Anil Kumar Jagirdar
Principal Consultant – Healthcare,
PricewaterhouseCoopers India

Indian Healthcare – A Market Ripe For Disruption

The Indian healthcare market is currently pegged at around USD 100 billion (2015) and is expected to grow at approximately 13 percent Y-o-Y on account of rising demand and increasing affordability. India’s growing aging population (at 4.1 percent CAGR) along with a shift in the disease burden toward non-communicable diseases has led to an increased demand for healthcare services. Affordability of care, however, remains a major concern with the private sector accounting for 60–70 percent of the healthcare services in India. The country’s GDP per capita is rising (at a CAGR of 3.9 percent), but so are the healthcare costs and out-of-pocket expenses, with only 22 percent of the total population being insured. These, combined with higher public investments enhance the need for partnerships with the government aimed at decreasing the cost of healthcare. Conducive policies from the central government such as permitting 100 percent FDI in healthcare and 49 percent in health insurance are encouraging international investments in healthcare and better tax benefits. Additionally, promising growth prospects have helped the industry attract private equity, venture capital, and foreign players.

On budgetary allocation in healthcare

The National Health Protection Scheme aims to cover over 10 crore poor and vulnerable families with close to 50 crore beneficiaries, providing up to `5 lakh cover per family for medical care. This would enhance accessibility and affordability of healthcare for 40 percent of India’s underserved population. The National Health Policy, 2017 proposes to increase the healthcare spend to 2.5 percent of GDP by 2025 from the current 1.3 percent. The government is encouraging the participation of private players to deliver the national goal of universal coverage, which is a welcome move.

On planned budgetary allocation for the fiscal year 2018-19

Budgetary allocation depends on the maturity of the hospital/healthcare delivery system, clinical services offered, and the level of care delivered. For a mature multispecialty hospital, close to 10 percent of the budget would be allocated for medical equipment and devices, which would be largely directed toward replacement and expansion needs. However, in the years where some of the large equipment like radiology scanners are added, a significantly larger proportion is allocated for medical devices.

On monitoring the quality of private healthcare

India continues to face the challenge of availability of skilled manpower which directly impacts the quality of care. Various national and international guidelines and protocols are being followed to bridge the quality gap. Also, accreditation organizations like NABH, NABL, and JCI bring in robust processes and protocols for standardization of care. Digitization and use of technology also helps organizations in ensuring that there is minimal deviation from set standards.

On vision for health and family welfare and challenges faced while implementing health services

The government’s efforts and interventions have significantly brought down the burden of communicable diseases. Key health indicators have also shown a great improvement in the last decade. However, healthcare falls under the states’ purview. There is variation in the implementation of policies across states. Therefore, there is a vast scope for standardization of policy implementation based on past successes.

On importance of public private partnership in making healthcare a success

The government is aggressively marching toward the achievement of Universal Healthcare Coverage. However challenges around infrastructure, manpower, quality of care delivery, and governance remain key in implementation. PPPs hence become crucial in the rapid scaling up of projects. India has seen some of the most successful PPPs in the areas of dialysis and diagnostics. However, the key is to design a PPP that is viable for a private player without compromising on quality.

On areas where government should invest to make healthcare available to everyone

Accessibility, affordability, and quality are the key challenges the health system is currently facing. Government has been taking initiatives to enhance access to semi-urban and rural areas by strengthening PHCs and CHCs. NHPS would give health access to the 50-crore Indian population for secondary and tertiary care. However primary care, emergency, and screening are three key areas where the government could invest more. This helps in prevention and the early identification of disease which helps in reducing the overall cost of treatment and also enhances quality of outcomes. IT-enabled infrastructure would also help in increasing efficiency and bringing more accountability in public systems and PPPs.

On policies interventions

Since health is a state domain in India, there is a variation in priorities and implementation rigor on various programs.  While certain programs like communicable diseases and mother and child take a common priority, there is a large disparity in the implementation of other programs like cardiovascular, oncology, and transplant. However, with the implementation of NHPS, a higher scale of standardization is expected.

On government’s price control initiatives

The Make in India campaign, Ayushman Bharat, and other price control initiatives are all welcome changes. These are expected to bring down the cost of healthcare significantly. While some private players have expressed discomfort on the implementation of price controls and the new rates, I am sure that the inclusion of a larger pool of citizens in the system would yield higher asset utilization, lower the fixed costs, and reduce the cost of overall delivery

On significance of IT in healthcare

E-health and AI technologies are disrupting the way healthcare is being delivered particularly in primary care and diagnosis. They are focusing on addressing the challenges of accessibility and lower the dependence on skilled manpower. Virtual doctor visits, pharmacy, and diagnostics at the door step are enhancing access to primary care. Various AI algorithms are being developed for differential diagnosis, automated processing of radiology images, and pathology screening. These would help in building efficiency among the clinical staff, bring standardization, and help in reducing errors. These technologies are attracting significant investments from the PE investors and are poised to be part of the mainstream delivery soon. Precision medicine, genomics, remote monitoring, point-of-care diagnostics, 3-D printing, artificial intelligence, digital platform integration, m-health, and risk-based payment models are some of the technologies I believe are going be to game changers in the healthcare industry globally.

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