Is Managed Care at all a Possibility in Developing Countries? – A Perspective from Thanjavur

By Nachiket Mor and Karthik Tiruvarur 1

Developing country environments are characterized by acute shortages of both financial and human resources for healthcare as well as by a high burden of infectious diseases. In the recent past a large and growing burden of non-communicable diseases has also become very visible in these countries. And, while this is not true of all developing countries, there are some such as India and China, which have additional problems imposed upon them by the sheer size of their landmass and a very large population. At over 3 million square kilometres, stretching 3,000 kilometres from one tip to another in both directions, and with a population crossing 1.2 billion individuals living in over 600,000 habitations, India is one of the largest countries in the world. Some of her districts have populations that are comparable to those of entire countries. For example, Burdwan District of West Bengal at 7 million has a population comparable to that of Papua New Guinea and Serbia.

Faced with these very stark realities, developing countries have sought to address their healthcare challenges with a number of different strategies. India, for example, currently has in place a veritable potpourri of “solutions”:

  1. A public health system with, at 1% of GDP or $10 per capita, a miniscule amount of funding, and a decidedly mixed record of performance.
  2. A very large community health worker programme in which very poorly trained and very poorly paid local women are simultaneously expected to dispense prescription drugs, act as the voice of the community to make the public health system more responsive to local needs, and act as the agents of the government for a large conditional cash transfer programme designed to incentivise women to deliver babies at hospitals rather than at home.
  3. Multiple national and state level insurance schemes that, at $6 per capita, for the very first time, have allowed millions of families to gain access to a large number of secondary and tertiary healthcare facilities in the private sector. Multilateral institutions and governments in both India and China have seen such schemes as a low-cost opportunity to entirely by-pass the government owned public health systems and yet offer an apparently comprehensive healthcare solution to their citizens. These schemes have been built with a very strong technology back-bone and appear to be delivering on their promise of low cost healthcare provision to the vast Indian populations.

Despite all these “solutions” being available the reality of India is that her citizen’s end up spending approximately $50 per capita on health care, of which more than $40 per capita is out-of-pocket. Much of this money is spent at the local level and since there is a complete absence of modern healthcare provision at the Primary level either within the government or in the private sector, a large proportion of it is handed over to the numerous “medicine-men” that have existed for centuries peddling all manner of “cures”.

Faced with this state of affairs we want to explore if it is at all conceivable for developing countries like India to offer a comprehensive high quality healthcare solution to all her citizens. It is our view that, given the unique nature of healthcare, a pure laissez faire, demand driven approach will not produce first-best outcomes for India and nor do existing “solutions” that have been mentioned earlier have the potential to do so. Managed Care with its emphasis on offering a structured set of solutions with strong gate-keeping functions, in our view, represents the ideal model both from a cost control and healthcare point of view, irrespective of whether it is operated by the Government or the private sector. One could have a long debate on the pros and cons of Managed Care but even assuming for the moment that we all agree that this indeed is the direction that a developing country like India must go, all the practical challenges that have dogged Indian efforts at providing healthcare do not magically vanish merely because a new model of healthcare has been proposed.

The IKP Centre for Technologies in Public Health is an action-research institution based in India with a large field site in rural Thanjavur – one of the poorer rural districts in the Southern Indian state of Tamil Nadu. Our focus has been on developing a set of ideas that will address the several on-ground challenges that Indian healthcare systems face. In ICTPH it is our view that while a few such viable solutions do exist, they involve multiple design elements working closely together. It is also our view that while India has done a relatively good job of addressing challenges at the secondary and tertiary care level, as evidenced for example by the growing medical tourism industry, on the twin dimensions of provision of Primary care and integration of care across higher levels, we have a long journey ahead. The focus of ICTPH’s work is therefore on these two dimensions. In our view, clever human resources strategies, advanced point of care diagnostics, health management information systems, and expert architectural designs, by themselves will not be able to address these challenges but, when combined together in interesting ways, they have the potential to dramatically transform the provision of Primary healthcare and the integration of care across levels. Our research work examines health systems along four complementary dimensions of: (i) Human Resources; (ii) Infrastructure; (iii) Interventions; and (iv) Financing and seeks to combine them to produce desired outcomes. Taking this approach, we have rolled out a specific design in rural Thanjavur with the help of our on-field partner: Sughavazhvu Healthcare.

The design currently being implemented on the ground in Thanjavur seeks to serve a relatively “tiny” population of 200,000 individuals or approximately 50,000 families in a clearly defined geography. This version of the ICTPH Health Systems design has the following core components:

  1. Within the geography in which the 50,000 families live, identification of 20 distinct contiguous areas in each of which 2,500 families live.
  2. Working with a locally hired temporary team of Enrolment Officers, a GPS mapping of each dwelling and a one-time enrolment and Rapid Risk Assessment (RRA) of each individual residing within each dwelling, and issuance of bar-coded identity cards to every individual along with a selective issuance of High Risk Status cards to specific people found to be at risk for certain non-communicable diseases. These High Risk Status cards entitle them to free treatment within the local health centre for that specific disease. The RRA measures five markers for each individual (height, weight, blood pressure, tobacco consumption, and waist and hip circumference) and based on internally developed automated algorithms risk grades each person. The entire enrolment and RRA process is implemented using low-cost Android based mobile devices which synchronise real-time with Sughavazhvu’s central database. The cost of this one time effort is estimated at $800 for each location.
  3. Establishment of one Rural Micro Health Centre (RMHC) to serve the enrolled and risk graded population of 2,500 families. Each RMHC is sought to be located a point such that it represents no more than a twenty minute walk for the household living at the furthest point of the catchment. The architecture of the RMHC is such that it is a welcoming and colourful place with a lot of light and air but with an adequate degree of privacy. Each fully equipped RMHC on average costs about $6,000 to construct and fit out. It has a monthly operating cost of about $120 including rent, electricity, and internet charges. For every five RMHCs there is a fully equipped diagnostic centre which costs about $10,000.
  4. Each RMHC is staffed by a locally hired physician with an undergraduate degree in Ayurveda, Unani, or Siddha systems of medicine. This physician is legally permitted to prescribe allopathic medicines and is completely retrained and recertified using ICTPH’s internally developed, year long, training programme. This physician is trained to use technology; work with clearly developed protocols; and is multi-skilled to treat infectious diseases, non-communicable diseases, offer dental treatments including scaling and fillings, conduct a comprehensive eye exam as well as prescribe and dispense glasses, mental health counselling and treatment (under development), and cervical screening including cervical cancer screening and treatment using Cryotherapy. On average it is possible to get a very large number of such physicians at a salary of about $250 per month.
  5. Each physician is supported by a locally hired and heavily trained health extension worker who is paid about $50 per month.
  6. An internally developed Health Management Information System(HMIS) and a central team of auditors ensures that each RMHC follows all processes and protocols exactly as laid down centrally. A new Clinical Decision Support System (CDSS) will also assist the physician in reaching an appropriate diagnosis and arriving at the best treatment plan.
  7. Each RMHC is able to serve about 40 patients in a day and spends about $1 per patient on drugs and diagnostics. It is our estimate that the full suite of primary care offered by the RMHC including medicines and diagnostics can be offered to each individual at approximately $14 per capita per year including all costs.
  8. Secondary and Tertiary care health insurance can be provided to each individual at approximately $6 per year assuming tight gatekeeping at the primary care level and a great deal of proactive work to ensure that the high risk individuals identified in the RRA are able to bring their risk levels down to moderate levels. The insurance will pay for care at a clearly identified preferred network of providers.
  9. Therefore a comprehensive Managed Care plan (with no deductible or co-pay) can be put together in our view at approximately $20 per capita or $100 per family per year. However, with the government willing to spend only $10 per capita, additional resources would have to be found from within the $40 being spent by the people themselves taking care to ensure that equity considerations are kept at the forefront. For starters we have defined health-poverty as having a high-risk status on the RRA thus entitling the individual to completely free care for that condition until they reach a moderate risk status.

Our early work with the 12,500 households that we currently serve through our 5 RMHCs persuades us that many of these ideas may actually find some traction in the field. These are preliminary ideas that we have been working on and a great deal of work remains ahead, particularly in completing the development of our Primary Care HMIS, our in-depth certified physician training curriculum, our mental health treatment and counselling protocols, and in thinking through various health financing mechanisms. Over the next two or three years we hope to explore some of these ideas more carefully and if indeed we can successfully offer this as a Managed Care programme to our target population of 50,000 families and work towards building a disease free future for them. If we are indeed able to do so successfully then we hope to be able to take these ideas to both the government as well as the private sector so that they may be taken to scale across the country.

1 Nachiket Mor ( is an Independent Board Member of the IKP Centre for Technologies in Public Health (ICTPH) and is the corresponding author. Karthik Tiruvarur is a senior member of the ICTPH team as well as the Chief Operating Officer of Sughavazhvu Healthcare in Thanjavur. This note was first delivered as a speech by Nachiket Mor at the Massachusetts Institute of Technology (Cambridge, Massachusetts) on February 23rd, 2012.

Leave a Reply

2 Comments on "Is Managed Care at all a Possibility in Developing Countries? – A Perspective from Thanjavur"

Notify of

Sort by:   newest | oldest | most voted
11 years 10 months ago

It is a mockery to see Nurses practicing as Doctors and playing with human life in India.Please tell in which rule of MCI and MJP it is possible.

Aarti Sahasranaman
Aarti Sahasranaman
11 years 10 months ago

Dear Dr. S. P. Kumar,

Thank you for your comment. However, if you had read point #4 above, you would see that our RMHCs are staffed by certified and trained AYUSH physicians, and not nurses, as you mistakenly claim. Having said that, the nurse practitioner model has been successfully implemented in other countries, and is certainly worth exploring given the human resources crunch in the health sector in rural areas in India.

April 2024
« Apr