Introduction

At the heart of the regulatory enterprise is the intention to control the behaviour of actors to achieve a variety of economic objectives and social objectives in the public interest. This chapter examines the current regulatory regimes and practices in the health system in India, using the trust/control duality as an analytical frame. In doing so, it critically reflects on the stewardship and governance of the health system, exposing the limits and fragilities of the current regulatory approach to controlling health system actors’ behaviours and practices. Evidence and insights from this analysis are used to depict the nature of trust relations and regulation in the health system, and the problems therein, and to explain why they take that shape. The final part of the chapter outlines possible strategies for the effective stewardship and governance of health systems, and concludes with the identification of key questions for further research.

Rationales for regulation

Regulation as an intervention is usually the prerogative of governments. While politically, governments may have many possible motives behind regulating or not, on a purely technical level, the rationale behind regulation as an intervention is the pursuit of the public interest. Two broad rationales are identified for regulation in the health care context. The first major rationale is that health care markets are imperfect markets and are prone to a range of market failures that require control and intervention to protect the public interest; and also that the health care market is an imperfect market with many public goods, merit goods and private goods with positive and negative externalities, all requiring some form of intervention to promote the public interest. The second major rationale locates regulation prior to, and not in response to, market failures. In this rationale, regulation is seen as a method for organising social relations as a matter of right and as an expression of and a means to furthering social solidarity.

The market failure and imperfect markets rationale for regulation addresses certain unique properties of the health care market.