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What Healthcare sector is expecting from Union Budget 2017

India has one of the lowest health expenditure ratios in the world in terms of the government spending on health as a percent of GDP. This is lower than that of the low income countries as well. India is a lower middle income country as per the World Bank classification.

Dr. Nupur Pavan Bang   New Delhi     Last Updated: January 30, 2017  | 19:33 IST
What Healthcare sector is expecting from Union Budget 2017

It takes a healthy nation to build a wealthy nation. Focus on ease of doing business, creating jobs, building houses, putting more disposable income in the hands of people are all appreciated and needed. Yet, the importance of health cannot be undermined because all of the above will be meaningful only when the people who reap the benefits of such reforms are healthy enough to enjoy the benefits. Healthy citizens also improve the efficiency and effectiveness in the economy, thereby contributing much more to the nation.

India has one of the lowest health expenditure ratios in the world in terms of the government spending on health as a percent of GDP. This is lower than that of the low income countries as well. India is a lower middle income country as per the World Bank classification. Similarly, India also has one of the highest out-of-pocket health expenditure in the world, which is higher than the out-of-pocket health expenditure (as a % of total expenditure on health) of the lower income, lower-middle income, as well as the middle income countries (see Exhibit, Data Source: World Development Indicators).

The author asked a few renowned doctors in the city of Hyderabad, one of the major healthcare hubs of the country, regarding their expectation from the forthcoming union budget.

Budget Allocation

Dr. V.P. Jyotsna, Obstetrician, Expert in Gynecological Endoscopy and High Risk Pregnancy, the Birthplace, says that the first step should be to substantially increase the budget for healthcare. "In the last two budgets, while the absolute amounts have gone up, as a percentage of GDP, the expenditure has remained more or less stagnant", she said.
Spending of the budget effectively.

Dr Lavanya Kannaiyan, Consultant Paediatric Surgeon, Continental Hospital, says that even the budget that is allocated is poorly spent. "There are hospitals which build the infrastructure with the budget allocated to them but not enough thought goes into aspects like sanitation and staffing. While the number of beds increases, the care providers do not. The backbone of any health system is not the doctors but the nursing staff and technicians".

Dr. Jyotsna suggested that all Community Health Centres (CHCs) in the country should be upgraded. She said that every small scale hospital, nursing home and clinic should have a basic level of facilities. "There are instances of a cesarean being undertaken without an Ambu bag and resuscitation kit for emergency. Accountability mechanism in the event of negligence or procedural lapses has to go up".

Dr. Lavanya also points out that the number of government funded institutions has not kept pace with the rising population. "The backbone of our health infrastructure dates to the colonial period and the immediate post-independence period. There is only one government children's hospital per state while ideally there should be one or more per district", she said.


Dr Tarjani Vivek Dave, Consultant, Oculoplasty, Ocular Oncology, Orbit, Facial Aesthetics, L V Prasad Eye Institute adds that access to healthcare in India is severely limited by inadequate infrastructure. "Inadequacy is not only in terms of equipment but also manpower", she said.

Dr. Jyotsna felt that the budget should focus on specific allocation for continuous updating of skills and knowledge not just for doctors but nurses and paramedical workers too. "We need more well trained nurses and paramedical staff. Improving medical education for all categories of medical staff will probably help the country a generation later, but it must be undertaken now!" Dr. Tarjani further emphasized the need for improvement in the quality of medical care that's provided. "Continuous medical education and certification of doctors is definitely the need of the hour", she added.

Dr. Nitasha Bagga, Paediatrician and Neonatologist, Rainbow Children's Hospitals said, "Medical teaching is the most important aspect to nurturing a good healthcare system. If the government is serious about improving healthcare in India, it must strengthen the government hospitals and the medical colleges, in terms of equipment, trained doctors and retaining trained doctors and staff".

Dr. Jyotsna added that manpower was needed not just for providing healthcare services, but for analytics, administration and increasing the reach of services! Budget allocations should keep all these in mind. To attract good talent, the hospitals need to pay at par with the market rates.

Urban Rural Divide

Dr Lavanya said, "Most health professionals are in the urban centres. They shun rural areas because of the poor pay and hardships. Doctors must be incentivized to serve in remote areas. Government doctors' pay has not increased proportionally compared to inflation".

Dr. Jyotsna adds that by the time Doctors finish their post-graduation, they have a family. Accepting a rural posting, where access to good schools and basic facilities may not be available, is a difficult proposition. The only way out is for the rural areas to be well connected and sanitary conditions to improve. And maybe fixed period contract jobs where doctors have to show up actually and not just sign attendance once a week. That way doctors wouldn't mind a temporary stint for a few months in rotation.    
In Australia and USA doctors posted in rural areas get paid a lot more than their urban colleagues. The Christian mission hospitals pay for the children's education at some of the best boarding schools.
Dr. Nitasha said that if government hospitals or health centers, especially in the rural areas, have ambulances with transport ventilators, it will be very useful for the rural population. The sick people can be taken to the nearest well equipped hospital with minimum casualty.

Dr. Saumya Dikshit, Radiologist, Tesla Diagnostics, said that awareness about healthcare is the key to improving healthcare in India, especially in rural and suburban areas.

Rising costs

Rising healthcare costs is a big challenge for the patients. Dr. Saumya said, "a significant cost is the cost of medical equipment and implants which ultimately get transferred to the patients. Most of the medical equipment and implants are manufactured abroad. There should be a huge incentive, either in terms of taxes, subsidies or grants to promote "Make in India" of medical devices".

She adds that generic medicines are highly underrated at times and doctors sometime prescribe expensive imported medicines. Even though in the previous budget, it was announced that the government would open pharmacies to enable the public to access cheaper drugs, the effect has been negligible.

Even though the Indian pharma industry is a large player in the generics business, they still need to step up the value chain and endeavor to be a significant player in drugs discovery. The budget should encourage the pharma companies to increase their efforts towards research activities.

Dr. Nitasha points out that while there are many state and centre sponsored health insurance schemes, there are still many poor people who are either not covered or are not aware of the schemes. As a result, they are devoid of the treatment. Each and every Indian should have an equal right to be treated irrespective of their social and economic standing. Till the gap between the private and government sector remains as wide as it is now, in terms of quality of treatment, health cannot be universal. A universal health cover must be worked out by the government sooner rather than later!

Concluding remarks

All the five doctors that the author spoke to also concluded that in the end every penny that goes into laying roads, highways, sanitation, clean drinking water and food subsidies, contribute to improving healthcare in some way or the other.
Sufficient allocation of funds and its effective utilization; impetus to education and 'effective' training; investments in quality assurance; building infrastructure; containing rising costs and bridging the urban rural divide should be foundations on which Mr. Jaitley should base the health budget for a healthy India!

The author is an Associate Director with the Thomas Schmidheiny Centre for Family Enterprise at the Indian School of Business. She was the Head of Analytics at the Insurance Information Bureau of India prior to her current role.


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