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Union Budget 2022-23 for healthcare sector witnessed an increase of 16.5 per cent in fund allocation

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Lalit Mistry, Partner and Co-Head-Healthcare Sector, KPMG in India shares his views on Union Budget 2022-23 for healthcare sector

The government seems to be following through its commitment to increasing healthcare allocation by allocating Rs 86,200 cr to the Ministry of Health and Family Welfare, 16.5 per cent increase in comparison to the previous year’s budget of Rs 73,932 cr. However, when compared to the revised estimate for 2021-22 of Rs 86,000 cr, the increase amounts to a marginal 0.1 per cent.

Apart from the new allocation of Rs 404 cr to strengthen blood transfusion services, the budget missed new allocations and incentives. Some of the key focus areas in Union Budget 2022-23 are:

Boosting medical education infrastructure and developing a robust healthcare workforce: The increased allocation to Pradhan Mantri Swasthya Suraksha Yojana (Rs 10,000 cr, increase of 46 per cent) and Human Resources for Health and Medical Education (Rs 7,500 cr, an increase of 56 per cent) points not only towards the improvement of medical education infrastructure but also indicates efforts to bridge the shortage of healthcare professionals in the country.

Expanding and bolstering the disease surveillance system: COVID-19 has highlighted the need for having a multi-sectoral approach for the management of diseases that can easily cross barriers and cause human infections. Budget allocation to the One Health Programme (Rs 670 cr) and an additional 18 per cent to the National Center for Disease Control (Rs 72 cr) will help in the control of Zoonotic Diseases and other neglected tropical diseases’ surveillance. A distinct operational plan for programme implementation is needed for further strengthening the country’s surveillance system.

Building a strong and resilient healthcare ecosystem: The Pradhan Mantri Ayushman Bharat Health Infrastructure Mission (PM-ABHIM) with an outlay of Rs 64,120 cr announced in October 2021 had a budgeted outlay of Rs 5,826 cr this year (including One Health programme). Going forward, the components under the scheme need to be implemented at mission mode approach to strengthen health infrastructure and improve primary, secondary and tertiary care services.

Impetus on digital health: As a part of creating a more modern and inclusive Digital India, the National Digital Health Ecosystem was announced with an increased allocation of Rs 200 cr to the existing Ayushman Bharat Digital Mission (ABDM). For its successful adoption, the components should be integrated with the existing programme to build an accessible and affordable digital healthcare system.

Increasing the adoption of Ayushman Bharat-Pradhan Mantri Jan Arogya Yojana (AB-PMJAY) to cover the missing population: There was no significant change in the allocated budget for AB-PMJAY and there was an expectation was that it will at least be extended to cover the remaining uninsured population. Further the revised budget estimates accounted for only 50 per cent of the allocated budget last year. Hence, to design a comprehensive insurance model, clear guidelines and concerted efforts are needed to empanel more hospitals, converge various health insurance schemes and speed up the processes related to the disposal of claims.

Strengthening a network of mental health institutions: With the announcement of establishing 23 tele-health centres of excellence for mental health, the government aims to address the rising prevalence of mental disorders linked with COVID-19. However, for implementation, it might also require integration with the National Mental Health programme and policy.

Need for more initiatives to drive innovation and collaboration with private players: The Budget lacked incentives for the private sector to emphasise infrastructure development in terms of healthcare delivery and education facilities. Furthermore, there is also a need to implement reforms for ease in GST regulations, improve capital funding, ensure provision of viability gap funding, and schemes to incentivise healthcare providers to imbibe technology, encourage R&D and digitise the sector.

This year’s budget witnessed increased allocation in ongoing schemes and programmes initiated last year. Despite this, the budget missed the expectations of the industry to optimally allocate resources and fund critical areas of the healthcare system for preparedness against future health emergencies.

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