Synopsis
The Union government must establish more medical colleges. They discount the fact that the size of the problem goes beyond the capacity of the government — fiscal and administrative. Enlisting the support of the market is necessary for India to have a shot at meeting the doctor deficit.
The ongoing political crisis in Ukraine has a small sub-plot that links to India’s education policy self-goals. Multiple news reports claim that there are nearly 18,000 medical students in Ukraine. Indian medical students are also opting to study in the Philippines, and Kyrgyzstan besides Russia and Ukraine. Perhaps, for this reason, Prime Minister Modi in a speech on Saturday called upon the private sector to enter this sector in a big way and plug the gap in the supply of medical seats. It’s useful to understand why the low-supply situation exists in the first place.
Commonly understood reasons for students taking up courses outside India are the limited number of seats in government medical colleges, and higher costs in private medical colleges. But the price is just a signal of the underlying market conditions. And so, fixing prices cannot be done by price-fixing. In this particular case, higher prices are due to the low supply of undergraduate medical seats. Apparently, 88,120 seats are on offer every year. For reference, there were 2,86,000 undergraduate seats in China. A good 40% of these seats are in government colleges where the fee is subsidised by the taxes Indian citizens pay, while the remaining 60% are in private colleges where the fee can range from Rs 18- 30 lakh a year. The demand outstrips the supply by quite a margin and, hence, the high prices.
Had the market for seats been liquid, many more colleges should have sprung up and brought prices down. But this hasn’t happened, for two reasons.
One, unreasonable restrictions for setting up medical colleges. Until 2019, the regulatory authority for this sector was the Medical Council of India (MCI). Run by doctors, increasing the supply of doctors wasn’t their highest priority. Setting up a college meant pleading with this regulator and complying with conditions like owning 20 acres of land (in rural areas) and running an attached hospital (which comes with a separate set of requirements). Colleges had to justify their student intake and were evaluated on the basis of things like the number of “auditorium-cum-examination” halls, classroom sizes and, of course, the student fees. In short, all the perverse incentives dutifully put together to create a rent-seeking apparatus par excellence. Corruption rose. Only politicians who could stare down the regulator risked starting new colleges, and the rest stayed away.
Two, the regulations disincentivise scale. In recent times, the number of medical colleges per se has increased handsomely, albeit from a low base. In a Lok Sabha reply, the Union health ministry said that 132 medical colleges in the government sector and 77 medical colleges in the private sector have been approved by the NMC/MCI since 2014, an increase of 72% since 2013. However, intakes continue to remain low. While the number of undergraduate medical seats in China are nearly 3.5 times those in India, the former has far fewer medical colleges — 420 (2018 figure) as against India’s 596 (2021 figure). So, India now has the largest number of medical colleges in the world and yet isn’t producing nearly enough doctors.
The private colleges that pick up the gauntlet prefer to stay small rather than grow. If you were to visit the webpage for starting a new college, you will find different compliance categories, depending on whether you admit 50, 100, 150, 200, or 250 students. All the rules mentioned in the previous point — such as hospital seats, number of examination halls — need to increase correspondingly for the student intake to increase. Those who can, set up another college instead. Those who don’t, prefer not to increase student intake. Moreover, fees for 50% of the seats in private colleges are capped. There are only so many people in the other 50% who will cross-subsidise the rest. Even 10% of seats going vacant dents profits significantly. So, colleges prefer remaining small.
And so, we continue to regret that India falls way below the WHO-recommended target for doctor density. Most people think the solution is simple — the Union government must establish more medical colleges. They discount the fact that the size of the problem goes beyond the capacity of the government — fiscal and administrative. Enlisting the support of the market is necessary for India to have a shot at meeting the doctor deficit. So, the PM is right in saying that the private sector can help. But the solution lies in his government’s hand. A radical liberalisation of medical education in India is the only option. The problem of ‘bad’ commercialisation can only be solved by more liberalisation. All other solutions are akin to putting a band-aid on a bullet wound.
Writer is deputy director of Takshashila Institution, an independent centre for research and education in public policy. Views are personal.
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