he 70-year-old farmer was in dire need of care. The pain in his abdomen felt like knives piercing his flesh. He was sure this time that the cause was more serious than his gastric ulcer. Scared, he boarded the bus in his village with his brother, and sweated through the four-hour ride to the government's Safdarjang Hospital in New Delhi.

"He's been vomiting coffee-like material for the past two days," his brother impatiently told the doctor, when one finally addressed them in the packed emergency room. Staffing on the floor looked to be alarmingly thin.

The ER doctor looked grim. "I'm sorry," she said. "But there is no blood available, and the wait for a CAT scan is anyone's guess. We have lost our electrical power, and the backup generator is overloaded."

The farmer and his brother headed out the door. Back to the sweltering bus. Back to the village. Maybe supplies would be available in a day or so.

This unsettling scene was described recently by a physician who trained at the public hospital. According to health systems expert Peter Berman--for 13 years a leader in population and international health economics at the Harvard School of Public Health (HSPH)--episodes like this repeat daily in public hospitals and clinics all across India's 28 states.

After winning independence in 1947, India's central government laid out a plan for a national health service that promised free cradle-to-grave coverage for all. But the government never came close to delivering on this vision, and today it finances only about 20 percent of health care. Eager to bypass the flawed public system, most citizens turn to the burgeoning but largely unregulated private sector, even borrowing money at usurious rates to pay for drugs and services. Nearly 70 percent of total health expenditures--a staggering figure--comes from households. According to surveys, unexpected health expenditures are the single most significant reason households fall into poverty in India, and the biggest source of financial insecurity.

Ironically, for a poor country India has "a reasonable amount of health-system resources in place: scientists, health-care workers, facilities, and so on," says Berman over a crackling phone line from New Delhi. Previously director of HSPH's International Health Systems Program and now an adjunct professor with HSPH, Berman became head of the World Bank's Health Nutrition and Population team in India in 2004. "But the national system is seriously underperforming. Compared to other countries at similar levels of income and education, India has poorer health outcomes and huge disparities among its people."

What India's government needs, Berman says, are much more effective mechanisms for translating financial and human resources into services that reach people. Strangled in bureaucratic red tape, the government often underspends its health budget--about .9 percent of gross domestic product.

To help change that, Berman and his colleagues in India are engaged in laying the groundwork for a "revolution of innovation." From the impoverished villages of Bihar to the struggling clinics of Karnataka, home to technology-rich Bangalore, Berman oversees a $2-billion effort to develop, implement, and evaluate more than a dozen national- and state-level health-reform projects. Among these are health-insurance schemes, performance-incentive programs, and public-private sector alliances.

"Peter came to New Delhi to do a very big job," says Paolo Carlo Belli, senior economist for health at the Bank and a David E. Bell fellow at HSPH from 2000 to 2001. "He leads the policy dialogue with the Indian national government concerning how we can best help."
Energizing strategies

Berman has no quick fixes for a system that's been breaking down since its inception in the early 1950s. But he does have strategies for injecting energy into an unmotivated workforce, for empowering patients and communities to play a role in their care, and for redirecting scarce rupees into for-profit and nonprofit non-governmental organizations (NGOs) and other outlets that can generate better results.

"If you tie money to performance, empower local people to make demands on the system, and encourage what works--be it public or private--that gives you a strong force to bring about improvements in services," says Berman.

An incentive program might make a nurse's salary contingent on her showing up 20 days each month. Or it could light a fire under a hospital or clinic with a "challenge fund," as Berman's team is doing in the state of Karnataka. There, primary-care clinics and local administrations that make well-conceived proposals for improvements--expanding immunizations, for example--win additional funding to carry out their plans. In a similar innovation at the national level, the government, with backing from international partners, is disbursing a portion of funds allotted for the Reproductive and Child Health Program as an added incentive to states that meet targets for, say, prenatal care.

Projects Berman oversees give a shot in the arm, often literally, not only to people, but to the public health infrastructure as well. Berman says innovation is possible even with respect to roles long performed solely by the government. In Bihar, for example, his team is developing a pilot with the new state government to renovate and operate 50 or so rural health-care centers through contracts with NGOs. Many of these clinics have languished for years, with state authorities unable to mobilize the investments needed through government channels.

Perhaps the most challenging quandary facing India is how to best use the large private health-care sector. One route is for the national and state government to buy services rather than provide them, contracting with private organizations to run primary-care facilities, for example. To that end, Berman is collaborating with national and state officials and NGOs to improve the design, financing, selection, and monitoring of the recipients of such contracts.

Another route of innovation is to "capture," as Berman puts it, the large sums people now spend out of pocket and "organize the money to make the system work better," channeling funds into a health insurance plan for poor rural areas, for example. In Karnataka, he's helping design an insurance experiment for two million people, figuring out what conditions to cover, how to collect premiums, how to build a network of providers, and what subsidies to grant the poor.

"I would not be surprised if Peter brought to the World Bank in India a more rigorous way of looking at public financing issues," says K. Sujatha Rao, a former HSPH Takemi Fellow in International Health who is now director general of India's National AIDS Control Organization. "He has a deep understanding of the country, and an uncanny ability to convert that knowledge into practice."

Thea Singer writes about science, public health, business, and the arts. Her work has appeared in the Washington Post, Boston Globe, and other publications.


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