There is quite a slack in the pace of increase in the budgetary allocations for healthcare and will result in India finding it difficult to achieve some of its objectives
Public spending on healthcare in the country is among the lowest in the world at just a little over one per cent of the Gross Domestic Product (GDP). Hence, the healthcare system is beset with various problems that include shortage of workforce, infrastructure and dismal quality and availability of services.
Finance Minister Nirmala Sitharaman announced a set of measures to stimulate and boost the healthcare sector as an industry in the Union Budget, 2020-21 and allocated Rs 69,000 crore for it, which also includes Rs 6,400 crore for the Ayushman Bharat-Prime Minister Jan Arogya Yojana (AB-PMJAY). In the last Budget, the appropriation was Rs 62,659 crore. Though there has been an increase in the allotment, the fact remains that it is quite insignificant when adjusted to inflation. Moreover, Rs 69,000 crore amounts to barely one per cent of the GDP — a far cry from the National Health Policy’s much-talked about target of increasing the health budget to 2.5 per cent of the GDP by 2025.
There is quite a slack in the pace of increase in the budgetary allocations for healthcare and will result in India finding it difficult to achieve some of its objectives, like reducing infant mortality. India ranks 12 out of the 52 lower-middle income countries with a high infant mortality rate. Even though there has been a gradual increase in allocation, the dismal percentage of the GDP spent on healthcare is a concern, and will remain so for a long time, unless the Government makes some drastic changes in the future.
However, Mission Indradhanush, covering 12 new diseases including five new vaccines, is definitely a boon as it will provide the people of the country the much-needed relief and care.
Setting up of hospitals on the Public Private Partnership (PPP) model, along with medical colleges to address the shortage of doctors and opening up DNB and FNB certificate courses is a step in the right direction. Large hospitals running Residency programmes will also provide a training platform for medical professionals.
However, private hospitals which venture into PPP projects should be assured of all help by the Government and reimbursement for patients treated in them must be done within a month of the treatment/completion. This is because long delays in reimbursement will affect the volume of work done by hospitals and will not encourage private hospitals to come forward and join this genuine attempt to help the needy.
With 2020 being celebrated as the International Year of the Nurse and the Midwife by the World Health Organisation (WHO), the Finance Minister’s announcement of bridge courses for nurses and other healthcare professionals to match international standards, by allotting Rs 3,000 crore for skill development, is a good incentive.
Skill development of Physician Assistants and paramedical personnel through courses should also be done and these courses must be recognised by regulatory bodies and other associations such as the Indian Medical Association, the Medical Council of India and so on. This is prevalent the world over but is still not implemented in the country and recognition of these courses will enhance the services provided by the healthcare sector immensely. Last year, the AB-PMJAY was able to cover over 6.9 million treatments. However, the world’s largest Government-funded health insurance scheme’s budgetary allocation for this year is the same as last year, i.e. Rs 6,400 crore. So are the allocations for the scheme this year sufficient to make AB-PMJAY a success? There is a possibility that the payments would be delayed, leading to insurance companies not being a part of it actively. Currently, over 20,000 hospitals are empanelled in this scheme. Many hospitals, especially in smaller towns, are yet to be covered. The plan to set up 150,000 health and wellness centres by 2022 and fund them through the budgetary allocation for AB-PMJAY seems to be insufficient in regards to achieving this initiative. In order to address the shortage of hospital beds and enhance healthcare accessibility through PPP, innovative business models will be crucial. Also, cognizance about preventive healthcare and the habit of routine screening and monitoring could really reduce the liability from the entire ecosystem.
Even in the present economic scenario, India imports over 70 per cent of its medical devices, with a fourth of them coming from the USA. While the intention to impose a five per cent health cess was to strategically redistribute such earnings to set up tier-II and tier-III healthcare facilities, it does not resolve to boost the local medical devices industry. A legitimate certification authority for such devices would aid in use and adoption of equipment and devices made in India. Sadly, start-ups in medical devices, indigenous research and innovative products such as bioprosthetic valves and ventricular assist devices are not being encouraged and the attitude of the regulatory bodies in this country has to be reviewed. We have just one medical science park in the country with Special Economic Zone approval. However, during the last eight years no progress has been made to start research units like in the Biopolis in Singapore. But, this is not due to the lack of talent in the country. Many attempts are being hindered by the attitude of financial institutions such as public sector banks and so on. Hence, loans for these intuitions should be at par with NABARD rates or the Government should give grants rather than taking the entrepreneurs to Debts Recovery Tribunals, the National Company Law Tribunal and so on. Also, medical research should be identified separately rather than clubbing it with commercial ventures.
While healthcare services are on the negative list of the Goods and Services Tax (GST) for provision of services, the basic input costs of creating such services have had an upward tax implication with GST and hence increased the overall consumer cost of such services, with the inability of healthcare services to offset such costs through input credit. Clarification in this regard would have ideally balanced the cost outcome and kept rising costs in check. With a huge focus on the Internet-of-Things, Machine Learning, Artificial Intelligence and analytics, it is believed that the Budget will provide a boost to the country’s digital economy. However a digital incentivisation plan is completely missing. While 2019 saw various frameworks initiated such as the National Digital Health Blueprint, guidance and adoption remains unaddressed and the fact remains that budgetary guidance for furtherance and utilisation can go a long way.
This being said, the fact remains that the Government has a holistic vision of healthcare that translates into wellness of citizens. The Finance Minister proposed a viability gap funding window for setting up hospitals which is a good move.
The Budget also declared that the generic medicine retail outlets Jan Aushadhi stores would be available through expansion to every district. Apart from medicines, these stores in particular would also stock up on more surgical necessities. Currently the Jan Aushadhi stores sell 154 surgical instruments, which will now be expanded to about 300. This will result in a positive outcome for both SME pharma manufacturers and small domestic medical devices makers. While a lot of schemes and policies have been initiated, there are no clear roadmaps to see these through till the end. Proper channels and information centres should be set up, where potential beneficiaries can seek details and make informed decisions. A system or a special task force should be set-up to monitor each scheme. A robust feedback mechanism from the masses about the same would also help in their realisation and improvement.
There is a dire need for the Government to stress on R&D in basic medical sciences and medical research, which will pave the way for growth and progress of indigenous technology. In addition, special provisions should be made under the ‘Make in India’ initiative for manufacturing, which will in turn contribute to India becoming a frontrunner in medical technology and innovation across the globe.
(The writer is a Padma Sri awardee and cardiothoracic surgeon credited with India’s first bypass. He is Chairman and CEO of Frontier Lifeline Hospital)