Considering the mandate the BJP received, it becomes imperative for the new government to deliver on its promises. The expectations are high from the new regime as the saffron poster-boy has taken charge of the country at a very challenging time.
With many challenges in the row, a key one this government will be facing is: Healthcare. While World Health Organisation’s 2000 World Health Report ranked India 112 out of 190 countries, the key questions in Modi’s mind would be like: How to provide healthcare to all? What can be done to balance the reach of healthcare to rural and urban masses? What will be the major roadblocks in achieving this? And many more.
– The amount of public fund that India spends on healthcare is abysmally low compared to other emerging economies. India currently spends only 1.2 percent of its GDP on health care which is the lowest of the group of emerging economies that includes Brazil, Russia, China and South Africa, called the BRICS. Over 74 percent of the expenditure on health comes from the private sector. As a result, large numbers of people have to incur heavy out-of-pocket expenditures which further lead to increase in financial burden on the poor sections of Indian society. If truth be told, expensive healthcare pushes large swathes of the population into poverty. The High Level Expert Group of Universal Health (HLEG) report, however, had recommended an increase in public expenditure on health from 1.2 percent of GDP currently to 2.1 per cent of GDP by the end of 12th Five-Year Plan.
As now it is a high time when we all are eagerly waiting for the budget to come, Healthtechnology.in, interacts with a handful of leading stakeholders in the health sector to find out their expectations, wishes and requests from the new government,
Here are the excerpts
Dr.Ramakanta Panda, VC, MD, Asian Heart Institute
“Healthcare is not a standalone subject. It has umbilical connections to sanitation, education, provision of clean drinking water and moving our citizens out of abject poverty and consequent malnutrition. This budget, I would be very happy to see the PM’s vision of setting up 111 million toilets across India by 2019- move forward.
An Open Defecation Free (ODF) India is the need of the hour. India has the largest number of people, 597 million, according to the World Health Organization and the United Nations Children’s Fund, that defecate in the open. People in 67% of households in rural India practise open defecation according to the 2011 Census. In urban areas, those in 13% of the households do so. Open defecation fosters poor hygiene, is unsafe (apart from being undignified) for women, poses health challenges, and also results in loss of productivity. This is directly linked to the high incidence of diseases, infections and infant mortality in India. This has to change first. This is the seed of universal healthcare. Other important things on the wish list would be infrastructure status to hospitals in inaccessible areas, allowing doctors from abroad to settle & practice in India, allowing private hospitals to impart Post Graduation to doctors and streamlining the cost of medical education in the country.
Gautam Khanna, CEO, P. D. Hinduja Hospital & Medical Research Centre, Mumbai
The need of the hour is to establish India as the global hub for quality healthcare and medical technology. There are four key areas which need actions in the upcoming health budget: Customs Duty, Service Tax, Commitment to Capacity Building, PPP.
About 70% of medical devices are currently imported. Import duties on some machines, equipment, reagents, diagnostic kits can reach as high as 26%. We urge the government to reduce import duties to single digit so that these imported lifesaving drugs and advanced medical equipment become affordable to all.
A complete waiver of service tax will enable charitable hospitals to add better and more cost effective healthcare ecosystems.
Currently there is a short fall of 2 million doctors and 4 million nurses. By 2025, total demand for new jobs will rise to 15 to 20 million health care professionals. Hence, we request the government to focus on medical education and training to provide a sustained supply of skilled medical professionals at the right places. Investments in training and specialized programs for Allied Health professionals could address the current talent supply crunch in the country.
Healthcare funding is another major concern which can be addressed through strategic PPP’s. Today, 75% of Indian citizens are without a health insurance. 58% percent of total health expenditure is out-of-pocket. So there’s an urgent need for ‘accessible, affordable and quality’ healthcare for all, for which the Government should extend associations with private institutions of healthcare delivery. The Government could put in place, a public private partnership model for healthcare, which could involve subsidies in drugs, therapies and procedures, and cost efficient and effective health care delivery. There can be a special incentives for PPP with Not for Profit / Charity Hospitals to extend the private hospital care to Government Hospitals to benefit the masses.
Jagannath, M.S., Chief Financial Officer, Columbia Asia Hospitals Pvt Ltd
The private sector has been instrumental in providing healthcare services, with almost 80% of all out-patients, 60% of all inpatient care being handled by the private sector. Hence the role of private cannot be underestimated going forward.
Healthcare services should also be viewed from the perspectives of Access/Availability, Affordability and Quality. The root cause of these issues is the high cost for providing healthcare services which results in long payback periods and hence limiting the investment. The limited insurance coverage also leads to inability for the healthcare buyer to pay for services.
Based on above, a few expectations from the budgets:
Lowering of the cost of setting up healthcare facilities via tax incentives by increasing the tax exemption period. Increasing the depreciation rates for Radiology and Lab equipment.
Lowering of the cost of running healthcare facilities .The exemption or lowering of Import Duty / Customs Duty on life saving medical devices, consumables used with these devices and spare parts.
Increase in the limit of exemption for premiums under health insurance cover because this will encourage people to buy sufficient health coverage for their family.
V.S Venkatesh, Chief Executive Officer, Apollo White Dental
“Indian dental care services market, dentists and dental ancillary services — was approximately a US$740 million market in 2010 and is expected to reach US$1.3 billion by 2015 at a compound annual growth rate of 12%. To provide a spur to Prime Minister Modi’s ambitious ‘Make in India’ plan, Budget 2015 needs to heavily focus on healthcare. Currently, more than 74 per cent of the healthcare infrastructure investment is by the private sector. Industry also wants tax holiday benefit to hospitals set up in urban areas. The interim budget in July 2014 had given ample thrust to the sector with key announcements like setting up of four more AIIIMs, 15 model rural health research centres, a proposal to add 12 government medical colleges, two National Institutes of Ageing at AIIMS, New Delhi, and Madras Medical College, Chennai, a national level research and a referral institute for higher dental studies and e-visas that could aid medical tourism. E Visas and VOA should extend to African countries and EU countries where there is huge waiting period by NHS. Oral Hygiene awareness should be increased, Insurance should include Dental Surgeries and Dental Treatments, while increase in the GDP allocation on healthcare will help the government achieve its vision of universal healthcare and reduce out-of-pocket spending for a common man.”
Dr. G.S.K Velu- Founder and Managing Director, Trivitron Group of Companies
“This year, while the Honourable Prime Minister is keen to have a ‘Make in India’ Policy and has announced 100 % FDI for Medical Devices, unfortunately, the ground level changes are required for making India Import independent in around10 years from now . India is moving from 50% Import Dependency 5 years ago to over 75% currently and if corrective steps are not taken, we will soon be 90% Import Dependent in this 35,000 crs Medical Devices Industry. Care should be taken to keep the Domestic companies of Indian Origin viable and sustainable to ensure Access and Affordability to larger section of Indian Population. The Market of Medical Devices is estimated at over 35, 000 crore rupees and there is a huge manufacturing potential for Import Substitution for catering to Domestic demand as well as tap the huge potential of the Export Market (as done by China, Brazil, Turkey, Malaysia etc. ). In the upcoming budget this year, we are expecting the government to look at medical technology as a vital sector and promote Indian manufacturing by removing Inverse Duty Structure, Providing fiscal incentives for local innovation and manufacturing initiatives, Offer proper incentives for Exports from India and creating a Medical Devices unit under Department of Pharmaceuticals to promote local innovation/ manufacturing in this import dependent industry”.
Dr.Kaberi Banerjee, IVF and Infertility Specialist, Advance Fertility and Gynaecology Centre, New Delhi
“The Indian Government currently allocates only 1% of the annual GDP to public health which is a cause of great concern. The percentage is lesser than most of our neighbouring countries. Even Afghanistan and Sierra Leone allocate a better percentage of its GDP to public health as compared to India. If the budget does not lay emphasis on basic healthcare and infrastructure, then in my opinion we are definitely going on the wrong path.
In the 2015 budget, a special emphasis needs to be given to the health of women of the country. If the women of the house are healthy, they can in turn ensure healthy living of the entire family. Thus, funds should be allocated keeping the women’s health in mind.
Reproductive health is another aspect which is not given much consideration. It includes family planning for those who have more than 2 children and fertility treatment for those who are unable to bear children. Both can have serious emotional and social consequences and thus, need to be properly looked into. The Government should ensure that the right to live a healthy life is fulfilled for all.
Amol Naikawadi, Preventive Healthcare Specialist and JMD, Indus Health Plus
“The 100 % FDI in a separate policy for medical devices is a positive move by the new government. The move will further boost the investment climate in India. Since the government is focusing on prevention ever since their election manifesto was printed, PM and Govt together are focused towards working on prevention as priority. The sectorial allocation for health needs should be increased from current 1.69% of GDP to at least 7 percent of GDP which would be in line with other developing economies of the world. However the current government has given indications to reduce public spending on healthcare. A reduction in sectorial spending from current 1.69 percent of GDP to 1.29 percent is not advisable and will affect several public health assurance spending’s like RSBY ,Arogya Shree schemes etc. The tax exemption on preventive healthcare check-ups should be increased to Rs. 20000 and should be independent of the premium of health insurance.”
- Tax exemption to be made a different category to justify government’s intension. The amount of Rs. 5000 should therefore be increased to Rs. 20000Corporates should also be incentivized for their interest in preventive measures for employees
- Government should make routine health check – up mandatory from the age of 25 years through healthcare programmes
- Need to create personal health records and encourage screening of diseases amongst the population
- Make it mandatory for schools & colleges for initiating health programmes for early screening, promoting positive
Munish Daga, CEO, Remedinet Technologies
“There should be a push towards enabling Out Patient Insurance and the whole Health Insurance focus should move away from being Hospitalization centric to Preventive care centric. So special incentives for regular health check-ups and spends on preventive and primary care are required. This will not only help manage health of the population better but also reduce the burden on the hospital infrastructure in India. Secondly, there needs to be a push to make digital documents (digitally signed) the basis for completing transactions in the health insurance sector. This will push the sector towards digitization and greater efficiency. There could also be a financial incentive for doing so.’’
Dr.Amol Raut, Head, R&D Operations, Gene Support
“Lifestyle of Indian population has changed and has increased the susceptibility of falling prey to lifestyle disorders. In 2013 alone various types of heart diseases contributed to 30% of all deaths. Hence, looking at such a grave situation, from the upcoming budget I hope that government will emphasize significantly on preventive technologies in healthcare which are more helpful in analysing and detecting the ailments well in advance. During the Union budget in 2014 Finance minister called upon member states to intensify efforts towards curbing the burden of non-communicable lifestyle disorders like primarily cardiovascular disease, chronic respiratory disease, diabetes and cancer; genetic testing plays an important role in detecting and anticipating such disorders. Also in 2014 government gave Rs.5000 deduction for preventive healthcare check-up, I hope that genetics testing should be included in this policy. Genetic testing is one of the primary components with regards to preventive healthcare check-up thus leading to a better and genetically upgraded India in the future.”
Dr.GautamSen, Former Member, First Board of Governors, Medical Council of India (2010-2011), Member Task Force for Operationalizing DDU NHAM, MOH FW. And Founder Wellspring Healthcare Pvt. Ltd.
A nation can only achieve its development goals through investment in two fundamental requirements for human development- Education and Health. Through successive Government policies, though this realization was there, it did not match with action, due to various political compulsions and expediency.
In educational field there have been at least some initiatives, though much needs to be done. But in case of health care investment, there has been gradual reduction on health care expenditure rather than increase and whatever investment has gone in various entitlement schemes like RGJY, NRHM, NURHM etc. have become a failure due to mismanagement, misuse or even abuse.
In India, over the years, the total expenditure on health as a percentage of gross domestic product (GDP) has actually decreased from 5 per cent during the post-Independence years to 4.3 per cent in 2000 and 3.7 per cent in 2010, when it should have been the other way round for a nation which has arrived on the world stage. Out of this meagre total expenditure 70% of the cost is being borne as out of pocket expenditure. Indian government has abandoned its citizens to fend for themselves for their health. Any catastrophic illness literally pauperizes the Indian family.
So first expectation from the new Government is that Government must significantly raise its public investment on health and thus reduce out of pocket share of its citizens to a reasonable amount. Government must initiate the process of public private partnership in all aspects of health- from innovative financing to health care delivery, to all sections of people. It has to be a joint effort in our resource constraint country.
And whatever money Government allocates, it should be directed towards setting up a robust, high quality Primary Care and not erecting citadels of tertiary care hospitals like AIIMS and also simultaneously it should set up a mechanism of measuring the desired outcomes, so that money is spent in cost effective way- which is the principle of Accountable Care. Accountable Care Principles have now been accepted world over as a fundamental requirement for Universal Health Coverage.
ShrikantSoman, CEO, Bhatia Hospital
Currently India needs to establish as world class facilitator in quality healthcare and medical technology. The main key areas which need immediate actions in the upcoming health budget are Import Duty, Taxation, PPP, medical education & training.
Government should focus more on medical education and training so as to provide a sustained supply of skilled medical professionals. Right deployment of funds in training and specialized programs could address the current talent supply crunch in the country.
Majority of medical devices in India are currently imported. Import duties on some machines, equipment, and diagnostic kits are very high. We hope that government will reduce import duties considerably so that these imported lifesaving drugs and advanced medical equipment becomes affordable to all. Waiving off service tax will enable charitable hospitals like us to add better and more cost effective healthcare ecosystems.
Inadequate fund in healthcare is another major challenge which can be addressed through planned PPP’s. The Government should create a public private partnership model for healthcare which could be more accessible to all. There are still many Indians without a health insurance. So there is an urgent need for affordable and quality healthcare for which the Government should do more associations with private institutions.
Srinivasan H R, Vice-Chairman and Managing Director, TAKE Solutions
“The three key factors for the IT industry that I would like the budget to address are policies for the growth of the SME sector in IT, focus on R&D investments and manpower development incentives.
Policies to focus on SME growth in the IT sector is vital for both sectorial employment and new innovation which happens more in the SME sector. We need to address the funding of the SME. With challenges such as low asset base access to bank funds, investor regulations and lack of tax incentives make equity funding difficult, firms with sub 50 crore turnover need encouragement and must have special incentives. Larger IT companies should be encouraged to do seed/small funding of these SMEs with appropriate incentives. Most importantly SMEs must be encouraged to bid for Government projects – all projects below 50 crores budget should be reserved for SMEs. Today the eligibility criteria is loaded in favour of bigger firms with large balance sheets. This should go. The future of the IT sector is in the development of SMEs.
Secondly, focus needs to be on development of software products to compete on global scale. The services model of “time and material” is now out-dated and firms need to be encouraged to develop non- linear scalable business models that can compete globally. For this, the below aspects need to actioned.
- Remove ambiguous software product taxation and impart clarity
- R&D incentivization
Lastly, the technology industry is a manpower intensive one that requires constant re-skilling to stay globally relevant. Manpower development expenses need to be incentivised with deferred tax credits. So also recruitment or office establishment from/in rural and semi-rural areas need encouragement
If these incentives are aligned properly – the IT industry can generate twice the current employment in 4-5 years”.
MrinmoyPurkayastha, VP, AltenCalsoft Labs
“The recently rolled out ‘Make in India’ and ‘Digital India’ initiatives of the government have intensified corporate India’s expectations from the upcoming Union Budget 2015-16. With a task of a growth oriented budget, we hope to see increased investment in infrastructure: roads, railways, power, water supply and sanitation – which are the main pain points of SMEs. In most cases, infrastructure development can be accelerated through Public Private Partnerships (PPPs) which is a business model that the Government should make more attractive for businesses.
This coupled with increased spending on vital sectors like primary education and healthcare, will lead to positive growth and prosperity in the long term. One of the biggest challenges for the government is to balance development between the ‘leading’ and ‘lagging’ states in India. This mismatch leads to labour migration to a few cities thereby aggravating power, water, sanitation and hygiene issues, and hampering planned infrastructure development in cities. Balancing and accelerating infrastructure in the ‘laggard/lagging’ states is essential. This would lead to enhancement of productivity of individuals, in turn impacting the economy as a whole.
With an ambitious plan like ‘Digital India’, we do hope the Union Budget 2015-16 will provide investments in India’s technology infrastructure, and a significant amount should be invested in developing a robust network infrastructure across the country to build a foundation for our ‘Digital’ economy. A policy framework for industry and SMEs in particular that encourages innovation and adoption of technology can boost the ‘Make in India’ initiative”.
Vipul Jain, CEO, Advancells
“We have very high hopes from the budget 2015. It is a known fact that the Prime Minister is a strong advocate of new cutting edge medical treatments like stem cell therapies. His meeting with the Japanese stem cells pioneer Mr. Shinaya Yamanka during his trip to Japan in August 2014 only reinforces this fact. We hope that this government will give a much needed push to the medical research industry in the country. Making research grants available to credible private players, without the burden of bureaucracy would top my list. Another aspect where urgent attention of the government is sought is the ease and pace at which therapies under research can be bought to the main stream market so that they can be beneficial the common man’’.
Sameer MaliK, CEO, Southend Fertility & IVF
Implement & promote ‘National PPP Policy Framework for Healthcare’. The private sector over the years has proven to provide better access and quality of healthcare. By partnering with the private sector, the shortage in the healthcare infrastructure can be met fast. Healthcare should also be given special status to encourage higher investment. Import duties on equipment should also be brought down to enable access to better and latest lifesaving or life enhancing technology. Additionally the regulations need to be simplified to, possibly to a single window approach.
Rise healthcare spend should be at least 2.5% – 3% of the GDP in the next two years. The Current spend is 1.2 – 1.5%., which is very low. This should increase to 5% in the long term.
Introduce measures to encourage robust research environment and drug development in the country. The government needs to treat discovery R&D separately and incentivise organisations that are making progress in this area.
There is an urgent need to maintain big data generated through various means like inpatient data and reports generated through a plethora of tests done on the patients. Hence, sops should be provided to encourage implementation & maintenance of Electronic Health Record (EHR). Financial incentives/grants should be provided to the adoptive institutions.
Aditya Gupta, Chairman, Hindustan Wellness
‘’This being new Government’s first full-fledged budget by the Finance Minister, expectations across industries are quite high. Key thrust on improving the healthcare sector with development programmes, emphasis on insurance and enhancement of preventive health care will round up as an ideal budget. A growth-oriented budget, with a focus on preventive healthcare and an overall increase in financial inclusion and consumer awareness are the wish list for this years’ union budget. Preventive Healthcare being a relatively new idea is evolving and must innovatively and creatively face the challenges of lack of access and affordability, health/medical inflation, unavailability of resources to penetrate in all strata of society among other barriers and roadblocks. It is therefore, every Indian’s need to have access to an all-inclusive and quality healthcare system with special emphasis on Preventive Healthcare. We hope the vision and words of Narendra Modi to ”improve consciousness and facilities for better preventive healthcare” to translate into action in this Financial Budget. For consumers, increase in deduction limit of Preventive Health check up on section 80D from Rs 5000 to 20000 for the family will be more realistic and lucrative for middle class. Forthcoming budget should also take steps to remove service tax on health insurance premium. A special emphasis on tele-consultations and tele-medicine, which has also been emphasized by Prime Minister Narendra Modi, will be hugely welcomed by industry; this will help the country to move towards efficient and cost effective healthcare. Innovations across all touch points of healthcare will be harbinger of growth and will help us accomplish our mission of a healthier country; we hope this budget will take strong steps to move in that direction. ‘