Karnataka identifies 9 district hospitals for privatisation, to attach them to medical colleges

“The district hospitals will then be taken over by the private players and attached to the new medical colleges. They will be run on a PPP basis,” the official added.

The medical colleges getting attached to the district hospitals is the need of the hour and the government is focusing on that, added the official.

NITI Aayog proposal

The move has its roots in a two-year-old proposal by the NITI Aayog, the Indian government’s think-tank, that envisaged district hospitals being handed over to private healthcare companies to run attached medical colleges on a PPP basis.

The proposal was accepted by CN Ashwathnarayana, the then Karnataka deputy chief minister and minister for medical education.

However, there was little progress on the proposal till recently, when the state government began the process of identifying the districts to start the new medical colleges and the district hospitals to be taken over by private enterprises.

The NITI Aayog had said in its document — titled “Concession Agreement Guiding Principles for Setting up Medical Colleges” — that given the limited sources available, the Centre and state governments could not singlehandedly bridge the gap in medical education.

A PPP model was the most suited to improve the healthcare sector, it argued.

Taking over district hospitals by new medical colleges under PPP could boost the number of medical seats and also “rationalise the cost of setting up of a medical college”, the document said.

Cost of setting up a medical college

Health and Medical Education Minister Dr K Sudhakar had earlier told the media: “To start a medical college, the government needs ₹670 crore. The Union government gives a 60 percent grant, and the remaining 40 percent comes from the state government.”

He added: “In 2019-20, the Centre came up with new guidelines that if any district already has a private or government medical college, the permission cannot be given for a second medical college.”

As it was difficult for the state government alone to come up with a college, the PPP model would be followed to set up medical colleges in the districts, the minister had said.

Wenlock Hospital an example

Wenlock Hospital in Mangaluru that is currently working under a PPP model. (Wikimedia Commons)

Speaking to South First, Director of Medical Education Dr BL Sujatha Rathod said, “Yes, the process of identifying the bidders and the land to start medical colleges has started. We have also visited the nine districts,” she said.

Two nodal officers from Karnataka — one each from the Directorate of Medical Education and the Health Department —will be involved, along with a team of officials from the Central government, in completing the process.

Rathod said that the plan was based on the success of the PPP model between Kasturba Medical College Manipal Hospitals and Wenlock Hospital in Mangaluru.

“The Wenlock Hospital is on lease with the KMC, and this is doing very well. Based on the same model, we may come up with plans for the other districts,” she explained.

According to sources, the district hospitals and the land for the medical colleges will be under the state government, and the building and the faculty for the college will be provided by the private players.

Uttar Pradesh, Maharashtra, Gujarat, and Meghalaya are also reportedly in the process of finding bidders for similar PPP projects.

However, Dr B Unnikrishnan, Dean and Professor in the Department of Community Medicine at KMC, told South First, “I am not sure if the Wenlock model will work in other districts. The kind of commitment the KMC Manipal Group has given it might be very difficult to achieve elsewhere.”

He explained: “This PPP model exists since 1955, and now we are in 2022. From free lab investigations at our NABL accredited lab to offering of 52 undergraduate medical seats every year at a fee of ₹1.5 lakh, the KMC also provides about 100 consultants, postgraduate students, housekeeping staff, security staff and even nurses. Even maintenance of the machinery is done by the KMC Manipal.”

No clarity on what patients will pay

While the newly built medical colleges will be entirely private and will charge students fees as per the current regulations, it is still not clear whether the district hospitals — which were treating patients for free — will now start charging patients. And if so, at what rate?

“These modalities are still being worked out. Nothing has been decided as yet,” the DME official said.

Meanwhile, the public health activists in the state are completely against this model and claim that the state has had examples of failure in running district hospitals using the PPP model.

“While Karnataka’s example of establishing several successful PPP models is quoted by the Centre, there are a few examples of failure as well. I would call this a fair-and-lovely model,” said Prasanna Saligram of the Karnataka-based Jan Swasthya Abhiyan (People’s Health Movement).

A classic case of government rolling back PPP in Karnataka was the Raichur district hospital, pointed out Saligram.

The Rajiv Gandhi Super-Speciality Hospital in the Raichur district was among the first to be put under PPP.

“The project, was taken up in a joint venture with Apollo Hospitals Enterprise Limited (AHEL) in 2002. Despite Apollo being a hospital chain that runs across several states, it could not sustain this PPP,” said Saligram.

“After several attempts of making it work, complaints ranging from wastage of government infrastructure to people not willing to visit the hospital due to several government schemes not working, BPL cardholders not utilising the services, and services in departments like nephrology and gastroenterology not being available came to the fore. The joint venture came to an end in 2013,” he said.

Other problems in PPP model

The health department officials also stated that leasing out district hospitals might be a failure if not monitored well.

“It will take the government years to restart such hospitals. Hospital workers, healthcare staff, and common men will be the most affected. The staff salaries also will be an issue when it’s the PPP model. They are usually paid less and don’t fall under the government pay scale, making it difficult to get doctors to join a PPP-model hospital,” explained one of the health department officials.

Interestingly, the vision document on health that was released with much fanfare by the Karnataka government recently also talks about how the new PPPs should be carefully examined at the highest level for their potential benefits, and that a technical committee should also be allowed to evaluate the model in each district.

The chapter on PPP said: “A joint study of Karnataka Health Systems Resource Centre (KSHSRC) and Deloitte Touche Tohmatsu India Ltd reviewed existing PPPs in the state and reported several deficiencies (like the absence of monitoring and evaluation mechanisms, and lack of grievance redressal mechanisms or defined quality/accreditations standards).”

The paper also suggested the need to establish an autonomous convening authority for the management of PPPs in the state. The agency, the chapter argued, would have to be established outside the department with suitable checks and balances, and would be responsible for ensuring standards of both the public and private capacities.

Meanwhile, biomedical researcher Dr Anant Bhan said, “There is a need to enhance the availability of medical education, but also quality and equity in medical education. By further privatising medical education and making public hospitals available to private entities to enable this, it’s not clear how the government is delivering on its important role in ensuring access to health and education as a social good and without any socio-economic barriers.”

Bengaluru-based public-health activist Dr Sylvia Karpagam said: “In spite of glaring evidence that taxpayers’ money should be invested in expanding and strengthening public facilities, there are repeated attempts to hand over even existing facilities to private players, which the state government is unable to regulate using terminologies such as PPP. This comes at a huge cost to the accessibility and affordability of healthcare.”

She added: “During and after the Covid-19 pandemic, the need for comprehensive public healthcare was evident. There are good lessons from other countries, and India needs to bring in evidence-based, equitable policies. We need to invest in human resources (not just doctors but all levels), evidence-based medicine, ethics in healthcare and allied research, and transparency. Corporate-led, centralised, commercialised healthcare helps neither the rich nor the poor. While the rich are likely to undergo unwarranted treatments, procedures, and tests, the poor end up with catastrophic health expenditure or denial of care, or even negligence.”