· Ease of access to capital, incentives to create newer models to improve accessibility, availability and quality and health insurance for ‘Missing Middle’ will go long way to transform the health systems
New Delhi, January 30, 2023
The government has set a target to achieve Universal Health Coverage (UHC) by 2030. This is a critical agenda for achieving the other Sustainable Development Goals. The healthcare sector expects that the government would make all efforts to create newer models to improve accessibility, availability, affordability, and quality in Tier 3 and 4 including rural areas. It is believed that the government needs to create new models otherwise the target UHC would be difficult to achieve. New models incorporate many pillars of healthcare including financing, capacity building, infrastructure, technology, and insurance among others.
Technology has emerged as a game changer for the sector and it provides unique solutions to India’s several challenges. The country witnessed its mettle during the pandemic. The World’s largest vaccination and efficient management of the pandemic were done with huge support from technology. It is expected to play a critical role in achieving the goal of UHC as well. A policy push would be required.
According to Mr Ashim Kumar, Facility Director at Narayana Super Speciality Hospital, Howrah, “We have already witnessed the importance of technology in healthcare. Now, we need to move to the next level by adapting technologies (digital health with all its newer tools like IoT, AI, data analytics, and electronic records). New technologies can take care of the entire continuum of care. These technologies have specific roles from admission to discharge and post-discharge period too. Now, National Digital Health Mission is in place and we hope the government would surely announce further impetus for wider use of technologies. We need Out of Box thinking for innovative health Care Models which would keep the cost low and within reach of all income groups with introduction of technology and skilled manpower for reaching clinical excellence. This is imperative to ensure Quality healthcare for all.”
The budgetary allocations for health in 2022-23 were nearly 2%. The industry is hoping that the government would surely make provisions for spending an extra 0.5% of GDP every year on health for the next five years and encourage private sector investments through tax sops and other incentives.
Anurag Kashyap, Director-Finance & Strategy, TR Life Sciences, said, “ Both capital and operational expenditure have significantly increased for the hospitals. This has cascading effects on the cost of treatment. For sustainability and quality, the hospitals would pass on the burden to the patients. To overcome this challenge, we are expecting that the government would create an enabling mechanism for credit facilities. Long-term (15-20 years) credit facilities would come as a booster dose for the sector as it would decrease the burden. Interest rate, tenure, and collateral are the major concerns. Easy access to capital at lower rates without collaterals would long way to creating a new healthcare ecosystem in the country.”
“The sector needs both structural and tax reforms. Tax sops and incentives for both existing and new healthcare projects are required. For new or green field projects a tax holiday period of 10 years, as given to Special Economic Zones and Tech Parks, would go long way to transform the sector. If Union Budget focuses on creating similar zones for the hospital sector and extending all the benefits including tax incentives, a new healthcare economy will be in place very soon,” added Kashyap.
The healthcare sector requires different solutions including higher public and private spending to deal with its challenges. In order to support patients in gaining access to high-quality and cost-effective care, new models should enable the development of a comprehensive and integrated healthcare ecosystem in the country.
According Sugandh Ahluwalia, Chief Strategy Officer, Indian Spinal Injuries Centre, “India has emerged as a key destination for medical tourism. Highly experienced doctors combined with world-class facilities, attract millions of overseas patients. It is a huge foreign exchange earner segment. We expect that Union Budget 2023-24 would provide further momentum with fresh incentives to this segment which witnessed a slowdown during the COVID-19 crisis but now recovered.”
According to the BCG Report, better clinical outcomes lead to improved productivity as well. It is estimated that this could lead to an ‘additional benefit of USD 200-250 billion to India’s GDP.’ Other advantages include a big push for Patient Trust, Diagnosis Rate, and Deep Penetration of health insurance instruments.
“Cohesive collaborations and partnerships among the government, public sector health institutions and private sector would go long way in creating a robust healthcare ecosystem in the country. For the government, collaborations and partnerships would ease the burden to a large extent. The government needs to make policies more comprehensive and universal. Cohesive collaborations and partnerships are possible in every segment Provider, Medtech, Diagnostic, and Digital Health,” said Baldev Raj, Healthcare Expert.
In nutshell, the ease of access to capital to encourage entrepreneurship in healthcare, incentives to create newer and sustainable models to improve accessibility, availability and quality in Tier 3 &4 cities including rural areas and health insurance coverage for ‘Missing Middle’ would go long way to transform the healthcare systems in India. Expediting investments in capacity building, especially in Tier 3 & 4 cities and rural areas, would help in the realization of the dream of Universal Healthcare on the set deadline.