Globalization of traditional Indian medicine and health economy

The development of Ayurveda, between national public health challenges and inclinations for international expansion, will be analyzed through several questions: 

  • What is the place of Ayurveda in the landscape of Indian healthcare industry? 
  • How does this medicine has adapted to changes in societies and their demands for health? 
  • Which way has she chosen in India where the generic drug industry allows mass access to biomedicine drugs? 
  • Finally, can the Indian healthcare industry constitute a sector flagship of Indian industrial development and foreign trade, and thus contribute to influence of India internationally?

Ayurveda in the Indian health landscape

The health needs in India are enormous. Development by unequally affecting the population, leads to diversification and increasing demand for care. New diseases, typical of countries developed, spread through the wealthy urban strata of the population (diabetes, obesity, tension, cancer), while the demand for primary care of the rural poor remains high and difficult to satisfy. 

According to the worldwide healthcare press, the state of health of the country stagnates since ten years, while life expectancy increases, infant mortality remains high and the supply of care is uneven on a regional scale. The objective of “health for all” remains distant, with large differences between states and between urban India and rural India. 

The government specifically encouraged development traditional medicines within the Indian healthcare industry: its objective was to increase medical coverage of the population by developing care practices that seemed more accessible to rural, isolated and disadvantaged populations. This goal echoed concerns health and the interest in traditional medicines in supranational bodies. 

The World Health Organization was interested in alternative medicine to biomedicine saw the multiplication of international official documents advocating the “revaluation of the traditional medicine ”. The “development” bodies saw and still see in vernacular knowledge and practices the advantage of a “local” solution health problems, benefiting from a strong social anchorage and having a low cost for patients and institutions. 

Traditional medicines, perceived as a windfall within reach for health development, have thus acquired a new legitimacy, validated by external actors. The World Health Organization confirmed its commitment to the alternative medicine and the need to improve accessibility for the most disadvantaged poor people. 

The definition of health economy

Health economy is recognized today as a discipline in the field of science economic. It is devoted to the study of health and is interested in the organization of the health system and social protection, to the determinants of the supply of care and the demand for care. The purpose of systematic choices made by individuals in terms of risky behavior, prevention and treatment of diseases when prices, costs and income change. 

It borrows concepts theoretical benchmarks of economics in four main areas: the economics of insurance, industrial economics, labor economics and public economics, to which must be added development economics for health work in Third World countries. But if health economics shares with other sectors of the economy many specific features, it is also distinguished by unusual economic characteristics: 

  • the extent of state intervention; 
  • the dominant presence of uncertainty at all levels, from the random nature of diseases to the understanding how medical treatments work in different people; 
  • the large gap of knowledge between doctors and other medical service providers and patients – consumers of these services; 
  • the external effects due to the behavior of certain people who make outweigh costs or provide benefit to others.

If these particularities are also found in other sectors of the economy, they never are to such a degree.

Application of economic theories and techniques to health sector

Health economics is the application of economic theories and techniques to health sector. Health in itself is not something that can be bought or sold – in some situations, no money spent on treatment can bring back life or health. Health care is marketable. So in practice, health economics is the application of theories and techniques to provide for healthcare needs (preventive or curative).

The role of the economy in the provision of health care has often been questioned. The argument was that ideally health care should be provided on the basis of need for care, not on an efficiency calculation. But in reality, as the health officials, resources are always limited and resource issues inevitably influence decisions. Health care rationing is a reality. Finding information on the best ways to distribute limited resources is a relevant way not to waste them.

Information on effective resource allocation can help managers programs to demonstrate to others – financial authorities, budget providers – that limited resources are spent in the best possible way in the most appropriate. It can also help these managers to distinguish areas which, if they were better funded, would be good investments. This information may allow savings in unexpected areas. It is also useful for clarifying and stating the cost from certain areas where economic efficiency is sacrificed in favor of other considerations. 

For example: after establishing the most efficient allocation of resources in a healthcare, we can decide that a field hospital, which is not as efficient that the city hospital should remain open because it is neither fair nor equitable for people in the surrounding area to have to travel to town to receive treatment health. This decision has its value, because it is a choice of conscience within a policy overall health. But we must also be able to quantify how much this choice of ineffectiveness” will cost the entire health system.