Chhattisgarh has invited proposals from private parties to run pathology, X-ray and CT scan services at its public health facilities. The state wants to outsource pathology tests at all its 26 district hospitals, 169 community health centres and 19 hospitals. The patients will not have to pay for the tests though; the government will directly pay the private agencies, which it will sign public-private partnership agreements with for seven to nine years. The state has budgeted Rs 30 crore to pay for its free diagnostics scheme this year.

As with the outsourcing of hospitals, the Chhattisgarh government is justifying outsourcing diagnostic services by claiming that its public health facilities lack adequate manpower. But the government’s own data shows that is not the case: its district hospitals and community health centres are staffed by around 724 lab technicians, while the Indian Public Health Standards require 636. The stated rationale of outsourcing the services, therefore, does not hold.

Moreover, most of the state’s older district hospitals and many community health centres and civil hospitals already provide a wide range of laboratory services. The Mahasmund and Durg district hospitals, for example, provide most of the laboratory and radiology services that the government now says will be outsourced. Most of the tests that the private agencies are listed to provide are biochemistry tests that can be performed by semi-autoanalyser machines available in nearly all district hospitals and in about 40% of community health centres. Serological tests on the list, such as those for dengue, malaria and hepatitis, are kit-based tests and are also available at most district hospitals and community health centres. If these tests can be provided by government hospitals, what is the need to outsource them? It is evident that the government has not analysed the availability of human resources, equipment and services, before proposing this public-private partnership.

The Centre’s guidelines to states for offering free diagnostic services stipulate that high-volume tests should be done in-house by government hospitals. Yet, the bulk of the tests Chhattisgarh wants to outsource are high-volume tests. The National Health Mission has suggested that the state strengthen in-house diagnostic capacities at its government hospitals instead.

The proposed public-private partnership is designed in a way that would make it more difficult for poor patients to avail healthcare services. It visualises a district laboratory operated by a private party that will collect samples from healthcare facilities across the district. It does not recognise the huge distances between the district headquarters and community health centres in the blocks. This arrangement means almost all patients will have to wait at least a day to get their results, which in turn means they will have to make an extra trip to the diagnostic centre, incurring additional expenses.

Weak penalties

The request for proposal states that in case the private party does not start providing services in a district, it will have to pay a penalty of Rs 1,000 per day. This means that a private party that does not set up a laboratory in a remote district such as Dantewada or Balrampur will have to pay Rs 3.65 lakh a year, which is negligible for a contract worth Rs 20 crore. Moreover, there is no penalty if a private party sets up services in a district but fails to make those services available in remote blocks.

The document specifies the time in which laboratories are expected to provide results for specific tests. If the results are not given within that time, the government will deduct anywhere between 2% to 20% of the bill. Further, the penalty clause states that if a test is prescribed and not done, the agency will have to pay a penalty of Rs 100 a test. It does not, however, state how the private parties will be monitored for reporting times or maintaining records of tests being prescribed and performed. There is a mention of digital entries but those will be maintained by the agencies themselves, leaving them open to manipulated.

Ignoring past experience

Chhattisgarh refuses to learn from past experiences with outsourcing diagnostics. In Bihar and Andhra Pradesh, outsourcing diagnostic services has led to cost escalation because of unnecessary tests being performed. The Centre’s 2012 Common Review Mission to Bihar found that diagnostic outsourcing had led to existing laboratory facilities in government hospitals becoming dysfunctional, services being stopped and laboratory personnel becoming redundant. The Bihar healthcare system was also plagued by delayed turnaround times and the quality of services provided was not as per the contract. This was in contrast to states such as Rajasthan and Tamil Nadu that had strengthened their in-house diagnostic services.

Chhattisgarh tried to outsource diagnostic services once before in 2013. The attempt failed because private agencies refused to set up facilities in the Adivasi regions of Sarguja and Bastar.

If the Chhattisgarh government succeeds in outsourcing diagnostic services this time, it will damage the public healthcare system. The progress made so far by government hospitals in providing lab services will be disrupted and the capacities built over the years will go to waste. It will also mean poor use of government resources because the existing staff and facilities will become redundant. The other concern is that this can lead to irrational diagnostics being prescribed by doctors and commercialisation of healthcare in government hospitals.

There are numerous examples of the failure of public-private partnerships across the country, but few of their success. Considering that diagnostics are a critical part of healthcare services and that there is no dearth of lab technicians in Chhattisgarh, the question that arises is this: does the state government want to spend public money to strengthen public healthcare services or does it want to hand over public resources to private parties and legitimise their profiteering at the expense of the public.

Sulakshana Nandi and Deepika Joshi are public health researchers working in Chhattisgarh.

This is the second story in a two-part series that dissects the rationale for the newly planned PPPs and their implications for the health system in Chhattisgarh. Read the first part here.