Anirudh Krishna Healthcare in India

Anirudh Krishna (PhD in Government, Cornell University, 2000; Masters in Economics, Delhi University, 1980) is the Edgar T. Thompson Professor of Public Policy and Political Science at Duke University and founder-director of the Summer School for Leaders in International Development, a collaborative program of Duke University, IIM Udaipur, and a group of NGOs. His research investigates how poor communities and individuals in developing countries cope with the structural and personal constraints that result in poverty and powerlessness. His most recent book - The Broken Staircase: The Paradox and the Potential of India’s One-Billion (Penguin and Cambridge University Press, 2017) – examines why poverty persists despite rapid growth and addresses way to overcome inequality of opportunity. He has authored or co-authored five other books, including One Illness Away: Why People Become Poor and How they Escape Poverty (Oxford, 2010), and more than seventy journal articles and book chapters. Krishna received an honorary doctorate from Uppsala University, Sweden in 2011; the Olaf Palme Visiting Professorship from the Swedish Research Council in 2007; the Dudley Seers Memorial Prize in 2005 and 2013; and a Best Article Award of the American Political Science Association in 2002. Before returning to academia, Krishna spent 14 years with the Indian Administrative Service, managing diverse rural and urban development initiatives (

Sam Fraser CMC '19 interviewed Dr. Krishna on October 24, 2018. 

What is India’s “Ayushman Bharat” healthcare program, and why is it so significant?

 There's a lot of research that shows that poverty in India is deepened and people become freshly poor because they don't have access to high-quality healthcare. The typical story is that someone’s loved one – their wife, their husband, their son or daughter, their parent, parent-in-law – becomes seriously unwell or suffers an accident, and that person is in the typical village in India. First, they need to find a taxi to take that person to the hospital, which is maybe 30 to 40 miles away, and that is expensive.

Then they get to the hospital, a government-run one supposedly free of charge. But very often the nearest hospital doesn't have doctors, doesn't have nurses, and doesn't have sterile facilities. So they need to go even further away to the main hospital in a district, and there again it's a hit or miss whether it has a competent doctor. Even though it's supposed to be free in theory, in practice it's costly. It's the cost of transportation and other expenses. Very often the doctors and the medical staff want some side payments.

At the end of it all a cure is not assured, because there's very little regulation of the quality of healthcare that people receive. Studies have documented how millions and millions of Indians fall into poverty each year – who are already poor – but poverty gets deepened because of incidents of catastrophic healthcare expenditure. It's been calculated that anywhere between 3 and 5% of poor Indian households fall deeper into poverty each year due to the size of their healthcare expenditures. This phenomenon is immiserating lots of people in India. It's really high time that's something big was done to make the conditions of life easier for these people.

I really applaud the magnitude of the vision because the time to do it is right for a lot of people. The investments in terms of budgetary support that they're willing to provide for this enterprise may be small in terms of the ultimate need, but it's still very large in terms of what's been done before. They're going about it in a very sensible way by tying it up with private hospitals, by tying it up with state governments, and so on.

What problems in the Indian healthcare system does this program fail to address?

If you go back to the example of the person from the village I was telling you about, what is the person from the village facing in terms of his or her healthcare problems? Well first of all, the hospital or the medical facility is very far away. Second, there usually aren't enough doctors or medically-trained personnel at these hospitals, and third, what they do, how they do it, and how much they charge for it is not at all regulated.

So the individual is spending a lot of money first on transportation, and then on taking a whole bunch of relatives with them to the hospital because you need all those people around to help you negotiate the various matters you need to negotiate. It's a strange and forbidden place for most people, and then on top of that is the payment for the healthcare itself.

So what the government is ensuring is that health insurance works for as many people as intended. It will make the payment aspect of the catastrophic health expense more easy for the individual to deal with, but what it does not fix is the provision of health care itself.

The government over the last 30 to 40 years has vastly expanded its network of primary health centers intended to bring modern medicine closer to the average Indian. However, they've had a very hard time staffing these facilities. The doctors, even the ones who are positioned there, refuse to go. About 70 percent of Indians live in villages, so they are the prime audience of this program. But it’s only a percentage of the healthcare problem that will be solved even if this program works well.

The good part of the program is that the insurance amount is clearable whether you go to a public or a private facility. But there will be a new problem.  The private facility is still dozens, sometimes hundreds of miles away. Once you get there, and once everybody else gets there because now everybody can afford to go there, the size of the system isn't increasing, and the number of doctors isn't increasing. So you're going to have a huge rush of individuals, but the existing system isn’t able to accommodate that. Nothing in this program raises the provision of medical services at the same pace as it is reducing their costs and making them more affordable.

So this program essentially addresses the part of the demand problem in giving people the ability to pay for healthcare, but it doesn’t address the massive supply problems? 

I wouldn't quite put it like that. I'd say that there are three prongs to a healthcare strategy that will fix the health care problems in India. One problem is providing the service – having more doctors, having more facilities closer at hand – so just increasing the total supply of healthcare and bringing it closer, that's one part. The second part is making it more affordable without reducing quality, and the third part is making sure that the system is well regulated.

The new program is not increasing the provision of services at all. But it's making expensive services affordable to the majority of Indians. The belief is that as more people come to demand the services, the number of private hospitals will expand, and they probably will.

But now consider the following scenario. Let's say that I'm an unscrupulous finance guy in a chain of private hospitals and I know that these semi-literate people from villages will come with entitlements of up to 5 lakhs of rupees – that's half a million rupees each year – that they can avail themselves of by taking treatment in the hospitals. So the hospitals get aid of up to half a million for treating a person for a village or from a slum. This person has no knowledge of medicine, as most people don't. But this person also doesn't have access to networks where they can check around and confirm that what this doctor is saying seems plausible, that they really have this particular problem, and really need this particular procedure. They can't really answer that, and the doctor knows that. So it may be that what they really need is an aspirin, but the doctor ends up prescribing a procedure that’s pretty intrusive and that costs half a million rupees. Since you're not really spending anything from your pocket, and they say it’s really necessary, and this is a big doctor in a big private hospital, the individual goes ahead and gets it done although he doesn't need it.  There's all sorts of stories about unnecessary procedures being inflicted upon patients.

This huge information asymmetry can be exploited by unscrupulous operators. I'm not saying everyone in the private sector is an unscrupulous operator, nor am I saying that there are unscrupulous operators only in the private sector, but there's this huge opportunity here for unscrupulous operators to milk people of the insurance money. I don't see very much in the system that has been put in place in anticipation of these kinds of things. There is no regulatory mechanism. That is one of the big weaknesses of the Indian system.

How might a healthcare program address these issues of service provision and of regulation?

I would say that a program would need to be a little less modest in terms of its growth plan. This plan is being piloted in a few locations as we speak, but by September of next year it's expected to go mainstream and cover its entire targeted population of half a billion people.  That kind of expansion – of something big, important, new, and untried – is a prescription for all sorts of things coming apart at the seams. If I had to do it differently, I would pilot it in a small number of locations, and I would want to attend to all three of the prongs of healthcare, the provision part, the cost part, and the regulatory part. I would experiment with different models to get this balance right, and it might take me two, three, or four years, but then I would be mainstreaming something that I knew had the potential to work, because it had worked already.

That's the difference between how the Chinese do their institutional and programmatic engineering, and how it's being done in this case. The Chinese do it in a slow, measured way. Things are tested out on a small scale and refined, and tested out on the next, larger scale, and then only after three or four such sequential expansions is the program made national.

Critics have pointed out that this ambitious proposal comes six months before Prime Minister Modi faces a general election. Do you think that the approach you’ve just described in India is a function of this political imperative, to some degree?

Absolutely. This is definitely an initiative taken with a clear eye to the elections because by that time it will still only be an intention rather than anything on the ground. By the time it becomes a set of things on the ground, some good some not-so-good, the elections will have been long over. 

So you think that they might be announcing an overly ambitious rollout to get as much political dividend as possible, but that they don't have a clear way of following through on it completely?

That's my fear, though I don't really know what's happening on the ground.

If implemented fully and successfully, how would Ayushman Bharat affect the lives of India’s poor, and the social spending gap between India and peer countries?

If you add the money that people spend privately to what the government of India spends, then the country of India spends as much of a share of its per capita income on healthcare as most other countries at its income level. The point is that the private amount is too large, and that's what this program seeks to fix by increasing the public share of expenditure through the insurance mechanism. But throwing money at the problem will not make the problem go away, unless all parts of the problem are simultaneously resolved. That can't be done in a year, or two years, or even five years.

That said, they've hired really good people to run the show. The CEO of Ayushman Bharat is a very competent guy. I know him well, and he in turn hired very good people. They have very good people working for them, the problem is what they've been given to play with is not enough to fix the problem that they've been set up to fix.

Both in terms of time and money?

Not money. Time and points of intervention. They've been given only one point of intervening in this issue. That’s not enough.


Sam Fraser CMC '19Student Journalist

“Ayushman Bharat Call Centre Inaugurated,” via DDNews India.

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