On the healthcare market in India vis-à-vis the global market
With the Indian population reaching 1.3 billion, with changing demographics and socio-economic mix, and with the economy growing at above 7 percent, there have been significant changes in the healthcare requirements of the country. The Indian healthcare sector has grown at a nearly 16.5 percent CAGR since 2008 to become a USD 110-billion industry in 2016, and is expected to touch USD 280 billion by 2020. Over the years, Indian healthcare scenario has shown great progress on several health indicators like life expectancy and maternal and child mortality. The significant progress made by the healthcare system in India is attributed to the combined efforts of the public and the private sectors.
The hospital industry in India stood at `4 lakh crore (USD 61.79 billion) in FY17 and is expected to reach `860,000 crore (USD 132.84 billion) by FY22. Further, presence of world-class hospitals and skilled medical professionals has strengthened India’s position as a preferred destination for medical tourism. The Ayushman Bharat – Pradhan Mantri Jan Arogya Yojana (PMJAY), the largest government-funded healthcare program, targeting more than 500 million beneficiaries, was allocated `6400 crore (USD 887.04 million), under the Union Budget 2019-20.The health share of gross domestic product (GDP) is expected to rise to 19.7 percent by 2027.
On budgetary allocation in healthcare
The healthcare sector in India is at a stage where the right policy action is extremely critical in determining the future course of the healthcare sector. The health industry faces major challenges owing to the changing demographics of the country, the poor state of the public infrastructure, lack of financial resources, scarcity of human capital, and poor governance. The low contribution of the public sector in the healthcare industry sits at the center of all these problems. Though the National Health Policy tries to address the majority of these issues, it lacks significantly in terms of the feasibility of implementation and also inadequate finances. Although the government realizes that there is need to increase public spending in healthcare, it would be important to ensure that the spending is done in the right, efficient, and effective manner.
On planned budgetary allocation for the fiscal year 2019-20
- Enhance the budgetary resource for public health by both Center and states.
- Chronically low levels of public health resources, inadequate staffing, and a freeze on regular appointments of medical staff have debilitated the system. Both the Center and the states would have to work toward augmenting the human resources and infrastructure for healthcare.
- Private sector needs to be regulated in order to achieve the health goals. The government, instead of being a strategic purchaser of services from the private sector, needs to actively work toward ensuring public provisioning of healthcare in the country.
- As a large part of the OOP expenditure is owing to expenditure on medicines, the government needs to put in a rational drug policy in place.
- A preventive healthcare in terms of proper sanitation, timely vaccination, avoidance of self-medication, increasing awareness through health education, and regular health check-ups should be promoted.
On your vision for health and family welfare
The healthcare system in India consists of public sector, private sector, and an informal network of care providers. The Indian healthcare sector is expected to reach `1,956,920 crore (USD 280 billion) by 2020. Rising income level, greater health awareness, increased prevalence of lifestyle diseases, and improved access to insurance would be the key contributors to growth. The most common challenges, faced while implementing health services, are acute shortage of hospital beds with a ratio 0.9 per 1000 population. This ratio is still lower than the requirement of 1 bed per 1000 population as defined for the low-income countries by WHO. Human capital crunch is another major challenge – healthcare sector requires highly skilled human resources from doctors to other medical support staff like nurses, lab technicians, pharmacists, and the like. The physician ratio in India stands at 0.7 per 1000 population. Moreover, majority of the healthcare professionals happen to be concentrated in urban areas where consumers have higher paying power, leaving rural areas underserved.
On monitoring the quality of private healthcare
The spectrum of quality within private providers is quite varied. Large networks are digitally enabled to monitor clinical excellence parameters and create structures and processes for the JCI (Joint Commission International) and NABH certifications. Fundamental structural issues will have to be resolved to arrive at a long-term sustainable solution. Reducing the OOP burden on patients, creating infrastructure in Tier-II, Tier-III, and rural parts of India, creating a robust primary healthcare network, and a crisp and systematic increase in the talent pool, are aspects that will have to be resolved. In addition, the entire healthcare ecosystem needs to be pivoted on quality and accountability standards.
On public-private partnership in making healthcare a success
Over the years, the public and private sectors have helped in addressing the health needs of the country and made good India’s progress on key health indicators like life expectancy and infant mortality. Today, the healthcare system in India faces a challenge in raising the service quality and ensuring equitable access to people while simultaneously gearing up its capabilities to tackle the changing disease incidence profiles. This challenge needs to be addressed through a concerted effort of both public and private sectors by their agreeing on suitable public policy initiatives, which incentivize financing and provision of healthcare, and thereby increase healthcare access.
On areas where government should invest
- Increasing investment and transparency in the human capital in promoting economic growth with investing in health.
- Aiming for equitable distribution of resources.
- Increasing the accessibility and safety by investing in health infrastructure and development of low-cost strategies.
- Investment in training of health force and development of strong leadership.
- Investment in preventive and promotive health strategies to decrease the burden of hospitalization.
- Investment in health research for development of cost-effective context relevant healthcare technologies.
- Shifting focus on noncommunicable diseases.
On policy interventions
- To aim at achieving universal health coverage and delivering quality health care services to all at affordable cost
- To look at problems and solutions holistically with private sector as strategic partners.
- To promote quality of care and focus on emerging diseases and investment in promotive and preventive healthcare.
- To provide access and financial protection at secondary and tertiary care levels, free drugs, free diagnostics, and free emergency care services in all public hospitals.
- Envisage private sector collaboration for strategic purchasing, capacity-building, skill-development programs, awareness generation, developing sustainable networks for community to strengthen mental health services, and disaster management.
- To raise public-health expenditure to 2.5 percent of the GDP in a time-bound manner.
- To allocate major proportion (up to two-thirds or more) of resources to primary care, followed by secondary and tertiary care and to provide at the district level most of the secondary care.
Anything else you would like to add
Robust public budgeting in the health sector is a necessary condition to enable the effective implementation of health-financing reforms toward universal health coverage. Moving from input-based budgeting to health budgets that are formulated and executed on the basis of goal-oriented programs can help build stronger linkages between budget allocations and sector priorities. This can also enable the implementation of strategic purchasing, and incentivize accountability for sector performance.