Budget 2020: Experts seek higher govt spending, incentives for healthcare

Budget 2020: Experts seek higher govt spending, incentives for healthcare

Budget 2020 expectations: The healthcare industry also wants the allocation for the sector to go up as the government had promised to earmark 2.5 per cent of the GDP in the National Health Policy

Budget 2020 wishlist: Healthcare industry experts also called for tax relief on preventive health check-ups Budget 2020 wishlist: Healthcare industry experts also called for tax relief on preventive health check-ups

Industry experts have called for increase in public spending on healthcare in the Union Budget 2020-21, considering India's demographics, growing population and increasing disease burden.

The allocation to healthcare should go up as the government had promised to earmark 2.5 per cent of the GDP in the National Health Policy, said Suneeta Reddy, Managing Director, Apollo Hospitals Group.

"The Budget for financial year 2019-20 saw an outlay of Rs 62,398 crore for the healthcare sector, which was just 1 per cent of the GDP. This should be increased to 2.5 per cent, or around Rs 150,000 crore to drive the health sector forward. Along with the private spend of 1.5 per cent, the total GDP percentage shall go to an acceptable 4 per cent. In developed countries it is 10 per cent, and in the USA it is 18 per cent of the GDP. This will help in making healthcare accessible to marginalized populations," said Dr Azad Moopen, Founder Chairman and Managing Director of Aster DM Healthcare.

Reddy said another demand of the healthcare sector is that of an infrastructure status, which will open up other sources of low-cost funding.

"While Ayushman Bharat has covered 50 crore people (of which 10 crore have been enrolled), India still has very low insurance penetration in other affordable segments. India should have a tiered insurance program in place. For example, employers being mandated to provide meaningful cover for their employees, mandatory health insurance for self-employed professionals, affordable healthcare policies for elders, and then back that all up with an increase in deduction under Section 80D," said Reddy.

FULL COVERAGE: Union Budget 2020

Dr Moopen said there is a requirement for a viability gap funding by the government for smaller hospitals in Tier II and III cities to increase the provider base for Ayushman Bharat. There is also a requirement for increasing the package rates of Ayushman Bharat for more hospitals to take this up and make the program a success.

Moreover, the healthcare industry needs incentives for the private sector to increase bed capacity and invest in latest medical technologies, said Reddy. A Healthcare Infrastructure Technology Upgradation Fund that provide subsidies for capital investment undertaken in upgradation of healthcare infrastructure is another option, she added.

"Incentives for hospitals to invest and develop Medical Value Travel, and to exempt foreign exchange earnings, can create lakhs of jobs and bring in foreign exchange. The Union Budget should introduce a separate deduction of Rs 10,000 for each individual with respect to preventive health checks. Similarly, incentives for investments in R&D and data mining is also required in the Budget as the private healthcare is investing a lot in data infrastructure," said Reddy.

Dr Moopen said the Budget should focus on increasing the number of healthcare professionals as the doctor to patient ratio is 1:1,445, against the WHO recommended ratio of 1:1,000. Government should ease the rules and regulations for establishing more medical teaching and training institutions to produce more medical professionals to fill the gap, he added.

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"The recent decision to allow medical colleges by joint venture between trusts and companies is a welcome step with the PPP model attached to government hospitals. The establishment of National Medical Commission (NMC) aims to address the skill gaps but more clarity on increasing UG and PG seats should be brought in," Dr Moopen said.

The government should give a boost to digital healthcare to increase accessibility, The National Digital Health Blueprint (NDHB) is a right step in this direction. There needs to be further action and investment for developing infrastructure for electronic health records, for data portability, privacy and security. Telemedicine connectivity between the primary health centers, taluk hospitals, district hospitals and medical colleges must be increased to provide expert opinion in the peripheral centers.

"Compulsory rural service for two years after MBBS, and higher pay scales for PG doctors and other para medical graduates should be rolled out to get more doctors to the rural areas," said Dr Moopen.

"Increased spending on education is needed to bring in more standardisation as there is a need to have a centralised database, which will benefit the universities and education institutions. Teacher training/up skilling should be mandatorily linked with respective industry for teaching as well as non-teaching staff for two way communication and coordination for need versus deliverables. Like the 2 per cent mandatory spending on CSR, a certain fixed percentage of profits from corporates have to be spent on research in the respective industry/profession," said Nitin Maniar, Chairman, Bombay College of Pharmacy.

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"Budget will focus on home healthcare services. Other critical aspects to be addressed include good governance, a robust system to procure and supply medicines, devices, as well as a connected health information system," said Dr Alok Roy, Chairman of Medica Group of Hospitals.

Dr GSK Velu, Chairman and Managing Director of Neuberg Diagnostics said "Centre should come up with clear guidelines to enable Public Private Partnership in the diagnostics segment to realise the vision of quality advanced diagnostics at affordable cost with accountability and better clinical outcomes. Investment in diagnostics services sector in Tier-II and Tier-III towns should get similar tax breaks and subsidies like hospitals."

Any ambiguities in GST levied on healthcare services, including diagnostics services, should be avoided, Dr Velu further said. "Tax free spending limits for annual preventive health check to be enhanced to promote preventive medicine and wellness focused health care initiatives," he said.