Thursday, October 15, 2020

Health Crisis in India during COVID-19 Pandemic: Indicator of Failing Neo-liberal Capitalism

- Narender & Vaishali

David Harvey, a Marxist, has rightly argued that in neo-liberal capitalism, the private sector including multinational companies are not interested to deal with global public health crisis like the Covid-19 pandemic but the private hospitals and pharmaceutical companies to have more capital accumulation by undertaking more business from public health and maximize their profits by any means. As he stated:

 Corporatist Big Pharma (Multinational Company) has little or no interest in non-remunerative research on infectious diseases (such as the whole class of coronaviruses that have been well-known since the 1960s). Big Pharma rarely invests in prevention. It has little interest in investing in preparedness for a public health crisis. It loves to design cures. The sicker we are, the more they earn. Prevention does not contribute to shareholder value. The business model applied to public health provision eliminated the surplus coping capacities that would be required in an emergency. Prevention was not even an enticing enough field of work to warrant public-private partnerships. President Trump had cut the budget of the Center for Disease Control and disbanded the working group on pandemics in the National Security Council in the same spirit as he cut all research funding, including on climate change. If I wanted to be anthropomorphic and metaphorical about this, I would conclude that Covid-19 is nature’s revenge for over forty years of nature’s gross and abusive mistreatment at the hands of a violent and unregulated neoliberal extractivism(Harvey, 2020)

Image courtesy Reuters
Covid-19 pandemic has not only exposed the crumbling state of the developed nations like the US but also of developing countries like India, wherein privatization is at its peak and is demeaning the nature of health as public good via expanding privatization and discouraging public funding as advocated by the neo liberal economic policies since early 1990s. The current scenario also stands firmly in line with Kalecki (a Polish Marxian Economist)argument, in 1945,of about how the nexus between capitalism and fascism stresses on having more expenditure in war and defense and declining public funding in social sectors like health and education.  The declining percentage of GDP in Indian health care over the time has kept the poor striving for basic right to life even during this ongoing pandemic. It is pertinent to take a note that even during the pre-pandemic period, the central and most of the state governments in India were spending lower in comparison to other countries, which have managed to flatten the curves of Covid-19 led infections.  Germany, Sri Lanka, Norway, New Zealand, Pakistan, China and Cuba have successfully flattened the curves due to their strong public health care infrastructure, public funding and good governance policies.

In the past three decades, Indian government has been consistently making rhetoric statements on increasing public health care spending up to 3% of GDP to achieve SDG 3 on universal health care to all by 2030. At present, the percentage share of GDP in Indian health care system is lowest at global level, which is only one percent of GDP.  Due to lower public funding in healthcare by the governments, Indian household is compelled to spend on private healthcare, as the percentage of total health expenditure in India out of the individual’s pocket is highest at global level, i.e. 62%. It is the public nature and the longer gestation period of final outcome or realization of health or education services after the consumption or use that delays or derails the public response. This happens due to asymmetric information between the buyer and user or seller and producer. Despite knowing about their wellbeing, people’s voices remain feeble on uniting against such policies and ask government to raise public expenditure or to universalize essential services like education and health. Today India is progressing from second rank to first rank in terms of highest number of Covid-19 virus cases and the resulting deaths, but there is no talk on increasing the spending in health care.  The US is on first rank as on 14th of September 2020 and Brazil has third rank in terms of the number ofCovid-19 cases at global level. Another common feature among three nations- India, the US and Brazil, is that they allhave the most populous leaders as their heads of the governments, which  have exposed their poor Covenant in handling Covid-19 virus as these three countries stand on first 3 ranks in having maximum number of Covid-19 cases at global level.

Indian state under Neo-liberalism has weakened the public healthcare by allowing privatization of health services in India and also inviting private interference in public healthcare, also called de facto privatization in terms of public private partnership (PPP). The PPP model in the health care sector is using insurance schemes in the healthcare services by the government and private hospitals.   In 2018, September, the present Modi government launched Ayushman Bharat Pradhan Mantri Jan ArogyaY ojana(AB-PMJAY), to cover health insurance of 10 crores people through public private partnership. But, would it be viable to ensure universal public health care? The answer lies in the basic public economics principle of provision and production of public services, like health services as the privatization of public services led more economic inequities, social injustice and corrupt practices.  After the completion of 2 years of implementation of the AB-PMJAY, there are reported cases of corruption, showing the failure privatization in healthcare sector and wastage of public funding via adopting PPP model. In Delhi and Mumbai, governments have asked private healthcare sector to contribute in controlling Covid-19 pandemic.  It was noticed that private health care providers are shirking from their responsibilities as most of the private hospitals in India are not offering more than 50% of their capacities of beds and patients intakes in the private hospitals during the Covid-19 pandemic .They are also withdrawing from delivering 10% quota of hospital beds for the Indoor Patient Department (IPD) and 25% reserved Outdoor Patient Department (OPD) quota of beds to the Economic Weaker Sections of the society as the government gives the expenses of the health expenses of the  EWS category[1]. Thus, the private health care service providers and hospitals are absent from the provisioning of health services in this health emergency rather there are instances of private hospitals making profit out of misery of the masses during Covid-19pandemic, by charging exorbitant medical fee. For instance, according to the media reports, the private Max Hospital in Delhi is charging Rupees 25, 00,000 for a Covid-19 package and plasma therapy is being charged at Rupees 2.5 lakh by the private hospitals in urban India.  Such episodes adds on to enough reasons for arguing against private intrusion in social sector mainly health and education. So, despite the pandemic being class and caste neutral, its medical expenses are exorbitantly high for people who can’t afford. 

Status and Strategy in Combating Covid-19 Pandemic

The number of Covid-19 cases in India is rising at greater pace along with the number of resulting deaths. It is observed that the neighboring countries, Pakistan and Sri Lanka have performed better to contain the Covid-19 pandemic than India. The clustered based lockdown in Pakistan has contributed better in containing Covid-19 showing better governance in the country rather than India’s strategy in handling Covid-19 by imposing complete lockdown. In comparison to India, Sri Lanka has also shown better status of containing Covid-19 because of having better health infrastructure to flatten the Covid-19 curves as noticed in the cases of data explained below.

A comparative analysis of status of health infrastructure, in different countries and its impact on containing Covid-19, was done. It included countries like the USA and Brazil (non-flattening curve of Covid-19 in these countries), Germany,  Norway,  and New Zealand (highest human developed countries and have managed to flattenCovid-19 curve),  Sri Lanka,  Pakistan (neighbouring countries of India and developing economies and flatten their curves), China (the neighboring country of India and flatten its curve) and the communist country-Cuba. For the comparison, three indicators of health infrastructure are considered- physical, financial and human. The physical health infrastructure is analyzed by using number of hospital beds per 1000 people, the financial health infrastructure is analyzed by using private and public health expenditure in the country as well as out of pocket health expenditure.  Human health infrastructure is examined here by using number of doctors and nurses per thousand person ratios.  The number of Covid-19 cases and resulting deaths are also examined in these countries till the time period of 14th September 2020. 

Physical, Financial and Human Infrastructure in Healthcare Sector

The public funding in India is mere 1 per cent in this critical times, pushing people to spend out of their pockets in the absence of government health Finance.  Data suggest that out of pocket private health expenditure in India is highest at 62%. After India, China has second rank, in terms of out of pocket health expenditure which is only 36% out of total expenditure in health. Public funding by the Chinese government in Healthcare is 3% of GDP, which is 2 percent-point higher than Indian public spending in health. This implies that the Chinese government spends higher public funding than Indian government.  This could be a major reason or factor in containing the Covid-19 virus.

            The communist country, Cuba is most successful in containing the Covid-19 pathogen. The main reason behind containing the virus is public funding which is highest at global level, that is 10.5% of GDP. It is because of the higher public funding in health by Cuban government,  the people are not forced to spend higher amount of Private Health expenditure out of their pockets therefore percentage of  out of pocket expenditure in health is only 10.5% of total health expenditure in Cuba. Germany is another country, which has shown improvement in flattening the curve of Covid-19 virus, due to higher funding, which is 8.7 percent of GDP.  As a result, out of pocket health expenditure in Germany is also in lowest category that is 12.7% of total health expenditure.   After Germany, New Zealand is also successful in containing the virus, with higher public spending of 6.9 percent of GDP and declining out of pocket health expenditure at 13.6% health expenditure from the total health expenditure in the country.

In addition to that, physicians per 1000 people; and nurses and midwives per 1000 people in India are lowest at global level, which are 0.8 physicians per 1000 people and 2.1 nurses and midwives per 1000 people. Comparatively, these two respective rations for China are 2.0 and 2.7 respectively, showing higher ratios. In the communist country, Cuba has relatively higher ratios in comparison to India and China, which are 7.7 and 8.3 respectively, reflecting highest physician ratio at the global level.  These ratios in Germany are 4.2 and 13.2 and in New Zealand, these respective ratios are 3.5 and 12.3, reflecting highest nurse ratios in Germany and New Zealand at the global level. The higher ratios of doctors and nurses in the communist country and the highest human developed countries, like Germany and New Zealand, which are successful in flattening the curves of Covid-19. But the conditions in India are not conducive due to poor ratios of health professionals and lowest public funding, which in turn reflect at crumbling situation of Indian health infrastructure. The condition becomes severe when private health care providers across the country are either making profit or shirking from their social responsibilities in the Covid-19 pandemic. The situation confirms the failure of private good in the public health services and so by allowing private stakeholders dominance in healthcare, the Indian government is violating the basic principles of the public economics since early 19990s under neo-liberal economic policies. The public health expenditure by the Norway government is also higher at 8.9 % of GDP which reduces out-of-pocket health expenditure at 14.2% of total health expenditure.  In the US, government expenditure in health is 8.6 % of GDP; total expenditure in health in the US is 17 .1%, reflecting higher proportion of private expenditure in the US, which could be one of the reasons behind higher number of cases of Covid-19 and the resulting deaths in the US.

In terms of physical health infrastructure in terms of hospital beds per 1000 people on an average, India and Pakistan have lowest ratios than the world average of 2.7 beds, i.e.0.7 beds in India and 0.6 in Pakistan. Brazil (2.3) has also lower beds than the world average and the US is also not far behind the world average at 2.9 beds showing poor physical infrastructure in the US. However, the communist country, Cuba has 4.2 beds followed by the highest human developed countries -New Zealand, Finland and Norway, which has higher hospital beds than the world average, i.e.8.5, 5.3 and 4.0 respectively  (UNDP, 2020).  Other countries with better hospital beds ratios are Russian Federation (8.4), Germany (8.2) China (4.2), and Sri Lanka (3.6). The better equipped countries with physical health infrastructure are most successful in flattering the novel Covid-19 curve than countries like India, the US and Brazil. The failure in ensuring health infrastructure as reflected in the above analysis on the status of health infrastructure indicators provide lessons to contain the Covid-19 pandemic in India and other most affected countries. It is also advocated to expand the public health care infrastructure via inserting more government finance and improving their hospital beds ratios as well as the ratios of doctors and nurses. The pandemic has taught world a great lesson to universalize public health care to follow basic principles of public economic of public good in case of social services like health and education to ensure human right to lead a quality life for every citizen. However, in the neo-liberal capitalism, it would be difficult to change the policy framework of the health care sector, so the situation demands a political movement to universalize public health care and also to achieve SDG-3. The ongoing emphasis on adopting neo-liberal privatization in the health care via defacto and dejure are fatal in ensuring public healthcare to all. The universalization of health care, if adopted as an emergence action for short run, would greatly result in containing the Covid-19 pandemic.  But for the long run, there would be a need to change the political economy of the health care policies through a change in the political regime of the neo-liberal state and its privatization policies so that global public good like health and education can be ensured to all.


In the neo-liberal capitalism, the private sector is running its business in the health care sector via exploiting people with (i) higher prices to reap profit/surplus by either working individually (dejure) or coordinating with the state under public -private partnership model (defacto) of privatization and (ii) shirking from their social responsibilities for serving the people even under the global health crisis-the COVID-19 pandemic. The analysis of Covid-19 cases and the deaths reported in these countries especially India and the US, reflectsat the challenging times in the Covid-19 pandemic. Even though, India is surging towards the top rank in terms of having higher number of cases at global level, reflecting health inequality due to lower public health and expanding privatization. This paper has examined the factors behind increasing trend of Covid-19cases in India.  It is observed in the analysis of health infrastructure in India in comparison to other countries including; the communist country Cuba and the highest human development ranked countries like Norway, New Zealand, Germany and Canada, Finland, India has poor health infrastructure in terms of physical parameters, public funding and health professionals. The poor health infrastructure and lower public funding reflect at the challenges before India to contain the Covid-19 places and deaths in the present time as well as in future. There is a need to change the policy framework of healthcare in India, it should be welfare oriented rather than market oriented, which is being followed by the present populist political   regime. 

At present there is no concrete public policy in the healthcare sector to increase public spending from 1% of GDP to 3% of GDP to universalize Indian health care as also stated in the United Nations’ Sustainable Development Goal 3 (SDG 3), by 2030. The existing scenario in Indian health care demands a strong political movement for universal public health care for all in this global health emergency of Covid-19pandemic, as observed in the highest human developed nations- Norway, New Zealand, Canada, Finland and Germany. It would be for short run, but for the long run, the dire need is to revamp the existing neo liberal dominance in every sphere, most importantly in education and health. Indian health care in current situation of health crisis require a change in the political economy of the health care policies as in the case of Cuba so that global public good like health can be ensured to all. 

PS- Narender is assistant professor of Economics at Delhi University and Vaishali has a doctorate in Education.   



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