DOES MONEY MATTER?
Indiais facing rising dual diseases burden of both communicable and in the form of and noncommunicable diseases (NCDs). Industry estimates that the growing burden of NCDs is estimated to lead to a loss of $6.2 trillion by 2030—nearly three times of India’s current GDP. On one hand demand-supply gap in healthcare service delivery is rising and on the other hand overall spending in the healthcare sector is merely 4.5 percent of GDP of which the government contributes only 1.6 percent. To meet the challenges at multiple fronts including healthcare infrastructure and services and to achieve universal health coverage, India needs at least 8 percent of overall spending in the sector.
Big question is- Are we moving in right direction? Answer is-Yes. Going buy the Budget 2017-18 announcements and recently unveiled New Health Policy (NHP) 2017, the government has sent clear signals that it wants to make
universal access to health a reality. More laudable is the focus on engaging the healthcare industry in several schemes and programmes with different models including Private Public Participation (PPP). The industry has responded positively and gears up to take the healthcare sector to the next level.
With new policy in place the private sector will go for an increased collaboration with the government for operationalising health and wellness centres across the country. It is now the implementation that holds the key to its success.
Implementation of successful PPP Projects
A lot has been said about PPP projects and there are many success stories in the country. Dr Arvind Lal, Chairman, Lal PathLabs and President NATHEALTH said that to meet the challenges of higher spending in the healthcare sector, PPP projects required to scaled up and implemented across the country and the government needs to encourage successful projects.
"Presently, 70 percent patients are being taken care of by private sector. In view of huge demandsupply gap, India needs to spend nearly 8 percent of GDP in healthcare sector, whereas
the government spends 1.6 percent and 3.5 is being spent by private sector. To increase overall spending, private sector can play critical role, the PPP model can be the best options,” Dr Lal told R&M.
“On diagnostic side, We have submitted a detailed PPP structure
On diagnostic side, We have submitted a detailed PPP structure to NITI Aayog and hopefully a roadmap would be ready soon. NITI Aayog will come out with guidelines which would act as advisory to the States. With this we move a step further for implementation of effective PPP projects across the country
Dr Arvind Lal Chairman, Lal PathLabs
to NITI Aayog and hopefully a roadmap would be ready soon. NITI Aayog will come out with guidelines which would act as advisory to the States. With this we move a step further for implementation of effective PPP projects across the country,” he added.
“As for as the government is concerned, we need to sit together and chart out further
course of actions. All successful PPP projects need to be studied and implemented. Tamil Nadu, Karnataka, Rajasthan and Andhra Pradesh have several successful projects, why can't we implement them across the country,” Dr Lal questioned.
Cost of Delivery
It is generally perceived that private sector charges exuberantly from patients. While opposing unnecessary profiting, Dr Lal said that healthcare cost for private sector has gone up drastically and today one bed in a quality hospital nearly cost Rs 1 crore, equipment and devices cost moving northward along with higher import duties and other taxes, hence the private hospital or groups are operating at a tight margins. Things can improve only if promotional policies are in place for the sector.
With an investment of Rs 250 crore, Aakash Healthcare has set up a super Speciality Hospital in New Delhi which will cater not only NCR but whole North including Punjab, Haryana and
Himachal Pradesh. The Aakash Group focuses on providing affordable and quality healthcare services and for that it prefers ‘Spoke and Hub’ and ‘OpEx’ models to expand its reach in North India.
Elaborating the models, Dr Aashish Choudhry, Director, Aakash Healthcare said, “For cost effective, we would not open major centres in different locations in North, but go for sub-centres in Tier II and III towns. Patients will be treated there and if needed they will be shifted to main Centre in New Delhi. This is our ‘Spoke and Hub’ model.”
“Cost of healthcare service is very expensive for the private sector. Land, electricity and equipment are very high which raises the cost of delivery. Once footprint increases, there is scope for cost reduction. For costeffective, we are opting operational model (Opex) by acquiring sick or smaller units in various places to cut down the overall operational cost,” he added.
“With these two models, Aakash Group aims to bring down cost of a bed in its chain to Rs 30 lakh from an average of Rs 1 crore in a speciality hospital. We are committed to provide affordable and quality healthcare,” Dr Choudhary emphasised.
Prevention is the key
New Health Policy focuses on preventive care. Millions of people go below the poverty because of catastrophic out-of-pocket expenditure (OOPE) on healthcare. The industry estimates OOPE at nearly 60 percent. Several Reports pointed out that prevention of diseases, particularly noncommunicable diseases ( lifestyle diseases) that are expensive to treat, is the most cost-effective strategy for a country scarce resources.
“Data reveals that one out of 10 person in India is now diabetic. With rising NCDs burden, prevention is the most effective strategy and it is promising to note that the new policy focuses on preventive and promotive heathcare. We, at Indus Health Plus, are determined to make quality healthcare affordable, accessible and affordable,” said Harish Pillai, Chief Operating Officer, Indus Health Plus.
Indus Health Plus, a leading company in preventive healthcare sector, has introduced comprehensive package for preventive check-ups and it is operating in 17 states to reach over 80 lakh people.
“We have tie-ups with state-of-the-art hospitals and diagnostic centres to ensure the best of healthcare facilities for our clients acrors the country. Apart from comprehensively designed preventive health checkup packages with high deliverables, the company provides ‘Health Friend’ cards to take care of the medical and hospitalisation expenses,” Pillai explained.
He said that with the government’s thrust on prevention & promotional policies and with a large number of Institutes of Excellence in both private and public sectors, India can emerge as global Prevention and Wellness hub. Wellness segment is growing at a rate of 23 percent annually which reflects the potential of the sector.
“Digital Health can transform the way we look at healthcare ecosystem in the country. It can hugely impact patients, doctors and supply chain. A data can be chipped in a simcard. Access to medical records would be easy. Telemedicine, e Pharma and online consultancy can be overcome many hurdles,” Amit Mookim, Managing Director, ims health said.
Milan Rao, CEO, India &
For cost effective, we would not open major centres in different locations in North, but go for sub-centres in Tier II and III towns. Patients will treated there and if needed they will be shifted to main Centre in New Delhi. This is our ‘Spoke and Hub’ model
Dr Aashish Choudhry Director, Aakash Healthcare
South Asia, GE Healthcare said that cost-effectiveness, access and quest for quality can be achieved with extensive use of digital health. As we scale, cost will certainly go down and technologies will multiply disruptions as well. He said from a centralised care centre of a city, with the help of digital technologies, 100 beds in Tier III hospitals can be managed.
Further the NHP proposes setting up of a National Digital Health Authority (NDHA) and health information exchange platform. These measures will certainly create the much needed digital backbone of health infrastructure and will become a game-changer in continuum of care. Deploying technology through Social Endeavor for Health and Telemedicine (SEHAT), a telemedicine health initiative with public -private partnership, has shown how technology can be leveraged across rural and remote areas to deliver patient-centric health care.
NATHEALTH-PwC Report : The Way Forward
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 Report which was released at NATEv2017, an annual c conference recently organised by t the Healthcare Federation of India ( (NATHEALTH). NATHEALTH).
The Report recommends f four scaling innovative modes w which should be introduced for f funding Indian healthcare. These include Fund of funds such as Pension funds, Investment route through PPP and 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 significantly been increased in the last three years. However, healthcare public expenditure’s share in GDP remains around 1.6 percent in FY 16 and innovative funding would support the target of taking it to 2.5 percent by 2030.
Anjan Bose, Secretary General, NATHEALTH said that, “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.”
Access to capital has been one of the biggest roadblocks to the growth of healthcare sector. Today, the Indian government spends only about 1.6 percent of its GDP on healthcare, which is among the lowest globally for any country. There is a need to focus on the healthcare needs.
With new policy in place the private sector will go for an increased collaboration with the government for operationalising health and wellness centres across the country. It is now the implementation that holds the key 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
Anjan Bose Secretary General, NATHEALTH With the government’s thrust on prevention & promotional policies and with a large number of Institutes of Excellence in both private and public sectors, India can emerge as global Prevention and Wellness hub. Wellness segment is growing at a rate of 23 percent annually which reflects the potential of the sector
Harish Pillai Chief Operating Officer, Indus Health Plus