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It has been over 50 days since several groups in Karnataka’s Vijayapura district began a sit-in protest against the state government. A similar protest by a coalition of people’s collectives was held in Kolar, demanding a rollback of the Public Private Partnership (PPP) model proposed in the district in the 2025-26 budget.
Protests were also seen in Puttur in Dakshina Kannada district and Tumakuru. The demand is simple. The state must drop the privatisation of government hospitals, as the model is anti-people, especially the working-class majority, labourers, and underprivileged caste groups, who are already vulnerable and who will further be excluded from the healthcare system.
In 2022, the government withdrew the proposal due to widespread protests of various progressive people’s groups in Davanagere.
The protests are not just in Karnataka. Protests in Madhya Pradesh have forced the government to put the plan on hold. Tribal communities protested in large numbers to save their district hospital in Gujarat. The fight continues in other states such as Maharashtra, Andhra Pradesh, and Jharkhand, to name a few.
This growing mass resistance in Karnataka is in the backdrop of the state Medical Education Minister Sharanprakash Patil announcing that “the Karnataka government is planning to establish new medical colleges under a PPP model in districts that do not have government medical colleges at present.”
At least eight districts have been identified for this purpose: Tumakuru, Davanagere, Kolar, Dakshina Kannada, Udupi, Bengaluru Rural, Vijayapura, and Vijayanagara. In Bagalkote and Kanakapura/Ramananagara in Bengaluru South district, the state government has promised the establishment of government medical colleges.
In 2022, the state had made similar plans but withdrew them after widespread protests. What has been key in pushing not just Karnataka but other states as well to go in this direction is the NITI Aayog recommendation and guiding principles since 2019.
NITI Aayog claims that “it is practically not possible for the Central/State Government to bridge the gaps in the medical education with their limited resources and finances.” With this justification, states are giving up state-run district hospitals, which offer free treatment, to private establishments. But it is up to the states whether they want to implement this recommendation. Several states, including the neighbouring states of Kerala, Tamil Nadu and Telangana, have taken a pro-people stance and have not fallen into this trap.
Establishing medical colleges in PPP mode neither meets the gaps in healthcare nor medical education. Under this arrangement, the district hospitals will be handed over to the private agency that agrees to establish the medical college. The reasoning is that for a medical college to run with 150 MBBS seats annually, it should have a minimum of a 300-bed teaching hospital (based on the National Medical Council rules).
What would “handing over” the district hospital mean? What more does this agreement between the state and the private agencies entail in terms of subsidies? Will people continue to access free services? Will the hospital continue to be a public asset that people can have a say in? Who would these private agencies be? Who would ultimately own the medical college and benefit from it? Answers to these questions not only reveal that this would make healthcare inaccessible to a large majority of the population in these districts who are reliant on district hospitals' resources, but also that the arrangement gives large government subsidies and public assets for private profits in the disguise of ‘partnership’ and ‘development’.
Such an arrangement is going to have dangerous effects on
1) patients, especially those below poverty line (BPL), who will no longer be able to afford and access services that are currently free
2) hospital staff who will be deprived of their labour rights
3) the state that will lose its public resources to private interests and exploitation
4) thousands of students who will be deprived of their right to affordable medical education.
Medical college in PPP model: ‘Partnership’ or privatisation?
One of the arguments for the PPP model is that it is not privatisation but a useful partnership with the private agencies to bring “better services” and medical education.
In a TV channel interview, Health Minister Dinesh Gundu Rao said this will bring more staff into the hospital and increase speciality services. But the same minister had opposed it in 2023, saying they did not want to encourage it as it was their own premises and staff. He had argued that they should strengthen their department and keep it under the government’s ambit.
Privatisation, as described by the World Bank, “occurs when all or substantially all the interests of a government in a utility asset or a sector are transferred to the private sector.” This model, which began in the 1990s with the onset of liberalisation, can take various guises and is not new to healthcare.
For instance, the privatisation of Group D sanitation workers in the health facilities is a widespread practice. What that has led to is well-documented: precarious working conditions for the workers, lack of safety, including against sexual violence, no labour rights, and accountability falling through the cracks, slipping both from the hands of the state and the private agency.
Similar to this, different parts of our hospital/healthcare system have been apportioned and given to private agencies like ancillary services (ambulance, food), diagnostics, medicines, IT infrastructure, etc. Our public health system is already being slowly dismembered, its vital parts handed over to private interests, until it no longer survives. Yet another serious form of privatisation is where facilities/institutes are given en masse to the private agencies because the government trusts the private entity more than itself to be efficient.
Call it “public-private partnership”, or “private sector participation”, or “partial privatisation”, or “development” to make it sound harmless, but it basically is the privatisation of our district hospitals and handing over public money for private profits.
In an article in the Times of India, Rema Nagarajan describes how Karnataka has had a failed history of such privatisation and often had to terminate agreements for violations. “Yet, Karnataka has announced its intention to start nine new medical colleges in PPP mode, by which over 2,000 beds in nine district hospitals, worth more than Rs 1,000 crore of public money invested in building these hospitals and hundreds of acres of public land, will be handed over to private players,” she said.
Will people continue to get free treatment?
People, including those below the poverty line, will end up paying a lot more for their care if this arrangement comes into effect. Patients and hospital beds are proposed to be divided into two categories – paid patients and free patients – which is against the spirit of Universal Health Care. The private establishment agrees to provide free care for those in the ‘free’ category while charging market rates for the ‘paid’ category. The existing beds, along with those developed by the private establishment, will thus be divided into ‘paid’ and ‘free’ categories.
It is already well known that people struggle to get beds in government hospitals, and this new arrangement will further reduce the number of beds available to the public, forcing them to seek care in private hospitals with high out-of-pocket costs. For instance, in Davanagere district hospital, which has 930 beds, it is possible that around 300 beds would be allotted as ‘free beds’, while the remaining beds would be designated as ‘paid beds’ for those who can afford high charges for care.
Naturally, the private establishment’s interest will lie in expanding the number of ‘paid’ beds, from which profits can be made. Moreover, to qualify as a ‘free patient’, one would need to obtain an authorisation certificate, a process that can become a major barrier to accessing care. People may have to go from office to office and remain at the mercy of the private establishment to be admitted to beds that should rightfully belong to them.
While the guidelines say that patients should not be denied admission under the ‘free beds’, they also state that admission can be refused in cases of bed non-availability. This clause will undoubtedly lead to the denial of care, forcing people to turn to private hospitals and spend large amounts on treatment.
Even for diagnostic tests, ‘free patients’ might not truly receive free services. They could be charged at Central Government Health Scheme (CGHS) rates. A simple complete blood count test could cost as much as Rs 140. Additionally, the private establishment is free to charge any amount for ancillary services such as cafeteria use, lodging facilities, and transport. There is also no mention of whether food will be provided free of cost to patients.
It is important to note that the private establishment is not entirely paying for the care of ‘free patients’. It will receive reimbursements from the government for services provided under Ayushman Bharat and other insurance schemes. Moreover, the government may also support the operational and running costs of the district hospital under this agreement.
In effect, the government would be providing the hospital infrastructure, funding its development, and paying for patient care, while the private corporations stand to make profits. And the public will have no say in the running of the hospital, as the private agency would not have direct accountability to the public.
In the guidelines, it states that the managing board will be left to the private establishment, with only one member from ARS (Arogya Raksha Samiti). Arogya Raksha Samitis are management committees currently functioning at all levels of the public health system, from primary health care to district hospitals. The Arogya Raksha Samiti oversees the hospital’s functioning and is responsible for maintaining the facilities and ensuring the provision of improved amenities for patients. But this committee will also lose its power with the handing over of the district hospital to the private establishments.
Turning a blind eye to previous failures of PPP models
One of the main arguments for PPP arrangements in healthcare in general is that they meet the critical gaps that exist within the public health system, either in terms of resources (financial, human, etc.) or in terms of techno-managerial aspects and make the service delivery more ‘efficient’. This can only happen when the goals (and motives) of the state (public) and private entities are the same.
But we know clearly that the motive of the state primarily is welfare, while the private will have to prioritise profit-making. We need to acknowledge this not as a moral judgement but in terms of how the market system functions. To ignore these innate differences in motives and expect to get better results in terms of meeting the needs doesn’t fit logically, however well-intentioned the parties are.
There is ample evidence documented to also show the failure of such PPP initiatives in primary, secondary and tertiary care levels across states. A report, “Public Private Partnerships: Reflecting on 20 years of theory and practice,” produced by the People’s Health Movement in India during their third National Health Assembly (2018), has systematically put together various case studies. These studies show that by just shifting the ownership to private establishments, the existing gaps, such as retaining human resources, improving quality of care and governance issues, do not get addressed.
Rather, newer problems emerge due to the perverse incentive of profit-making—prioritising high profit-yielding services/treatments/specialists, prescription of unnecessary diagnostic and treatment modalities, higher out-of-pocket expenditure for patients who can’t afford it, unavailability of common facilities, and further violation of labour laws for the human resources, to name a few. “Even with the best of the PPPs, all that we can assert is that they were able to survive,” states the report.
In Karnataka, the state government signed an agreement with Apollo Hospitals to provide management of the Rajiv Gandhi Super Speciality Hospital (RGSSH) in Raichur and super-speciality clinical care services with free services for BPL patients. The 350-bed hospital was built on 73 acres with financial aid of Rs 60 crore from OPEC (Organisation of Petroleum Exporting Countries) in 1997.
The agreement came into effect in 2002 and an evaluation was carried out in 2011. Public health experts who accessed this report through RTI analysed the failure of this in their book chapter of A Critical Look at Public Private Partnership for Health Services in Karnataka. The analysis showed that the agreement had failed to meet its responsibility to provide free care to BPL patients, and only around 25% of the In-Patient (IP) services and 15% of the Out-Patient (OP) services had been utilised by the BPL patients over the period of 10 years.
Services were limited, and referrals were frequent. Out of the 350 beds, 154 were operational, and among those, only 40 were available for BPL patients. The community around the hospital reported harassment in the name of BPL card verification and were demanded Rs 25,000 upfront. Employees did not get their salaries for three months. This agreement was brought into effect despite citizen groups raising concerns and due to the failure, the contract had to be terminated in 2012 by the state government.
In 2016, the 70-bed Government Maternity and Children Hospital in Udupi was handed over to industrialist BR Shetty (BRS Health Research Institute Private Limited) to develop into a multi-speciality hospital and manage the hospital for 30 years. This was done despite citizen groups' opposition and the history of the land being donated by Haji Abdullah Saheb under the condition of providing free healthcare.
Due to poor management and failure to pay salaries to the staff, the state had to terminate the agreement and take the administration of the hospital (Kosamma Shambhu Shetty Memorial Haji Abdullah Government Mother and Child Hospital) back in 2022.
Despite this failure, plans were made in 2024 to hand it over to another private agency and establish a medical college in PPP mode, which continues to be opposed by various groups, including the Haji Abdullah Trust.
Even the Arogya Bandhu scheme in 2011-12, which had pushed for partnership with NGOs and charitable trusts and medical colleges to run PHCs in Karnataka, had to be reversed. The state government passed an order in 2016 to scrap it after an evaluation showed non-compliance with rules, misuse of funds, lack of accountability, and failure to provide quality service to patients.
Similar evidence from Maharashtra was published recently describing PPP projects in secondary and tertiary care hospitals that showed such models end up prioritising commercial interests over public health goals. They noted that many hospitals had low utilisation rates and were unaffordable for the majority, with costs three to fifteen times higher than those in government hospitals.
Despite these learnings and resistance from various people’s movements, governments continue to push for PPP or privatisation of health care with enthusiasm.
This naturally raises the question of what is in it for them. The guidelines state that whichever private establishment asks for the lowest grant/funds for the development of a district hospital or offers the highest amount to pay the government as ‘premium’ in the bidding process will enter the contract.
In the past, we have seen how the contracts are given to corporate giants who may be favoured by the ruling parties. There are enough instances of conflict of interest among people in power. Example: Banas Medical College, Gujarat; GCS Medical College and Research Centre, Ahmedabad; Zydus Medical College and Hospital, Dahod. In 2009, GK General Hospital in Bhuj was given to billionaire businessman Gautam Adani.
Is it really about “limited resources”?
The recommendations were made under the premise of “limited resources and finances.” This is saying that the state does not have enough resources to meet gaps in healthcare and medical education, so we invite private participation to meet these needs. But this underlying thought process can be challenged. Political commentator and economist Prabhat Patnaik argues that the state is not a private individual to have this resource-limiting mindset. If basic essentials and the welfare of the people are prioritised, then the state has the authority and responsibility to raise adequate resources (through taxation and loans) to meet these standards.
Karnataka spends 4% of the total budget on health, while the Union government spends 6.4%. Both are inadequate. India’s tax-GDP ratio is also very low, among the lowest in the world. This shows the priority of the state is in globalised markets and the neoliberal agenda.
This arrangement will inevitably result in private entities increasing prices and the government having to pay more. Instead of strengthening the government budget, it will drain it, while private profits increase. Hence, the argument of limited resources is like selling the well because there isn’t enough water in it.
Medical education only for the elite
The colleges established through the PPP model will be on par with private medical colleges in terms of fees and will be affordable only to class and caste-privileged students. The fee will range from 1.5 lakh to 20 lakh annually, with very few state quota seats. The PPP arrangement doesn’t promise any higher number of state quota seats. The premise that more students will have access to medical education is untrue.
Ensuring the representation of students from marginalised backgrounds in medical education is not only about fairness in access but also about the power to transform the health system to be equitable and inclusive.
Having enough doctors to cater to the public health system cannot be just a numbers issue, where we produce doctors by hook or crook. We need to look into how these doctors are being trained in order for them to actually meaningfully contribute to the health needs of the majority of the population.
Moreover, we need to concentrate on the quality of medical education that builds good doctors who are willing to work in districts/regions where doctors are in short supply and not simply focus on increasing the numbers. Otherwise the medical colleges built in this mode will be neither for the well-deserving vast majority of students nor for the betterment of overall healthcare in these districts.
The present Siddaramiah government in Karnataka came to power riding on five guarantee schemes. Despite opposition from various quarters, this government commendably stood behind the schemes and implemented them. If this were a commitment to build a welfare state, it should show in healthcare too. The founding promises of our nation, enshrined in our Constitution, included ensuring the economic and social well-being of all its citizens.
The elite has always tried to renege on this promise by opposing a welfare state. This tension shows up in the case of privatisation, too. Catastrophic health expenditure pushes millions of Indians into poverty every year. The state is taking away from the poor another essential safety net by disinvesting in healthcare. Our resources thus “freed up” are then often utilised for the exclusive gain of the elites.
While several people from within the Congress party have opposed this PPP model and privatisation of district hospitals, the real test for the government is whether it delivers on its commitment to the welfare state and the Constitution in its entirety by establishing government medical colleges and strengthening the public health system. Karnataka should save its public hospitals by progressively ruling out the PPP model for public hospitals like the neighbouring states of Tamil Nadu, Kerala and Telangana.
Dr Swathi S Balachandra is a public health practitioner, Co-founder of Action for Equity and a member of Sarvatrika Arogya Andolana, Karnataka. Inputs from Akshay S Dinesh. Views expressed here are the author’s own.