Dr Prathap C Reddy
chairman, Apollo Hospitals Enterprise Ltd
India's healthcare industry is at a crucial crossroads today. While we continue to chart a course towards modernity and economic development, 40% of Indians remain deprived of the benefits of modern healthcare. In 2011, the country had the dubious distinction of overseeing the highest number of deaths of under-five children in the world. While the country has made admirable progress on many healthcare parameters, the per-capita government expenditure on health is an abysmal $15, compared to the global average of $517.
The challenges to universal access to healthcare, or to use the government's axiom of "health for all" remains four fold – creating infrastructure to reduce bed shortages, training and upskilling of the healthcare workforce, accessibility to a health system that is contemporary and technologically advanced and a paradigm shift from curative to preventive medicine to tackle the rising disease burden of non-communicable diseases (NCD's).
The government, some months ago announced its intention to increase the health spend to 2.5% of GDP, up from 1% now, by the end of 12th will this money be spent? I believe the focus of this increased spending should be on the four challenges enumerated above.
The initial steps taken by the new government are encouraging. The recent Union Budget was very constructive and pointed the country in the right direction. I, like so many Indians, have high hopes for the future, considering the impeccable reformist credentials and out-of-box thinking of our Prime Minister and his team. Appreciably, the budget singled out capacity creation in health and education as major thrust areas. I commend the government for its resolve to give priority to free drug service and free diagnosis service to move towards "health for all." But I believe the interests of the healthcare sector would be best served by drastic surgery, not piecemeal reforms.
On health infrastructure, the statistics are dire. The US has 1 bed for every 350 patients while for Japan the ratio is 1 for 85. In contrast, India has 1 bed for every 1,050 patients. To match the bed availability to the standards of more developed nations, India needs to add an additional 100,000 beds in this decade.
By some estimates, creating this additional capacity would cost the country over $50 billion. Therefore, the need of the hour is to create an enabling environment where such investments would be possible both through government spending and private investments in healthcare.
One way of increasing spending in health infrastructure is through innovative private-public-people (PPP) partnerships. While an appropriate model for partnerships at the primary, secondary and tertiary levels still eludes us, I am confident that the work being put in by the government and the private sector will help create a blueprint for such partnerships to create infrastructure for the future. Similarly, the recently announced, Real Estate Investment Trusts (REITs) hold the potential to be a game changer in terms of investments into healthcare projects through private investments.
Thirdly, hospitals have long-gestation periods, which need long-term loan periods to the tune of 7 to 15 years to be set up. The government needs to grant the healthcare sector industry status on an urgent basis to help it secure long-term loans on low interest rates. We believe that such a step will provide the right impetus to help fund investments in the creation of health infrastructure at all levels. Lastly, incentivising the creation of health infrastructure in Tier-II and III cities is a must. The government has provided tax breaks for such projects and may be needs to extend the benefits to smaller hospital projects that come up in such parts of the country.
Healthcare is also one of the largest employers in the country. In India, millions of youth need to be trained to enter the healthcare industry to address the acute shortage of manpower. We need to accelerate training courses and upgrade health skills across the board. This will give gainful employment, improve accessibility and develop better healthcare for all. At the same time, the government should focus on increasing the supply of human resources for healthcare. We need hundreds of more colleges and training institutes to produce doctors, dentists, nurses and paramedics. This will help tide over the current human resource crunch faced at all levels of the healthcare value chain.
Currently, over two-third of all healthcare spend in India comes out of the pocket of patients. This is a huge burden on people seeking treatment. Many slip into poverty paying for medical costs or become heavily indebted. The only way to reverse this situation and improve accessibility to quality healthcare is through health insurance for employees of the organised sector and inexpensive health plans for the poor. The current tax exemption limit of Rs 15,000 for medical insurance premium has remained unchanged since 1999. It needs to be increased to at least Rs 100,000. This way, people can have full coverage for themselves, their families and elders.
The Indian healthcare industry is expected to grow at a CAGR of 15-20% over the next decade. The Indian government should facilitate this process like governments of Singapore, Thailand and Malaysia have done for their own healthcare players. This momentum will help India to attract investments in healthcare and also bring in the much-needed foreign exchange through medical value travel. The success of healthcare in India will decide the destiny of our country. For a healthy workforce will be critical for India to take its rightful place in the comity of nations.