Govt’s healthcare spend grossly inadequate
The government's healthcare spend, promised through the stimulus package or otherwise, is grossly inadequate to fight the current pandemic as well as similar eventualities in the future. The viability gap funding announced for attracting private investments in healthcare infrastructure in smaller cities also may not yield much result, say experts.
As part of the stimulus package, the government had released Rs 4,113 crore to states for buying essential items, testing kits and protection gear for health workers. Further, Rs 8,100 crore was announced to raise viability gap funding (VGF) for social sectors, including health and education, to as 30 per cent from 20 per cent. The government plans to set up infectious diseases hospital blocks in all districts and integrated public health labs in all districts and blocks.
These hospital blocks would hardly meet the hospital bed requirement in India, which has 0.55 beds per 1,000 population. "There is an acute shortage of hospitals beds in the country, which has been clearly exposed by the pandemic. The announcements are inadequate to meet the healthcare requirements of this pandemic and any such eventuality in the future,' said Kapil Banga, assistant vice president, Icra.
"The current healthcare expenditure of the government is 1.3 per cent and by including the private sector investments it can come up to 3 per cent of the GDP. The global average is 8 per cent and we have to at least double the spend to meet at least part of the required healthcare infrastructure. It has to be noted that twothird of the healthcare infrastructure is owned by the private sector with a higher concentration in metros and tier-I cities," he said.
Though the government said the public expenditure on health would be increased, it did not indicate what would be the higher allocation. The Rs 8,100-crore VGF is meant for social sector investments, not just for healthcare.
However, the private sector is not very enthused about the 10 per cent increase in VGF. There was not much enthusiasm when 20 per cent VGF was announced in the Union budget either, as long gestation of hospital projects and lower paying capacity of patients make smaller cities non-viable for private healthcare players.
"In the current scenario, I don't think there will be any impact of VGF on investments in smaller cities. In addition, the government also will have to provide soft loans. Apart from VGF, there is nothing much for healthcare. We are waiting something more to come from the government," said Sangita Reddy, joint managing director of Apollo Hospitals.
"Some of the doctors who run small nursing homes and clinics in smaller cities might see this as an opportunity to increase their bed-strength," said Aswajit Singh, chairman and managing director of IPE Global. However, such investments are not adequate to meet large-scale requirements of an epidemic.