Shaping healthcare policy

In a strongly worded editorial, the reputed medical journal, the Lancet asserted that India’s healthcare record has deteriorated, and the government’s lack of credible data is hindering policymaking. The Indian government spends just 1.2 percent of GDP on healthcare, making it among the lowest among G20 countries. MoHFW has rubbished this report and declared that spending is at an all-time high and out-of-pocket expenditure has decreased. There has been an overall 133.23 percent increase in its department’s budget reaching ₹86175 crore, while the Modi government has been in power over the last ten years from FY15 to FY24. Public investment in health is envisioned to reach the mandated 2.5 percent of GDP by 2025.

The Indian Medical Association, ahead of the Lok Sabha elections has prepared a Health Manifesto and sought increased funding for the health sector. Households bear the burden of the high OOP health expenses, and more than 55 million people are impoverished each year on account of expenses for ill health, says the association.

AiMeD, representing Indian manufacturers of medical devices is disappointed that the government policy to reduce dependence on imports from 80 percent to 30 percent has not taken off, and imports have shot up 13 percent to ₹51040 crore in April-December 2024. The single window clearance system for licensing approvals has only CDSCO on board, PLI’s stringent targets are benefiting only large companies and the exorbitant 5 percent royalty on patents is making it unattractive for companies to invest in R&D.

The hospitals are anxiously waiting for the elections to be over when they can discuss the issue of standardizing rates for different services and medical procedures with the government. This is in response to the Supreme Court directing the central government to expeditiously fix the rate of fee chargeable by hospitals across the country from the patients in terms of Rule 9 of the Clinical Establishment (Central Government) Rules, 2012. In the event, that it does not come out with a concrete proposal, the apex court will consider issuing appropriate direction in this regard. The NGO, Veterans Forum for Transparency in Public Life, which had filed the PIL had recommended that till a solution is found, the central government notify the rates applicable to the CGHS empanelled hospitals! Whatever the outcome, pricing practices such as differential rates, packages, discounts, etc may attract scrutiny from a competition law perspective and hospitals need to closely assess them from a risk mitigation perspective.

Shifting gears, as we await the Q4FY24 results, hospitals are expected to deliver healthy YoY growth in the quarter, and with improvement in occupancy, better case-payor mix, and new capacity additions expect the momentum to continue. In the diagnostics space too, the lab chains are expected to report 12 to 16 percent growth.

Nurture (the sector) and it shall nurture in return is an old adage!