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Nathealth, PwC release report on funding Indian healthcare

NATHEALTH

To bridge the huge infrastructure gap, India will need much more participation from the private sector and for these conventional modes of healthcare funding will need to be aided by innovative modes funding to improve healthcare investments in India, reveals a NATHEALTH-PwC Report which was released here today at NATEv2017, an annual seminar organized by the Healthcare Federation of India (NATHEALTH).NATHEALTH

The private sector has been involved in building the healthcare infrastructure in the country with active participation from private equity players and increase in FDI investments, the paper says innovative modes of funding are needed to meet the requirements of the healthcare sector which has also been highlighted in recently unveiled New Health Policy 2017 by the government.

The New Health Policy 2017 aims at universal health coverage and affordable quality healthcare services to all.

NATEv2017, an annual seminar organized by the Healthcare Federation of India (NATHEALTH) witnessed the release of the Report on “Funding Indian healthcare; Catalyzing the next wave of growth” by NATHEALTH in association with PwC. The Report was released in the presence of Faggan Singh Kulaste, Minister of State, Ministry of Health and Family Welfare, Government of India.

The Report recommends four scaling innovative modes which should be introduced for funding Indian healthcare. These include Fund of funds such as Pension funds, Investment route through PPP, long term debt. Report bats for financing through pension funds which may provide access to a large pool of money. It also suggested funding through business trust entity like Real Estate Investment Trusts along with bilateral investment treaties.

While underlining the need of huge funding requirements, the Report says the FDI in the sector has been significantly increased in the last three years.

However, healthcare expenditure’s share in GDP remains around 1.6 percent in FY 16 and innovative funding modes would support the target of taking to 2.5 percent 2030. It also highlights the fact that Private Equity Deals are supporting the funding in the sector and value of transactions has increased from 94 million USD in 2011 to 1,275 million USD in 2016 a jump of 13.5 times.

The Report also examines the key challenges the healthcare industry is facing and the opportunities with which Indian Health Care system can overcome these challenges “With a 22 percent shortage of primary health centres (PHCs) and 32 percent shortage of community health centres (CHCs), it is estimated that 50 percent of beneficiaries travel more than 100 km to access quality care. India has only 1.1 beds per 1,000 populations in India compared to the world average of 2.7. Most physicians are located in urban areas, resulting in significant access issues in the rural regions.”

On the occasion, Dr. Rana Mehta, Partner and Leader, Healthcare PwC India, said “Access to capital has been one of the biggest roadblocks to the growth of the Indian healthcare sector. Today, the Indian government spends only about 1.5 percent of its GDP on healthcare, which is among the lowest globally for any country. Along with building highways, firing up our power plants and ensuring there is a roof over every Indian’s head, there is a need to focus on the healthcare needs of the country.”

“While the opportunity for improvement of Health services in India as well as globally is huge, for it to fall into the right place the government and the entire healthcare ecosystem will have to work together even as they compete on other fronts so that the benefits percolate to the segment which most requires it. Promotional government policies such as New Health Policy and adequate regulatory regimes would support scaling up the healthcare sector,” said secretary general NATHEALTH, Anjan Bose.

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