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Incentivise private sector health care in Budget for greater penetration in the country

Every year as the time draws near for a new budget to be tabled, almost all sectors of the economy start to build their wish lists on what they would like the Finance Minister to address. The healthcare sector too, has its needs and requirements and these are discussed as well year on year. And so we move forward, a little at a time. This may no longer be enough. We need to make a bigger resource commitment to healthcare. The percentage of GDP invested in any social sector, particularly in health, is often used as a yardstick of a nation’s commitment to providing adequate, basic health services to all levels of society.

Two years ago, India, as one of the United Nations Member States, agreed to try and achieve Universal Health Coverage (UHC) by 2030. Although India has made tremendous progress in improving its health system in the last decade, much more needs to be done if we are to reach this goal by 2030.

Representational image. AFP

Representational image. AFP

Currently almost 70 percent of our healthcare needs are met by the private sector. Because of the increasing role of the private sector in healthcare delivery, we have seen many positive improvements in recent years and the expansion of the private health sector has helped make health services more accessible across the country. Moreover, the overall quality of healthcare has dramatically improved.

The private health sector remains integral to bringing high quality healthcare services at all levels, particularly the secondary and tertiary levels, to all parts of the country. We have the expertise and the means to penetrate the country and take high end health services to all. For this to happen, the government must consider incentivising various health services and initiatives in the private sector so that we can plough back money and invest in more resources and infrastructure.

When we look at the cost of healthcare, India is one of the cheapest healthcare providers in the world. We are however an ethnically and socially diverse country, with over 4,000 communities, making us multiple countries within a country. This diversity necessitates the use of different approaches to create access and deliver healthcare in both urban and rural areas.

While India is the world’s fastest expanding economy and the most dynamic emerging market, it still has a disproportionately small healthcare budget, in fact, one of the smallest health budgets in the world. I believe this is a good time to reiterate the need for greater budget allocation to health. However, allocating sufficient resources to healthcare would be only one very significant input. We need to see a more judicious use of these resources. We need higher levels of efficiency and accountability, greater cooperation between the Centre and the states, and far more collaboration between public and private healthcare providers.

Some other pressing healthcare requirements that need a higher fund allocation are:

Access to good quality medicines and treatment at affordable prices: A developing country like India, with large socio-economic disparities, requires an efficient public health sector to deliver basic health services especially to those in hard-to-access regions of the country. There is great need to invest in infrastructure and ensure a good supply of medicines across the healthcare system.

Increased focus on health insurance: Although the number of people getting insured every year is on the rise, a mere 15 percent of the population is covered by medical insurance. The government did increase budgetary allocation to health insurance last year, and it is my hope that this year’s budget will see a similar if not a higher number. We must also increase the tax deduction limit for health insurance premiums, which will encourage more people to opt for health insurance, making medical treatments more affordable.

Health Insurance is an issue that has not been discussed enough and the movement forward has been slow. I believe the upper middle class should be incentivised for insurance based on job description while for those below the poverty line, the government could consider stepping in with a cross subsidy plan. This will help increase access to high end care and reduce the burden on individuals and groups who are otherwise unable to access such health services.

Support for medical tourism: Medical tourism is one of the leading drivers of our country’s health industry and the overall economy. We do, however, need a bigger health budget to allow us to support medical tourism, to meet the rising foreign demand for health services in India, and avoid the overburdening of our own medical and human resources caused by this tourist influx.

It is encouraging to note that budget allocations for the health sector have increased year on year from 2005, taking us from 0.9 percent to 1.3 percent of total GDP. However, India continues to fall short when compared to other members of the BRICS countries, who spend a far higher proportion of their GDP on health; ranging from 3.5 to 8.5 percent.

It would be ambitious to expect dramatic increases in India’s health budget, but it is my hope that the government will recognise the immense need for greater attention to the health sector and the many gaps that continue to exist. Without this we may not be able to mobilise all the resources needed to achieve our 2030 goal of universal health coverage, and a healthier future for all.

(The writer is Chairman and CEO, Healthcare Global Enterprises Ltd)

For full coverage of Union Budget 2017 click here.


Updated Date: Feb 15, 2017 13:01 PM

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