On the Indian healthcare market
India is expected to rank amongst the top three healthcare markets in terms of incremental growth by 2020. Indian healthcare sector, one of the fastest-growing industries, is expected to advance at a CAGR of 22 percent during 2016–2022 to reach USD 372 billion by 2022. India has an advantage over its peers in the West and Asia in terms of cost of high-quality medical services offered. The hospital industry in India, accounting for 80 percent of the total healthcare market, is witnessing a huge investor demand from both global as well as domestic investors. Indian companies are entering into mergers and acquisitions with domestic and foreign companies to drive growth and gain new markets.
The presence of world-class hospitals and skilled medical professionals has strengthened India’s position as a preferred destination for medical tourism. Superior-quality healthcare, coupled with low treatment costs in comparison to other countries, is benefiting Indian medical tourism which has, in turn, enhanced the prospects of the Indian healthcare market.
The diagnostics industry in India is currently valued at USD 4 billion. The share of organized sector is almost 25 percent in this segment (15 percent in labs and 10 percent in radiology). The primary care industry is currently valued at USD 13 billion. The share of organized sector is practically negligible in this case.
The government is emphasising on eHealth initiatives, such as Mother and Child Tracking System (MCTS) and Facilitation Center (MCTFC). Telemedicine is a fast-emerging sector in India. Digital health knowledge resources, electronic medical records, mobile healthcare, electronic health records, hospital information system, PRACTO, technology-enabled care, telemedicine, and hospital management information systems are some of the technologies gaining wide acceptance in the sector. Per capita healthcare expenditure is rising due to rising incomes, easier access to high-quality healthcare facilities, and greater awareness of personal health and hygiene. Greater penetration of health insurance has aided the rise in healthcare spending, a trend likely to intensify in the coming decade. Contract research is a fast-growing segment in the Indian healthcare industry. Rising income levels, aging population, growing health awareness, and changing attitude toward preventive healthcare are expected to boost healthcare services’ demand in future.
On proportion of budgetary allocation for healthcare
The budgetary allocation for the department of health and family welfare has been increased by 15 percent to Rs 62,659 crore (BE 2019-20) from the revised estimate for 2018-19. India continues to face the challenge of a low spend on healthcare (around 4.5 percent of the country’s GDP vis-a-vis the world average of around 9 percent), around 62 percent of which is still funded out of pocket, with public funds constituting an insufficient amount. Despite several government initiatives relating to social protection, such as the Employees’ State Insurance Scheme and the Central Government Health Scheme, only about one-fourth of the population is covered by some form of health insurance. Though several efforts, such as the NRHM, the Janani Suraksha Yojana, and the Rashtriya Swasthya Bima Yojana, have been made in the past few years to provide equitable healthcare to Indians, these programs by themselves cannot accomplish universal health coverage (UHC). The National Health Protection Scheme will substantially increase provision of secondary and tertiary care services to the poor. The increased focus on healthcare will go a long way in meeting the government’s target to enhance its spend on healthcare from 1.15 percent of the GDP currently to 2.5 percent of the GDP in 2025, and is in line with the government’s aim of becoming a payer rather than a provider of healthcare services.
On vision for health and family welfare
Increase life expectancy and improve physical quality of life of people so that they attain the highest level of physical, mental, and spiritual health and contribute toward the development of the country.
On monitoring private healthcare
For the success of healthcare organizations, accurate measurement of healthcare service quality is as important as understanding the nature of the service delivery system. Without a valid measure, it would be difficult to establish and implement appropriate tactics or strategies for service-quality management.
Thirty-two percent of the national bed strength is in the 150-plus private corporate hospitals. The private sector has improved access to medical and healthcare. The quality of care offered by the private healthcare-delivery system needs immediate attention. Improving the quality of medical and para-medical education, capacity building, improving access to standards and guidelines, and encouraging accreditation are some of the measures that can improve quality of care. There is also an urgent need for developing an effective mechanism to monitor the quality of care. A centralized system might prove useful in ensuring uniformity in standards adherence as per the prescribed norms, as state-level implementation has been found to be lacking.
On importance of public-private partnership
While PPPs may enhance quality of clinical services, weaknesses in the state’s capacity to run competitive procurements, write complete contracts, and budget for them proficiently generate risks. The capacity of private partners and public sector officials toward managing the partnerships is yet to be fully developed. Public sector managers may perceive the new initiative as a burdensome task, requiring them not only to placate their subordinates but also to seek better performance from their private partners. This is a daunting task. Private partners, who are known for their informal and flexible systems and organizational processes, are uncomfortable with the rigid organizational and managerial processes and procedures of the public sector. Partnership with the private sector is not a substitute for the provision of health services by the public sector. Also, PPP initiatives cannot be uniform across all the regions or suitable under all kinds of political and administrative dispensations. There has to be a clear rationale for partnering with the private sector. The first step must be to improve basic administrative systems. Even with additional capacity in place, it may be that the regulatory instruments – such as accreditation – can play a useful role as an additional source of performance pressure.
On the areas where government needs to invest
India’s public health expenditure is amongst the lowest in the world, lower than most low-income countries which spend 1.4 percent of their GDP on healthcare, according to the National Source: National Health Profile, 2018. The government needs to invest more in the healthcare sector. Creating more medical colleges is a necessity today. With a population of 1.2 billion, our country needs more doctors and specialists to accommodate growing healthcare needs.
India needs to invest more in public healthcare and build a robust health-delivery system in all aspects, including infrastructure and human resources, with special focus on rural areas. Roughly 60 percent of medical and surgical devices used in India are imported. The government needs to consider that healthcare services are already expensive for the common man and further taxes would only make them inaccessible. The government should lower the tax on import of equipment essential for healthcare. The Budget should focus on inclusive growth and this should be reflected in defining the Budget spends across key sectors, including healthcare and infrastructure. Many reforms that have been talked about in the past, including those for the insurance sector, need to be brought in at the earliest to spur economic growth. It is imperative for the government to look at building positive sentiment through growth-oriented policies on a regular basis
On policy interventions required at the state level
The largest proportion of public spending on health actually comes from the state budgets. Many states simply do not allocate enough for health. The National Health Policy recommended increased public spending on health in the states to more than 8 percent of the state government budget by 2020. It also recommended to align the growth of private healthcare sector with public health goals. Influence the operation and growth of the private healthcare sector and medical technologies to ensure alignment with public health goals. Enable private sector contribution to making healthcare systems more effective, efficient, rational, safe, affordable, and ethical. Strategic purchasing by the government to fill critical gaps in public health facilities would create a demand for private healthcare sector, in alignment with the public health goals.
While decentralization is a policy direction the government has already embarked on, health is a state subject in India, which means that although some fund allocation, policy and legislation is done at the central level, states have a wide scope for implementing all of this and for doing more than what the Center prescribes. Every state has a distinct health story. Data and evidence need to be more individualized, and policy interventions need to be bespoke. There is wisdom in shifting health to the concurrent list so that both the Center and the states can manage it.
Decentralization can likely happen when planning for health would be done at the most local possible level. It means all levels of government have a role with the locus of decision-making shifting to the lowest possible level.