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A few nights ago I had a bad dream.
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I was lying in an operation theatre undergoing surgery.
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I was having a toenail removed.
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I was fully conscious and for some reason the doctor had cut open my torso and was bent
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over it in deep concentration.
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After some time he pulled out my kidney and held it up proudly.
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Here's your toenail, he said.
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That's not my toenail, I shouted at him, it's my bloody kidney.
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I mean it's literally my bloody kidney.
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Have you studied medicine?
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He looked at me and gave me a wild smile.
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Actually, he said, I don't exist.
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I am just a creature in your dream.
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But doctors like me could be reality if not for the Medical Council of India.
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Everyone in India should be glad they exist because if they did not, I would.
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And then he gave an evil laugh as in front of my eyes, my kidney turned into a toenail.
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Welcome to the Seen and the Unseen.
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My weekly podcast where I examine the intended effects and the unintended effects of public
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Today, I am going to talk about the Medical Council of India, which is a statutory body
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that oversees medical education in India.
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To quote from Wikipedia, the council grants recognition of medical qualifications, gives
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accreditation to medical schools, grants registration to medical practitioners and monitors medical
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What is the scene effect of this?
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The scene effect of the Medical Council of India is that it sets high standards for medical
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That sounds like a healthy effect.
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But what are the unseen effects of such regulation?
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To discuss that, I've brought Pawan Srinath onto the show.
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Pawan is a fellow at the Takshashila Institution in Bangalore.
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Pawan, so it sounds intuitive to me that the Medical Council of India should, after all,
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regulate medical education because they are doctors.
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They're in the best place to make those decisions.
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What do you feel about it?
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So yes, on the offset, it feels like it's better that you have qualified doctors rather
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than appointed bureaucrats manage medical education.
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The problem is one of professional competition, right?
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We all know that we have a limited number of doctors in the country and basically medical
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education allows for new doctors to come in, younger folk who are probably better trained,
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who probably have a bit more modern outlook.
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They have the latest research and these guys will start providing competition for the incumbents.
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So if you are regulating competition to yourself, will you be honest?
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And remember that the Medical Council of India is not just a board of some sort, but it's
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sort of an elected body.
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It has membership, so presidents get elected.
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So there is a politics inside the Medical Council of India, which wants a lack of competition.
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They have their own incentives, basically.
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So the incentives get perverse.
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So I do think that the Medical Council of India should have a role in intervening in
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medical education, but that should be to set standards, to do stuff like that, rather than
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be a gatekeeper for how many new colleges can be opened and how many new people can
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So what are the unseen effects of this regulation?
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So the first unseen effect, which is seen in a certain way, is scarcity.
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So let me give you a few numbers.
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There's a rough estimate that we have about 600 to 700,000 doctors in the country who
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are practicing right now, who are qualified and trained and have a proper degree.
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And to this, we are now adding about 45,000-odd doctors every year who are graduating.
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And of this, the postgraduate numbers and the super specialization numbers are way smaller.
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We're talking 5,000 to 10,000 from within the country, a few more from outside.
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So that's a very tiny number.
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That's half a doctor for a thousand people in the population.
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WHO says, by and large, you're better off if you have about two and a half, three doctors.
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And the thing is, this scarcity is misattributed.
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We say that, oh, this is because we are a poor country.
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That's the standard, actually.
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Oh, so many things are wrong because we are a poor country.
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But no, even as a poor country, we are producing far more engineers.
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And I would argue increasingly better quality engineers over the last two decades, right?
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So the situation that it was in, say, 1990 to now is fundamentally different, whereas
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in medical education, maybe in 1990 or 2000, you would have, say, 25,000 doctors or 20,000
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So the scarcity is acute.
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And again, various folk devils get created who are to blame for this shortage, right?
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Oh, doctors don't care for the country.
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They go abroad and they pursue sort of personal interest, but don't do anything for the nation.
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So all these sort of tropes come about from this idea of scarcity.
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That's the first unseen effect.
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The second one is the immense cost of medical education, which we seem to have taken for
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There are two parts to this.
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One is we know that private medical education is extremely expensive.
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And we just think that, yeah, this, because they have to do so much lab work, so much
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clinical work, it just costs so much, but that's simply not true.
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It's because the moment you restrict supply and demand is immense, prices go through the
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roof, either legally or illegally, right?
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And then the knock-on effect of that is you say, oh, therefore you need state subsidization
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of medical education, right?
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So state should, so you need an aims in every state and, you know, just like we had, we
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wanted an IIT in every state.
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So you have the old tropes sort of continuing, right?
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And then what happens is there is perverse incentives for doctors who enter the system
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There is a desperate need to super specialize so that you can sort of recover all this investment
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So remember, it's not just cost, right?
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So probably doctors who go to private medical colleges between their MBBS and their post-graduation
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spend maybe 50 lakhs, a crore.
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And not just that, but what, eight years of their time, 10 years of their time studying
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for all those exams and so on.
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So now you're 30 or 28 and now is the chance for you to start earning and you have to recover
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And you want to, and then we say that medical costs are through the roof, right?
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So that's the knock-on effect that happens.
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Even beyond that, what happens is because the gate is so restricted, even the private
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players who get in with a few salient exceptions are slightly dodgy players, right?
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So there are people who know how to get in because they know the right people, they know
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how to make the right connections and so on, right?
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So do they not have an incentive to deliver quality education, but you have adverse selection
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where the best possible players in the market sort of leave.
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And I don't even want to go into the lack of FDI and education, the lack of foreign
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competition, all of that, right?
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We still don't have that in other branches of higher education, but I would argue that
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the sectors are doing much better than how medical education is doing.
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So what you have is bad private players coming in and then private players in general getting
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a bad name, the old idea of, you know, private enterprise being evil in India.
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So the trope sort of continues.
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So it's a larger sort of, I would argue, a moral decay in society and sort of a misalignment
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of what is good and what is bad, right?
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Which seems far-fetched when I sort of draw this, it's like a third order effect, but
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I think it's really important.
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And would I be correct in saying that a knock-on effect of the scarcity, which you alluded
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to as a first effect also then has an impact on healthcare costs because there are less
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Healthcare costs are way higher for the consumers, for the patients, and then this is blamed
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on private greed and so on.
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Or either private greed or graft.
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So the government essentially doesn't allow a free market to operate and the effect of
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restricting the supply is that prices go through the roof, there is scarcity, healthcare prices
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also go through the roof and all of it is used by the government to say that, hey, look,
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the private free markets aren't working when there weren't free markets in the first place.
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And therefore we need a national health service, we need nationalizing this.
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So and the other problem that happens is, again, more folk devils are, oh, look at the
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Look how messed up their system is.
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That's like talking about obesity to a malnourished person, right?
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It doesn't make sense, I mean, these persons aren't getting enough food, we don't have
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They have sort of a post-modern problem, right, or a first world problem.
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Our problems are entirely different.
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So healthcare costs go through the roof and then what happens is quacks, charlatans, alternative
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medicine and pill peddlers step in to fill the vacuum because people desperately need
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solutions for their medical problems.
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And people are seeing that elsewhere in the world, sort of different diseases are getting
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And one of the things is no matter what income level you're in, if there's a cure, you will
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do whatever it takes to get your family member the cure, right?
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So this is there at all levels, right?
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At one, you would have seen if you ever go to a medical store, you'll have people who
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come up and say, hey, I have a fever, what should I take?
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And the medical store clerk is dispensing medical advice.
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While we are loftily saying we want high standards for doctors, we're having a medical store
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clerk giving medical advice, right?
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That's patently ridiculous.
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I mean, at the other end you have people who say doctor and then start practicing and start
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giving pills, start giving injections.
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The placebo effect is a real thing.
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So you feel like this doctor has given you a dramatic intervention.
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Plus we have a ministry of Ayush with homeopathy.
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Let's not even go there.
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So you have quacks of all types who get in.
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And yeah, you have Ayurveda.
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I don't have a problem with Ayurveda per se, but it desperately needs to be modernized.
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And you have actual sort of quackery, which is homeopathy, reiki, and all kinds of things
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that sort of fill up this vacuum that is there.
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And I'll tell you how, I'll give you one example, how weird this becomes.
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In 2014, there was this announcement that homeopathy and Ayurvedic practitioners can
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now start performing abortions.
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And this was done in the name of promoting sort of, you know, women's rights, safety
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Because they don't have enough OBGYNs and doctors who can perform abortions, right?
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I mean, homeopathy, by the way, does not believe in surgery either.
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So there are multiple levels of cognitive dissonance that is happening over here.
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But those are the kinds of weird solutions that people come up with.
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And I would say the final thing, the biggest sort of unseen effect that happens is frankly
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a curb on personal freedom.
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We are saying, oh, you got a medical degree, now go spend a year and a half in a rural
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Oh, you do this, only if you clear conditions A, B and C, will I allow you to go abroad
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Are there conditions like this?
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They're trying desperately to put it in.
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The good news is state capacity is a little limited, so they can't enforce some of the
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And as we have seen with any draconian rules, people find workarounds around that.
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So what you see is just skewed decisions, people doing weird things to get around weird
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And in general, you have a lack of freedom, I mean.
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So the reality is if we didn't restrict supply, if instead of 45,000 doctors a year, we had
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200,000, 500,000 doctors.
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Or whatever the market can take.
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Whatever the market can take.
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And the reality is India has been providing labor to the world.
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So it's not doctors in the US versus doctors in rural India.
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If we start supplying enough doctors, trained doctors, and India can do it more cheaply
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compared to most other countries, we can supply doctors everywhere.
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And we can bring down medical costs in the United States if we get our medical education
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We can send homeopaths to Pakistan to perform abortions, sir.
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Yes, that probably we can do now.
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So in a utopian world where there's no opposition at all and the political economy is bowing
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down to you, what would be your policy recommendation?
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So for what it's worth, this is a hard problem, right?
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Healthcare does not lend itself to a complete free market very easily because contestability
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And without contestability, markets struggle to work.
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Can you explain contestability?
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So you go in saying that you have a cough and a mild fever.
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One doctor says, oh, you have nothing, you just take good bed rest, stay at home for
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Another doctor says, no, no, no, you need to go for these three tests that this person,
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this diagnostic center who will give me money, you have to go get those tests done and I'll
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do all these expensive things, right?
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And you as a patient have no idea which doctor is better, right?
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So you need some form of mechanisms to sort of intervene over here.
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What kind of mechanisms exist in more advanced markets where the market is allowed to operate?
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So the first thing is you do need a body of doctors to sort of prescribe standards for
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medical education, right?
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What should people know before they get into medical school?
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What should they know after they get into medical school?
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What kind of exams should they go through?
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And this needs to be continuously updated, right, because science is rapidly improving.
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But you probably need something.
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So I'll tell you what India is trying to do.
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There is a bill that's been put out by the Neeti Ayog, a draft, about how the medical
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And this has happened because of some really giant scams in the last few years, which were
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inevitable when all the conditions were set in.
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So what they say is they want to get it back to the government, right?
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So the current solution, which I still think if they do it, even half right is better than
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what it is right now, is create independent boards.
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These are not elected doctors, but they'll have doctor appointees.
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You will have sort of bureaucrat appointees.
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And the idea is also to separate functions, right?
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So you want to have a medical council overall, but then you want to have a separate accreditation
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So these guys will just take care of approving licenses for medical colleges.
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But even over there, I'll tell you, the way government policy happens is so silly.
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They want to say, oh, there should be adequate financial resources of any medical school
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Why is that a criteria?
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So I think they should only see if equipment, facilities, doctors, and teachers are well
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trained and maybe you should do random inspections, a few things, but they should not have power
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to impose penalties themselves.
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They can only report, right?
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So the idea is to separate functions in a big way and probably provide regulatory competition.
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So the current idea that's been envisaged in this new draft is you have this accreditation
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board and there are state level boards and they delegate a bunch of the powers to the
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So this is automatically better because different states can experiment with different ideas
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and then over time, the ideas, the best ideas sort of bubble up, right?
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So competition always, even at the regulatory level, can provide interesting outcomes.
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But even here, you have a local monopoly, right?
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There's only that state board in that state.
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So instead, supposing we had the Medical Board of India A and the Medical Board of India
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B and both of them had jurisdiction across the country and you were a qualified medical
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college if you got approved by either of them, then they don't have as much of an incentive
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to seek rent because automatically colleges will go to the player who is seeking less
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So I would say some form of intelligent regulatory competition, which does not involve elected
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bodies of doctors, is sort of an improvement over the status quo.
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And I think it's a complex enough field that I would hesitate to provide one solution,
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which I think will work.
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I think we need to do these, I mean, I remember my economics professor telling me it's not
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about good or bad, it's about better or worse, right?
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So let's get better with this and then let's keep tinkering as to what improves rather
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than have one Medical Council of India, which was set up in 1993, which now may finally
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So what are the obstacles within the political economy to these reforms taking place?
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The biggest thing is currently the private medical colleges are run by individuals and
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groups which have a good amount of political power and they're able to seek a lot of rent.
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So any changes in this will affect how much rent they are seeking from the economy, right?
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So there is some immense opposition.
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The good news over there is if the union government intervenes, most of this rent takes place
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So arguably an union level intervention could be blind to some of these considerations,
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but unless they manage this intelligently, they might pass the law and the states may
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not implement anything, right?
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The other thing is the old mentality of, oh, the state will provide this, right?
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And there is intellectual support for this, which is the most troubling, right?
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If it was only the government saying this and intellectual support was against it, the
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game would be different, but there's intellectual power being provided for why the state knows
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That is a mindset and it's also power, right?
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So you have departments with immense power, immense budgetary power, and supposing you
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only have private medical colleges or you only do financing, right?
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You don't do sort of, you don't manage them as line departments, then power is immensely
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reduced for those who are sitting in those departments.
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So they have a strong interest against this, right?
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So, but these are problems that are not insurmountable.
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I mean, people wait for the right crisis, right?
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Crisis is always an opportunity.
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Do we need a crisis for change to happen or?
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Well, for what it's worth, I'm quite happy that in 2009, there was a government committee
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called the Yashpal committee, which we sort of looked at this and gave fairly sensible
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suggestions along the lines that we discussed.
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In 2011, the previous government tried to pass the new bill, it somehow didn't go through.
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Now the Neeti Ayog has a draft out.
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So hopefully when this demonetization truckers gets over, I have no idea when it will.
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If people still have money to go to doctors.
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And if people still have money to pay for their kids medical education, hopefully we
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expect something in the next year.
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It was great talking to you, Pawan.
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It's sad how often good intentions lead to bad outcomes.
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The state of health care is abysmal in India and the medical council of India might actually
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be a contributor to its ill health.
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There is an old proverb here that is quite apt.
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Physician heal thyself.
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The physician here, of course, is the Indian government, which is about as competent in
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governance as 18th century physicians were in treating disease.
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But then bloodletting was a common remedy for many diseases today.
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We know it's usually just harmful, but our governments keep bleeding us on that cheerful
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Next week on the scene and the unseen, Amit Varma will be talking to Parth Shah about
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profit motive in education.
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For more, go to scene unseen dot in.
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If you enjoyed listening to the scene and the unseen, check out another hit show from
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Indusworks media networks, Cyrus Says, which is hosted by my old colleague from MTV, Cyrus
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You can download it on iTunes or any other podcasting network.
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Hi, this is Amit Doshi and I wanted to thank each and every one of our listeners.
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I would really appreciate it if you could take a couple of minutes out of your day and
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go to IVM podcast dot com slash survey and fill it out.
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And please keep listening.
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Hey, man, just help me out, man.
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I need some podcasts, man.
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I haven't had a fix in a week, just need some.
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Don't you worry about it.
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I got podcasts below for you, man.
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Go to IVM podcast dot com, you can also find us on Facebook, Twitter and Instagram.
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I'm going to check it out.
