Wednesday, August 24, 2016

Fundamentals of healthcare policy



Basically copied from Prof. M. Ramesh's excellent slides on the topic :



Health Care is a “private” good which markets can provide efficiently in a technical sense. Free competition among providers and insurers would ensure that prices are as low and quality as high as possible. Households would get the services they want and can afford and society would benefit from highest quality and lowest prices

Yet there are many features that make health care an atypical private good
Many public goods features
Information Asymmetries  
make estimation of quality, costs and benefits difficult
allow opportunity for supplier-induced demand
Moral hazard
Adverse selection by consumers, users and providers
Those least able to afford health care have the largest demand for it. 
Possibility of “catastrophic” health care expenses
Nearly impossible to save for all health care contingencies

As a result, market allocation of health care would lead to
Higher costs and prices
Poorer quality (except for the frills that consumers can see)
Inequity (because access related to income)

Technically, government can address the above failings :
Directly provide health care with public goods features
Pay for or provide the necessary health care to those who cannot afford it
Adopt measures to limit the market participants’ ability to exploit information advantage
Eg. Require transparency in pricing and outcomes
Regulate adverse selection
Adjust provider payment and financing mechanisms to reduce moral hazard

However, there are practical limitations to govt intervention:
Limited financial resources
Incomplete information on consumer and producer behaviour and the different medical options
Lack of analytical capacity to understand needs of the sector
Lack of administrative capacity to implement policy
Lack of political capacity to deal with conflicting demands of various stake-holders (Consumers, physicians, managers, insurers, healthy, etc )

Considering the potential and limitations of both markets and governments, an effective health care system requires health policy that employs extensive role for both to offset each others disadvantages


An optimal health care market is characterized by:
Competition among providers to attract. But competition over value rather than frills. 
Limitations on providers freedom to prescribe and charge, so that they do not take advantage of patients’ ignorance
Limitations on insurers’ freedom to select risk or set premium, so as to prevent cream skimming or passing on of costs to consumers or government
Limitations on consumers, so as to minimize moral hazard
Establish risk pooling to ensure redistribution of resources from more healthy and wealthy to less healthy and wealthy. 
Reduce out of pocket health expenditure 
Costs affordable to the society as a whole, rather than the govt. Considers TOTAL (and not public) health expenditures

A good health policy is one that sets out appropriate incentives :
Incentivize providers to improve quality while containing cost
Incentivize users to moderate consumption
Co-insurance or deductible (subject to a stop-loss)
Encourage users to use primary care facilities
Incentivize insurers to get better deal from providers on behalf of their members 
Instead of passing on costs to users or the government
Such an optimal health policy requires a strong governance structure characterized by
firm government stewardship
Functioning markets, where possible


Friday, August 12, 2016

A new kind of hotel





From travels in small town India I have had enough experience of hotels in the Rs 2000/- and below range. With a few exceptions the experience has been uniformly uninspiring. 
Things that make the travel experience less than fun include:

  • the hotels are grimy and dirty 
  • rooms have cheap plastic furniture that ages very fast and looks shabby 
  • cobwebs
  • walls always have stains, discolourations or yikes, cracks 
  • power cuts 
  • kitschy out-of-place decor if at all. A hotel I went to recently had a life-sized wooden sculpture of the famous Marilyn Monroe image.  
  • yucky toilets - of course the thing that most spoils a hotel experience. Smelly, leaky taps, non-functional plumbing,   
  • highly dubious bed linen and blankets 
  • Restaurants if-present , have the deadening standard pan-india menu , you find in countless hotels countrywide. I call it the ‘panneer butter masala’ menu 


There is a deep and pervasive lack of interest in maintenance (and it runs much deeper in India than just hotels). I wonder why this is. Is it so expensive to keep a room clean and have everything work the way it should be ? 

The other ‘design pattern’ is the choice of building and furnishing material that ages rapidly or starts looking bad quickly and easily. Flooring material, Nilkamal chairs, wall paint 


I therefore propose a new kind of hotel. The design philosophy is: 

austere, spartan, impeccable, fanatic about cleanliness, local culture and aesthetics 

Have less stuff or less facilities, but keep whatever you have looking good and maintain it 
Have a breakthrough in bathroom quality. 
Figure out how to keep the walls clean - maybe use whitewash which is cheaper and repaint more frequently  
Start working with a whole new set of materials that do the job  without degrading in appearance and quality rapidly over time  
Figure out a new menu tapping into local expertise and local traditions 

I read the logic of Tata’s Ginger chain of hotels somewhere and they seem to be on these lines. And pilgrim spots like Tirumala tend to work on these lines of austere and functional. We can build on these and other experiences  


Saturday, August 06, 2016


Life’s experiences leaves their mark on us. Most of the time we think of this as positive - learning from life. But experiences also distort our thinking. Someone who has been through severe poverty may go through life always insecure even if rationally they have made enough to feel secure. Someone whose parents have had a difficult marriage or who comes from a broken household will likely carry that over to their own marriage. They have no other experience on which to base their behaviour in marriage. 

This holds true at a societal level too. Certain ideas have strong hold on the national imagination and it is difficult for people to think rationally about this. Examples include the Kashmir issue in India and the Israel-Palestine conflict. 

One of the most valuable services that a human can provide another is to free them from this grip of the past, to help them to drop their 'baggage'. To quote from Landmark, to be “informed by the past, but not limited by it”.  To help a person to design their future, outside of the constraints of the past. However, the requirement for such a service is not even widely recognised today, leave alone provided. 


On a national level, I see an impact from this, for poverty alleviation and national progress, economically and otherwise. In particular, moving people out of poverty can be quite challenging because of the mindset changes required of the poor.  If societies as a whole could provide  service, it stands to reason that, freed from the ‘demons’ on the past, individuals and therefore societies will progress much more rapidly and in a  win-win way, than they could otherwise. 

My report on GST (Goods and Services Tax)


As the nation celebrates the passage of the constitution amendment bill on GST in the Rajya Sabha, let me mention the report I did on GST as part of LKY coursework.

One point that is worth making in the current congratulatory mood is that there is still a long road ahead for operationalisation of the GST, multiple bill passings at Union and State level and IT infrastructure to put in place.

Link to my report: https://www.dropbox.com/s/pdiqpfihfptm6db/GSTAssignment.pdf?dl=0  

Friday, August 05, 2016

On traffic


It has been good coming back to India after a year's gap and looking at the same everyday things with fresh eyes. In particular, this time around, I am looking at things from the point of view of finding something for myself to do.

Today's observation in this regard: I dived into peak hour Bangalore traffic (Cowtown and Indirangar).  Looking at the traffic policeman : who could possibly be motivated to do this job well? You see hordes of people in their swanky A/C cars honking impatiently and you are there in terrible working conditions all day and supposed to make their lives better. Is it surprising that they do a lot of extortion ? Actually, it should be the other way around. We should be liberally tipping them whenever we get a chance, passing by. That would motivate them to stick around at their jobs and do as good a job as they could. This idea could be thought through and pursued more seriously. It is a kind of reverse bribery, but it seems appropriate for India. Its a way of distributing private sector wealth a little more equitably, resulting in better services, without compromising on ethics 

Wednesday, August 03, 2016

Bangkok musings


I like Bangkok (like millions of other tourists). I like it not because of its tourist attractions, I like its feel. I would like to live in Bangkok.The numbers and geography tell you that its a huge city, but it has a human scale and a middle-class feel. Weighed down by its infrastructure problems, it has a melancholy. It feels like an Indian city, but better-off: a cleaner, better-fed and sexier India. 





Streetside shop
Giant candles in shop

Street at night















One of the many temples - seen from the river cruise
The Rama-Something Bridge, seen from the river cruise


The Graceful Spires of Wat Pho

Tuesday, July 05, 2016

My travel guide to Angkor



The key to visiting Angkor is to not try to do too much. As one guide book put it, the ‘second string’ temples here would be star attractions at any other location. But the mind gets fatigued with too much visiting. So the best thing really is to just go to a few places and spend time at them and soak in the atmosphere. And don’t try to do too much on any one day. My schedule actually worked out very well - reached on day 1 afternoon, early enough for a quick trip to one of the temples ; went to 2 locations on day 2,  one in the morning and one in the afternoon, and visit Siem Reap in the evening ; revisit Angkor Wat on day 3 morning and flight out in the afternoon. 


From the guidebooks, I picked Angkor Wat, Bayon at Angkor Thom and Ta Prohm and those were the temples I went to. On the way from Angkor Thom to Ta Prohm, I passed Ta Ko another splendid structure and stopped there for a bit. I think Angkor Wat and Ta Prohm are must sees, you could pick the others to see based on reading about them and your personal interests since there is enough unique attractiveness to most of the temples. 
A second visit to the place you most like is a good idea - it deepens the experience and there is almost certainly something you missed the first time round. 

Since the temples tend to be large and have several kinds of things to look at, a detailed guidebook is a good thing to have It anchors you so that you are not wandering a bit aimlessly and you also can have an idea of what’s there to look out for. I bought one of these guidebooks so you could try getting it from me. A human guide is also a good option, the official guys there seemed pretty good. 


The transportation arrangements to the temple from Siem Reap are not the best. I couldn’t figure out a better way so just hired tuktuks via the hotel which waited for me at the temples, which seemed inefficient. And worse, on one of the days, one the way back mixed up my tuktuk drivers and took the wrong driver and wasted some money. Its not just me being me :-) , the guidebooks also warn about confusion with tuktuks. The tuktuks also like to stick to two standard routes (Grand circuit, Little circuit) and you have to talk to them to get them to understand that you want to do your own thing. 




My photos from the trip : https://goo.gl/photos/N7WQTz2jCtaXhtMe7  



Thursday, May 26, 2016

Daydreaming about the Congress party

I’ve seen some posts on my Facebook timeline about the decimation of the Congress party in the recent elections and the real possibility of a Congress-mukt India. But the same events can be rewritten into a narrative of no significant setback and even the beginnings of a major renewal. Here’s how that might go:

The defeat in Kerala is an incumbent loss, which is par for the course. The Congress can come back at the next election. The defeat in Tamil Nadu is a reflection of the deep rot within the DMK. That party is rife with corruption, internal wrangling and Karunanidhi is past his ‘use-by’ date. If the DMK is able to enact a succession and clean up its act, coming to power next elections is quite feasible for them, and with the Congress in tow. The defeat in Assam was to be expected after two terms under Tarun Gogoi, a better-than-good run under a less-than-exceptional leader .

I don’t think all the above will happen on their own. The party does need real, strong, and deep, renewal. Thankfully and at long last, development/governance is now seriously on the agenda when public evaluates parties for election. The BJP campaigned on ‘development’ , AAP’s only line is good governance and some regional leaders like Nitish and Chandrababu Naidu provide more examples of good governance. There’s no going back. The Congress needs to get with it. it needs to move (way) past the Gandhi family. The Gandhis need to be one pole of power of a multipolar party. I have no idea why even intelligent Congressmen slavishly hold on to the Gandhi family when its clear that its not producing results. The Congress needs to rebuild itself. Regional leaders who deliver the goods in their states should be calling the shots rather than putative national figurehead leaders. 

And here’s an intriguing possibility that might bring all the above together into a winner. How about Rahul Gandhi for CM candidate  in UP? I don’t subscribe to all the conventional dissing of Rahul Gandhi as buffoon. I think if the Congress gambles on him as CM candidate in UP and puts their all behind him, they can well come to power there. And what a comeback that will be!


Note 1: I write the above as a unrepentant Congress sentimentalist - despite their many crimes of omission and commission - most recently in their 2nd term that ended in 2014. 

Wednesday, April 20, 2016

Notes on the drought


Like farmer suicides the news every year about droughts, increasing summer temperatures and water scarcities is worrying and scary. One would not want one’s countrymen to be exposed to such trauma.  And yet, there is precious little in terms of a organised, meaningful, at-scale response. 

This is a nasty problem in that working on it is thankless - involves being out in the pitiless sun. The better a job you want to do, or the more you want to engage with the problem, the more time you spend in the sun. In that respect its like my old haunt of sanitation and it probably contributes to why the problem doesn’t get addressed effectively. 

It seems to me, we need a good national monitoring system that can tell us the scale of the problem and whether it is getting better or worse. Beyond the media articles, which paint a pretty scary picture, I don't know quantitatively how bad the problem is and whether it is getting worse. 

It seems to me, the basic approach to a solution should be a multi-year plan by each state with clear measurable outcomes. The outcomes would include things like a ‘drought-proofed’ condition, and the ability of the state to respond in a rapid, proportionate and effective way to a drought. However, Governments in India think too short-term and too political - its hard for them to have the patience to set up and follow through on  a multi-year response. Perhaps the solution then is a ‘policy entrepreneur’  who can sell long-term and sustainable drought proofing to the government. 

Another source of the problem is the lack of voice of those most affected, like small-farmers. The solution might be for people with the required knowledge and policy experience to work with farmers organisations and labour unions of landless labourers to raise the demand for real solutions. 


What can ‘common people’ like you and me do ? Donate to a good organisation working on the problem. Visit a drought-affected area to educate yourself. Realise that the challenges of national development are so large that insulating yourself from them is not an option if you want to live in a decent humane society
And, plant trees. 

Some recent articles in the media:


On transparency in Singapore







Singapore’s lack of transparency in governance is almost legendary. Researchers, for example, have extraordinary trouble getting data. A couple of examples from personal experience:
-In a class with a guest lecturer from the Public Utilities Board, he cautioned us against taking photographs of some of the slides (“You do not want to be arrested later for this”). 
-In talking to people about the immigration rules and systems, I find that people don’t know how or why the decisions are taken on work permits, guest passes etc. There is amazing amount of discretion and lack of transparency. 

It would be interesting to understand the historical origins of this phenomenon. In reading extensively of the writings of Lee Kuan Yew, I did not see anything about why he did not feel transparency important. 

In the ongoing project of revisioning Singapore, I am pretty sure that transparency will help Singapore in finding a way forward.  There have been memorable debates about Asian values and Singapore-style democracy. I don’t think these addressed the role of transparency and whether lack of transparency is a part of Asian culture :-)  
 Lack of transparency is simply incompatible with a modern society. You cannot have a educated, well-to-do population that is creative and free-thinking and a society that aims to be globalised and at par with the best of them, and at the same time, hide your governance behind a veil of secrecy. 
Prof Lam Chuan Leong, a retired bureaucrat whom I respect, pooh-poohed transparency in one of his classes. I wish I had taken it up with him then!  The bureaucracy will of course protest mightily that it is simply not possible to function efficiently if you have to be able to explain everything that you do. While there can be more discussion about the pros and cons, enough developed countries have implemented Freedom of Information acts and none have reconsidered its value. Even India has one, and you don’t hear anyone complaining about it.  Certainly it could make life more difficult for bureaucrats, but making bureaucrats' life easy is not the purpose of governance! In any case, the system will re-adjust and find new ”SOPs” that are compatible with the new laws. 

Singapore continues to be a restricted society with little space for questioning the government. Transparency would be one way to open up the space for questioning. Asking an innocent question cannot be grounds for harassment or taking someone to court.


It is surprising that the PAP, which has gone so far as to consider splitting itself in order to provide a more robust political system, has not considered the importance of transparency and implemented substantive measures in this direction. Its quite likely that 50 years of obscurity will have concealed a fair number of governance boo-boos. Whether there are more serious discrepancies between the facade and what went on behind the scenes, I do not know enough to speculate about (nor do I want to attract attention of the government by doing that!).