Unlike in several other global economies, health care is a state subject in India.
The Centre’s participation is confined to umbrella health programmes such as the National Health Mission. While funding takes place at the state level, the government has often been criticised for spending meagre amounts in this segment.
Keeping this in mind, the Union Budget 2016-17 was a significant one for the health care industry and for the citizens of the country.
As part of his proposals, finance minister Arun Jaitley announced the universal health coverage plan, paving the way for affordable health care access for all.
According to the World Bank data, public health expenditure in India — putting together the Centre’s and states’ contribution— amounted to 1.3% of GDP as of 2013.
While the government is constrained by having to maintain tight fiscal discipline, people continue to pay huge health costs from their pockets and many end up being burdened with debts.
According to the Aon Hewitt Global Medical Trend Rates survey, the gross medical inflation rate in India for 2015 was 13% as against the annual general inflation rate of 7.53%. The rates for the previous year were 12% and 10.71% respectively.
Given this, the Universal Health Scheme coverage, sponsored by the Centre, is the only option available to improve health care access in the country. Moreover, the precedents set by several developed countries are testimony to it.
Though health insurance comes with its own pitfalls, such as increased complexity of health care delivery, we are yet to find a superior system to fix the health care outreach. In the latest Budget, the Centre has announced health protection up to Rs 1 lakh per family and a top-up of up to Rs 30,000 for senior citizens.
While insurance can help manage health care expenditure to an extent, citizens may still have to shell out a substantial amount of money on medicines. Realising this predicament, Jaitley has proposed to increase the number of pharmacies under the Jan Aushadhi Yojana by 3,000 stores during 2016-17. The scheme aims to provide generic medicines at affordable prices to the masses.
Another significant announcement was the proposal to launch a National Dialysis Services Programme. There are approximately 4,950 dialysis centres in India, a majority of which are owned by private players and are concentrated in big towns. Every dialysis session costs about Rs 2,000, amounting to an annual expenditure of more than Rs 3 lakh. Besides, most families have to undertake frequent trips, often over long distances, to access dialysis services, incurring huge travel costs.
To address this situation, the finance minister has proposed to start the dialysis programme funded through a public-private partnership (PPP) model under the National Health Mission. This will bring dialysis services to all district hospitals and the government has also exempted certain parts of dialysis equipment from import duties, which currently amount to at least 21% of the costs.
Under the PPP model, private partners can provide soft infrastructure, which includes medical personnel and staff. In addition to this, they can step in for technological assessment, and upgrade of facilities.
The private health care providers can be a part of joint ventures with the government agencies to share the risks and rewards of the arrangements.
For the longest time, India’s health care industry has been demanding universal health coverage to improve medical service delivery to the citizens. The Budget has taken steps to ensure equitable health access to all. Quality health care, however, is a work in progress. The private sector can, at all levels, partner the government to create a healthier nation.
Suneeta Reddy is managing director, Apollo Hospitals Enterprise Limited. The views expressed are personal.