What is to be done: Healthcare Agenda for the new Government

Healthcare Agenda



Now that the jubilation of an absolute mandate, star-studded ceremonies and fierce debates about appointments are over, its time to get down to business. ENNs Subash Deb interacts with a handful of leading stakeholders in the health sector to find out their expectations from the new government at the centre.

Just a decade ago, our country was abuzz with fascinating tales about its growth trajectory that the nation was heading for a superpower status. India was equated with China in terms of growth and development. However, today, the reality is the country is still far away from its promise. Growth has plunged from sub-10 percent to sub 5 percent. Corruption has adversely affected our economy. In 2012, India has been ranked 94th out of 176 countries in Transparency Internationals Corruption Perceptions Index. The menace of corruption has eaten into the very soul of our nation. A nation which cannot ensure basic healthcare, education and housing to its citizenry, and where vast swathes of its populace go without a square meal a day, cannot call it a developed nation. Therefore, the priority of the new government should be to get growth back as close to double digits as possible.

The BJP-led NDA claimed a landslide victory in the recently concluded Lok Sabha election, ending decades of Congress-led UPA rule. There was bonhomie across the country after the party registered a historic win. For the party, it was a significant victory in three decades, and for the nation, it is a harbinger of good things to come.
Considering the mandate the party received, it becomes imperative for the new government to deliver on its lofty promises. The expectations are high from the new government as the Prime Minister Narendra Modi has taken charge of the country at a more challenging time.


In the recently held Union cabinet meeting, Modi discussed the top policy priorities of the new government. The top priorities included development of education, health, water, energy, and road infrastructure.

The focus, now, is on Health Minister, a medical professional himself, Dr Harsh Vardhan who shot to fame after undertaking the most popular pulse polio drive when he was the health minister in Delhi government. He faces the herculean task of lifting Indias weak and fragmented healthcare system.

Healthcare in India”the current state of affairs

In his address at Global Healthcare Conference “The Future of Healthcare: A Collective Vision, which was held in New Delhi, earlier this year, President Pranab Mukherjee said, Healthy citizens are integral to building a healthy economy. Most often people do not fully comprehend the fundamental correlation between the state of a nation and the health of its people. Though India has made significant inroads in the healthcare sector since independence, a lot more still remains to be done. It is necessary to create an efficient healthcare delivery system, one that provides high quality, affordable medical facilities to the people, and in particular, to the weak and disadvantaged sections of society. Indias health indices need to improve to achieve the Millennium Development Goals and meet the World Health Organization mandates.

The presidents quote more or less sums up the current state of healthcare in India.

At the beginning of this century, health outcomes in India and the quality of the basic health system were extensively lagging that of peer nations. From such a weak health system, the progress made over the last decade in different areas of health has been mixed. The UPA government had recognized the need for structural reforms and introduced several in the 11th and 12th Five Year Plans.

Despite the unparalleled growth experienced by the private healthcare providers in recent years, India is still far behind its peers on healthcare outcomes. Moreover, disparity in healthcare access across states and demographic within the population, poor public expenditure on health, infrastructure gaps, workforce scarcity have further exacerbated the situation.

It is obvious that a status quo approach would be insufficient to lift the healthcare system out of the doldrums. Indias reform journey needs impetus and implementation at scale.

Now, with the new government at the centre, the 12th Five-Year Plan, based on a vision of universal access, is expected to user in a huge mass of revolution in Indias national health strategy.

Industry Recommendations:

Increase healthcare spending The amount of public fund that India spends on healthcare is abysmally low compared to other emerging economies. India currently spends only 1.2 percent of its GDP on health care which is the lowest of the group of emerging economies that includes Brazil, Russia, China and South Africa, called the BRICS. Over 74 percent of the expenditure on health comes from the private sector. As a result, large numbers of people have to incur heavy out-of-pocket expenditures which further lead to increase in financial burden on the poor sections of Indian society. If truth be told, expensive healthcare pushes large swathes of the population into poverty. The High Level Expert Group of Universal Health (HLEG) report, however, had recommended an increase in public expenditure on health from 1.2 percent of GDP currently to 2.1 per cent of GDP by the end of 12th Five-Year Plan.

Emphasising the need for increasing public healthcare spending, Dr Rajeev Boudhankar, Vice President, Kohinoor Hospitals recommends that there should be at least 40 percent increased allocation in 2014-15 budget. We expect the government to increase the public expenditure on health to somewhere around 5 percent of GDP by 2020. Out-of-pocket (OOP) private expenditure on healthcare by an average Indian is one of the highest  in the world. Around 71 percent of the health care expenditure is borne through own resources as compared to average 15 percent spend by individuals in developed world. There should be no proposal in the next budget for widening of service tax net to cover diagnostics and hospitalisation in hospitals, which will create a larger hole in the pockets of patients. This is likely to be brought back in the budget of 2014-15 with Goods and Service Tax which we in the industry dread, he adds.

Dr N K Pandey, Chairman and MD, Asian Institute of Medical Science says, Our healthcare spending is less then sub-Saharan countries, and this needs to improve. Budget after budget, we have seen that allocation on healthcare has not gone up. There is an urgent need to change it. The Government needs to take healthcare seriously.

Improve access, equity and quality

There is a high degree of disparity in quality and access to healthcare service between rural and urban Indians. While, in major urban areas, worldclass, five-star hospitals have sprung up, boosting the industry of medical tourism, access to quality medical care is limited and unavailable in the boondocks.

The UPA Governments National Rural Health Mission (NRHM) has been greeted as one of the most ambitious rural health initiatives ever. It was launched in 2005 to correct the skewed access to healthcare facilities between the urban and rural areas.

Though the NRHM mission conferred some benefits on rural areas, it has proven mostly ineffective so far. In addition to the severe shortfall in physical infrastructure, the programme has been beset by insufficient and erratic drug supply, poor staffing and ambulance facilities, lack of specialised medical professionals, etc.

While sharing his pearls of wisdom for the new government on healthcare, Dr Rajesh Srivastava, Chairman, Rockland Hospital says, Healthcare delivery up to village levels is the biggest challenge India faces today. It is sad to note that AIIMS, Indias No 1 Medical Institute, which can guide the entire healthcare industry through its research and development activities, is crowded with primary-care patients. The lack of quality and accessibility is forcing these patients to rush to metros.

This problem can easily be resolved if quality diagnostic facilities are created in remote locations and linked with centres of excellence through IT and Telecom interfaces. Reports can then be read by specialist doctors, and then the patients can be referred to a primary, secondary or tertiary-care facility. This will ensure right treatment at the right time, and will also reduce the pressure on the tertiary-care hospitals in the metros, he adds.

Appreciating the initiatives taken by the previous government to set-up five AIIMS like institutions in India, Dr Aditya Vij, CEO, Fortis Healthcare Limited says, This kind of setup should not be only at the tertiary level, but also should fan out andreach out to the community at large Most of these hospitals are placed in metro cities, or Tier I and II cities, where a common man cannot access and afford the best facility, he adds. 

Shortage of Beds/Doctors
Details 2010 WHO Std
Hospital Bed Density (per 1,000) 1.3 3.5
Doctor & Nurse Density (per 1,000) 2.2 2.5
Source: McKinsey & CII report of Dec 2012

 Gaps in healthcare Infrastructure

It is estimated that by 2025, the Indian population will be 1.4 billion. In order to cater to this demographic transition, the healthcare sector would require more investments to expand its size and capacity in terms of hospital services.

As per the National Health Profile 2011, the hospital bed density (per 1000) in India stood at 1.3 in 2010. There are 11,993 hospitals with 784,940 beds in the country, out of these 7,347 hospitals are in rural areas with 160,862 beds and 4,146 hospitals are in urban areas with 618,664 beds. This excludes the 148,124 subcenters, 23,887 primary health centres and 4,809 community health centres in India as on March 2011.

Infrastructure gaps are extensive, and are complicated by under-utilisation of existing resources.

Dr Rajeev Boudhankar observed that investments in healthcare infrastructure have not kept pace with population growth and increasing urbanisation. Increasing the number of beds to around 200 per1,00,000 would mean creation of 1.3 million new beds, which would require fresh  nvestments of $80 billion.

Health is a state subject in India and cash strapped state governments are not likely to be able to provide budgetary support for such investment. The private sector, therefore, should step in, and provide bulk of these investments. The central government should give a strong impetus to the private sector, he recommends.

As per the World Health Statistics, India ranks among the lowest globally, with 0.9 beds per 1,000 population, far below the global average of 2.9 beds.

Add to this doctor-to-patient ratio is terribly low in India. HLEG, formed by the Planning Commission, had recommended that the doctor-to-patient ratio should preferably be 1:1000. However, in India, it currently stands at 1:1800. Moreover, most doctors flinch from serving in the hinterland.

Dr D S Rana, Chairman, SGRH aptly puts, The government should give incentives to the doctors for working in the rural areas. Also, they should give incentives to the NGOs and individuals to open small healthcare centres in rural India.

Improve health insurance scheme

The objective of 12th Five Year Plan is to achieve universal health care. Until the 11th Five Year Plan, health insurance coverage has been inadequate, and the poor hardly had access to any insurance in in-patient care. In 2007,  however, the Rashtriya Swasthya Bima Yojana (RSBY), was introduced to provide health insurance coverage to the under-privileged. It is a superb health insurance scheme, but it covers only BPL (Below Poverty Line) families. Therefore, families marginally above the BPL cant avail themselves of this facility, though they too need it.

Moreover, RSBY provides only Rs. 30,000 cover per year which is essentially inadequate. While stressing on the need to raise the amount of health insurance coverage, Dr Boudhankar says, The plan allocation for RSBY must be increased by at least 40 percent of the previous year.

At present, there are three central government health insurance schemes run by two ministries, Central Government Health Scheme (CGHS) by the Ministry of Health and Family Welfare, and Employees State Insurance Scheme (ESIS) and RSBY administered by the Ministry of Employment and Labour that separately assist healthcare treatment for different sets of population.

The CGHS was started in 1954 with the purpose of providing complete medical care facilities to Central Government employees, pensioners and their dependents residing in CGHS covered cities.The medical services are provided through Wellness Centres under Allopathic, Ayurvedic, Yoga, Unani, Sidha and Homeopathic systems of medicines.
The CGHS scheme has been plagued by huge outstanding dues towards hospitals. Recently, the amalgam of the private healthcare institutes warned that they would stop providing cashless treatment to CGHS patients if the government failed to release their payments.

Dr S Warsi, Medical Superintendent of Holy Family Hospital says, We dont make the kind of profit that other big hospitals do. They can keep themselves going even with the CGHS payment delayed, we cant. We need our daily income to look after ourdaily expenditures. Thats the only reason. Otherwise, we would love to have CGHS

Bottom Line

Our health sector is beleaguered with multitude of problems. The longtime demand for increased healthcare spending to 6 percent of GDP is still a pipe dream. The new government should make provision for an increase in the budget allocation. This will result in the reduction of economic burden on the common man.

Accessibility to healthcare is one of the major problems faced by huge swathes of the Indian population. The government may not be able to immediately construct health facilities in rural areas, but they can partner with several private health providers and Non-Governmental Organizations, working in the rural areas, in order to bridge some gap in healthcare accessibility between rural and urban areas.

Moreover, there are multiple schemes addressing the same problems. The Janani Suraksha Yojna (JSY), Janani Shishu Suraksha Karyakram(JSSK) and Indira Gandhi Matritva Sahyog Yojna (IGMSY) all cater to the needs of the same group of beneficiaries. It is important that such multiple schemes are identified and consolidated into one. This would lead to reduced financial burden on the government, and also benefit the intended beneficiaries.

While addressing the first joint sitting of Parliament, as mandatorily required under the Constitution after general elections, President Pranab Mukherjee said that the Narendra Modi-led NDA government at the centre will work for development in a resurgent India in which corruption will have no place.

Reducing corruption in the health system should be the first priority of the government, because no schemes and reforms measures will work unless corruption is stamped out of the system.

The Union Health Minister Dr Harsh Vardhan needs to take into consideration all of these. He has a herculean task of lifting our healthcare system out of the doldrums.

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