Dr Radheyshyam Naik
Group Medical Advisor
HCG, Bangalore

Healthy partnerships desired between government and private sectors

The Indian healthcare sector expenditure is USS 280 billion, of which medical tourism is USD 9 billion. The cost of surgery in India is 1/10th of that in the US. India has the largest number of USFDA-compliant pharma plants (>262, including active pharmaceutical ingredients). The global healthcare market during 2020 will be ~USD 2 trillion. Innovation in the healthcare realm is evidenced by the convergence of technology such as Blockchain, improving the liquidity of data for analytics application, and artificial intelligence managing Blockchain systems more efficiently than humans can. Globally, evidence suggests tax-based financing as a better form of financing mechanism for funding healthcare services, followed by the social health insurance. Out-of-pocket (OoP) expenditure is the most regressive form, contributing 62 percent of the total health expenditure in India.

On government spend in healthcare
During the past decade, the government’s public health expenditure (including both central and state) is 1.2 percent to 1.6 percent of GDP, but it is 8.5 percent in the US and 9.4 percent in Germany. The department of health and family welfare accounts for 97 percent of this allocation, with the remaining 3 percent allocated to the department of health research. National Health Mission (NHM) received ~50 percent of the ministry’s allocation. Union Budget 2020 provisioned the boost for health infrastructure in Tier-II and III cities, through taxes levied on imported medical devices. Regulating the price of medical devices and slashing the import duties on raw materials will enable increased access to healthcare and support for local manufacturing. During the current COVID-19 crisis, the traditional production and systems of delivery are choking as they are unable to match supply to demand.

In 2019-20, the ministry of health and family welfare received an allocation of `64,559 crore. The Make in India campaign of the government should support start-ups by restricting imports and duty protection for domestically made products. ~70 percent of medical devices available in India are imported from other countries. The import tariff on medical devices and spare parts should be increased from the present 0–7.5 percent to 15 percent. GST has made certain Chinese imports cheaper as the input credit was provided on the basis of supply, whether the vendor is a manufacturer or trader/importer. This will impede the bidding by domestic manufacturers in the government tenders.

Currently, there is an absolute price ceiling for medical devices like orthopedic implants and stents, and a limited 10 percent annual price increase for other notified products. The All India Medical Devices Forum states that the imports have risen by 24 percent. A patient safety medical devices law will protect patients and aid responsible manufacturing.

On your outlook for healthcare
Any health scheme favoring hospitalization over comprehensive outpatient care and coverage will not be conducive in the current health scenario, given the burden of non-communicable diseases. As we work toward outcome-based care models, social determinants of health will assume prominence.

Medical tourism has vastly expanded in India owing to the cost-effective medical care. We have emerged as a hub for R&D activities for international companies owing to relatively low cost of clinical research.

Poor and vulnerable families not only spend money out-of-pocket due to ill health but also have to suffer wage loss to seek healthcare. In India, the private sector accounts for 75 percent of total outpatient visits and 62 percent of total inpatient visits.

A pluralistic universal health coverage (UHC)-based health system will enable enhancing the quality of care and reduce costs, by channelizing the available market choices and regulating the dynamic private sector. Expansion of Jan Aushadhi Kendras will make medicines more affordable.

On regulating healthcare
Private sector in the Indian context seems to thrive in the absence of little regulation and supply induced demand. Some providers are qualified, some unqualified, and others less than qualified. Instead of socializing the private sector, we need to strategize ways to seamlessly engage them as in the case of National Health Service (NHS), UK. Even private providers at NHS emphasize on prevention and promotive interventions.

Quality assurance measures include NABH accreditation for hospitals, processing of insurance claims only when treatment guidelines were adherent, and enlisting criteria for empanelment for ensuring compliance of processes. Structural quality is ensured through attending continuing medical education (CME) programs instituted by the Medical Council of India. However, some state governments do not enforce this policy.

The Clinical Establishments (Registration and Regulation) Act of 2010 registers the clinical establishments and prescribes minimum set of adherence standards.

On public-private partnership
In India, 80 percent of healthcare expenses is OOP by the beneficiaries. Public-private partnership enables improving access to healthcare, reduces out-of-pocket expenses, improves quality, promotes the implementation of best practices, augments resources, and provides opportunity for accountability and better efficiency. Some examples include the health department contracting with NGOs for the management of primary/community health centers and specialty hospitals, public sector hospitals outsourcing the annual maintenance of CT/MRI scan machines, specialist doctors from the private sector providing care in public hospitals including tele-consultations, poor patients accessing healthcare services at private hospitals financed by public insurance, community-based health insurance, such as Yeshasvini farmers scheme, and private entities managing mobile health clinics for the poor people. We need to establish regulatory standards, such as a legal framework and improve institutional capacity for monitoring the partnership.

However, the government will continue to play a critical role in the health sector but with renewed vigor in collaboration with the private sector.

On areas where government investment is required
UHC delivers equitable distribution of health services without risking financial hardship from unaffordable out-of-pocket payments at the point of care. Healthcare services should be physically accessible, provide optimum quality, and be socio-culturally acceptable. Financial affordability can be improved through insurance prepayments and pooling. Pooling includes collection of government revenues and/or health insurance contributions to fund health services. Evidence suggests that tax revenue is a key determinant for the progress toward UHC in LMIC countries.

NHM was an architectural correction to the public healthcare system toward addressing health inequalities and improving outcomes. There should be convergence of the regular program management staff (from the directorate) with the contractual staff (of NHM).

On policies intervention the healthcare sector in the state needs to align with the healthcare objectives at large at the national level.
The core set of essential public health services for alignment include:

  • Monitoring health status to identify community health problems;
  • Mobilizing community partnerships to solve health problems;
  • Informing and empowering people about health issues;
  • Enforcing laws and regulations to protect health and ensuring safety;
  • Assuring a competent public health and personal healthcare workforce;
  • Evaluating effectiveness, accessibility, and quality of health services; and
  • Research for innovative solutions to health problems.

Anything else you may like to add
In alignment with the sustainable development goals (SDGs) toward adopting a continuum of care approach, recent development includes: health and wellness centers (HWCs) and Ayushman Bharat (AB) Pradhan Mantri Jan Arogya Yojana (PM-JAY).

The existing sub-centers and primary health centers will be transformed to health and wellness centers to deliver an expanded range of services for addressing the primary healthcare needs of the capital population.

PM-JAY is the largest health assurance scheme in the world, aiming to provide a health cover of Rs.5 lakh per family per year to the bottom 40 percent of the Indian population. It subsumes the earlier (before 2018) Rashtriya Swasthya Bhima Yojana (RSBY).

The synergy between AB and Employees State Insurance Scheme (ESIS) will create an ecosystem wherein ESIS beneficiaries will be able to access services at AB-empaneled hospitals and vice versa.

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