was 1689.91 percent
that was 16.90 times growth. The number of Out Patient Department (OPD) and
Indoor Patient Department (IPD) patients rose to 611659 and 60857 respectively in
the above mentioned period. An average of 400 beds was added per decade. The
health care services provided by the nursing homes grew at a decreasing rate. The
study states that the sharp increase in the private health care facilities in the last
decade indicated the new trend of privatization, which began in 1991. The study also
indicated that the capacity of the people to pay for the health services was increasing
and at the same time they were not satisfied with the government services. Lastly, the
study has emphasized the need of carrying out more such studies as this kind of
database would be useful for determining areas of government intervention. This was
necessary to maintain standards in the private health sector and check it from
becoming exploitative.

McKinsey (1998) conducted in association with Chartered of Indian Industries

(CII) found out that the healthcare system in India is quite poor. The study noticed
that demand for healthcare has grown up in last 10 years, thus it required hard work
and collaborations between government and private sector. Further, India has low
levels of pre-payment and lack of competition between healthcare providers. The
industry was unorganized in India with low spending on in-patient care, low
affordability in industry, lack of standards and malpractices.

Nandraj S, Jesani, Sinha (1998) study aimed to document and analytically

understand the perceived morbidity patterns, access and constraints of women to
health care facilities and their utilization and expenditures by households on women's
health problems with special reference to socio economic differentials.
The study was conducted in the 'L' ward of Greater Mumbai City, a congested pocket
with residential units as well as small-scale factories and commercial establishments.

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A stratified random sampling method was used in the five clusters, two slums, two
chawls and one apartment block. A household interview schedule was administered in
the study area. Since women were the focus of the study, women investigators
conducted the interviews and the respondents were all women. The sample consisted
of 430 households. The findings were quite revealing. The monthly prevalence rate of
illness worked out to 363 per thousand. Due to the modifications that were made in
the methodology, the researchers were able to record a significantly higher burden of
morbidity among women. The study attempted to create an environment, which
encouraged women to feel, unhindered to speak about their health problems even
while a deliberate attempt was being made to elicit information about unreported
illness through the probe list. Morbidity by physical environment revealed that the
non-slum population, who comprised 41 percent of the total population, had 31.79
percent of total morbidity and the morbidity among slum dwellers was 10 percent
higher than that of the total population. Reproductive illnesses form the largest group
of problems accounting for 28.2 percent of all episodes among females. The study
found that 127 out of the 167 reproductive episodes reported by women were related
to menstruation and child bearing (Menstrual problems, uterine prolapse, low back
ache and lower abdomen pain). The study found a steady rise in the morbidity rates
with age of females. Forty-three of the pregnant women did not utilize any facilities.
These findings clearly showed that Mumbai in spite of some of the best health
facilities in the country, people residing within the city were not able to access them.
The study found a very high utilization of the private health services and the limited
role played by the public sector in the city of Mumbai for provision of health care.
The private practitioners mostly treated illnesses such as fever, respiratory and gastro
intestinal problems. In case of the reproductive illnesses, about 70 percent of the
facilities utilized were private. Of those pregnant women who utilized health
facilities, 57 percent utilized private facility and only 32 percent utilized public
facilities. With regard to deliveries the public sector accounted for only 30 percent of
the deliveries as compared to the private sector, which accounted for 31.7 percent.
The average expenditure incurred per capita per case was Rs. 95.45 working out to
Rs. 415.68 per year. In terms of gender difference per case cost worked out to Rs.
148.56 for males and Rs. 78.59 for females. In 90 percent of all the illness cases, the
combined expenditure was incurred on the fees paid to the doctor and the purchase of

29
medicines. The expenditure incurred was much higher than what was spent by the
government which was just Rs.250 per person in Mumbai city and very much less
than the national per capita expenditure of Rs. 90. There was a high expenditure
incurred on pregnancy, which works out to Rs. 213.08, Rs. 2428.90 for a delivery and
Rs. 989 for an abortion. The strong gender bias was very much evident right across
the findings of the whole study. Women received a raw deal both in terms of
utilization and the expenditure incurred on their illness and non-illness events. One
found out that irrespective of the age, education, occupation, earning status, location
of the households there was a wide difference among men and women in terms of
utilization.

In both slum and non-slum areas households were spending less on women's
health. The study had brought out these and many other important issues related with
women's health, which required proper attention and corrective action. The study has
emphasized the need of examination of these issues at a broader level and in a more
gender sensitive manner. This study throws up the issue of non-utilization of health
services especially women who suffered from various illnesses and for deliveries even
in a premier city such as Mumbai that has more public health facilities compared to
other parts of the country. This raised the question that though the services may be
available, the access to them was determined by factors operating within the
household and outside.

Bhat, Ramesh (1999) study gave an account of the policy initiatives by State
Governments of Punjab, Rajasthan, Tamil Nadu, West Bengal and Maharashtra to
develop relationships between public and private sector. Secondary data was used for
the study. The study had concluded that in our country the public-private initiatives
were in premature state. While designing a PPP venture, the government should pay
attention on following aspects: Information, Public goal and Private initiative,
Coordination and monitoring, Market subsidy and incentives, Institution and
Organization. The study had emphasized on the importance of PPP as a form of
privatization. If these measures were implemented properly, the ventures could
provide an efficient and equitable option of healthcare delivery.

Parmar (1999) aimed to study the extent to which patients' rights were
respected or violated by private Intensive Care Unit (ICU) / Intensive Critical Care

30
Unit (ICCU) in Mumbai. To study about the infrastructure, equipment, staffing and
overall functioning and finally to examine the existence and non existence of
regulation by various bodies expected to be responsible and their role. For this study,
40 private hospitals were selected from the central and western suburbs of Mumbai
which displayed an ICU / ICCU board. The questionnaires were prepared based on a
review of standard critical care books and literature available. The study found out
that there was absence of new and sophisticated gadgets that were needed for critical
care. Life saving drugs was not stored in sufficient quantity. All hospitals in the
sample employed non-allopathic doctors on a round the clock duty for critical care,
where experienced, qualified specialists were needed. Basic cleanliness was absent.
The charges per day levied on patients were exorbitant. There was total lack of
holistic approach and teamwork amongst the specialists. There were no attempts made
to upgrade the unit or the application of basic knowledge and concepts in critical care.
The study found that many of those deaths in private ICU / ICCU could have been
prevented, if the admission had been made in higher level institution. Many of the
deaths were hushed up and the belief of the public that 'death in ICU / ICCU is
expected' was taken advantage of. The lack of awareness about what was expected in
terms of 'critical care' has helped the mushrooming of these units. The study also
found out that the phenomenal mushrooming of private ICU / ICCU hospitals
paralleled the commercialization of the medical profession after 1985. Kickbacks and
commission in medical practice has been responsible for admissions to such units.
Thus, as a solution people and doctors should be made aware of their rights and
doctors their duty vis-à-vis health care for people. There is a need to lay down
standards for every hospital and nursing homes, and they must be made legally
binding. There is also a need to formulate laws, rules and regulations for private
hospitals. Lastly, current private ICU / ICCU hospitals in Mumbai must recognize and
adapt to the realities of available resources rather than permitting inadequate care
detrimental to the health and life of the public and against all human rights.

Mahal, Srivastav and Janan (2000) paper has two main objectives: to trace the
progress of decentralization in the provision of social services and to test the
hypothesis that decentralization in the system of public service delivery in primary
health care and education leading to improved outcomes in rural India. On the first
point, the paper found that prior to 1992, with the exception of a few states (Gujarat

31
and Maharashtra) and to lesser extent (Kerala and West Bengal); there had been little
or no progress on decentralization. Local government bodies in rural India had little
control over finances, administration or in expenditure and acted mainly as executing
agents for other government line agencies. A number of indicators of democratization
and public participation- frequency of elections, presence of NGO’s and parent
teacher associations etc-generally have positive effects; but these effects are however
not always statistically significant. The authors concluded by recommending further
work on developing better measures of decentralization and social participation and
suggested that village-level case studies should be undertaken.

Mahal, Ajay (2001) summarized the empirical findings on the use of health
services by the poor, providing a national-level analysis as well as state level
comparisons. It found that as in most developing countries, publicly financed and
delivered curative health care services in India were more likely to service the richer
segments of the population than the poor. The delivery of private services was more
skewed in favor of the rich. Secondly, it found that those below the poverty line
continued to rely on the public sector. Thirdly and importantly, the richest quintile
used tertiary level hospital services both in and out patient more likely than the
poorest quintile. Further, it was found out that public services in urban areas were
found to be more equitably used than those in rural areas. Gender and caste and tribal
affiliations on aggregate do not appear to affect utilization rates. Finally, large
variations were found across states in public and private service delivery.

Reddy (2002) in his study has considered health indicators and determinants
of health status of people for 21 states of India for the year 1951 -1981. They studied
the relationship between percentage of literacy and expectation of life in India. The
correlation coefficient in case of males came out to be 0.97 and in case of females
0.93. Of the eight determinants, female literacy turned out to be the most important
determinant of health status. Hence, it was pointed out that the spread of literacy must
be paid due attention for the enhancement of health status.

Wagstaff (2002) in his study tried to quantify the trade-off between the health
costs of rising incomes against the health benefits. Results showed that reducing
income inequality and raising the share of health expenditure financed publicly might
reduce heath inequalities, but neither the effect is at all strong and nor is statistically

32
significant. It is clear from the results that economic growth tended to increase health
inequalities. Countries that were successful in raising their per capita incomes have
paid their price in terms of higher health inequalities. Another finding of the study
was that the countries with the lowest average rates of under-five mortality and
malnutrition have the largest gaps between poor and non-poor children. Evidence
from trends in health inequalities showed that health inequalities have tended to grow
both in developing and developed countries at times of economic growth. The study
suggested that this is probably due to technological change going hand-in-hand with
economic growth, and a tendency for the better off to assimilate technology ahead of
the poor.

Shresthova (2002) assessed the use of personal and professional transport use
among women’s trade unions association in India and found out that in the majority of
cases women and their families used public buses or walked to health outlets. Further,
it reveals that women participating in his study were less likely to hire a rickshaw in
cases of personal health emergencies (8 percent) than for the other family members
(14 percent) which illustrated that even where intermediate forms of transport were
available to access emergency health services, even better off professional women
were less likely than other family members to use them.

Soman, Krishna (2002) looked at the health care sector in the primarily
agricultural district of West Bengal. In this district, new privatization initiatives were
being undertaken by the government in collaboration with external funding agencies.
In addition to public health care facilities, a range of private sector providers existed,
practicing different systems of medicines (homeopathy, allopathy, ayurveda and other
traditional systems) with different ownership types (profit, not-for-profit). Many
practitioners engaged in informal, holistic practices combined traditional healing with
homeopathy and allopathic medicine. For a range of cultural reasons, a substantial
portion of villagers (estimated at over a third) prefered such services- often run out of
practitioners homes, grocery shops, or even door-to-door to formal health institutions.

Gupta, Indrani and Purnamita (2002) study attempted to derive demand

functions for healthcare in rural India. The study found out that income and price
were strongly correlated. Further, it was found out that age was positively correlated
with medical care utilization and education was found out to be an important

33
determinant of provider choice. Lower levels of education were associated with
increased demand for medical care. The most important finding of the study, from a
policy perspective was concerned with the price elasticity of demand for health care
services across rural India and for different fee ranges and income levels the demand
for health services was found to be highly price inelastic. Within the highest fee
range; a 10 percent increase in fees was associated with a small 0.03 percent decrease
in demand. The richer segments of rural India were particularly insensitive to price
increases. Price elastic ties were even lower for private health services than they were
for government-provided services; thus reflected a clear preference for private
healthcare provision. The authors found out that limited options explained these low
elastic ties consequently, increased prices for public health care services without a
corresponding improvement in the quality of such services, it was found to be the
poor policy option. On the other hand, an improvement in quality was likely to
increase demand for healthcare services.

Savedoff (2003) has identified at least four different approaches for answering
the question of "how much" a country should spend on health. These four approaches
range from rough comparisons with other countries to a full budgeting framework. In
general, the peer pressure approach was the easiest to quantify but probably the least
informative. The political economy approach focused attention on the process of
political decision-making, but is less likely to produce a quantitative estimate of
requirements. Only the budget approach appeared to be both feasible and directly
confronting the issues of current and desired health status, prices, effectiveness and
tradeoffs. According to author, fundamentally there was no shortcut. This seemingly
straightforward question cannot be adequately answered without doing the hard work
of addressing these four basic questions together.

a) What health problems together.

b) What health status do we aspire to?
c) How effective are our health services, activities and policies?
d) What are the processes of inputs?

Pandey, Roy (2004) studied the pattern and correlates the utilization of
antenatal care services and assistance received during delivery in the three states,
which had distinct geographical and topographical characteristics. The study had

34
obtained results specific to the particular features of the 3 states. The study discussed
on antenatal check-up and showed that women living in Jharkhand and Chhatisgarh
were more likely to use Antenatal Checkup (ANC) services than their counterparts
living in Uttaranchal. The hilly terrain in Uttaranchal was responsible for the low
utilization of antenatal care services. Women with lower birth order were more likely
to use ANC services than women with higher birth order. The findings suggested that
there was a need to apprise women and those with higher birth order about the
importance of ANC services in all three states. Delivery care in the three states varied
with the socio-economic characteristics of its population. The delivery care was
utilized more by women from Uttaranchal than women living in Jharkhand. This
finding was reversed to what emerged in utilization of antenatal care services. Thus, it
was necessary for the reproductive and child health programmes to evolve a strategy
giving due consideration to the geographical and socio-economic factors.

Arora, Lonnoth (2004) study area was a partnership unit in an urban context
named as Mahavir Trust, which is a non profit hospital in Hyderabad that was acting
as an intermediary between private practitioners at the primary level and the program.
This partnership was initiated in an urban area where there was almost no government
service available and individual private medical practitioners were involved in the
programme as they were the first point of contact for most patients. They noted that
Mahavir Trust hospital acted as a coordinator, intermediary and supervisor between
the government and private medical practitioners (PMPS). The Mahavir Trust and
nursing homes kept the records for the government. The government provided TB
control policy, training, drugs and laboratory supplies. This study also incorporated
five outreach workers who followed defaulters and motivated them to continue
treatment. This partnership illustrated the presence of several actors performing
multiple roles ad their success is dependant on the optimal functioning of each of the
actors and their interaction with one another. This trust provided space and staff for
the programme free of cost and also receives drug kits. Thus, process building, value
orientation of the organization, its commitment and trust with the community was
noted as the necessary and the sufficient condition for the success of this partnership
to last long forever.

35
 Sankar and Kathuria (2004) in their paper attempted to analyze the
performance of rural public health system of sixteen major states in India. The study
concluded that investment in the health sector alone would not result in better health
indicators, efficient management of investments is required. The analysis of variation
across states in the health systems in the rural areas suggested that there were two
critical ways to improve health outcomes. The first was to enhance the efficiency of
health sector. The second was to create more infrastructure and thus provide better
health access to rural people and make more physicians available in rural areas. So, in
order to cure what ails the health system in many Indian states, efforts need to be
made in the direction not only of providing more infrastructure but also using them in
the most efficient way. This demonstrated that states should not only increase their
investments in the health sector, but should also manage it more efficiently in order to
achieve better health outcomes.

Radhakrishna and Ravi (2004) in their paper have analyzed the trend in
malnutrition over the past two decades and showed that improvement in health status
have not kept pace with the reduction in poverty. About half of the population
particularly children and women- the most vulnerable groups- suffer from various
forms of malnutrition. This is seriously retarding improvement in human development
and further reduction of mortality. The study showed that malnutrition is uneven
across states. Some middle-income states such as Tamil Nadu and Kerala had
comparatively better nutritional achievements than higher income states like Gujarat
and Maharashtra. North-eastern states were comparatively better performing states
and some of them have even out- performed Kerala. Concentrated efforts were needed
to break the vicious circle of malnutrition among the poor. Improvement in incomes
of the poor and the support of health services are the long term solutions to
eradication of malnutrition.

Roy, Kulkarni, Vaidehi (2004) assessed the extent of inequalities in health

care and nutritional status across states with a focus on tribe and caste. The study
utilized data from National Family Health Survey-2 (NFHS-2), a large scale survey
on demography and health conducted in India in 1998-99. Inequality by caste and
tribe was examined in this paper with regard to the four Socio-Economic Indicators

36
(SEI): low standard of living, Illiteracy, No exposure to media, No health facility
within locality. Two Programme indicators of utilization of health services: unsafe
delivery and non utilization of ANC services and two nutritional status indicators: low
body mass index and anemia were taken. Chi-Square test and Logistic Regression
tools were used to find the results. Analysis of differentials between four major
groups in Indian society, presented in his paper has brought out that the situation in
four North states- Uttar Pradesh, Madhya Pradesh, Bihar and Rajasthan was
unfavorable. In terms of SEI, the inequality was quite low in West Bengal, but
situation was relatively better in Orrisa. Karnataka and Maharashtra showed the least
inequality. Further, SC women were less likely to be without ANC, OBC women
were less likely to have unsafe delivery, less likely to be anemic and ST women were
less likely to be anemic.

Rao (2004) study objectives were to identify and assess the impact of critical
factors that have a bearing on executive health, which included lifestyle and habits,
stress level, common health problems, preventive measures adopted and facilities at
the workplace. A survey on executive health was conducted on a representative
sample of 275 participants during 2001-02. Over two-third of the respondents
admitted that they have one or more health problems that have bothered them for
more than three months. Among them, over half of them reported two or three health
problems. Hypertension, gastric problems, headache and obesity were the major areas
of concern. Junior and middle level executives suffered more from gastric and
postural problems than their seniors. Obesity was dominant in the middle
management level. Over two-thirds of the respondents took non-vegetarian food, go
out for business lunches and undertake outstation travel; a little less than half sit for
seven or more hours during a working day and consume alcohol in one form or the
other and over one-fourth smoke. The stress profile of the sample was not alarming.
But stress does contribute to health problems. Thus, this study pointed to the fact that
employee health was a crucial determinant in organizational competitiveness and
success. Further, greater insights were possible when executive health was correlated
with other organizational factors.

37
 Bloom (2005) in his study entitled “Public Health in Transition” explored the
epidemiological transition of countries with rapidly expanding economies where
chronic diseases were becoming the greatest challenge to health systems. In these
countries people were living longer and developing diseases such as obesity, diabetes
and heart diseases, which occurred more typically in developed nations like the
United States. Bloom illustrated the economic benefits of using measures to prevent
or reduce both infectious and chronic diseases. According to the study although health
threats often cross national boundaries, there was no global organization in place to
develop and coordinate an integrated response to such threats. A study listed eight
recommendations that, if implemented, would have significant impact on health
around the world.

Deewan, Puneet, Chauhan (2006) study observed that a strong public sector
TB control programme proved critical for provision of necessary advocacy,
supervision in relation to building and sustaining partnerships with the private sector.
Their study was held in a district of Kerala for detecting Tuberculosis (TB) patients
and study found that there was a significant improvement in case detection. It was
possible because of existence of a strong local government TB programme which was
having adequate staffing, medication and capacity to monitor the partnership while
continuing routine diagnostic and treatment services for the most of the TB patients,.
The Indian Revised National TB control programme has developed formal guidelines
to help local programmes structure collaborations with private healthcare providers
and non government organizations. These guidelines offered a diverse group of plans
for the community of private providers, with options to participate in the referral,
diagnosis and treatment of patients with TB. Further, the Indian TB program also
made financial incentives available for local programmes to distribute to cooperating
providers, although these incentives were not always used.

Gudipati (2006) assessed the India’s current health care system and its effect
on India’s rural population and looked at the impact this may have on the country’s
future. The Indian government has created an extensive network of public health
centers throughout the country. While the network existed to serve rural and poor
areas, these centers were grossly underfunded and understaffed. Evaluating the public

38
health system requires looking at the current infrastructure of the system, the resource
allocation within each public health center and at the qualification of the staff. Finally,
it looked at public demand of the services provided by the public health systems.

Anant Kumar (2007) reviewed the scope and limitations of self help groups in
improving women’s health, focusing on their implementation in the state of Bihar in
India. It critically assessed the extent to which SHG’s can be involved in attaining
better health for women and children by exploring the crucial role of caste and class
in access to health services. His study concluded that SHG’s failed to capture local
structural contexts such as caste and class, and as a result, develop approaches that
produced equitable health services provision to marginalized and poor people.

Amit (2007) study revealed that about 30 percent of cardiovascular patients

who succumb to death in India fall in the age category of 35-64. About 15.2 million
diabetic patients were there in India. The important observation was that the public
health expenditure was far lower than that of Bangladesh, Pakistan and China with
just 20.7 percent against 25 percent in Bangladesh, 34.9 percent of Pakistan and 45
percent of China. It revealed that the percentage of cardiovascular patients who
succumb to death in India were estimated at 30 percent within the age group of 35-64
as compared to 12 percent in US,22 percent in China, 25 percent in Russia and 40
percent South Africa. He concluded that increased health budget should check the
increased pressure of globalization, which could be the one reason for the same.

Gupta (2007) have assessed that India have relatively poor health outcomes,
despite having a well developed administrative system, good technical skills in many
fields and an extensive network of public health institutions for research and training.
This suggested that the health system was misdirecting its efforts, or was poorly
designed. To explore this, the author used instruments developed to assess the
performance of public health systems. Their data indicated that the reported strengths
of the system lie in having the capacity to carry out most of the public health
functions. Its reported weaknesses lie in three broad areas: it has overlooked some
fundamental public health functions such as public health regulations and their
enforcement; deep management flaws hindered effective use of resources, the central
government functions too much in isolation and needs to work more closely with

39
other key actors, especially with sub-national governments, as well as, with private
sectors. The author concluded that with some reassessment of priorities and better
management practices, health outcomes can be substantially improved.

Section II
Public Health Expenditure

This section covered articles which were related with public health
expenditure overtime. Public health expenditure is linked with expenditure done on
different sectors of health overtime to improve the health status of the people. The
studies relating to this are:

Sukanya, S. (1994) study aimed to: understand the pattern of investment in

medical equipment in private hospitals in city of Madras, to determine the influence
of financial and non financial factors on investment decisions, to understand the role
of stakeholders in the decision making process for investment in medical equipment.
This study was confined to “for profit” hospitals, offering multi-specialties in
allopathic medicines. Purposive Sampling method was used in selecting the hospitals
for survey. Study chose 50 hospitals, out of these 25 were self-proprietary, 10 were in
partnership and remaining 15 were corporate hospitals. A structured questionnaire
was used to collect data. The study concluded that hospitals with a high bed capacity
(more than 90) and corporate hospitals invested more on intensive care and therapy
equipment and less on laboratory equipment, while the reverse is true with smaller
hospitals. Investment in imaging equipment is highest and that in lab is lowest.
Investment in imaging equipment accounted for 50 percent of total investment.
Capital budgeting techniques were not used by most hospitals in investment
evaluations. Under the existing payment mechanisms, heavy capital investments were
likely to make provider both over utilize and charge high for the services.

Ramamani (1995) study based on NCAER’s Market Information Survey of

Households (MISH) presented aggregated (all-India) and disaggregated (state level)
data on household health care expenditure and utilization. The MISH survey was
conducted over a one month period in mid-1993 and gathered detailed data on the
prevalence of illness, utilization and source of health services, types of providers,

40
system of medicine used, expenditure associated with each illness case and the
distance traveled to seek treatment. This study provided a number of valuable insights
on the nature of health care utilization in India. It found out that the number of
reported hospitalization cases (per 000 of population) was considerably higher in
urban than in rural areas, perhaps due to differences in access to hospital facilities.
Further, the survey found out that there was high dependence on private sector
facilities for out-patients care; moreover this dependence on the private sector was
higher for higher-income groups and for highly educated urban residents. In sharp
contrast, when hospitalization became necessary, both urban and rural residents
tended to use public health care facilities more than private facilities and this was
especially true in case of Himachal Pradesh, Madhya Pradesh, Orrisa and Rajasthan.
Further, it was found out that the residents of rural areas traveled considerably greater
distances on an average to reach health care facilities.

Charu, C. (1998) study’s basic aim was to develop a national health accounts
framework for India. Using the framework, his paper proposed to describe the various
sources from where the funds come from, how they flow through various financial
intermediaries and finally how different providers and socio-income groups used
these funds. Karnataka was taken as a case study to understand, describe and measure
these flows. For this study, data was taken of the year 1993-94. Further, household
survey of healthcare utilization and expenditure was carried out using sample of
18693 households: 6354 rural and 12339 urban. The survey collected information on
morbidity, utilization of health services by type of providers, system of medicines,
untreated illness episodes, breakdown of expenditure for treated patients. The study
found out that after 1992, percentage of non-plan expenditure has declined marginally
for medical and public health activities. State government also raised their own tax
and non tax revenue which accounted for approximately one-third of total revenues
raised by government. The revenue for the state department of health was calculated
from the audited accounts of government from budget documents. Further, it was
observed that 63 percent of expenditure was used for medical and public health
activities, out of which 5 percent was used for public health. About 25 percent of
expenditure was used under the general category, which included transfers to local
government and rest 12 percent was used for family welfare activities.

41
 M., Mahinen (2000) in their research work used existing data from national
surveys of eight countries: Burkina Faso, Paraguay, Kazakhstan, Thailand,
Kyrgyzstan, Zambia, Guatemala and South Africa. They compared in their study how
rich and poor people use health services and how much of their income they spend.
Policy makers in developing regions and countries in transition needed reliable
information to make decisions about how to allocate healthcare expenditure and
resources. Yet, accurate quantitative data on healthcare inequalities in countries were
rare. Results of their study showed that: 1) Wealthier people were more likely to be
seen by a doctor than a poor individual. 2) Richer groups spend the most on health
care. 3) Wealthier groups in Burkina Faso, Paraguay and Thailand spend a smaller
percentage of their household income on healthcare than do poorer groups. However,
the reverse was true in case of South Africa and Guatemala. These results provided
the basis for number of possible policy measures, such as increasing amount of
publicly funded health services used by the poor. Strategies to achieve this goal
included building health facilities and increasing health personnel numbers in
disadvantaged areas.

Gupta (2000) in his paper presented a comprehensive review of the existing

pattern of health care and it's financing in India. In their opinion, there was growing
evidence that the level of health care spending in India- currently at over 6 percent of
its total GDP- was considerably higher than in many other developing countries. This
evidence also suggested that more than three quarters of this spending included
private out- of –pocket expenses. Despite, such a high share of expenditure by
individuals, the provision of health care and the outcome of these expenses were not
satisfactory. Particularly, public delivery of health care was poor in quality,
presumably for reasons of inadequate financing. His paper, therefore, highlighted the
need for alternative finances, including provision for medical insurance at a much
wider level. The authors in their paper examined that the majority of the low-income
people were left to suffer either from poor health care delivery or to incur high out –
of-pocket expenses or both. Therefore, a revamp of health system with expanded and
improved health insurance facilities was required. The authors besides this also took
the critical appreciation of insurance and re-imbursement schemes such as mediclaim
policy of General Insurance Corporation and Life Insurance Corporation. They

42
suggested that besides revamping the public health care system there is an urgent need
to reconstruct the existing schemes and mediclaim policies.

Duggal and Nandraz (2000) in their analysis have showed that there was an
overwhelming domination of the private sector in the health care, bought out by the
gross underdevelopment of the public sector and by the complete lack of regulation
and planning for the private sector. Their study showed that the investment by the
public sector for health has been inadequate, so much so that the state has never
committed more than 3.5 percent of its resources to the health sector. Further, from
1970’s there has been a steady decline in public sector investment, which reached to
its lowest level in 1994-95, being only 2.6 percent of total government expenditure.
The health care expenditure has not kept pace with increase in total government
expenditure. Further, the public health expenditure’s share in national income peaked
at 1.3 percent of per capita GNP in 1980’s, but after then declined to 0.95 percent.
The share of the central grants for public health declined from 27.9 percent in 1984-
85 to 17.17 percent in 1992-93. The rural-urban gap was very wide in terms of
investment, infrastructure development and availability of health care as the
expenditures by states accounted for around 90 percent of all PHE’s and moreover the
better-developed states like Goa, Karnataka, Maharashtra, Gujarat, Punjab, Haryana
have higher per capita expenditure as compared to states of UP, Orrisa, Bihar and MP.
The exception being Kerala which despite being economically under- developed has a
higher expenditure on health.

Shordis, Das (2001) study have analyzed spending on maternity care in urban
slum communities in Mumbai. Objective of the study was to understand about the
household’s spending pattern on health. Expenditure data for maternal and neonatal
care was collected by Interview method. Interviews were conducted in 2005-06 with a
sample of 1200 slum residents in Mumbai. Data was collected on Socio-economic
status (SES). Results depicted that a high proportion of respondents spent
catastrophically on care. Lower SES was associated with a higher proportion of
informal payments. Indirect health expenditure was found to be regressive as the
poorest were more likely to use their income to meet health expenses, while the less
poor were more likely to use their savings.

43
 Sadanandan, Rajiv (2001) provided a historical overview of the health care
sector in Kerala, reviewing investment decisions and budgetary allocations in the pre
and post independence periods. This paper examined the impact that these decisions
have had on the quality and distribution of health care facilities and the private
sector’s response. The article found out that the erstwhile princely states invested
heavily in modern health services, especially when compared with the rest of India.
As a result, Kerala enjoyed relatively wide and deep spread of hospitals and other
health care facilities. This trend continued up to 1970’s when Kerala’s fiscal problems
caused a decline in budgetary allocations to health care and a subsequent decline in
the availability of healthcare, especially in rural areas. Importantly, the paper found
out that there was a large increase in the share of salaries and other overheads in the
total healthcare budget since 1970’s and consequently a large drop in the share of
expenditure on medicine and hospital equipment and accessories. Although, the
private sector has filled some of the gaps, (importantly in rural areas), arising from the
government’s declining involvement in healthcare; it has been unable or unwilling to
extend the reach of services to historically under-served areas. This paper noted that
although Kerala has achieved a remarkable health transition in the few past decades
the sector suffered from a high degree of spatial inequity that is there were wide
urban-rural and district wise disparities in access to healthcare. It was suggested that
decentralization can mitigate some of these problems.

Mahal, Berman (2003) report developed AIDS-Specific national health

expenditure accounts for Nigeria. Researchers worked in six countries in European
region to carry out detailed studies to estimate out-of-pocket and informal payment in
health systems. Study covered countries- Poland, Czech Republic, Hungary, Croatia
and Romania Aurora. The results of the report displayed that in these countries
informal payments were quite significant. But the patterns were very different across
countries, with much lower payments in the Czech Republic. In all the countries,
where informal payments were significant, it acted as an important constraint to
effective health financing reform.

Jain, Sanjay (2003) study found out that during 1983, 4.37 percent of per
capita monthly expenditure was incurred on health which went up to 5.72 percent in
1999, which made India’s per capita private spending on health one of the highest in

44
the world.. During 1990, private health expenditure grew 7.5 percent per annum
against 4.6 percent hike in private final consumption expenditure. Further, in 1983
Muslims spent Rs. 4.86 per capita per month on health against Rs. 5.82 for Hindus. In
1999 health expenditure by Muslims went up to Rs. 30.64 but it remained constant at
around Rs. 84 for Hindus. Similarly, health expenditure by SC\ST rose from Rs. 3.96
to 23.97 during this period, but remained at around a third lower than that for Hindus.
The results hold true for almost all the income classes. On the whole, however, the
study concluded that India’s health performance is poor. Even basic health parameters
like IMR, below five-mortality rate or population with access to essential drugs were
lower than that for countries like China. Thus, this study explained the sharp surge in
private health expenditure.

Maathai, K. Mathiyazhagan (2003) study tried to analyze the rural household

characteristics and health expenditure in India. The study used a national level
household survey and found that the health expenditure of the members of rural
households in India was sensitive to changes in their income levels. The elasticity of
health expenditure with respect to income was largest for high income groups with the
income elasticity of health expenditure more than one. It indicated an income elastic
situation for spending on treating both short term morbidity (STM) and long term
morbidity (LTM) by the upper income groups. It was also true in case of drugs and
medical expenditures. The results also suggested that households incur higher total
health expenditure on drugs and medicine for getting treated from formal health care
providers in rural areas.

Bhatt and Jain (2004) in their study have analyzed about public expenditures
on health using state level public health expenditure data. Their findings suggested
that state level government have target of allocating only about 0.43 percent of state
gross domestic product to health and medical care. This does not include the
allocations received under central sponsored programmes such as family welfare.
Given this level of spending at current levels and fiscal position of state governments
the goal of spending 2 to 3 percent of GDP on health looked very ambitious task. The
analysis also found out the elasticity of health expenditure in states and revealed that
for every one percent increase in state per capita income, the per capita health care
expenditure increased by around 0.68 percent.

45
 Joshi (2006) attempted to analyze the expenditures incurred by the central and
state governments on social sector during the pre-reform and post-reform period. He
stated that the social sector expenditure of the centre as a percentage of aggregate
expenditure and gross domestic product have increased during the reform period.
However, a fact which could not be neglected that higher expenditures incurred by the
central government on social sector was at the cost of lower allocations made from
central plan outlay to the states. Author observed the declining trend of health
expenditure in the post-reform period and remarked that in spite of noticeable
improvements in key social indicators, a vast majority of the Indian population
continued to remain poor. The study also emphasized that the rising cases of HIV/
AIDS in India, demanded an immediate and response from the government.

Rahman (2008) study examined the trend of public health expenditure in

India. A panel data model was used to explain the main factors which affected public
health expenditure in the period 1971 to 1991. The empirical results showed that the
key determinants causing the regional variations in health expenditure were real state
per capita income and literacy rate, while other structural demand variables such as
the proportion of the state population over the age of sixty, population per primary
health care centre and population per doctor were statistically insignificant factors. An
income elasticity of 0.47 implied that health care was not a luxury good.

Section III

Health Status and Public Health Expenditure

This section covers articles which were related with studying the relationship
between health status and public health expenditure over time.

According to Teresa (1982) there was a close interactive relationship between

health and level of income. The attainment of a higher income level affords an
individual access to better health. He may not necessarily choose to maximize his
health status but at least has the means to attain improved health. Difference in
mortality rates among rich and poor countries were paralleled by differences in
diseases patterns. In the early stages of development, infectious and parasitic diseases
coupled with malnutrition, affected infants and children. As income level,

46
environmental conditions and life styles changes, problem of infectious diseases and
malnutrition were contained and non-infectious diseases such as diseases of the
circulatory system emerged as principle causes of illness and death, affecting children
less and adults more.

George and Nandraj (1993) in their article on ‘State of Health Care in

Maharashtra – a comparative analysis’ studied health development in Maharashtra
with respect to other socio-economic indicators. In their article, they tried to examine
the relationship between health sector development and capitalist’s growth. Their
results showed that Maharashtra and Punjab have attained high growth with respect to
health indicators having high per capita income (PCI) and good economic
development. About Kerala, they noticed a good development in the health sector;
inspite of low PCI, low level of industrialization and the state was associated with
good infrastructural indicators. According to the authors, the pattern followed in
Maharashtra could be due to trickledown effect of capitalist’s modernization of the
industrial-cum-agrarian variety. They viewed that socio-political, geographic and
demographic peculiarities of Kerala were the root causes for the pattern followed in
this particular state.

Baru, Qadeer and Priya (2000) throw light on the efficiency of the private
sector in providing health services to the people. Study showed that though it was
assumed that private sector was more efficient and provides better quality care, it does
not stand up to empirical scrutiny. According to the study, Delhi's private hospitals
followed questionable management practices with regard to workers as well as patient
care. Expenditure on wages in these hospitals was kept low through contractualisation
of fourth class employees. Thus, these private hospitals were having many loopholes
like more emphasis on profit motive leading to cutting of costs which has a direct
bearing on the quality of care, practice of discharging patients early in order to ensure
quick turnover and increased intervention. Study concluded that it was imperative for
these hospitals to ensure certain minimum working conditions expected in all
industries for the employees. The study suggested that the states should have effective
administrative mechanisms that can ensure that these private hospitals comply with
conditional ties for receiving subsidies like quality and equity in the provision of

47
services. Regulatory framework for medical care would certainly help in improving
the performance of medical industry in health services delivery.

Nobuhide (2001) in his article have analyzed that like education, health is
regarded as a necessary source of productivity because it can be a proxy of labour
quality. Health can be an investment for future economic return and this positive
impact of health on economy has been tested in many micro studies. The author
demonstrated that health measured by life expectancy has a positive impact on
economic growth. Health status also has indirect impact on economy through its
influence on education. The author stated that particularly in developing countries,
economic factors were very relevant in determining the state of health.

Chakrobarti, Rao (2001) paper’s basic query centered on the role played by
income in determining the extent of fund allocated by Indian states for the
improvement of health of its population. Drawing data from the 14 major states of
India over a time span of 23 financial years (1974 to 1996) and using recent advances
on panel data time series econometrics, this paper documented the presence of a long
run relationship between income and health expenditure. The long run elasticity
estimated that publicly provided health services should be considered as “necessities”.
Results from the Panel Error Correction model demonstrated that ageing of the
population and proportion of rural areas were only non-income factors which found to
exert a significant positive impact on real per capita health expenditure. They
suggested that this was important in view of the demographic transition that India is
passing through.

Devarajan, Miller and Swanson (2002) paper assessed the relationship

between public expenditure and outcomes at country level. The relationship between
public expenditure and outcomes is complex, and empirical evidence from developing
countries suggested a weak link between public spending on education and school
enrollments and hence between health expenditures and mortality. They observed that
these human development outcomes depended on household characteristics, such as
whether the mother is educated, or the family can afford to send the children to
school, there was a difference between the average cost of producing services and the
incremental cost of enrolling a child or treating a patient, public spending does not
always translate to outcomes because the delivery of public services, which was the
vehicle for translating policies into desired outcomes, is often highly inefficient.

48
Further, in case of IMR and maternal mortality, data quality was so poor that it was
difficult to estimate the size of the problem and estimate its cost.

Misra (2003) study put together two concepts of health- inequality in health
status and inequity in health spending. Childhood diseases like diarrhea, anemia etc.
were more prevalent among low income households compared to high income
household. If one looks at the institutional deliveries per 1000 live births then it was
clear from the study that poor had much lower rate of institutional deliveries. Further,
when total illness cases treated during the last 15 days of the survey was considered
then the poorest 20 percent obtained treatment 3 times less than the richest 20 percent.
For hospitalization the difference observed was six times.

Gupta, Monica Das (2004) in her paper focused on health system in India and
its functioning at national level. According to her, India has relatively poor health
outcomes despite having a well developed administrative system, good technical
skills in many fields and an extensive network of public health institutions. She
underlined the fact that this is all because of misallocation of resources, inadequate
focus on evaluation, deep management flaws and inadequate funds at state level. So,
by using its financial and political leverage the central government can persuade the
states to work towards specific health objectives and priorities.

Himanshu, Sekhar (2006) study examined the micro aspects of health

economics. It examined the effect of income and education of the household on its
health expenditure based on primary data. The descriptive statistics for tribal area of
Orrisa in their study showed that per capita health income was Rs. 5143.75 per annum
with 2555.27 and 0.5 as standard deviation and coefficient of variation respectively,
whereas per head health expenditure (PHE) was Rs. 108.13 per annum and 91.36 and
0.84 as standard deviation and coefficient of variation respectively.

Kaushik (2006) examined the relationship between health status, expenditure

on health and education and per capita income in respect of the state of Himachal
Pradesh, using the data for the period 1971-2001. The authors used Johansen’s
methodology to test the existence and uniqueness of co-integrating vectors among the
different variables. Their results suggested that the health expenditure- health status
relationship was different from the health expenditure- income relationship, as there
was a lack of causality in the latter relationship. They further observed that causality
that flowed from per capita expenditure on education to infant mortality rate was

49
stronger than the impact of real per capita income on health status. Thus, the
implication of his study was that increasing public expenditures on health was a
necessary policy intervention for accelerating the economy’s health status of the
state’s population. In conclusion, the authors remarked that the health expenditures
was an important determinant of better health status and was, therefore, a key tool
available to policy makers.

Malhotra and Shweta (2006) attempted to study the pattern of public health
expenditure in various states and analyzed the extent to which state was fulfilling its
responsibility in providing public health facilities. They used Regression for studying
the relation between per capita health expenditure and level of economic development
as measured by per capita Net State Domestic Product (NSDP) in various states. They
also analyzed the relations between major indicators of health viz; crude birth rate
(CBR), crude death rate (CDR), infant mortality rate (IMR), expected life for male
(ELM), expected life for female, and their major determinants viz, per capita net state
domestic product (PCNSDP), per capita health expenditure (PCHE) and literacy rate
(LR). The results of inter-state disparities in case of health indicators showed that the
basic health indicators in various states have improved over time but still were far
behind many developed countries. The results of relationship between health
indicators and per capita health expenditure (PCHE) showed that Infant Mortality
Rate (IMR), Crude Death Rate (CDR) and Crude Birth Rate (CBR) had significant
and negative relationship with per capita health expenditure. Similarly, life
expectancy both for males and females were highly significant and have positive
relationship with per capita state health expenditure. Values of R2 and R 2 are
relatively low because health was also affected by factors other than per capita health
expenditure like gender empowerment, poverty, education, adequate housing, clean
drinking water and sanitation etc.

Thus, in this chapter an attempt has been made to review different aspects
relating to health status, public health expenditure and relationship between health
status and public health expenditure of India and of its various states. The review of
literature for this study is not exhaustive in so much as number of aspects still need to/
can be delved into.

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