Medical tourism - Does private hospitals affect public health care in India?

http://hbswk.hbs.edu/item/5814.html

Q: How does growth in private hospitals affect public health care in India?

A: There is an assumption in the view often expressed in the media in India and Europe, for instance, that when private hospitals in India provide care to heart patients from England, the hospitals are somehow taking care away from poor people in India. The assumption seems to be that if medical tourism was banned, the doctors in question who were catering to wealthy patients would suddenly, as a practical matter, move to a village. It takes a different set of individuals, a different set of infrastructure circumstances to create that scenario. We need good scholarship to verify the idea that there is a potential substitution between caring for sick people from England and providing medication for malaria in an Indian village. I'm not aware of such analysis yet.

My guess is that the bulk of India's problem is primary health, and has nothing to do with tertiary care. And the primary health problem is not going to be addressed by a private hospital for the most part anyway. These are almost different industries. If someone analyzes the landscape and discovers that there is substitution between care, then there is a real public policy issue that needs to be debated.
---------

Some options for india:
1. govt step up primary health care
2. make PHC more lucrative for fresh doctors
3. mandate private hospitals that benefit from medical tourism to open up free clinics in rural places or provide quality free healthcare for the urban poor
4. an entirely different angle - make rural india attractive and economically more viable (by creating jobs and enabling reverse migration) so tier-2 hospitals would look at villages/towns for 'business' growth, considering urban area is crowded and more competitive for them

As a good friend of mine, a doctor and a primary health care consultant, put it
"I do not think this is a substitution phenomenon but a general failure of primary care worldwide." Bull's eye.