Many Mountains To Climb!

This month, we mark the first anniversary of PMJAY. In a short period of one year, under the Ayushman Bharat scheme, more than 21,000 Health and Wellness Centers have become operational and 4.7 million hospital treatments worth USD 1000 million have been carried out. And 18,073 hospitals and healthcare providers have been empaneled across the country. Of this, 53 percent of the hospitals empaneled are private, especially multi-specialty, and 62 percent of the treatments have been in these private hospitals. And portability has helped the eligible poor and migrant workers to seek treatment outside their states. So far, there have been more than 40,000 portability cases.

While Ayushman Bharat has the potential to drive dramatic healthcare access, the struggle is far from over. Apart from the shortage of doctors, and constant de-empaneling of errant hospitals, by the time 150,000 HWCs are in place by 2022, a Bain & Company-CII report warns that 140 million Indian households are expected to enter the middle-class by 2030. The healthcare industry will face challenges due to rapid increase in patient volume accompanied by pricing and margin pressures. And the demand from developed rural areas along with the increase in middle-class households will drive about two-times hike in healthcare consumption.

In the biggest reduction in 28 years, the government has recently announced a cut in corporate tax rate by almost 10 percentage points. For companies looking to shift from China or considering a China Plus One policy, with base tax rate coming down to 22 percent (15 percent in case of new investments in manufacturing), India now has one of the lowest corporate tax rates in the region. Vietnam, one of the foremost substitutes for China, offers tax rates of 10 percent and 17 percent (for 15 years and 10 years) for investments in healthcare.

To take these reforms to a logical conclusion, the powers-that-be urgently need to address central labor and land law reforms, administrative and regulatory risks, access to international arbitration, more capacity in the judicial sector, and an independent and apolitical regulatory. We have just taken baby steps to becoming a global medical devices manufacturing hub!