Express Healthcare

Budget and Beyond

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The Union Minister’s announcements for healthcare has made the public health sector and private healthcare players very optimistic of the coming times. According to the Finance Minister, the ambitious plan to roll out healthcare coverage for 10 crore families will make it the world’s largest government funded healthcare programme. The private sector looks at this as a great opportunity to partner with the government and expand their businesses. Express Healthcare looks at the real impact of the Union Budget on the healthcare sector

A concrete push on UHC, but foundations needs to be strong enough

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Nilaya Varma

Decades of low public investment in the healthcare space has resulted in two health systems co-existing under one flag- world class care for those with ample monetary backing and connections to access it, and for the rest, a stark choice between poor quality services or financial ruin – or very often both.

Now, under the proposed Ayushman Bharat Programme, the government has taken a major step towards a solution to this crisis for hundreds of citizens. Properly designed, funded and implemented, the scheme represents a once-in-a-generation opportunity to improve the health and wealth of India’s under-privileged.

Under the programme, the National Health Protection Scheme (NHPS) will cover 10 crore families with an annual coverage of 5 lakh per family. The same is expected to boost demand for medical services and also provide an opportunity to healthcare providers and insurance companies to partner with the government. Further, it will reduce out of pocket healthcare spending, leading to increased disposable income, thereby laying the foundation for a strong economy in a long run. The proposal also includes an allocation of Rs 1200 crore for setting up 1.5 lakh health and wellness centres which will specialise in managing non-communicable diseases.

The policy is big on ambition, but faces a difficult road ahead. India is a new addition in the series of high growth economies to launch a national health insurance schemes over the last decade, and not all have worked. Looking around the globe, as well as to the lessons of the Rashtriya Swasthya Bima Yojana (RSBY) it is clear that the future of NHPS will in large part be determined by the foundations that it is built on.

How well its design can respond to the four tests for success:

First, would NHPS be a big enough player to really change the shape of healthcare in India? Health is a $100 billion annual market nationally, and to meaningfully move the sector towards ‘health for all’, the scheme is going to need to be seen as a serious, ideally dominant, payer. The initial amount allocated in the Union Budget 2018 will be sufficient to fund implementation, but will stand short of the full requirement.

Second, would NHPS be an active or a passive payer? The least effective national health insurance schemes perform a largely administrative function – enrolling citizens, accrediting providers and processing claims. They pay money out but give little attention to how it could be used to raise quality or lower costs. This passive approach is changing as more and more countries become actively involved in the services they are buying – contracting with new kinds of providers, creating new kinds of services and setting quality standards below which they won’t reimburse.

Third, would NHPS be governed in a way that people can trust? In choosing what will and won’t be reimbursed NHPS would be making controversial life and death decisions that affect almost 500 million citizens. The only response to this is to rely on transparency and evidence. A good example of this is the UK’s value-for-money agency, National Institute of Care and Heath Excellence (NICE), which determines what drugs and procedures will be funded by the tax payer based on clear thresholds of costs and benefits.

Fourth, would it have the digital infrastructure needed to cope with such massive volumes of data on citizens, records and payments? The US Government remembers well how the launch of Obamacare was undermined by the frequent delays and crashes to its benefit exchanges, causing huge embarrassment to the President personally. There is a huge variation in technical capabilities across India’s many states, and the IT aspects of NHPS will have to be managed carefully.

These four tests will be at the centre of the policy discussions ahead over how to operationalise NHPS the best. To sum up it may be some years until we understand the full impact of the scheme, but what that impact is will likely be determined by the foundations created over the next few months.

Nilaya Varma, Partner & Head, Government & Healthcare, KPMG in India


A step in the right direction

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Dr Ramen Goel

The government has made the health of its citizens an important priority in this year’s budget. India has traditionally been behind the developed world in its focus on the state’s role in the healthcare sector. The budgetary announcements are a step in the right direction but further measures need to be taken to address the challenges in healthcare.

If implemented, these measures will result in substantial benefits to the marginalised and underprivileged sections of society. Access to healthcare is a fundamental right and these announcements are a nascent step in that direction. The announcements are likely to result in greater enrollment in health insurance schemes across the country.

As health is a state subject, it may be difficult for the centre to get every state government on board within this financial year, given the significant burden the scheme is likely to pose on states finances.

A national health policy which facilitates the participation of the private sector in increasing access to healthcare would be an important step in the success of this scheme. We need to create a national NHPS authority on the lines of UIDAI to structure and implement the scheme, otherwise it is likely to be a non-starter.

The government should look to leverage the private sector’s resources and expertise in implementing this plan. The National Health Policy 2017 envisages the strategic purchase of services from secondary and tertiary hospitals for a fee so that people can go to both public and private healthcare providers for treatment. The government must partner the private sector to clearly define the procedures and cost of treatment under this scheme.

There is no denying that India’s rural areas suffer from a shortage of skilled medical professionals. The addition of PG seats is desirable but the major problem is an uneven distribution of manpower between rural and urban areas.

Only a concerted effort to provide medical professionals with security, infrastructure and adequate financial compensation will result in the nationwide presence of healthcare professionals.

Many experienced people understand that in a diverse country, a robust public sector plays an essential role in healthcare provision. Alternative solutions like government coupons or payments can’t act as substitutes in the basic provision of primary healthcare centres. The government’s focus must eventually shift towards improved governance and better quality of existing public healthcare services.

According to a 2017 report by the World Bank, roughly five crore Indians are pushed into poverty because they have to pay for healthcare costs out of their own pockets. Therefore the NHPS should be broadly viewed as an attempt to tackle the drivers of poverty in addition to its role in providing essential health services for citizens.

Dr Ramen Goel, Senior Bariatric and Metabolic Surgeon & Director, Center of Bariatric & Metabolic Surgery, Wockhardt Hospitals


We have to come up with creative ways to ensure coverage for all

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Dr Ramakanta Panda

For the first time in years, healthcare sector has been given prominence in the Union Budget. Considering the role of the healthcare sector in assuring the nation’s health, the government has placed a strong emphasis on covering underprivileged and elderly. The National Healthcare Protection Scheme outlines providing up to Rs 5 lakh cover per family per year for secondary and tertiary care hospitalisation. It will benefit nearly 50 crore (500 million) citizens.

The biggest declaration by the Finance Minister is the health protection scheme where 10 crore poor families – for secondary and tertiary treatment – will get Rs 5 lakhs per family. This announcement will steer the move towards universal healthcare in India. It is encouraging to note that the government has allowed senior citizens to claims benefits of Rs 50,000 as part of medical insurance, earlier this was Rs 30,000. The allocation of Rs 1200 crore towards health and wellness centres and Rs 600 crore towards nutrition for patients suffering from tuberculosis are positive steps. All these initiatives are expected to boost healthcare services demand at every level. For example, pharma sector will also get an impetus as more than 30 per cent of the healthcare cost is through purchase of medicines.

Covering 50-crore citizens under a healthcare scheme is a humongous task. A well-coordinated effort both at the central and state level is required to successfully roll out this type of a scheme. To make it a success, all the stakeholders including private and public healthcare, insurance as well as pharma companies will have to work in tandem.

India is under-served in the healthcare sector, both in terms of number of doctors and hospital beds. Public hospitals are overburdened and are not able to cope with the flow of patients seeking treatment. We have to come up with creative ways to ensure coverage for all and therefore need to look at ways in which private healthcare can support and accommodate a significant share of the patient load.

It’s imperative that the entire population receive healthcare and not just pockets of it. As I said earlier, to achieve this the country has to come up with creative ways to ensure coverage for all.

In India, private healthcare providers can play a key role in supporting government healthcare initiatives. However, it is vital that they are able to break-even and remain profitable to be able to contribute towards making the partnership successful. We must also address the need for providing health insurance solutions that will work in favour of all the stakeholders and focus on affordability, ease of transactions, accessibility and overall security to the citizens.

The Finance Minister spoke of 24 new government medical colleges to be set-up and this could be a big incentive for medical education in the country. India has just one doctor per 2000 people, according to Ministry of Health and Family Welfare estimates. There is a desperate need to increase the number of doctors in various specialities and therefore starting new medical colleges is a step in the right direction. Hopefully, every year India will be able to add more medical colleges.

We need a paradigm shift in our approach to make the most of the available resources and infrastructure. Implementation of information technology is crucial to run the systems more efficiently. Likewise, training AYUSH practitioners to fill the gaps in healthcare delivery at primary level can improve the doctor-patient ratio.

Dr Ramakanta Panda, Vice Chairman and MD, Asian Heart Institute


Monitoring investments improve quality of maternal health services

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Dr Aparajita Gogoi

The decision of the government’s Ayushman Bharat Program of increasing availability of drugs and diagnostics to reach all 1.5 lakh health centres will be of benefit to women. Childbearing women need to often pay out of pocket for these services in case they are not available. With better availability of drugs and diagnostics and general investment of Rs 1200 crore to overall healthcare is bound to raise demand for services. It is hoped that these monitoring investments will lead to overall improvement in the quality of maternal and child health services and lower infant mortality rate and maternal mortality rate, so that we meet SDG 3.2 in the near future.

Dr Aparajita Gogoi, Executive Director, Centre for Catalyzing Change


Universal healthcare insurance seems to be the only remedy

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Dr Bipin Chevale

The Union Budget definitely has given most needed attention to healthcare this time around, by thinking about the reach of affordable healthcare to the masses, by taking first step towards ‘Universal Insurance Coverage’. Also, the mention of additional medical seats would have a far-reaching impact to bridge the gap in the medical talent space. Allocation though seems to be the issue, as there is no clarity as of now about the funds, and keeping in mind the meagre allocation that healthcare has been getting all these years, reaching to the level of 2.5 per cent of the GDP at the earliest is the need of the hour.

In the long run, universal healthcare insurance seems to be the only remedy which will try to bridge the gap. If the wishful thinking of the government is implemented in true letter and spirit, there is no doubt that it would change the healthcare scenario in coming years and make affordable healthcare available to the masses.

It remains to be seen how and who will contribute towards financing the National Health Protection Scheme (NHPS), as few state governments are already running these health cover schemes on their own, or through insurance partners. It would be a herculean task to amalgamate all these into one, in a time bound manner. Also, roping in private players with reasonable cost structure and outcome based incentive model will be pertinent to cater to all the beneficiaries. India already has a three-tier healthcare delivery system, which has not been leveraged efficiently so far. NHPS can actually revive the same for categorising the cases requiring primary, secondary and tertiary level care, thereby reducing the burden and the cost considerably.

The scenario today is that the government hospitals lack infrastructure, talent, etc. but are overflowing with patients while private hospitals are struggling to fill their capacity. By partnering with each other, both the stakeholders can leverage each others strengths. The government has already shown its resolve to contain the healthcare cost by rolling out substantial price control measures through National Pharmaceutical Pricing Authority (NPPA) and Drug Price Control Orders (DPCO). In this scenario, low cost – high volume would be the mantra for private healthcare providers.

The void in the medical talent space is pretty huge in this country when it comes to doctor to patient or specialist to patient ratio. The announcement of opening 24 medical colleges, is a welcome step with a far-reaching impact on healthcare delivery as it not only provides sustained infrastructure but enables continuous churn of talent. The number of post graduate seats allotted to these medical colleges will also help in curbing lot of brain drain in times to come. However, maintaining the healthcare education standards would be a tough task herein due to the dearth of recognised teachers and infrastructural limitations. The private sector can again be considered as a partner for post graduate teaching and training.

The problem with most of the healthcare facilities run by government, is lack of proper infrastructure and hygiene, bureaucratic apathy, improper resource allocation, non-adherence to quality standards, etc. Taking care of the aforesaid basic good governance practices is essential to sustain in the long run. Employing trained hospital administrators, adhering to basic NABH guidelines would be the way forward.

Dr Bipin Chevale, Zonal Director, SL Raheja Hospital, Mahim – A Fortis Associate


A collaborative approach is needed

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Dr Vishal Beri

The new policy is definitely an indication towards carving a powerful roadmap for healthcare in 2018. But, we are still far behind the global average, when we talk about numbers. The financial requirements are actually much larger than what is targeted in the new policy. The allocation still falls short of the targeted 2.5 per cent of the GDP. However, the new NHPS is a big step in the direction of universal healthcare.

The intent of the announcement is definitely positive. The government-funded healthcare scheme will cover a large chunk of the population which was not previously covered, which is laudable, since we all know that a sudden medical event is one of the major reasons why people get pushed into poverty in our country. On the other hand, though the announcement is huge, the detailed contours of the programme are awaited. We are seeking better processes from the government, right from ease of implementation, to simplification of the regime.

Further, a scheme of this size is going to take at least a couple of years to materialise, and only then would it be fair to comment on its true potential and the impact that it will have on the healthcare scenario.

The exact role of the state’s required funding, as also the fate of the state’s existing schemes, is yet to be defined.

The government would also need to boost healthcare infrastructure, in the rural areas. Lastly, the sole focus on tertiary healthcare is not appropriate, as prevention and primary healthcare would provide superior and sustainable long-term outcomes for the entire population.

A collaborative approach is needed, to be able to achieve the true potential of the Indian healthcare sector. The government could help by freezing the contours of the plan as soon as possible, defining the role of states v/s Centre, discussing with insurance companies to work out the lowest premiums, involving private hospital stakeholders to arrive at viable price points for proposed packages, and by working out modalities to minimise leakages and fraudulent practices, during the implementation of the NHPS.

The role of the private sector would be to provide its full cooperation to the government, and ensure that the entire healthcare delivery and claim process is managed seamlessly. The government’s idea to set up 24 new medical colleges and hospitals, by upgrading the district level ones, will help address the shortage of skilled medical professionals.

The shortage of nurses and paramedical staff would also need to be addressed simultaneously.

The Union Budget 2017 talked about re-naming primary healthcare centres as ‘Health and Wellness Centres,’ with the focus on catering to non-communicable diseases, mental health challenges, geriatric and palliative care, and rehabilitative care services. The allocations towards these initiatives must be on a priority basis, which will be a great step towards decreasing the burden of disease in the country. Also, finding the talent to man these proposed centres in the rural areas, would be a significant challenge.

Dr Vishal Beri, CEO, Hinduja Healthcare Surgical


The health and wellness centres should be well leveraged

201803ehm07The focus on health and wellness of its citizen indicates that the government is driving a robust health and well-being ecosystem. Deduction under Section 80D – that includes amount paid towards health insurance premium for covering senior citizens has been increased from existing limit of Rs 30,000 to Rs 50,000. It is a positive step and would help increase penetration of health insurance in India. It would have positive impact on the health insurance companies. However existing limit of Rs 20,000 for citizens below 60 years has not been revised. The health and wellness centres should be well leveraged. It is a great opportunity for the government to educate people about health, sanitation, hygiene and so on.

The step to provide universal healthcare of an unprecedented amount of Rs 5 lakh medical insurance cover per year for 10 crore families across the country means that more people will now have access to health insurance who have affordability issues.

Increase in medical colleges is a positive step forward to meet the growing healthcare demand in India.

The government taking concrete steps to help people with TB with free drugs and Rs 500 per month.

Sandeep Patel, MD & CEO, Cigna TTK Health Insurance


A bold and visionary move

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Dr Dhaval Shah

The government for the first time has come up with  a healthcare scheme which is moving beyond subsidies and promises. The proposed healthcare coverage plan for 10 crore families will give a fillip to the entire ecosystem including hospitals , pharmacies as well as diagnostic chains. It will also ensure that there is standardisation across healthcare channels as well because everyone will be eyeing the same business. The country will benefit a lot from this bold step to bring every Indian under a universal healthcare coverage.

It is a bold and visionary move. A lot of things will need to be made right for this to work and the implementation will be key but the step is in the right direction. The devil always lies in the details. Waiting to hear the scheme document and wait for the next steps to comment on how it will impact the sector in the coming years.

Digital healthcare ecosystem is something that comes before this implementation. In simple words – getting the patient, practitioner and pharmacy on the same platform in a digital format is key for success. The government needs to ensure that this is done before roll out can happen. linking the scheme with Aadhar will be the first step and ensuring that the entire implementation happens through Aadhar will be key to moving ahead and success.

The private sector can play an active role. However, there needs to be clear cut demarcation. If the scheme is structured well where the first reliance is on the public sector and if needed private players can come into play at a predefined cost, it will give a boost to the public sector healthcare facilities as well as ensure that the private players are incentivised to provide state of the art facilities and ensure quality healthcare is given out. For the private sector working with the government is always difficult from reasons of cash flows. Payments are delayed and that leads to issues across the chain. If this can be dealt with well – I am sure the private players will be happy to setup facilities in remote areas as well where its otherwise difficult for them to sustain them for a longer period of time.

I would say this is the single most important step taken in the budget. More doctors is the need of the hour in the country. The current lot of doctors coming out don’t have enough avenues for higher education in the country and are forced to move abroad. With this step, we can expect a lot more quality doctors coming out which are aware of the local problems and issues at large and help fulfill our dream of a healthy India.

Public health centres in the country have always faced an issue of supply in terms of raw materials to medicines and even the required technology and machinery to ensure that the best quality healthcare is given to the people at large. The problem in the current scenario is that everyone wants to have the doctor accountable without giving him all the tools and mechanisms. Healthcare cannot operate in silos or in the hands of individuals – it needs to be the entire ecosystem that works well.

The intent of the government has always been in the right direction. I would have expected more doctors and better healthcare facilities in the earlier budgets but this is a welcome move nonetheless. We have been seeing public healthcare facilities being overburdened since decades now. Waiting for signs of revival , which I am sure this budget should be able to do.

Dr Dhaval Shah, Co-founder, Pharmeasy


This budget will definitely help to boost the growth of the sector

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Joy Chakraborty

This Union Budget 2018 has definitely been a game changer. The government has launched one of the most ambitious project by any scale and if succeeded, the state of the primary and secondary healthcare in this country will change for good.

As per the data presented, the National Health Protection Scheme would cover 10 crore poor families and provide up to Rs 5 lakh per family per year for hospitalisation in secondary and tertiary care institutions. With 50 crore beneficiaries, this would be one of the largest benefit programme of its kind in the world. Getting the poor the access of secondary and tertiary care also indicates penetration of hospitals into smaller cities and villages, thus improving accessibility.

Another impactful measure to tackle rural healthcare is the opening of 1.5 lakh healthcare centres that will provide comprehensive healthcare including non-communicable diseases and maternal and child health services. The centres will also provide free essential drugs and diagnostics.

Both the above schemes have been the highlight of this year’s budget but there are still some questions unanswered like the fate/ role of existing health policies initiated in states, the number and type of diseases that will be covered under NHPS, role of insurance companies in taking this policy ahead to the rural India and its final implementation. However, if executed structurally, quality and affordable healthcare will finally reach the villages of India. This budget will definitely help to boost the growth and development of the sector.

The most notable initiative of this year’s budget, is the world’s largest government funded healthcare protection scheme that aims to cover close to 10 crore Indian families. With this, the burden of out-of-pocket expenditure faced by most of the Indian population, irrespective of socio-economic strata, will drastically reduce, making quality medical facilities reach the underprivileged.

The surprise element in this year’s budget was the government’s commitment to reach out to the elderly. The increase in the deduction limit for senior citizens will encourage the ageing population to buy a higher health insurance policy and hence boost the entire ecosystem (patients, insurers, care providers) of healthcare specifically targeted for senior citizens.

Besides, policies for the health sector, there were other plans announced this year, which would indirectly impact the health sector. Chief among them was the focus on pollution control and sanitation (plan to open two crore additional toilets). This would definitely impact public health by reducing infection and pollution-related diseases, thus reducing the burden on health systems by some degrees.

On the whole, this budget marks the importance of social sectors and the government’s focus on healthcare for the common man is a step in the right direction for India’s health.

Had there been any incentives for private care takers set up hospitals in rural areas or announcement of schemes for Public Private Partnership (PPP), the implementation of NHPS would have been easier.

Since there has been no announcement on a PPP model in setting up healthcare centres in the rural, the government can look into join hands with the private sector to set up medical colleges that will provide quality learning to aspirants. The government can then look into incentivising doctors, healthcare practitioners who are willing to step into rural villages and work. This model has worked in the past considering currently nobody wants to go to the villages apart from a few passionate ones. Furthermore, government should connect the digital drive with certain sectors like healthcare and education.

The government in the last Budget and this one too has emphasised on increasing the medical seats. As per data available, the undergraduate seats in the government medical colleges in the country is likely to increase to 85,525 while postgraduate seats will go up to 46,558 by 2020-21. The announcement of setting up 24 new medical colleges, one in each state, is a welcome step. This will create additional seats in MBBS and PG in the country, promote affordable medical education, utilise and eventually better the existing infrastructure of district hospitals and increase the availability of health professionals in the rural areas. However, shortage of manpower is not limited to doctors. There is an equal dearth in allied health services professionals and nurses in the country. Although, these are positive steps in closing the gap, a lot still needs to be done to take affordable and quality healthcare to the villages of India.

The success and legitimacy of good public health revolves around process, transparency, participation, fairness and accountability. Good governance is necessary to ensure that health system rules and institutions are beneficial to the population. The government should also more and more interact with the public in general to understand the basic needs of the community or population as a whole.

Joy Chakraborty, COO, PD Hinduja Hospital & MRC

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