The healthcare industry in India is growing steadily and is estimated to reach USD 372 billion (`2.8 lakh crore) by 2022, with a growth rate outpacing the global healthcare market. In addition to the growing domestic demand, India has become a hub for the world for medical technology, pharmaceuticals, innovations, quality medical treatment and as is being witnessed now, for the production of COVID-19 vaccines. Some services within healthcare have also witnessed rapid growth like diagnostics, home healthcare and medical tourism. COVID-19 pandemic has reinforced the importance of ensuring healthcare for all and hence, I believe there will be renewed focus on the health sector, not only by the government but also by private players. This will further propel growth of the sector.
On budgetary allocation in healthcare
India’s public spending on healthcare, at about 1.5 percent of GDP, is one of the lowest amongst comparable economies. The government has set a target of spending 2.5 percent of GDP on health by 2025. Therefore, on the one hand, we need to start spending an additional 0.5 percent of GDP (approx. `1.2 lakh crore) on health every year to achieve the target of 2.5 percent; on the other hand, we need to make sure the increased budgetary allocation gets actually utilized and translates into better health provisions and outcomes. The second may prove to be more difficult than the first.
On procurement of medical equipment and devices
Dr Lal PathLabs is a 70 year old pioneer lab in the Indian diagnostic sector and we have introduced the maximum number of sophisticated diagnostic tests, equipment, and IT-C innovations for the first time in India to bring the best possible services to the patients.
The planned budgetary CapEx allocation for FY 2020-21 is in the range of `70-80 crore, out of which around `20-25 crore is allotted for procurement of medical equipment and devices.
On vision for healthcare in India
My vision for health and family welfare is no different from the global and national health agenda Healthcare for All. However, we have a long way to traverse to achieve this vision. The first step toward this has to be doing away with the public-private distinction. All stakeholders in health have to work collaboratively to improve healthcare in India. As the largest diagnostic chain in the country, we also face our share of challenges in delivering health services, ranging from lack of incentives from the government, low reimbursement rates for public health schemes, delayed reimbursements, competition from unorganized unregulated players in the field, to rising trust deficit on private health providers.
On monitoring the quality of private
Firstly, when we talk about monitoring quality of healthcare, it should not be restricted to only private providers; public health facilities must also be subjected to monitoring of quality. Out of a total of 80,000 hospitals, only about 2,000 hospitals are accredited by NABH.
The situation is worse for diagnostic labs, out of about 100,000 labs operating in the country, only 1 percent labs are accredited by NABL. Indian healthcare providers, both government and private, need to understand that quality is going to be the backbone of our health services in India. This will also help re-establish India as a medical tourism destination. For this to take place, we must incentivize healthcare providers to invest in standardization and quality improvement initiatives.
On public private partnership in making healthcare a success
COVID-19 pandemic has hampered years of efforts put into social sectors like health, nutrition, and education. Therefore, it is extremely critical at this hour to pool in public and private resources and forge new partnerships to prevent disproportionate adverse impact on our most vulnerable population.
In healthcare, both public and private providers, have a common agenda of quality patient care for better health outcomes. The government finances it with the taxes it collects and private sector providers finance it with investor’s money. Therefore, while the government has a singular responsibility of providing quality healthcare, private providers have to ensure highest standards of care to fulfil their responsibility toward the patient and the payer as well as generating reasonable return on investment for their investors.
Though, many advocate that provision of healthcare should be done by the government, we must consider the ground realities. In India, more than 70 percent of out-patient care and 60 percent of in-patient care is provided by the private sector. To accelerate availability and access to healthcare in the underserved areas of India, PPPs can leverage the private sector’s strengths in rapid expansion of infrastructure, adopting health management improvement systems, deploying IT-enabled solutions and training of healthcare professionals. For PPPs to succeed, it is imperative that a sustainable financial model be developed forthwith, followed by the government and private healthcare sector mutually developing the rules of engagement to ensure a conducive regulatory environment, accountability and transparency amonst the stakeholders and discouraging unnecessary red tapism.
On areas where government needs to invest
In order to make healthcare accessible to over 130 crore people, we need to get the basics right. Our focus has to shift from sick-care to health-care or from looking after in illness to looking after in wellness- to reduce the overall burden of diseases, prevent incidences and diagnose them early for better health outcomes at lower costs.
It is not possible to build hospitals for all strata of society. Therefore, we should now laser focus on making primary healthcare accessible for all, something which we should have done decades ago. Two-thirds of our health spending should be directed toward primary healthcare that can address 80 percent of people’s common health needs.
Additionally, the shortage of human resources for healthcare at all levels with stark regional variation demands our attention. India is facing a shortage of 6 lakh doctors, one lakh specialists, 20 lakh nurses, 30 lakh paramedical personnel, and therefore we have to find innovative ways of plugging these gaps. Technology will play a significant role in training more healthcare professionals, assisting them to improve their efficiencies as well as improving access in remote areas through solutions like telemedicine.
On policy interventions that the healthcare sector in the state needs to align with the healthcare objectives at large at the national level
While health is a state subject, handling of the current COVID-19 pandemic has reinforced the importance of national level policy and planning for health. We observed that even after the Central Government released clear guidelines and directives for nationwide implementation, states had their own interpretations of the guidelines, which caused utter confusion and disruption in delivery of crucial health services like COVID testing.
In a country as large and diverse as India, states must have a reasonable scope of flexibility in implementation of healthcare policies and programmes, but convergence and alignment to an umbrella national policy is equally critical.
Anything else you may like to add
Today, one of the biggest challenges in providing health services in India is the debate around pricing. While private healthcare providers are eager to work with the government, irrational pricing or reimbursements for health services are often a deterrent.
As the government transitions from the role of a provider to a payer with strategic purchase of health services, sustainable pricing can make of break the deal. To set the foundation, policy makers, healthcare providers and costing experts need to work together to scientifically determine what it costs to deliver healthcare, arrive at sustainable cost-based pricing models and adopt a differential pricing strategy. The pricing can pretty much be on the same lines as the differential pricing charged by the Indian Railways in transportation of our population.
Lastly, I want to share that in addition to the funding by the centre and the states, alternate modes of financing health reforms must be explored. When the government announced creation of 1.5 lakh Health and Wellness Centres across the country in the Union Budget 2018, the then finance minister late Arun Jaitley sought contribution from private sector through NGOs, CSRs, and philanthropic institutions. This is a great opportunity of private companies in the health sector to meaningfully contribute in their area of expertise. To enable this, clarifications or amendments in the CSR rules are required, which prohibit companies to do CSR activities in their core business area.
For example, a diagnostic chain like ours cannot take up free essential diagnostic testing in HWCs as a CSR activity. If we are able to change this for the health sector as an exception, significant amount of CSR funds can be channelised to improve healthcare by contribution from the private health sector.