Market and State in Health Services: The Case of India and China

Recently, China and India have received a lot of attention in the world economy and there is almost an obsession with these two countries and how their current growth presages the coming “Asian Century”. They are often quoted as the current "success stories", the two economies in the developing world that have apparently gained from globalization, with relatively high and stable rates of growth for more than two decades. In India also, one can find obsession with China. The rapid economic growth and structural transformation in China are typically called upon to rationalize the economic policy of choice. These economies are often treated as broadly similar in terms of growth potential and other features. But, in fact, there are significant differences between the two economies which render such similarities superficial, and which mean that individual policies cannot be taken out of context of one country and simply applied in the other to the same effect (Ghosh, 2005). China’s gross domestic product (GDP) has grown at the extraordinary annual rate of8 percent during the past 25 years, and its economy is now among the world's largest and most rapidly expanding (as cited in Blumenthal and Hsiao, 2005). However, the economic development has occurred unevenly across China’s communities. Also, while glorifying economic growth in the era of liberalization, its important to understand the dialectics of ‘growth’ and ‘development’. Growth is a convenient empirical and analytical category generally measured in single aggregative indicators such as Gross National Product (GNP), labour productivity, national income and consumption that does not include or reflect the normative concerns of development. It is not even indicative of inequalities that might exist in stratified society. Many dimensions of the quality of life like health, education and other aspects of well-being are excluded in the statistics of economic growth. Growth as an end in itself in the hope of inducing trickle-down effect also inevitably generates new inequalities and perpetuates old ones. It’s only in the last one and half decades that human development as a holistic concept has became a realistic tool for evaluating progress both on its own as well as comparative terms. Non-material components of living standards and their spatial distribution are very important. Development is thus a multidimensional concept and is defined as ‘the process of widening people’s choices and level of their achieved well-being. The most important ones are to lead a long and healthy life, to be educated and to enjoy a decent standard of living. Growth and development are in a dialectical relationship and there is a strong urge to subordinate growth to development in this neo-liberal era. Emphasis exclusively on growth is a form of escapism and here comes the role of state, the manner in which it establishes the socio-economic agenda for its societies and how it appropriates resources and shapes production, distribution, consumption and investment (as cited in Acharya et al., 2000). This paper compares the approach to human development in India and China through the lens of health improvement and access to health services within the varied socio-political context in these countries. The paper would briefly look at health systems of these two countries and then would focus on health services, which have strong interlinkages. Health systems cover more than health services for individuals. They include functions for which health is first priority and are essentially population based including public health, health promotion and assessment of health implications of other policies. The legitimacy of health systems is derived from political commitments made to citizens so that accountability and responsibility for their proper functioning lie in the public domain and cannot be left solely to consumer choice and action (Mackintosh and Koivusalo, 2005) .The paper would try bringing out the role of market and state in health services in China and India and analyze the shifts that have occurred since reforms in both these countries. The paper would primarily focus on role of state and market in provisioning, financing, health insurance, staffing and drugs and would look at issues of accessibility to health services in post reform China and India. The paper finally looks at impact of market reforms on health status of population in these two countries. In light of deleterious effect of market reforms on health system in China, which earlier in the pre reform period had a far more equitous base with State intervention, the paper concludes that China can be taken as a test case to show that markets which view health as ‘consumption’ rather than ‘need’ do not address inequalities in access to care and in fact aggravates inequalities. The paper emphasizes that health care has unique characteristics that deviate from the basic pre-requisites of competitive market model and hence vouches for state intervention in health.

• http://www1.unifi.it/confsp/papers/pdf/Gargi.pdf