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IMA asks Centre to increase health budget to 2.5% of GDP

The Indian Medical Association has demanded increased allocation of financial resources in the budget, advocating a tax-based system of health financing, the medical body said in a letter written to Finance Minister Nirmala Sitharaman on Saturday.

Indicating that government spending on health was low, the medical body said that allocations varying from 1.1 to 1.6 per cent of GDP by the various governments are among the lowest in the world. The body demanded an increased allocation of financial resources for the health sector.

Urging the Finance Ministry for this year’s union budget, it further demanded that the expenditure incurred on health determinants like drinking water and sanitation should be provided separately.

“A minimum allocation for health alone should be around 2.5 per cent of the GDP, the medical body demanded.

India’s overall health spending (public and private) is currently estimated to be 3.8 per cent of its GDP, lower than the low- or middle-income country’s (LMIC) average health spending share of GDP of around 5.2 per cent, as per the IMA.

Among the major demands, the body urged for tax-funded universal healthcare with a basic package for all citizens. It demanded investments in public sector hospitals, an allocation of 5 per cent of GDP for health, a re-envision of PMJAY to cover outpatient care and the cost of drugs, and facilities for direct patient transfer, copayment, and reimbursement models, among others.

IMA suggested that to achieve the goals of Viksit Bharat 2047, “the health sector has to be promoted judiciously and made a priority sector, like industries, education, and agriculture.”

“New hospital projects capital equity financing support through SIDBI/NationalInfrastructure fund/infrastructure grants/state infrastructure,” it suggested.

The IMA also suggested working capital loan subsidies as a supply-side financing mechanism to help with cash flow issues in PMJAY.

Highlighting the complexities of the third-party payer system under PMJAY, it said that the system is creating serious fault lines in India.medical care system.

Third-party payor system making medical care complex and creating serious fault lines in Indian medical care system (like US Healthcare), distorting its Indian values and USPs and leading to Burocratization of medical care: “Third-party payors are bringing indirect price control, and their predatory suboptimal pricing is killing the quality of medical care and creating moral and ethical distortions in medical care, illegalOOPE and undermining the trust relationships between patient-providers and payor-providers, the IMA said.

The body also emphasised the need to review the health insurance regulations and GST. ANI

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