The crisis in healthcare quality

The mirror to the learning outcomes deficiency in India is the medical treatment quality crisis. In a just released paper highlighted in Marginal Revolution, Jishnu Das and Co draws attention in an empirically rigorous manner on something which is not very salient in mainstream debates,

We sent standardized (fake) patients to rural primary care providers in the Indian state of Madhya Pradesh, and recorded the quality of care provided and prices charged in each interaction. We report three main findings. First, most private providers lacked formal medical training, but they spent more time with patients and completed more essential checklist items than public providers and were equally likely to provide a correct treatment. Second, we compare the performance of qualified public doctors across their public and private practices and find that the same doctors exerted higher effort and were more likely to provide a correct treatment in their private practices. Third, in the private sector, we find that prices charged are positively correlated with provider effort and correct treatment, but also with unnecessary treatments. In the public sector, we find no correlation between provider salaries and any measure of quality. We develop a simple theoretical framework to interpret our results and show that in settings with low levels of effort in the public sector, the benefits of higher diagnostic effort in the private sector may outweigh the costs of market incentives to over treat. These differences in provider effort may partly explain the dominant market share of fee-charging private providers even in the presence of a system of free public healthcare.

They write,

Private providers spent 1.5 minutes more with patients (62 percent more) and completed 7.4 percentage point more items on a checklist of essential history and examination items (47 percent more) than public providers. They were equally likely to pronounce a correct diagnosis (only 4 percent of public providers do so), to offer a correct treatment (27 percent of public providers do so), and to offer clinically unnecessary treatments (provided by 70 percent of public providers)... The rate of correct treatment is 42 percent higher (16 percentage points on a base of 37 percent), the rate of providing a clinically non-indicated palliative treatment is 20 percent lower (12.7 percentage points on a base of 64 percent), and the rate of antibiotic provision is 28 percent lower (13.9 percentage points on a base of 49 percent) in the private practice relative to the public practice of the same doctor.

As can be seen, reflecting the higher quality of public sector doctors, they perform the best with checklist completion. But I am not sure whether I agree with the tone (and possible headline takeaways) from this,

Under the status quo, considerable attention has been focused on improving access and spending for publicly-provided healthcare. Our results suggest that enthusiasm for the public sector as the primary source of primary care services in resource poor settings has to be tempered by the extent to which administrative accountability is enforced in the system and that poor incentives for effort may be a binding constraint to quality in the public system of healthcare delivery.

It would be a shame if instead of spotlighting attention on the very poor quality of primary medical care, the main lesson drawn from this paper is that private production is the way forward, as Alex Tabbarok's suggestion is likely to be interpreted. This is all the more significant given that the policy takeaway from the context of the paper concerns primary health care and not general medical care. This "bottom line" from Tabbarok is not encouraging,

The bottom line is that the private market for health care is much bigger and less expensive than the public health regime in rural India and once we control for knowledge it’s of higher quality. These results have important implications for reform. In particular, much more effort should go into improving the knowledge of the private sector.

You cannot draw a simple public policy take away that the superior outcomes associated with private provision and their ubiquitousness implies relying on markets to deliver primary care. If we do so then we are merely revisiting the long settled debate on who should deliver primary health care. As the very rich historical experience of every major country shows, an affordable and sustainable primary health care can be delivered only through a strong public system, though private providers can be important complements.

The challenge with improving the effectiveness of primary care in India requires work in two directions. Strengthen a very weak public system with resources and appropriate incentives, and mainstream and leverage the services of a huge, mostly unqualified, and completely unregulated private market.