No Money for Health
PUBLIC HEALTHCARE SPENDS WILL REMAIN LOW EVEN THOUGH THE NEEDS OF RURAL INDIA ARE A NEW FOCUS
THE ALLOCATION FOR HEALTHCARE IN Budget 2020-21 was disheartening—at Rs 67,484 crore, it’s a modest 5.7 per cent increase over the revised estimate of Rs 63,830 crore in the previous year. The allocation, given the estimated nominal GDP growth of 10 per cent, will mean a fall in public health expenditure as a percentage of GDP. Healthcare inflation in India is currently between 14 and 16 per cent and, considering the measly increase in budgetary allocation, public health expenditure is likely to stay under 1.5 per cent of GDP—a far cry from the targeted 2.5 per cent by 2025. At 1.3 per cent, India’s public sector spend in healthcare lags behind its neighbours Bhutan (2.5 per cent) and Sri Lanka (1.6 per cent). However, sub-strategies within the allocations point to a sharper focus on rural areas with unmet medical needs.
The Ayushman Bharat Pradhan Mantri Jan Arogya Yojana (AB-PMJAY), billed as the world’s largest governmentfunded scheme, is to be utilised to create bed infrastructure by setting up more hospitals in Tier II and Tier III cities under the public-private partnership (PPP) mode. For this, it proposes viability gap funding for setting up hospitals in 112 aspirational districts with no empanelled hospitals under the AB-PMJAY. “This is a commendable move,” says Dr G.S. Rao, managing director, Yashoda Hospitals Group, Hyderabad. “However, without adequate equipment and medical personnel to render quality care, these hospitals will only exist as empty shells. The government must walk the talk on the proposed model of increased reach of state-run facilities for the common man in order to restore their trust in the quality of care that is provided at these facilities.” Proceeds, about Rs 4,000 crore, from the proposed cess on medical devices will be used for funding these hospitals. This, while half of last year’s allocation of Rs 6, 400 crore for the same scheme remains unutilised.
“States with better health systems and prior experience of implementing such schemes are doing better,” says Sakthivel Selvaraj, director, economics, finance and planning, Public Health Foundation of India. While this is a step towards the government’s vision of universal health coverage, the amount earmarked for the task is insufficient and is bound to result in major delays in payments and be unviable for any insurance company to participate in.
An additional health cess of 5 per cent on import of medical equipment is a dampener in a country that imports over 80 per cent of its medical devices. Coupled with a customs duty of 7.5 per cent, this will make imported devices very expensive. The health industry’s plea is that the government should at least consider exemptions on medical equipment not made in India. “Infrastructure status, which has been the industry’s demand, has not been accorded,” says Vikram Vuppala, CEO, NephroPlus. ■
1.3% INDIA’S EXPENDITURE ON HEALTH AS PERCENTAGE OF GDP
112 INDIAN DISTRICTS WITH NO EMPANELLED HOSPITALS UNDER THE AB-PMJAY
80% OF INDIA’S MEDICAL DEVICES ARE IMPORTS