Business Today

Healthcare needs long-term financing and better infrastructure: Om Manchanda

As it is considered a social sector, the healthcare sector has been on the lower edge in terms of Budget allocation.

Om Manchanda | January 20, 2017 | Updated 19:50 IST
Healthcare needs long-term financing, better infrastructure and insurance coverage

The healthcare sector in India has undergone immense changes since Independence, while improving the quality of healthcare delivery. Since then, it has become one of India's largest sectors - both in terms of revenue and employment. In spite of the overall achievement in the quality of healthcare services, a lot still needs to be done for the country to ensure that optimal healthcare services are available to all.

As it is considered a social sector, the healthcare sector has been on the lower edge in terms of Budget allocation. Furthermore, the Indian states have also been struggling to utilize and appropriately channelize the allocated healthcare budget effectively.

The diagnostic industry has been witnessing immense progress in innovative competencies and credibility in India. With health issues rising by the day in India, the pressure on diagnostic healthcare has increased, forcing a number of such platforms to increase their presence around the country. Further, technological advancements and higher efficiency systems are taking the market to new heights. The size of the diagnostics industry was around Rs. 377 billion in 2014-2015 and will continue to grow by a CAGR of 16%-17% over the next two years, to cross Rs 600 billion by 2017-2018. India's healthcare expenditure is expected to continually grow in future, primarily due to mounting dual disease burden, rising disposable income, increasing healthcare awareness, changing demographics and increasing population.

Although the government proclaimed multiple initiatives under the Union Budget 2016-17 to strengthen the healthcare delivery services and to provide insurance coverage to the economically weaker sections, many stones were left unturned. The long awaited demand for assigning "infrastructure status" to the healthcare sector remains unanswered. Effective policies and robust framework are required to increase the national spend on healthcare, to improve access to basic primary and secondary healthcare. A thorough plan is needed to improve the utilisation of allocated budget.

Clinical Establishments are indirectly being subject to levy of service tax for use of various services which in fact increase the cost of treatment of medical services. Scope of healthcare support services should be expanded to include pathological services, dermatology, infrastructure and logistics support, in order to reduce the input tax. Further, to encourage preventive care, the preventive health check-ups could be aided with increase in tax exemption to INR 15,000 to INR 20,000 from the current threshold of INR 5,000. Tax incentives for securing accreditation is also expected.

Lowering slabs of customs and other excise duty will be helpful as it helps the healthcare sector to maintain quality and provide quality services, while maintaining their prices. This will ultimately help the private sector to further upgrade their services or provide same services at affordable prices.  Further, technology is changing the landscape of every sector today and the diagnostic sector is no different.  New innovations and technologies are entering the sector aimed at improving the customer service. Impetus from the Government encouraging and supporting the entry and usage of latest technologies will be helpful for the sector.

With the twilight of 2016, the government clarified that its focus remains the maternal healthcare and elderly healthcare in 2017. New national scheme for pregnant women and senior citizens has been announced. However, the need of the hour is the hearty implementation of all the policies and schemes for the advancement of healthcare service delivery.

Healthcare in India deserves significant attention in terms of long-term financing, better infrastructure and delivery, and insurance coverage to improve services across the four pillars of healthcare - affordability, accessibility, availability and acceptability.

(The article has been authored by Dr. Om Manchanda, CEO, Dr Lal PathLabs Limited)


  • Print
A    A   A