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Filling Institutional Voids in India. A way to prevent Covid 19.

Updated: Sep 4, 2021

Sujoy Kapoor

The rampant chaos and the immeasurable suffering caused by Covid-19 has brought to light one of the most severe issues faced by a country like India. A vast majority of its population relies solely on the overcrowded and overstrained government funded services for its healthcare needs. Access to quality healthcare services and specialised private hospitals still remains a distant dream for most Indians.

With 21 % of its 1.38 billion population living below the national poverty line, the Indian government needs to look for ways to provide its citizens with good quality healthcare at an affordable price. How should the government go about tackling this issue? According to me, devising ways of recognising ‘institutional voids’ in the system and subsequently filling them is one such strategy that may prove effective in addressing the problem.

This leads us to the question “What is an institutional void?” Coined by Professor Tarun Khanna, the Jorge Paulo Lemann professor at Harvard Business School, the term refers to the absence of intermediaries which help connect a buyer and a seller in a given market or simply help a buyer and a seller consummate their transaction efficiently. Unfortunately, in emerging economies like India, there are uncountable institutional voids. According to Professor Khanna, emerging economies are not defined by size or growth rate. Their primary characteristic is the lack of developed infrastructure and of institutions which prevents buyers and sellers to interact with ease. Applying the same model to the healthcare sector, we can consider the economically weaker section of the population as ‘buyers’ who do not have the financial capacity to avail the exorbitantly priced private health services and the medical care providers as the ‘sellers’.

A very interesting case study explains this analogy beautifully. Narayana Hrudayalaya (NH) is a chain of multi-speciality hospitals providing cutting edge cardiac care with centres in twelve different locations in India. As NH specialises in cardiac care, the Coronary Artery Bypass Graft, popularly known as CABG, is also performed at the hospital. This surgery approximately costs around $40,000 in any private hospital in the USA. Even in India, the cost of this surgery is very high. But NH is able to perform this surgery for free or for minimal cost to the poorest of people. It charges around $3,500 to people who can easily pay for this surgery, a price that is still way cheaper than what the other private hospitals charge. The same surgery is offered at a minimal cost or zero cost to the others depending upon their capacity to pay. The breakeven cost for this surgery is around $3,000 at NH. The patients who have the capacity pay the extra $500 cover the costs for the ones who cannot pay anything or who pay substantially less. By adopting this extremely effective cross-subsidy model, NH connects the needy to the best doctors and surgeons and thus fills a major institutional void in the area.

Before finding solutions to these institutional voids, we must first learn to identify them in the context of the Coronavirus pandemic. Let us take the example of a person of modest means who needs to visit a healthcare centre to be tested for Covid-19. However, owing to his geographical location, lack of transportation in the lockdown period, nature of work and its constraints or any other reason, he or she may not be able to visit the nearest clinic. The difficulty this patient faces in this case is because of the existence of a deficiency, a void, which prevents him from obtaining a service i.e. ‘a test for Covid 19’. This then can be viewed as a case of “institutional void. It is, therefore, extremely essential that such a void is filled so that the patient can avail healthcare services without worrying about the other implications. An ideal solution to fill this void would be to develop better infrastructure of healthcare facilities, establish a transport system which specifically caters to such patients in order to help them reach the nearest hospital or clinic for testing and provide treatment at the cheapest possible price.

One country which has outstandingly succeeded in flattening the pandemic curve through widespread testing, among other measures, is South Korea. Their medical teams and bio-companies went into an over drive to develop large amounts of testing kits within no time, so much so, that the South Korean government was able to conduct 18,000 tests in a single day at a time when testing in all other countries was still in its nascent stage. Under this “Korean” model, anyone can go to one of the 650 “drive thru” or “walk thru” testing centres across the country to get themselves tested and they receive the result the very next day via a text message. The setting up of these centres, of course, coupled with the other measures that were taken to contain the pandemic, brought the healthcare services to the door step of its citizens.

Another effective tool that is yet to be fully exploited in India, but can prove to be highly useful, is the use of ‘telemedicine’. The term ‘telemedicine’ refers to the practice of using video-conferencing tools by the doctors to connect with patients without being physically present with them. This is a system that not only makes healthcare accessible, especially in the rural areas but has also proved to be cost-effective, since patients can consult their physicians from the comfort of their homes. In fact, ISRO started its telemedicine programme in 2001 and has successfully connected major speciality city hospitals to the Indian rural areas with the help of satellites like INSAT-3A, INSAT-3C and GSAT-12. Presently, this system connects around 384 city hospitals with 306 remote/ rural/ district/medical college hospitals across the country. NH which is also a partner institution has managed to treat 53,000 patients in remote locations. However, this is just a drop in the ocean. There is a need to explore the potential of “telemedicine” as a means of filling the institutional void in the healthcare sector through allocation of funds for infrastructure development and manpower support.

I feel that in a country like India where Covid-19 is spreading at an exponential level, urgent adoption of similar models is the need of the hour. Of course, the logistics will have to be worked out. There also needs to be greater cohesiveness between the centre and the state governments.

Focusing on awareness campaigns and the adoption of tracking applications are all but methods of prevention. We are now at the threshold of the third phase of community transmission of this disease. Experts are predicting a manifold increase in cases in the coming months. This makes it all the more imperative to look at innovative options to ease accessibility of health services that are not only cost-effective but also have a wider reach. The Narayana Hrudayalaya model can be emulated to cut down the overpriced Covid 19 treatment costs for those who cannot afford private clinics and have no choice but to go there. Mass production of testing kits and protective equipment, coupled with large scale testing will help us to flatten the rising curve as in the case of South Korea. Thirdly, using telemedicine will enable patients and accomplished doctors to connect even if only for consultation, diagnosis and for determining the requirement for self-isolation.

The whole motive behind the analysis of identifying and filling institutional voids and connecting them to the current health setting is to explore ways of providing reliable health services to all irrespective of their economic status, more so during these uncertain times. It is imperative that the government, the private and public players as well as bio-companies all work together and look for innovative ways of filling the voids in the health sector. This will not only help us deal with the pandemic at hand but will also help us achieve a new normal situation faster, which in turn will help revive our paralysed economy and be beneficial to all stakeholders of the society. Ron Wyden, a US senator from Oregon has aptly said” Fixing healthcare and fixing the economy are two sides of the same coin”.



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