New Delhi: In a move that has angered the health ministry, the Planning Commission has asked for reversal of the long–standing public health policy from the 12th plan onwards ending governments’ dominant role in providing health services and transiting to greater privatization of the health sector. The plan is along the lines of the ‘managed care’ system which is followed in the US and Mexico.

The health ministry has taken a tough stance against what is being referred to as the "corporatization of health care" and will send a strong reply on Wednesday to plan panel deputy chairman Montek Singh Ahluwalia arguing that "the first priority should be to strengthen the public health system and involve the private sector only for critical gap filling".

The letter from health minister Ghulam Nabi Azad says that "the private sector should not substitute but actually supplement the public sector". TOI has accessed a draft, finalized at the end of July, of the 12th Five Year Plan’s health chapter which sketches the dramatic policy reversal that would bring in universal health insurance coverage by allowing a selected ‘network’ of private and other operators to sell their services on competitive basis to the government for which they would be paid on what the health industry calls ‘capitation’ basis — fixed rates for different treatments for every person handled.

The plan panel’s prescription visualizes the government’s role in delivering primary healthcare as restricted to mere essentials like antenatal care, leaving more lucrative medical treatment to the ‘managed–care’ system where private players will compete with cash–strapped government–run hospitals to run the ‘networks’.

The commission’s proposal runs contrary to what even its High Level Expert Group (HLEG) on health reforms had said as recently as November 2011. The HLEG, headed by Dr K Srinath Reddy, had recommended, "Purchases of all healthcare services under the universal healthcare system should be undertaken either directly by the central and state governments through their departments of health or by quasi–governmental autonomous agencies established for the purpose." The HLEG will meet on Thursday to discuss the plan panel’s latest proposal.

Dr Reddy told TOI, "We have clearly voted for strengthening of the public sector. We will meet on Thursday to discuss where there is a mismatch between our recommendations and the commission’s proposal."

He added, "We have clearly said that the public sector needs to be strengthened and should be the main provider of services under the UHC. Where needed, the private healthcare provider could be contracted to supplement these services through a well designed system. Both public and private providers should be monitored by an independent regulator for quality of care so that the entitlement under the UHC is properly delivered through technically competent and ethically correct health care."

The health ministry, however, is livid. An official told TOI, "We should not forget the exploitation of patients that goes on in the private sector every day through over–prescription and over–diagnosis. The health challenges in India’s urban and rural areas are completely different. The private hospital chains have no presence in such backward areas facing the worst health indicators. How will they perform there?"

The ministry is also worried that such a move by the Planning Commission will take away "the few doctors that are still practicing in public hospitals".

"The NRHM needs to be continued. We have invested huge amount of money and planning over the last seven years over it and are finally seeing results. A National Urban Health Mission needs to be floated for the urban poor," the official said.

Sources said at stake in this controversial move is the health sector pie which is set to rise substantially as the government ups its investment in the 12th Five Year Plan to Rs 10,85,369 crore.