Better healthcare critical for economic growth
India needs to increase public spending on health and focus on infrastructure and capacity-building in the sectoranalysis Updated: Apr 28, 2016 11:04 IST
The cornerstone of a Shining India must be the healthcare of the nation. Our country’s demographic dividend can accrue only if we accord priority to healthcare. A good place to begin would be to enhance public expenditure. The country needs to augment financial outlay, in line with the stated objective to increase healthcare spends from the current 1.2% of GDP to 2.5%. Public expenditure on health has been declining, a trend that must be reversed. Several studies, including findings from the World Bank and the World Health Organisation, show that greater public spending on health has a positive impact on GDP growth.
The IMS Institute’s study on healthcare access in India has identified the elements that constitute access to healthcare as: the proximity of a healthcare facility; the capacity and functionality of that facility; and the quality of the resources providing care. These elements come ahead of the price of treatment or medicines. The study across 12 states showed that two thirds of our rural population travels over five km to reach an in-patient facility and 85% of respondents would use public facilities if they were close and offered quality treatment. The study shows that the real barrier to access is the inability to pay out-of-pocket and the lack of insurance cover.
A viable public healthcare model requires a combination of financing and non-financing measures. Besides more public expenditure on healthcare, we need focus on infrastructure and capacity building as well as more doctors and nurses. State governments could procure medicines in bulk — following the example of the Tamil Nadu Medical Services Corporation, where an efficient mechanism provides access to medicines at affordable prices.
The long-term solution to India’s healthcare challenges requires a holistic approach and a critical evaluation of existing systems. We need sustainable policy solutions to address financing, infrastructure and human resource challenges. While we are hopeful that the government will accord greater priority to healthcare, the pharmaceutical industry remains committed to fulfilling its role in helping to further the nation’s healthcare objectives.
The government must increase budget allocation for healthcare to 2.5% over the next two years. In this year’s Union budget, the finance minister announced an additional duty on tobacco and alcohol products of between 10 to 15%. A first step could be to direct the collections from the duty towards health expenditure. That can help reduce the expenses that people have to bear.
Indeed, many healthcare indices look much better today, compared with 50 years ago. Tuberculosis treatment success rate has improved from 20% in 1995 to 88% in 2011. Malaria mortality rates fell by 47% globally since 2000 and AIDS-related deaths have fallen by 35% since the peak in 2005. Today, we have won the war against polio and leprosy. However, much still remains to be done.
Shailesh Ayyangar is managing director, Sanofi India. The views expressed are personal