Strengthening the Indian health system

India’s healthcare system resembles a sinking ship, remarked Alok Kumar, adviser, Niti Aayog, at the NatHealth Sixth Annual Summit held recently in the Capital. As harsh as it may sound, it is not far from the truth. India’s health system is a story of multiple fragmentations – a fragmentation of payers and risk pools; deep fragmentation of providers of healthcare services; and also of the digital backbone running it. And the multiple fragmentations, compounded by market failures and governance challenges drive each other.

It is in this context that Niti Aayog laid out a comprehensive roadmap in a book titled New India: Building Blocks – Potential Pathways to Reforms, released recently. In the Three-Year Action Agenda, it has restricted its focus in this document to four areas, namely, financing and risk pooling, strategic purchasing, organization and provision, and digital health.

The think tank has also presented the Medical Devices Bill, which proposes to bring all medical devices under one regulatory regime in a phased manner. The draft Bill proposes to have four separate divisions under the new Medical Devices Administration – health and safety division, conformity assessment division, enforcement division, and the laboratories and medical devices testing division.

As the implementation of Ayushman Bharat scheme progresses, the cracks are beginning to show. Hospitals across the country are facing a cash-flow problem. The government is not able to release payments for the cashless treatment done under the health schemes, and the dues are continuing to pile up. The hospitals are considering taking the exit route. Just a fortnight before this, 338 hospitals had been served show-cause notices and were de-empaneled, and penalties of over Rs 3 crore levied on them for submitting forged claims under the scheme.

As we usher in the new year, the diagnostics sector must prepare itself for a major disruption, not very different from its telecom counterpart, as Reliance Life Sciences announces its intention to set up a network of pathology labs across India through partnerships with local entrepreneurs. The existing path labs can expect cut-throat competition and price wars, and the vendors, a more commoditized business model!