Healthcare: The need for Shifting Gears

Every budget should have a theme and it is high time that the focus for this year be ‘Healthcare’, because, that is the ‘Hope’, as we battle availability, accessibility, and affordability, in pandemic times. Let’s shift gears and aim to reach automation (self-reliant) by the year 2027.??

It’s never too late as is the case with the healthcare industry. Despite a boom in the health-tech domain, India ranks 184 out of 191 countries in health spending, according to the World Health Organization. This clearly indicates that there are loose strings that need to be tightened up. It is time we play on our strengths, viz. technology and financing, to battle the 3As, viz. availability, accessibility, and affordability.?

Acting as a ‘whistleblower’, COVID19 exposed the gaps that exist in our healthcare system - be it infrastructure, shortage of manpower, high pocket expenditure, supply chain, or funding. India, with one of the highest numbers of tuberculosis, HIV, diabetes/cancer patients face a bigger challenge. There is no segment of this sector which doesn’t require deep attention.?

India’s public healthcare expenditure has remained between 1.2% to 1.6% of GDP between 2008-09 to 2019-20. In 2021-22, the Department of Health & Family Welfare had an allocation of INR 73,932 crores, in comparison to INR 67,112 crores in 2020-21, an annualized growth of 7% over actual expenditure in 2019-20. However, the figure stands nowhere given the kind of population India serves. While the National Health Policy of 2017 recommends government expenditure on health to be increased to 2.5% of GDP by 2025, the COVID19 exposure has given reasons to achieve this before 2025. The total per capita government spending on healthcare has nearly doubled from?INR 1,008 per person in FY15 to?INR 1,944 in FY20 but is still low. Infact, the total healthcare spending (out-of-pocket and public) is also pegged at 3.6% of GDP and is way lower in comparison to many countries.

While COVID19 exposed the gaps in the system, it also provided umpteen opportunities to increase efficiency and effectiveness in services specifically using technology. The technological intervention has increased the reach as well as has provided reliability to the entire nation. Year 2021 is said to be the blockbuster year for Indian health tech start-ups as they raised ~ USD 2.4 billion, a 500% increase from previous year. The clear indication is - Technology will clearly be the backbone of the growth story in the healthcare industry. It is helping consumers make choices, providing personalization and care that was beyond reach at one point of time. With the rise in chronic diseases, technology with a focus towards personalized care, viz. home care, is the need of the hour – that would help in strengthening the prevention cause.

So, what should be the focus for this year - there could be many as we trail across the segments. But then, one step at a time. Here’s my wish list for this year:

-?????Programs like SAMRIDH, supported by the U.S. Agency for International Development (USAID) and implemented by IPE Global, have been able to showcase how innovative financing models and timely business advisory services can enable small and medium enterprises to scale market solutions which target to improve wellbeing of rural and low-income communities. They play a crucial role in leveraging grant funding to offset barriers for commercial investments, thus, mobilizing affordable capital for social impact initiatives. Given these merits, it is time to mandate the commercial lenders, specifically the public sector banks and CSRs, to focus on social enterprises, by mandating investments through innovative financing structures to some percentage of their overall portfolio.?????????????

-?????Social impact bonds are unique public-private partnerships (PPPs) operating through performance-based contracts. The bond exclusively finances / re-finances projects that aim?????to achieve positive social outcomes, and hence can play a significant role in this sector.?Like Smart City Mission, which is now a proven structure in the urban sector, the government may consider creating Smart Social Bond Mission under the ambit of the Ministry of Health and Family Welfare and roll out initiatives in this direction. There is a lot to do in this space – understanding the regulatory aspect including policy framework, the institutional frameworks, the appetite, among others. The objective should be to strengthen the primary healthcare services with the help of bonds for smaller to mid-term duration.

-?????The healthcare technology ecosystem is growing fast and the government should have a focused approach towards promoting investment in this sector.?With the help of technology, the focus should be on increasing the preventive care that would also help in accelerating innovations in treatment through an evidence-based approach. The government should consider increasing the outlay for NITI Aayog by 50% to support technology-based transformation (promote R&D, provide outcome-based incentives, support in technology transfer, etc.) including providing incentives, in the healthcare sector.?

-?????The density of the active health workforce in India is less than one-third of the WHO benchmark of 44.5 health workers per 10,000 persons estimated to sustain Universal health Coverage. Further many lack the proper training and skills. Given this, there is a need to focus on providing training for pandemic management, to enable them to release the pressure from already crunched healthcare systems in tier-2 or below locations of India. The government with the support from National Skill Development Corporation (NSDC) can draw plans to invest heavily into this area by creating social bonds, launching short-term courses, etc.

-?????Last but not the least, there is a need to provide special insurance coverage to all the frontline workers working in this space. The government could increase the income tax exemption limits for medical insurance for such staff defining a special category. During the last two years, there has been an increase in insurance premium, and thus the government may consider defining a special insurance package for these frontline workers under the already launched Ayushman Bharat Pradhan Mantri Jan Arogya Yojana.??

Overall, I expect the healthcare sector to be the top-most priority for this year's budget. After all, there must be some reason why ‘Health’ and ‘Hope’, both start?with the letter ‘H’ – Now, that is how you serve ‘Humanity’ – the topmost priority for any government.

Disclaimer: The views and opinions expressed in this article are those of the author. The writer is solely responsible for any claims arising out of the contents of this article.

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