The healthcare ecosystem has seen significant evolution in the past few years both in terms of services as well as technology. The sector holds much promise with India Brand Equity Foundation (IBEF)-projected numbers suggesting its expected reach to be to the tune of $372 billion by 2022 from $110 billion in 2016.
After a stunning, pan-India mandate that brings back the incumbent government into power for the next five-year term, we can expect many reforms across sectors, chief of which I hope will be the healthcare sector. 2018 was a landmark year setting a vision for India's healthcare agenda. The expectation this year with the same government is more on the allocation and implementation of the grand dream sold in 2018.
While a good start is half the job done, we still have a long road ahead in meeting India's healthcare needs efficiently. According to PRS Legislative Research, the public health expenditure in India has remained constant at approximately 1.3 per cent of the GDP between 2008 and 2015, only to increase marginally to 1.4 per cent in 2016-17. This is less than the world average of 6 per cent. The National Health Policy, 2017 proposes to increase this to 2.5 per cent of GDP by 2025.
Right direction, but slow paced
Assessing how well-positioned we are as a country to meet our healthcare requirements in the present as well as the future will need a reality check on what has worked and what needs attention. Some of government contributions that stood out to make a difference are below:
i) Ayushman Bharat
The Modi government's flagship program, Ayushman Bharat, is one of the biggest initiatives that we have witnessed unfolding in the healthcare sector. It holds the promise of good health for half a billion people of this country. The curve of influence of the world's largest government-funded healthcare policy has started by having an understandably slow rise, but it has set the ball rolling in the right direction since access to healthcare is a benefit that every citizen should have.
With Rs 63,298.12 crore allocated to the sector this year, the government has once again hiked India's health spending recently.
ii) Evolution in access and delivery
Delivery of healthcare has increased with the mushrooming of small town hospitals and chains going beyond metros and into tier-2 cities.
A recent report by consultancy PwC, called 'The Future of India: The Winning Leap', says roughly 100,000 hospital beds have been added annually over the last decade. Given India's size, the population health management needs of the country require this rate to be increased to keep pace with demand and the continued government thrust on healthcare in the past few years is reigniting and nudging growth in the right direction.
iii) Better maternity benefits
The Maternity Benefit Amendment Act that came out in 2017 has increased the duration of paid maternity leave available for women employees from 12 weeks to 26 weeks. As per the new legislation, all companies that have 50 employees or 30 women employees, whichever is lower, will have to also provide facilities for new mothers to be able to work from home and be provided creches in the workplace.
The bill is expected to benefit around 1.8 million working women. This puts India proudly ahead of the rest of the world in terms of laws and financing in relation to maternity leave.
iv) Evolution in healthcare policies
The National Health Policy, 2017 that takes the private sector as strategic partners aims to achieve good health and well-being by bringing universal access to good quality and affordable healthcare services.
The National Mental Health Policy, India's first mental health action plan is another commendable move to help promote mental health, prevent mental illness and enable affordable treatment and recovery while working to spread awareness and de-stigmatise the issue. According to WHO projections, about 20 per cent of India's population would suffer from some form of mental illness by 2020 and the government's intervention and attention were long overdue.
Wanting for more
As per PRS Legislative Research, the total health expenditure as a percentage of GDP is estimated at 3.9 per cent through both public and private sector. Out of this total expenditure, currently about one-third (30 per cent) is through the contribution of the public sector. It is important to note here that this contribution is low in comparison to other developing and developed countries; Brazil (46 per cent), China (56 per cent), Indonesia (39 per cent), USA (48 per cent), and UK (83 per cent).
When the government becomes the largest payer in the market for healthcare services, it provides a large fillip to the entire healthcare ecosystem including hospitals, OPD, wellness, medical technology, etc. The supply of healthcare services gains more prominence attracting more investors and better offerings from the healthcare delivery industry.
This also stands to bring the cost of services down, given the government's negotiating power when it becomes the highest payer.
To continue on the growth trajectory
A few of the areas which need the government's focus and investment to further the growth of this sector are:
The imminent transition towards the digitisation of healthcare data requires attention and government focus. To manage such a large population, government will require wide scale adoption of automation for data transfers between hospitals and payers and progress management, etc.
The government's intervention for the regulation of this data and responsible handling are a must.
ii) Operational efficiency
Expanding into tier-II and III cities with asset-light strategies to push up demand with a more robust offering of clinical services, reduction in operating costs and attention to the clinical talent supply-chain will drive efficiencies.
iii) Regulating insurance intermediaries
The healthcare financing model needs sprucing up by doing away with the restrictions on intermediaries being eliminated or restricted to ensure better care for the insured.
A robust healthcare ecosystem with more government intervention and investment will help ensure sustainability for the sector; both in terms of demand and quality supply. We can expect 2019 to be the year of tech advancement in Indian Healthcare sector with a sharp focus on accessibility and affordability level, interesting innovation in the healthcare space and achieving better patient outcomes.
(The author is Founder & CEO of HealthAssure)