Context

• Public policies are shaped by the objectives they prioritise, whether equity, efficiency, fiscal sustainability, or political symbolism.
• In medical education, these choices have far-reaching consequences for access, quality, and public health outcomes.
• The proposed public–private partnership (PPP) model for medical colleges in Andhra Pradesh illustrates how policy design reveals true objectives.
• A close examination shows serious concerns regarding equity, risk allocation, system efficiency, and the long-term viability of public healthcare.

Expansion of Medical Education and the Shift Towards PPPs

• Andhra Pradesh has rapidly expanded medical education infrastructure. Government medical colleges increased to 17, alongside 19 private colleges, with plans for 10 more.
• Each new college was designed with 150 seats and attached to a 650-bed district hospital, financed through public funds, NABARD loans, and central schemes.
• To address fiscal pressures, a three-tier fee structure was introduced, effectively commercialising half the seats even in government colleges.
• The newer proposal pushes this trajectory further. Under the PPP model promoted by NITI Aayog, private investors would receive land and district hospitals on long-term leases at nominal rates, along with viability gap funding, assured bed occupancy, and regulatory clearances.
• In return, they would construct and operate medical colleges while providing limited free services.
• This marks a decisive shift, as the PPP model shifts welfare to market, prioritising investor viability alongside public objectives.

Unequal Risk Sharing and Incentive Distortions

• A central weakness of the proposed framework lies in how risks are distributed.
• Private investors face delayed reimbursements, mandatory free outpatient services, and capped package rates under public insurance schemes.
• These pressures may encourage undesirable practices such as informal fees, faculty shortages, compromised care quality, or selective denial of services to redirect patients to paying beds.
• At the same time, the government assumes long-term systemic risks. Handing over district hospitals for up to 66 years reduces public control over essential health infrastructure.
• If the private partner underperforms or exits, judicial remedies are slow and uncertain.
• This arrangement reflects how unequal risk sharing distorts incentives, undermining both efficiency and accountability.

Impact on Access, Equity, and the Public Health System

• The PPP proposal has generated widespread opposition due to fears of privatisation of public assets.
• Affordable medical education opportunities for middle- and lower-income students may shrink, while employment pathways in public hospitals could narrow as private operators are not bound by reservation or recruitment norms. Patients who currently receive free care may increasingly face out-of-pocket expenses.
• Beyond individual access, the model threatens the coherence of the public health system.
• District-level PPP hospitals fragment service delivery and weaken coordination between primary, secondary, and tertiary care.
• Effective health systems depend on seamless referral pathways and continuity of care, particularly for chronic diseases. The proposed structure risks exactly the opposite, as fragmentation weakens integrated public health.

Structural Weaknesses and Governance Constraints

• Andhra Pradesh’s health system already struggles with chronic underfunding, infrastructure gaps, and severe shortages of specialists, especially in rural areas.
• Commercialisation of medical education is likely to intensify these problems, as graduates burdened with high fees tend to prefer urban, private-sector, or overseas employment.
• Instead of selling seats at high prices, the state could expand subsidised education linked to service obligations, building a stable public health workforce.
• Moreover, PPPs require a strong regulatory state capable of enforcing contracts and standards.
• Past experiences with weak enforcement of health regulations and fragmented primary care contracts indicate limited institutional capacity, making large-scale privatisation of health assets especially risky.

Quality, Sustainability, and the Future of Medical Education

• Medical education in India faces a broader crisis marked by faculty shortages and uneven quality.
• Rapid expansion without adequate teaching staff risks repeating the collapse seen in engineering education after unchecked growth.
• Simply increasing the number of colleges does not guarantee better outcomes. What matters more is ensuring competent faculty, robust clinical exposure, and equitable access.
• In this context, quality and equity trump expansion. The PPP approach, focused largely on financial and infrastructural metrics, fails to address these foundational concerns and does little to strengthen the public health mission of medical education.

Conclusion

• The proposed PPP framework for medical colleges in Andhra Pradesh prioritises financial expediency over evidence-based health system
• By ceding long-term control of public hospitals, exacerbating inequities in education and care, and weakening system integration, the model risks undermining both medical education and public health outcomes.
• In a sector as critical as healthcare, policies must be guided by long-term system strengthening, equitable access, and quality of care rather than short-term fiscal or symbolic considerations.