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Budget 2019 to favour healthcare finally?

The government is bound to roll out the red carpet, will private players bite the bait?

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Long time followers of Express Healthcare will have noticed that our website has undergone a major revamp. Over the past few months, we’ve worked with our online design team to come up with an easy-to-navigate site that pulls the browser in, with more visual content and more sections. Check out our new sections like the Guest Blog section and video content from our recent conferences. We hope the new site will add to your reading pleasure, be it via a cell phone, tablet or PC. So even if you’re not with us in Hyderabad over February 22-23, watch out for live updates on our website from our upcoming conference, the inaugural edition of Dx Summit, a business conclave for the Who’s Who in India’s vibrant diagnostics sector.

No longer a mere reflection of the print issue, we hope, the revamped Express Healthcare website will become a platform for the industry to share their views and tell us their stories. With public healthcare coming centre stage with Ayushman Bharat (AB), we hope to also increase the spotlight on the opportunities and gaps in this arena. Do check out our site,, and send us feedback on how we can make it even better.

The revamp of our website comes at a time when our industry is undergoing a metamorphosis. Now more than ever we need to report and reflect on the many policy changes reshaping our sector. We are now part of a global value chain, with home grown hospital chains attracting venture capital across borders. Pioneers and venerable giants are being questioned and held accountable to global corporate governance standards. We hope Express Healthcare will serve as a valuable source of analysis and multiple perspectives, as a sane voice uniting the industry midst a cacophony of white noise.

It is an irony that Union Budget 2019 will be released while the Finance Minister is away in the US on medical treatment. No more needs to be said on the trust deficit and gaps in the healthcare ecosystem of our country. Though the Budget 2019, due to be released on February 1, is only interim in nature, the healthcare sector is hoping for an increased allocation for the AB scheme. A report from CARE Ratings also pointed out that in order to implement the scheme, on January 8 the government released broad guidelines to incentivise the private sector to set up hospitals in Tier 2 and Tier 3 cities. It therefore restored the status of hospitals as an industry so that they get the advantage of Viability Gap Funding (VGF). Thus, it is very likely that the government would allocate funds in this Budget to ensure private hospitals come up in these cities to serve the AB beneficiaries.

There is already criticism that the private sector has backed the government into this corner, as it steadfastly refused to participate in AB, citing unviable reimbursement rates. As per the guidelines, the government will earmark and provide sufficient unencumbered land on lease or through bidding, facilitate various permissions and clearances through a special window with timelines, compulsory empanelment of the hospitals for PMJAY and other government schemes, ensure timely payments for services, VGF up to 40 per cent of the total cost of the project, provide gap funding up to 50 per cent of tax on capital cost etc.

In return, private players will build, design, finance, manage operate and maintain the hospitals with quality standards as well as take market risk and provide services at PMJAY rates. With polls around the corner, the Budget Prime Minister Modi’s last chance to win over opposing state governments like West Bengal, Delhi, Odisha, Telangana, Chhattisgarh, Kerala which have pulled out of AB. Even if PM Modi does not win a second term, it will be almost impossible for the succeeding government to dismantle AB. The government is bound to roll out the red carpet, will private players bite the bait?

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