What healthcare sector wants from Union Budget 2021

So far India seems to have weathered the pandemic better than other major economies but the catastrophe did lay bare the gaps in the country’s healthcare system. India’s total per capita expenditure on healthcare stood at Rs 1,944 per person in the financial year 2019-20. As of April 2020, the total spending by Centre and states stood at Rs 2.6 lakh crore or 1.29% of GDP which includes salaries, transfers to the state under schemes such as Ayushman Bharat.

For reference, the average healthcare expenditure, both public and that borne by patients, in Organisation for Economic Co-operation and Development (OECD) countries stood at 8.8% of GDP as compared to India’s 3.6%.

By Niti Aayog’s own admission India’s overall spending is “low” and the situation needs to be “corrected”.

“India’s overall spending on the health sector is low. It has been coming from constrained resources… many many competing priorities. It is low and must be corrected,” said Niti Aayog member (health) VK Paul in November 2020 while addressing a virtual event organised by industry body CII.

Industry captains anticipate an increase in government’s healthcare expenditure in the first Union Budget to be presented in the Parliament after a pandemic which has killed over 150,000 people so far.

Dr Shuchin Bajaj, Founder & Director, Ujala Cygnus Group of Hospitals said, “As India faces the worst ever health crisis of all times, we hope that COVID-19 will at least provide the silver lining in increasing the healthcare budget. There has never been a greater spotlight on healthcare delivery in various environments. No election has unfortunately been fought on healthcare as an issue in India yet. But now with the coronavirus pandemic, the focus is only and squarely on healthcare. I hope that this will lead to an increase in the healthcare budget and various healthcare provisions so that the expenditure spend on health should go up to 3% of the GDP as promised by the government.”

The authorities had to work overtime during the pandemic to make up for infrastructure and equipment deficit such as personal protective equipment (PPE), oxygen cylinders, and ventilators.

Industry leaders also view restrictions on price and rules as a hindrance to more investments into the sector.

Dr Tushar Grover, Medical Director, Vision Eye Centre said, “The onslaught of Covid-19 has duly woken up the health authorities to the urgent need to raise the allocation for health as a proportion of GDP. Keeping that in mind, the upcoming budget should prompt higher allocation to R&D in biotech, epidemiology as well as pharma in general. Only with increased budgetary attention can we truly harness our existing strength in vaccines and generics”.

“With technology leading to a rise in healthcare costs, higher public health expenditure can make it affordable for common people and reduce out-of-pocket costs. At the same time, the government must relax unrealistic price restrictions and rules in order to encourage investment into developing world-class healthcare infrastructure in the country,” he added.

The COVID-19 pandemic is also an opportunity to prevent any such outbreak in future and the budgetary allocation for health must reflect that government is serious about the steps needed to reach that level of preparedness.
What healthcare sector wants from pandemic budget 2021—healthcare experts weigh inWhat healthcare sector wants from pandemic budget 2021—healthcare experts weigh in | Photo Credit: BCCL
So far India seems to have weathered the pandemic better than other major economies but the catastrophe did lay bare the gaps in the country’s healthcare system. India’s total per capita expenditure on healthcare stood at Rs 1,944 per person in the financial year 2019-20. As of April 2020, the total spending by Centre and states stood at Rs 2.6 lakh crore or 1.29% of GDP which includes salaries, transfers to the state under schemes such as Ayushman Bharat.

For reference, the average healthcare expenditure, both public and that borne by patients, in Organisation for Economic Co-operation and Development (OECD) countries stood at 8.8% of GDP as compared to India’s 3.6%.

By Niti Aayog’s own admission India’s overall spending is “low” and the situation needs to be “corrected”.

“India’s overall spending on the health sector is low. It has been coming from constrained resources… many many competing priorities. It is low and must be corrected,” said Niti Aayog member (health) VK Paul in November 2020 while addressing a virtual event organised by industry body CII.

Industry captains anticipate an increase in government’s healthcare expenditure in the first Union Budget to be presented in the Parliament after a pandemic which has killed over 150,000 people so far.

Dr Shuchin Bajaj, Founder & Director, Ujala Cygnus Group of Hospitals said, “As India faces the worst ever health crisis of all times, we hope that COVID-19 will at least provide the silver lining in increasing the healthcare budget. There has never been a greater spotlight on healthcare delivery in various environments. No election has unfortunately been fought on healthcare as an issue in India yet. But now with the coronavirus pandemic, the focus is only and squarely on healthcare. I hope that this will lead to an increase in the healthcare budget and various healthcare provisions so that the expenditure spend on health should go up to 3% of the GDP as promised by the government.”

The authorities had to work overtime during the pandemic to make up for infrastructure and equipment deficit such as personal protective equipment (PPE), oxygen cylinders, and ventilators.

Industry leaders also view restrictions on price and rules as a hindrance to more investments into the sector.

Dr Tushar Grover, Medical Director, Vision Eye Centre said, “The onslaught of Covid-19 has duly woken up the health authorities to the urgent need to raise the allocation for health as a proportion of GDP. Keeping that in mind, the upcoming budget should prompt higher allocation to R&D in biotech, epidemiology as well as pharma in general. Only with increased budgetary attention can we truly harness our existing strength in vaccines and generics”.

“With technology leading to a rise in healthcare costs, higher public health expenditure can make it affordable for common people and reduce out-of-pocket costs. At the same time, the government must relax unrealistic price restrictions and rules in order to encourage investment into developing world-class healthcare infrastructure in the country,” he added.

The COVID-19 pandemic is also an opportunity to prevent any such outbreak in future and the budgetary allocation for health must reflect that government is serious about the steps needed to reach that level of preparedness.

“It is time we de-silo healthcare as a service provided and look at the various other aspects that impact the need of health services or can impact its efficiency,” says Kamal Narayan Omer, CEO, Integrated Health and Wellbeing (IHW) Council.
According to Omer, budget this year must focus on primary healthcare, especially in rural and remote areas, ensuring trained manpower and diagnostic services, in addition to affordable and accessible secondary and tertiary care.

“Preventive healthcare to control rapid spread of non-communicable diseases and lack of adequate nutrition for the young and vulnerable population, and associated areas such as pollution control measures for air, water, and soil, and strengthening of supply chain, especially for perishable food items. At the same time, a separate allocation must be made for health communication for behavioural change that will nudge people to adopt healthy and sustainable consumption and behaviour in the medium-to-long run,” he adds. – ET Now News