Indmedica Home | About Indmedica | Medical Jobs | Advertise On Indmedica
Search Indmedica Web
Indmedica - India's premier medical portal

Journal of the Academy of Hospital Administration

A New Paradigm in Health Care Services in Public Sector Units (PSU's) in India

Author(s): Prabha Arora*, Rajiv Kumar Jain**, Uma Vasudeva***

Vol. 13, No. 1 (2001-01 - 2001-06)

Abstract : There are around 300 PSU's in India and these have varied systems of providing the Medical Care Services to their employee population. At this juncture of Privatisation, the management of the PSU's could benefit by doing an analysis of the available PSU's in a given geographical area that could develop an equation of sharing resources for providing Comprehensive Health/Medical Care Services to the employees and their dependents. The Paper attempts to address the question of Unified Medical/Health Care services for the Employees of the PSU's on the lines of the Services available to the employees of Central Govt., ESIC, Railways and Armed Forces.

The objectives of the paper is the optimum utilisation of the existing resources (Medical, Paramedical manpower, material) for providing the Comprehensive Health/Medical Care Services to the PSU's existing in a given geographical area. Also creation of needed Comprehensive Health/Medical Care Services for the PSU's in a given area with sharing of resources (Capital expenses like Land, Manpower and recurrent expenses) in situations where these do not exist.

Creation of Primary/Secondary and Tertiary Centres could be done for the identified populations of PSU's in the Given Geographical area by the merger of the existing or by creation of the Tertiary Centres only. Adoption of this mechanism could lead to diversification of the services also i.e., introduction of Disease Control and Family welfare Programme under the Comprehensive Health/Medical Care Services.

The Concept could be Operationalised by creation of a Board of Specialists in Health Administration and an agency for the Financial Management. The corpus fund could be created by the contribution of employees, Health Insurance agency and the Participating PSU's.

Keywords : Comprehensive Health Care, Public Sector Undertakings


Health has been declared a fundamental human right. Health is state subject and therefore it is the responsibility of the State governments to look after the Health of its subjects. The States have developed a system of Primary; Secondary, and Tertiary Health Centres for providing Medical care services for the subjects. Despite the existence of the State Health Services the country has various other setups for providing the medical care services for specified populations/employee groups.

Health Insurance

Two agencies namely: CGHS and ESIC provide Health insurance to the employees of the Central Govt. and of industrial units respectively. These two schemes provide medical cover to the insured persons and to their spouses during the Service and after superannuation from the service. The Central Govt. Health Scheme was set up in 1954 for providing Comprehensive Medical Care Services to Central Govt. employees and their families and to avoid cumbersome system of medical reimbursement. This scheme started with 2.3 lakh beneficiaries and is now operational in 17 cities and 312 dispensaries/hospitals in various systems of medicines and provides service to about 40.23 lakh employees.

ESIC also has an organised set up for providing social security cover to the workmen under the Employees State Insurance Act 1948. The ESIC provides the services by way of a network of dispensaries and hospitals and referral system. The financing for the services comes from the employee (1.75% of the total wage bill) and the State (1/8th of the total cost of medical care.). The per capita cost of medical benefit was Rs. 406.78 in the year 1992-93.

Railways and Armed forces also have organised systems of providing services to the employees by way of Primary, Secondary and Tertiary Care setups. Both the Organisations provide Medical Care Services to the employees and their dependents during service and after retirement.

The need for having a rethinking for providing the Comprehensive Health Care Services for the Public Sector Units (PSU's) arose from the following observations:

In the present scenario of Privatisation the emphasis has been on the reduction of the Govt. expenditure on the administrative costs. The Govt. too has been relying on the Private sector partially for providing the Health Care Services for their employees. The involvement of Private Sector for improving the Health Care Services has been observed and these indications are encouraging the Public Private Mix as far as the delivery of the Health Care service is concerned. This implies that the Private Sector needs to come up to the challenges and begin networking together amongst themselves for provision of Health Care to the employees.

The existing system of the provision of the health care services for the employees of the PSU's:
There are around 300 Public Sector Units in our country in various sectors and they have different setups for addressing the Health Care needs of their respective employees.

The PSU's have the medical setups that are Internal and External i.e., Internal set up to provide emergency services and routine medical Care needs of the employees during their working hours. In addition Dispensaries in the residential colonies and Hospitals/Family welfare centres also have been created by certain PSU's for their own employees and their dependents. The external setups ranging from Panel System for the General Practitioners, Specialists, Nursing Homes and Private Hospitals for the scattered population of employees and their dependents have also been created.

There is no organised unified system of providing Medical Care Services for addressing the Comprehensive Health Care Service needs of the employees of all the PSU's.

The Problems in the existing setups:

There is no proper system of networking and referral services for employees to utilise judiciously the Medical Care Services that are provided by the PSU's. Tertiary/Secondary Care services are not provided on a referral basis. This improper utilisation of the internal services also results from the existing Panel Systems that at times encourage the referrals to the Secondary/Tertiary Care Centres for trivial illnesses. This results in heavy reimbursement bills and costs dearly to the organisation. This is intentional or deliberate is a matter of conjecture. This often results in Medical claims that far exceed the actual requirement of the services for a particular ailment. This trend is also observed as overindulgence on the part of the employees to consult the Specialist/superspecialists even for trivial illnesses thus increasing the reimbursement claims that the organization has to bear. This trend mainly is seen in cities where the specialists exist in good numbers.

There is a serious lack of proper system of medical audit for the quality of medical services provided by the all empanelled Nursing Homes/Hospitals. This audit is required to be done by the PSU's with the help of their own Internal medical Units/organised systems for the conduct of the Medical audit by the PSU's. Some employees under certain circumstances (dubious?!) over stay in the nursing homes with mutual connivance (although unproved). This happens often due to the laxity of the systems under the PSU's for these Nursing Homes. The reimbursement bills have to be cleared and the excess amount of stay/medical leave of the employees/their dependents has to be acceded to by the organisations.

The Delhi Government has tried to devise a system to check the malpractice of the Nursing Homes by way of enactment of Nursing Home Act. Many of the States are yet to enact the same whereas Delhi Government is yet to implement it effectively to get the results.

Various PSU's adopt administrative procedures that are convenient to their employees and there are no proper guidelines/rules or reimbursement for different medical/surgical/investigative procedures and this results in different amount of payment that is reimbursed to different Nursing Homes/Hospitals. This is not the problem with the CGHS wherein the minimum rates are fixed for practically all the procedures and the reimbursement is done accordingly to the employee (regardless of the amount the employee spends). (CGHS has a list pertaining to admissible reimbursement for various procedures that is circulated from time to time).

The problems that are being faced by the present system are two fold. One aspect is huge amount of reimbursement claims and the other aspect is expenses for the Scrutinising systems in the Accounts Department of the medical claims. (The employees of the account section, Medical doctors and the time and effort of the employees that goes in for getting the advance, reimbursement claim etc.)

It is difficult to determine the genuineness of the medial claim of the employee and very often false claims are submitted by certain employees and the PSU's have to reimburse the claim as the panel doctors are not under their administrative control. This problem is faced by most of the PSU's.

It is one of the observations that patients are kept in the Nursing Home/Hospital even after the illness does not warrant admission/observation by the Nursing Homes/Hospitals. This practice results in inflating the claims and at times the employees are kept as hostages till such time that bills of the hospital are settled, which inflates the bill further, since most of the employees depend upon their organisation for making payment directly to the hospital or advance the payment in the form of reimbursement to such an employee. This may often be a hidden motive of the Nursing Home to extract more money from organisation. The employee in such circumstances also suffers, even though innocent.

The data on the expenditure on the Health Care of the PSU employees is not systematically available. In many of PSU's it appears that the expenditure on the Health Care is included under the Welfare Head. The statistics on desegregated amount spent on the different aspect of the Medical expenses i.e., Manpower, Medicines, expense on the internal setups, Secondary/Tertiary Care Setups and disease patterns which require exceedingly high reimbursement claims are not available.

The Medical personnel may rise up to the rank of General Manager maximum in the couple of PSU's. Even on they attain only the grade and perks of the post. Usually they would not have any say in the administrative matters in regard to their divisions. Mostly these medical personnel are also not interested in asserting themselves to insist upon their administrating superiors. The administrative superiors though well meaning and interested in improving the organisational setup, usually, would not be able to do so due to lack of specific knowledge in the field of Health Administration.

The objective of the concept

It is to sensitise the managements of the PSU's/BPE that an organised system for providing Comprehensive Medical/Health Care to the employees of the PSU's need to be developed. The best way is the PSU's existing in a given geographical area plan to Create/Merge their existing/available resources for the benefit of the employees and the employers. The services could include the Disease Control Programmes and Family Welfare Programme and would thus result in optimum utilisation of the existing resources (collective - Venue, Health manpower, medicines etc.). The additional resources (Dispensaries, Clinics, Secondary/Tertiary Centres) also could be created in accordance with the density and the felt needs of the participating organisations.

Operational aspects of the concept

A task force would require to be created for the operationalisation of the Concept. This could be done by doing a situational analysis of the existing manpower (within the PSU's and through the available panel system), resources that the PSU's would like to share, their existing utilisation pattern (In terms of the indoor bed capacity, Nursing Homes/Hospitals). The occupations. The number of dependents in these identified PSU's in a given identified geographical area may be determined.

The medical professionals in Private Practice comprise of 70%-80% of the total practitioners. These General Practitioners (GPs) are mainly concentrated in the urban areas. These could be given a platform to practice in the facilities created/Existing facilities and their timings suited to the convenience of the employees (in case of shift duties). Adopting this as an administrative necessity is likely to result in reduction of the medical claims.

Financial aspects of concept

The analysis of the financial aspects could be done by examining the current expenditure pattern of Medical claims, Medical advances, Credit scheme or other mechanisms of the payment to the Panel Nursing Homes, Hospitals by all the participating organisations.

The financial analysis also would require to be done by the participating organisations i.e., Cost per employe (Per capita cost being spent by each of the participating organisation), Number of instances of hospitalisation per year per organisation, Average cost per hospitalisation etc. Certain percentage of the amount of the per capita cost could be levied as an Health insurance deposit from the employees (on the lines of the CGHS and ESI schemes.). The involvement of the employees of the PSU's in contribution towards the Health insurance expenses probably varies from one PSU to the other. A uniform/graded approach could be developed amongst the participating PSU's (number of the employees per PSU) so that the generation of funds is also there and a sense of ownership also is generated amongst the employees.

As the Health insurance multinationals are also coming in for providing the Health Care Services in the country and the aspect of operationalisation could include their participation in the financial aspects of the Health Care of the employees of the participating organisations. This also would depend on the results of the analysis stated above.

The financial sharing equation between the PSU's could be developed to the extent of the shared resources, the employee strength of each participating PSU and involvement of the Health insurance and the contribution from the employees as it is in the case of the CGHS and ESIC.

The initial capital expenses for creation of the facilities could be done by the participating PSU's according to the number of the employees, the financial standing of a PSU and possibly generating funds from other financial institutions/participation of employees in the ownership of the scheme.

A Financial system would also required to be developed possibly by an agency specialised in business practices and possibly formed by the participating member PSU's. The contribution from the participating PSU's would be dependent on the analysis of the factors presented above.

Human resource aspects of the scheme

The existing manpower in the Medical units serving the PSU's could be utilised by doing the manpower analysis and matching with the needs at the work place and at the other levels of treatment (Secondary/Tertiary) to be created. The skill enhancement techniques i.e., rotation of manpower, redeployment in areas where special skills could be developed in certain occupation, retraining (need based and work on hand experience) would result in diversification of the services for the organisation and experience of different work areas would enrich the Medical and Para medical personnel by avoiding the problems that arise from stagnation of the person on the same job.

The available GPs in the area can be given a platform to practice in the facilities created/Existing facilities and their timings suited to the convenience of he employees (in case of shift duties). Certain amount of monetary package, and/remuneration commensurate with the amount of time spent could be given to the GPs in the local area.

The Human resources for the administration of the scheme should be drawn mainly from the fields of Health/Hospital Administration for providing effective leadership to the Independent Board of experts proposed to be created.

The Specialists/superspecialists could be drawn from the reputed hospitals in the vicinity and can work in these facilities and can be given remuneration according to the time spent in the Clinic/Number of operations performed etc.

The paramedical staff for the scheme could be appointed separately or the existing/available could be redeployed.

The managerial aspects of the concept

The Operational aspects of the concept would require creation of possibly a separate Board of Experts from the field of Health Services and Administration. The services of the existing manpower of the Health Sector of the PSU's could be optimised by giving them the platform of the setups (Primary/Secondary and Tertiary) that could be merged/created for extending the services to the participating PSU's existing in the identified geographical area.

The second approach could be Creation of additional (need based) Tertiary Health Care Setups. The establishment of these Tertiary Centres would require to be done according to the needs of populations and the existing services provided by the Private Hospitals in the geographical area to ensure their optimum utilisation. Appropriate referral linkage systems with the available Primary and Secondary Centres would require to be developed. The monitoring systems for he utilisation pattern by each PSU would also require to be developed. These Tertiary Centres could be developed on the analysis of the data above. As the Creation of additional Tertiary Centres would be cost and labour intensive. Therefore development of linkages with the existing Tertiary Centres could be attempted. The World Development Report "e93 states that 66% of the total expenditure of the Health Care Services is spent on providing the Tertiary Care services in the country. Accordingly this is the time to think seriously for providing the additional Tertiary Care centres to the employees of the PSU's in the given geographical area.

These Tertiary centres could also be run on the commercial lines to ensure profit to the participating organisations by allowing other users to utilise the services on payment basis. The Insurance agencies also could enroll the clients that do not belong to the PSU's. Inclusion of this aspect would gainfully utilise the time and services of the employed consultants/specialists and other manpower. Benefits of the concept

Health is central to the development of any organisation/industry/Nation. The benefits of the operationalisation of the concept would be optimum utilisation of the existing resources, judicious creation of the resources and the diversification of the services by inclusion of the Disease control and Family Welfare Programmes. All these would result in better health of the employees, of dependents and better performance of the organisations.

The tangible financial benefits of the concept could be tested in terms of Cost Benefit and Cost Effectiveness Analysis. It is expected that operationalisation of this concept would prove to be cost efficient and effective alternative to the existing system.

Post script

The concept of creating Comprehensive Health/Medical Care Services for the PSU's in a given geographical area could be tested by taking stock of the available resources and those that could be generated by the contribution of the employees, the participating PSU's and the Health insurance agencies and by the existing disease pattern and the pattern of utilisation of the Health Services. The referral linkages also could be developed and thus would result in judicious utilisation of the Services created.


Comprehensive Health Care: It means the provision of integrated preventive, curative and promotive Health Care service from womb to tomb. This mainly comprise of:

  1. Provide adequate preventive curative, and promotive health services.
  2. Be as close to the beneficiaries as possible,
  3. Has the widest cooperation between the people, the services and the profession.
  4. Look after specifically the vulnerable and weaker sections of the community; and
  5. Create and maintain a healthy environment both in homes as well as working places.

For the purpose of this paper the terms Comprehensive Medical Care and Comprehensive Health Care are interchangeably used.

Public Sector Undertaking: A organisation established with the objective of profit making in certain specified Govt. sectors which takes its start with initial grant from the Central Govt. and after a specified period starts giving returns to the Govt. from its profits. Primary Health Care: This is the first level of contact between the individual and the health system where "essential" heath care (primary health care) is provided. A majority of prevailing health complaints and problems can be satisfactorily dealt with at this level. This level of care is closest to the people. In the Indian context, this care is provided by the primary health centres and their subcentres, with community participating.

Secondary Health Care: At this level, more complex problems are dealt with. This care comprises essentially curative services and is provided by the district hospitals and community health centres. This level serves as the first referral level in the health system.

Tertiary Health Care: This level offers super-specialist care. This care is provided by the regional/central level institutions. These institutions provide not only highly specialised care, but also planning and managerial skills and teaching for specialied staff. In addition, the Tertiary level supports and complements the actions carried out at Primary level.

Poly Clinic: A set up of specialist at one place wherein Out Patient Services are made available to the patients and this setup saves the time and effort on the part of the patient.

Panel System: System of providing Medical Services to the employees and their dependents closer to their residence by authorising practising doctors and Nursing Homes/Hospitals in local areas.

Hospital: A hospital is a residential establishment which provides short term and long term medical care consisting of observational, diagnostic, therapeutic, and rehabilitative services for the persons suffering or suspected to be suffering from a disease or injury and for parturients. It may or may not also provide services for ambulatory patients on an out patients basis."-- WHO expert committee in 1963. Referral system: This is a fundamental and necessary system of the Health Care System. It must be a two way exchange of information and returning patients to those who referred them for follow up care. This aspect of the Health system is weak in India.

Airports Authority of India*,
Indian Railways Medical Services**,
National Institute of Health and Family Welfare***
E-mail: [email protected]

Access free medical resources from Wiley-Blackwell now!

About Indmedica - Conditions of Usage - Advertise On Indmedica - Contact Us

Copyright © 2005 Indmedica