Dr Krishna Reddy Nallamalla

Health systems have been evolving over the years, from a simple patient-doctor unit into a complex, adaptive, organic social system. Regulatory mechanisms also evolve in an organic way, along with the evolving structure and function of a system. Regulation is essential to harmonize the behavior of the various actors in a health system, namely people, providers, payers, producers, political representatives, and policy implementers among others.

While government regulation is the dominant form, market regulation and self-regulation play an equally important role in most democratic societies.The Government brings about legislations and executive orders to regulate health systems.Legal institutions pass enforceable laws. These regulations may be related to people (legal restrictions on consumption of tobacco, alcohol, and other habit-forming substances), providers (acts regulating medical and other health professionals, clinical establishments, pharmacies, diagnostic labs, rehab centers, palliative centers, online services etc.,), payers (licensing, product design, pricing, disallowances etc.,), producers (educational institutions, pharmaceutical, biomedical, biotechnology, digital health technology etc.,), and health information (health data standards, data privacy, data security etc.,).

Regulation of health systems is a core function of the government. National health plans provide broad guidelines on the regulatory frameworks. TheParliament enacts regulations of national relevance and lays down broad frameworks based on which state legislatures detail their own regulations, as health is a state subject. As members of global health bodies, countries are also bound by international health regulations. In an increasingly interconnected world, international regulations apply to the movement of goods, people, and services across boundaries. Ministries of Health and other related ministries undertake regulation either directly or through empowered autonomous bodies or professional councils.

The core purpose of regulation is to ensure safety and quality of health goods and services being accessed by people and protect against bias and discrimination. Regulation is a resource intensive function of the government and adds to the total health expenditure. Given the low public health spending in India, allocation to healthcare provision and public health take precedence over regulation. A resource constrained regulatory system is often inefficient, ineffective, corrupt, and counter-productive. Hence, it becomes important to prioritize areas that need effective regulation, given the limited resources.

Except for a cohesive national health plan outlined at the dawn of India’s independence, Indian health systems have evolved organically without adequate national or state health plans. The few enacted plans were not pursued earnestly. Regulations evolved in an unplanned post-hoc fashion. As public health faltered in its responsibility to safeguard people’s health, the private health sector grew rapidly, taking advantage of weak governance and the lack of regulation. The private sector too faced many challenges on account of countless license requirements, opaque rules, and corrupt regulatory inspectors.

In the absence of effective governmental regulation, markets started guiding the evolution of health systems. As India started exporting health goods, people, and services, international regulations influenced the evolution of domestic regulatory systems. Competition in the domestic market and the shifting demand-supply balances drove quality improvement and pricing. Financial levers used for consolidating payers (public and private health insurance systems) were more effective in bringing about quality improvement than the governmental quality regulation.

Though weak regulatory systems are conducive for uninhibited innovation, they face future uncertainties and business risks due to post-hoc regulation. Too much regulation carries the risk of stifling innovation, increasing the costs, and breeding corruption. It hampers the responsiveness of health systems to the dynamically changing health technologies and health needs. Systems become less resilient in responding to crises arising out of pandemics, climate change, and mass migrations on account of war and strife.

Biological systems offer the best examples in the complex regulation of core functions. Temperature and blood pH (the acidity or alkalinity of blood) regulations are two of the many perfect examples underlying homeostasis – a state of perfect balance.Highly evolved information (signals – afferent and efferent) and communication systems (neuro-circulatory) are critical for highly complex regulation. Advances in information and communication technologies reflect the natural evolution of complex social systems into a self-regulated, and self-aware universal being. We are witnessing the evolution in the way taxation systems are being regulated with the use of advanced digital information and communication technologies aided by artificial intelligence systems.

As the understanding of social systems grows deeper, the difference between ‘government’ and ‘governance’ is getting better delineated. While government is one of the many actors of a system with specific roles and responsibilities, governance is a principle that ensures fine balance between various actors of a complex system. Natural evolution is more resilient than planned evolution as the former evolves through natural selection of what is beneficial to the whole system. A systems-thinking leader keenly observes for emerging evolutionary patterns, and aligns his/ her plans, policies, and strategies to nudge these patterns into prominence. 

Dr Krishna Reddy Nallamalla
President, InOrder,
Regional Director, South Asia, ACCESS Health International

Views expressed by the author are personal.