The first major legislation on social security for workers in independent India was the Employees’ State Insurance Act 1948, when the country was in a budding stage and thriving on mixture of imported goods from the developed and fast developing countries. Jute, textiles, chemicals, etc were some of the industrial sectors where manufacturing process was concentrated and workers were deployed. Hence at this juncture, it was a bolt from the blue to workers in the form of ESI Act, 1948 designed for the socio-economic amelioration of the workforce. It was from here that the concept of ESI hospitals took shape, to provide adequate medical facilities to those covered under the ESI Act.
Infrastructural backlog of ESI hospitals
More than six decades later, today the government is mulling privatisation of ESI hospitals, obviously based on the past bitter experience of infrastructural backlog in all ESI hospitals across the country. Insufficient beds, incompetent doctors, staff and nurses, insufficient stock of medicines, harassment of in-patients (IPs) and their families are some of the reasons that have compelled the government to look at privatisation. Since our legislation came into force, 62 years ago, there has been very limited upgradation in the medical care systems of these hospitals under one of the biggest social security legislations in the world. A point to be noted here is that the revenue flow of the Corporation is quite healthy in terms of accumulation from the contribution of employees and employers. Add to that the 1/8th of share borne by the State government who, as per the provisions of the Act, contributes 12.5 per cent of expenditure on medical care on ESI beneficiaries in their respective States within the per capita ceiling.
Any expenditure over and above this ceiling is borne entirely by the State governments. But the fact, based on statistics and records of the past periods, depicts a very sordid picture of the conditions of ESI hospitals under State government administration. Untold sufferings like running from pillar to post, talking to doctors and nurses, persuading them for admission of ailing patients, arrangement of medicines from the available limited stocks and no seating and refreshment options for family and friends of IPs, etc. is what the beneficiaries get. Why should this happen when IPs are bonafide beneficiaries and one of the major stakeholders of the system? Is it the return they deserve for lending them to a social security net for a certain premium? It is not only the violation of constitutional right of a citizen of India, but an act of offence on the part of the authority.
Besides, ESIC’s wealth enhancement drive of increasing the wage ceiling to extend the coverage of the Act to maximum number of workers is being done from time to time. Recently, during the 149th meeting held on February 19, 2010 under the chairmanship of Mallikarjun Kharge, Union Minister of Labour and Employment, Harish Rawat, Union Minister of State for Labour & Employment and vice chairman, ESIC, the Corporation agreed to increase wage ceiling from Rs 10,000/- per month to Rs 15,000/- per month.
Enhancement in wage ceiling
The last enhancement in wage ceiling was done around three years ago from Rs 7,500/- per month to Rs 10,000/-per month. But the irony is that the scenario at ESI hospitals has not changed one bit. Intention of the Corporation seems to bring more and more employees under the coverage of the Act just for augmenting revenues rather than improving the service. It is also evident from the statistical report of ESIC that only 10-15 per cent of IPs avail of benefits whereas a large section does not go to ESI hospitals due to sheer infrastructural deficiency. The existing ratio of doctors to patients is 1 for every 30/45 IPs. Compare this to the standard of hospital facilities available in European and American countries where 1 doctor is allotted for every 4 or 5 patients and minimum beds allotted to each hospital is more than 1000 with ultramodern medical and surgical apparatus designed to deliver the optimum standard of treatment.
In its own journal, the statistics of ESIC reflects that medical facilities are provided through a network of 1427 ESI dispensaries, over 2100 panel clinics, 307 diagnostic centres besides 143 ESI hospitals and 43 hospital annexes with over 27000 beds. All this for IPs running in to millions!
Will privatisation be an alternative to meet the expected facilities at ESI hospitals? It seems to be the best option at this stage. The term “privatisation” of ESI hospitals is not binding on the Scheme or the Corporation. Control should always be with the government to ensure social security to working class. Lessons can be taken from the decade-long infrastructural development that took place in India such as road, bridge, flyovers, tunnels, airport, seaport, docks, etc., which were all designed to provide maximum comfort to citizens, and considered as a fulfillment of certain pledges by the State.
Most of these projects succeeded and opened the floodgates of economic boom and FDI in India. In all these cases, private organizations had extended their whole-hearted support to the government through well-devised public-private partnerships. So, ESI hospitals could be another such project where specialized private parties can be invited to join hands with the government and work in tandem to upgrade and rejuvenate the conditions of existing ESI hospitals in the best interest of the beneficiaries of the Scheme.
Alternatively, the privatisation can also be worked through a ‘Build Operate Transfer (BOT)’ model by active participation of private players with proven track record and worthy credentials, selected through a bidding process against certain yardsticks set by the government. The awarded vendor will be required to invest necessary resources for upgrading and refurbishing the hospitals based on WHO standards, and given the operating rights for at least 10 years so that the desired requirements are met, and quality achieved.
While voting for privatisation, one should not forget the basic guiding principles of the Scheme - affordable treatment to the lower, lower middle and middle class who are the main beneficiaries. Investments made by private partners for overall improvement of ESI hospitals should not pinch the poor IPs. Social security is the responsibility of the State for which it is committed and the government must ensure that the best possible treatment is provided to the beneficiaries. Profit motive of private parties should be restricted by well laid out government mechanism, at the same time ensuring that private players do not incur losses.
(The author is Head - Regulatory, TeamLease Services, Bangalore.)