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Quality vs cost in healthcare

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Healthcare is registering an exponential growth and receiving limelight for both right and wrong reasons. Industry is majorly dominated by private players. The Government is also empanelling them through various schemes like CGHS, ECHS, ESI.

healthcareRecently the Government of India launched Ayushman Bharat healthcare insurance scheme with the motive to provide universal health coverage to people of India. This is a lucrative business opportunity and will be coming up with regulatory norm of price ceiling.

The Government has also realised the importance of quality and is pushing hospitals to have NABH accreditation. “Matching cost” and “quality delivery” are key to success.

THE AFFORDABILITY CONUNDRUM

COST OF DELIVERY

Off late, there appears to be an increasing focus on affordability issue by regulatory actions that control prices. However, one needs to bear in mind the following things on cost containment front:

1. In today ‘s age of innovation and advancement, there is a wide variety in terms of quality of equipment, devices and drugs. If India has to attract the top-end products and technologies, the prices have to ensure economic viability for such premium products. With continuously reducing prices, there is a risk of disappearance of these products and services from the Indian market.

2. There is a threshold below which the quality vs cost equation can become dangerously tilted in favor of low quality, especially in the case of healthcare products and services. Therefore, it is critical that the Government draw a balance between these and find measures to mitigate the risk of lowering prices leading to corresponding reduction in quality to sustain the margins. An increased focus and a well-implemented plan for quality control are critical.

3. Nowadays best healthcare services are being provided majorly by private players. It is being funded by corporate or private equity investors expecting a fair return on investment.

However, there is a need to review the notion that the healthcare players are making huge profits. While evaluating costs and margins, healthcare delivery needs to be assessed as a continuum and not broken up into various components and products. There is a need to co-opt experts, who will carry out a fair and accurate assessment of the true cost of a delivery.

This would take into account requirements of minimum quality as well as the understanding that beyond a point, increase in volumes cannot lead to lower costs in the case of healthcare.
There are constraints on capacity of both equipment as well as medical professionals.

Moreover, considering that India depends heavily on private healthcare infrastructure, any steps that make investing in it unviable will exacerbate the already existing shortage of health infrastructure.

ABILITY TO PAY

In a poor country such as India, and for a high investment sector like healthcare, it will never be possible to solve the affordability issue by simply tackling the cost side. There is a need to address the other side of the equation too, i.e. ability to pay.

The Government should focus on healthcare financing, particularly for the part of population that cannot afford healthcare. Launching the National Health Protection Scheme (NHPS) is a step in the right direction. However, the success of the scheme will depend on how well it is detailed out, and is being implemented.

In order to generate maximum value out of the massive investment by the Government in this scheme, efforts should be made to encourage and incentivise wellness/preventive care and making primary care (including basic diagnostic tests and outpatient care) accessible and affordable for all. This will not only improve the overall health of the population, but also free up resources and reduce the overall cost to the exchequer.

Technology can play a significant role in managing population health. Big data analytics and artificial intelligence (AI) can help us in the areas of risk identification, disease prevention and early diagnosis. The Government must use these technologies for public health purpose. Lastly, it is critical that issues of quality and sustainability be borne in mind while setting package prices under NHPS in a manner that balances quality and economic viability.

To conclude, healthcare is a very complex sector and several countries and societies are struggling to get it right.

We, in India, are fortunate to have an extremely competent pool of healthcare resources, which can boast about some of the best health outcomes. India is called the ‘pharmacy of the world’ and is fast becoming the hub for innovation and manufacturing. Need of the hour is both private sector and the Government to work in sync and with trust and respect for each other. Each can support other and work towards creating a healthcare sector that ensures quality healthcare services to the poorest of the poor. It will also facilitate the availability of best-in-class products and services to those who cann’t affords it.

(Disclaimer: Author is Neha Lal, Sr General Manager – Operations & HR, GCS Medical College, Hospital & Research Centre, Ahmedabad. Views expressed are personal opinion.)

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