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Healthcare in India: An Overview (Part 2)

By Mohammad Anas Wahaj; MBA, University of Illinois at Urbana-Champaign, 2000, USA; BS in Mechanical Engineering, Aligarh Muslim University, 1993, India
Dated: 31 December 2018


Healthcare Education and Health Human Resources in India


There are central government run healthcare institutions, public state run institutions and private medical colleges that provide modern healthcare education mainly the four year degree MBBS and after that post-graduate degrees of MS and MD. India also have a number of institutions that provide degrees in other healthcare systems like Ayurveda (BAMS), Unani-Greek (BUMS), Homoeopathy (BHMS), Naturopathy etc. Moreover, there are vocational training institutes that provide skills and courses to develop other medical staff like nurses, health assistants etc. There are also corporate run and other private medical colleges and universities and training institutes.

India's medical schools are usually called medical colleges. Medical school quality was controlled by the central regulatory authority, the Medical Council of India (MCI), which inspects the institutes from time to time and recognises institutes for specific courses. But now MCI has been superseded vide Indian Medical Council (Amendement) Ordinance 2018 dated 26.09.2018. Moreover, there is a proposal to replace MCI with National Medical Commission (NMC).

Most of the medical school in India were set up by the central and state governments in the 1950s and 60s. But in the 1980s, several private medical institutes were founded in several states, particularly in Karnataka. Andhra Pradesh state allowed the founding of several private institutions too. But private medical education is very expensive compared to government run institutions. In most Indian states, entry to medical education is based on entrance examinations. NEET is now becoming a standard for admission to most medical colleges in India.

The basic medical qualification obtained in Indian medical schools is MBBS. The MBBS course is four-and-a-half years, followed by one year of Compulsory Rotating Residential Internship (CRRI). The MBBS course is followed by MS and MD, a post-graduation course in surgery and medicine respectively, and DNB (Highly qualified P.G. and Super specialization), which are postgraduate courses in medical specialities usually of three years duration, or by diploma postgraduate courses of two years duration. Super or sub-specialities can be pursued and only a MS or MD holder is eligible. A qualification in a super- or sub-speciality is called DM or M.Ch.

According to Medical Council of India website (mciindia.org), as of 2017, there are 460 medical colleges in India where qualifications are recognised by the Medical Council of India. These medical schools have a combined capacity to provide medical education for 63985 students.

The Medical Council of India was established in 1934 under the Indian Medical Council Act, 1933, now repealed, with the main function of establishing uniform standards of higher qualifications in medicine and recognition of medical qualifications in India and abroad. As the number of institutions continued to increase, it was felt that the provisions of Indian Medical Council Act were not adequate to meet with the challenges posed by the very fast development and the progress of medical education in the country. This resulted in the repeal of the old IMC Act in 1956 and his was further modified in 1964, 1993 and 2001. MCI has now been superseded vide Indian Medical Council (Amendement) Ordinance 2018 dated 26.09.2018.

The objectives of the Council has been - Maintenance of uniform standards of medical education, both undergraduate and postgraduate; Recommendation for recognition/de-recognition of medical qualifications of medical institutions of India or foreign countries; Permanent registration/provisional registration of doctors with recognized medical qualifications; Reciprocity with foreign countries in the matter of mutual recognition of medical qualifications.

According to the Central Council of Indian Medicine (CCIM - A statutory body under IMCC Act 1970, Ministry of AYUSH, GOI) website (ccimindia.org) as of 2014-15 there are 246 Ayurveda Colleges in India, 42 Unani-Tibb Colleges, 9 Siddha Colleges (Mosty in Tamil Nadu). Sowa Rigpa System of Medicine based on Tibetan Medicine is another form of indegenous Indian medicine. According to PIB (Press Information Bureau), dated July 2015, there are a total of 543 Colleges of AYUSH functional in the country currently. Out of this, 281 are of Ayurveda, 191 of Homeopathy, 44 are Unani, 18 are of Naturopathy and 9 of Siddha.

Central Council of Indian Medicine (CCIM) is a statutory body under Department of Ayurveda, Yoga and Naturopathy, Unani, Siddha and Homoeopathy (AYUSH), Ministry of Health and Family Welfare, Government of India, set up in 1971 under the Indian Medicine Central Council Act, (Act 48) which was passed in 1970. It is one of the Professional councils under University Grants Commission (UGC) to monitor higher education in Indian systems of medicine, including Ayurveda, Siddha and Unani.

Public Health Foundation of India (PHFI) is a public private initiative and was launched on March 28, 2006 at New Delhi. PHFI recognizes the fact that meeting the shortfall of health professionals is imperative to a sustained and holistic response to the public health concerns in the country which in turn requires health care to be addressed not only from the scientific perspective of what works, but also from the social perspective of, who needs it the most. The PHFI focuses on broad dimensions of public health that encompass promotive, preventive and therapeutic services, many of which are frequently lost sight of in policy planning as well as in popular understanding.

At the time of launch in 2006, PHFI had set out its Charter focused on building institutional capacity in India for strengthening education, training, research and policy development in the area of Public Health. The Charter goals are: establishing new institutes of public health, assisting existing institutes to enhance their capacity and output, promoting research in prioritised areas of public health to inform policy and empower programmes, facilitating policy development, programme evaluation, and advocacy on public health related issues, and enabling the setting of standards in public health education.

India has one doctor for every 921 people, as of December 2017, which is way ahead of the doctor-population ratio of 1:1000 prescribed by the World Health Organisation. The number includes ayurveda, homeopathy and unani (AUH) practitioners, along with allopathy doctors. If allopathy doctors alone are considered, the ratio soars to 1:1596. There are 7.63 lakh ayurveda, unani and homeopathy doctors in the country, and assuming that even 80% of them are practising, there are 6.1lakh AUH doctors.

There are also Allied Healthcare Professionals like Pharmacists, Nurses, GNM (General Nurse and Midwife), ANM (Auxiliary Nurse and Midwife). India faces an acute shortage of over 64 lakh skilled human resource in the health sector with Uttar Pradesh alone accounting for a shortfall of 10 lakh allied healthcare professionals, according to a study titled 'From Paramedics to Allied Health Sciences: landscaping the journey and way forward' undertaken by the Public Health Foundation of India for the Ministry of Health and Family Welfare. The HRH shortfall has resulted in the uneven distribution of all cadres of health workers, medical and nursing colleges, nursing and ANM (Auxiliary Nurse and Midwife) schools, and allied health institutions across the States.

According to the PHFI report, the largest skill gaps in AHPs (Allied Health Professionals) were in computer/IT-related skills and other important soft skills necessary to communicate efficiently with the patients and their family members. Relatively, they had better core clinical skills. With advancements in medical technology and allied health fields such as medical imaging & radiology, radiation therapy and medical laboratory sciences, technology is now essential to disease diagnosis. Additionally, the computerization of patient records and digital analysis of test results makes it imperative for AHPs to be proficient in IT-related skills.

According to the Medical Council of India, 10.4 lakh doctors registered with the state branches of the council. However, not more than 8.33 lakh MBBS doctors are in active service. Doctors are of great value in providing certain types of health care, yet primary health care services should not be doctor-dependent. Even in secondary and tertiary care, skilled support services should be provided by suitably trained nurses and allied health professionals. Planning for health professional education should reflect this paradigm. State governments should plan for allocating support staff at various levels across the states.

ASHA (Accredited Social Health Activist) workers are also an important component of India's healthcare. But it has failed to bring doctors, nurses and specialist in this area.



Healthcare Market - Urban and Rural


Best healthcare facilities are generally concentrated in urban areas while rural areas are generally served by public hospitals and centers. Private clinics are also present in both rural and urban areas. They are generally run by a single doctor or doctor couple and provide basic healthcare. Diagnostic centers are spread all over due to technological advancements and compact and affordable equipments.

Health sector has major disparities between urban and rural areas when it comes to healthcare access. Rural India contains over 68% of India's total population, and half of all residents of rural areas live below the poverty line, struggling for better and easy access to health care and services. Government hospitals are overcrowded and lack resources to meet the growing demand, while access to basic health services in rural areas and smaller towns remains poor. Urban centres have numerous private hospitals and clinics which provide quality healthcare. These centres have better doctors, access to preventive medicine, and quality clinics which are a result of better profitability for investors compared to the not-so-profitable rural areas.

According to estimates almost 70% of the doctors in India are concentrated in urban centres, serving around 30% of the total Indian population. Urban India enjoys access to almost 65% of the country’s hospital beds despite having less than 30% of the total population. Moreover, about 60% specialist positions in rural and district hospitals continue to remain vacant. Health care is a state subject but policy, disease control programmes and regulation of medical education are central subjects.India still spends only around 4.2% of its national GDP towards healthcare goods and services (compared to 18% by the US).

Rural areas lack trained medical professionals that can cater to the everyday and basic medical needs of the population that are necessary for survival. Rural people often have to travel long distances to avail of life-saving treatments like dialysis. Similarly, in absence of quality cardiac care in smaller towns and villages, many people fail to survive a heart attack.

Private sector finds little incentive in investing heavily in rural healthcare due to financial dynamics. But there are healthcare oriented corporate social responsibility initiatives that are trying to fill the gap in rural healthcare. Shortage of health staff and absenteeism in state facilities remain issues in rural areas. Private sector through some low cost but effective initiatives, can play a positive role in helping address the deficit of manpower in rural healthcare to some extent.

Telemedicine, that utilizes information technology to provide medical consultation in remote areas, can improve health outcomes. Telemedicine centers can benefit the isolated populations that lack physician presence through consultation and advice when needed. As communicable diseases substantially affect rural populations, basic consultation and hygiene advice will help in reducing their incidence.

Public-private partnerships (PPPs) are required to enhance involvement of the private sector in rural areas. These partnerships can offer incentives to doctors to offer services in rural areas for a small number of days of a year. With severe shortage of specialized cardiologists, nephrologists, neurologists and gynaecologists, rural populations often have to make with less skilled doctors or worse quacks. PPPs that can take skilled doctors of reputed hospitals to offer services in rural health centres and recommend patient transfer if needed, can play a role in bridging this gap.

The gap in rural health human resources can by filled by training and education. Shortage in rural areas is not just of doctors but is of all health staff like nurses, radiologists, pathologists and paramedica. Training programs for nurses and paramedica in smaller centers is required to overcome these shortages.

Tier-2 cities can be made health centers catering to surrounding smaller villages and towns. These mid-level towns can become long-term profit centers for corporate health providers if they can effectively combine and balance profit and social benefit. In recent years, thousands of small private hospitals and test centres have flourished, betting on high demand created by lack of adequate public facilities. Such providers opened 80% of India's new hospital beds during 2002-2012, according to a PwC-NatHealth report. Rural India is set to emerge as a potential demand source. Only 3% of specialist physicians cater to rural demand.



Healthcare Sector - Public and Private


Healthcare has become one of India's largest sectors - both in terms of revenue and employment. The industry comprises public and private hospitals, pharmaceutical companies, pathology and diagnostics, medical devices industry, clinical trials, outsourcing, telemedicine, medical tourism, health insurance and medical equipment. The public sector constitutes primary health centers, central research centers and hospitals, state-run research institutes and hospitals etc. The private sector provides majority of secondary, tertiary and quaternary care institutions with a major concentration in metros, tier-I and tier-II cities. According to National Family Health Survey-3, the private medical sector remains the primary source of health care for 70% of households in urban areas and 63% of households in rural areas.

India's healthcare sector is not fully developed and is growing, particularly in the private sector. Most pharmaceutical and healthcare equipment makers are private corporates. A number of global companies have their operations in India. As India is proactively seeking foreign direct investments in healthcare a large number of ventural capital and investment firms are buying out and developing hospitals. A number of hospitals are run in partnership with foreign players and consulting groups.

Healthcare has emerged as one of the largest service sectors with estimated revenue of around US$ 30 billion constituting 5% of GDP and offering employment to around 4 million people. By 2025, Indian population will reach 1.4 billion with about 45% as urban adult (15 years+). To cater to this demographic change, the healthcare sector will have to be about US$ 100 billion in size contributing nearly 8 to 10% of the then GDP.

According to Investment Commission of India, the sector has witnessed a phenomenal expansion in the last 4 years growing at over 12% per annum. As per a CII-McKinsey report, the key drivers for Indian Healthcare sector are - Medical Value Travel or Medical Tourism as world class treatment and benefits provided at a fraction of the cost (almost 1/10th) with less waiting time for surgeries as compared to advanced nations like UK and US where waiting period is substantially longer. Medical tourism have been instrumental in a large number of foreign arrivals to access healthcare services in India.

In private healthcare the emphasis is on seconary and tertiary care. High volume of private healthcare is unregulated. It accounts for 67% of total 30000 hospitals, 33% of 1000000 beds, 60% of 5 million doctors. There is a large demand-supply gap - 100 beds per 100000 population (WHO norm 300 beds). Moreover, number of doctors is below WHO norm. Government policy should encourage private, social and community health insurance. The existing financing and payment system not suitable for countering market failures.

Affordability of healthcare is the main challenge of India's healthcare. Public and private providers have to work together to bring balance to cost of healthcare. There need to be improvement in public sector service levels. Some areas of emphasis include - Referral systems enforcement; Controlling infectious diseases; Ensure availability of proper and adequate health services for any insurance scheme to succeed. In 2003, fee-charging private companies accounted for 82% of India's US$ 30.5 billion expenditure on healthcare. Private firms are considered to provide about 60% of all outpatient care in India and as much as 40% of all in-patient care. Moreover, it is estimated that nearly 70% of all hospitals and 40% of hospital beds in the country are in the private sector.

Sector-based Healthcare Market conditions are as follows:

PATHOLOGY/DIAGNOSTICS - The US$ 500 million domestic pathology industry has been growing over the last five years at an estimated Compound Annual Growth Rate (CAGR) of 20 per cent per annum. It currently comprises almost 2.5% of the overall healthcare delivery market. With diagnostic tests in India being inexpensive, India also has the potential to emerge as a hub for preventive health screening.

According to a joint study by the Confederation of Indian Industry and McKinsey, Indian medical tourism was estimated at US$ 350 million in 2006. In addition to receiving traditional medical treatments, a growing number of western tourists are traveling to India to pursue alternate medicines such as ayurveda, which has blossomed in the state of Kerala, in southwestern India. The number of medical tourists visiting Kerala was close to 15000 in 2006. India has the potential to attract one million medical tourists each year, which could contribute US$ 5 billion to the economy, according to the Confederation of Indian Industries.

Perhaps the biggest reason for why the healthcare industry in India today is making such big leaps is the foreign direct investment we receive from international healthcare service providers. A single surgery conducted within the Indian continent is only about one-tenth of the same surgery performed anywhere within Europe or even the US.

HEALTH INSURANCE - India offers tremendous opportunity for private medical insurance players. Increasing awareness levels and large-scale group insurance policies have pushed growth in the health insurance segment in recent years. Due to liberalization and a growing middle class with increased spending power, there has been an increase in the number of insurance policies 2001-02, 7.5 million policies were sold. By 2003-4, the number of policies issued had increased by 37%, to 10.3 million policies issued in the country. There is lack of effective payment and insurance mechanisms in India's healthcare. Reports suggest that only around 5% of Indians are actually under the protection of a health insurance plan – the rest pay cash straight out of their pockets after they've received their treatments.

HEALTHCARE BPO: India is capable of offering a wide spectrum of outsourced Healthcare services - Pathology and laboratory tests; Data capture; Documentation; Commercial; Administration; Human resources; Customer care.

TELEMEDICINE - Only 25% of India’s specialist physicians reside in semi-urban areas, and a mere 3 % live in rural areas. As a result, rural areas, with a population approaching 700 million, continue to be deprived of proper healthcare facilities. One solution is telemedicine - the remote diagnosis, monitoring and treatment of patients via videoconferencing or the Internet. Telemedicine is a fast-emerging trend in India, supported by exponential growth in the country’s information and communications technology (ICT) sector, and plummeting telecom costs. Several major private hospitals have adopted telemedicine services, and a number of hospitals have developed public-private partnerships (PPPs). Developing streamlined IT techniques in the healthcare industry is something that will help make a difference. This is where the tele-medicine industry is making waves today. The biggest challenges it faces are accessibility and lack of infrastructure. Tele-medicine provides a platform for doctors and patients to interact.

INVESTMENTS - The hospital and diagnostic centres attracted foreign direct investment (FDI) worth US$ 2793.72 million between April 2000 and January 2015, according to data released by the Department of Industrial Policy and Promotion (DIPP). The total industry size is expected to touch US$ 280 billion by 2020. During 2008-20, the market is expected to record a CAGR of 17%.

GROWING PHARMACEUTICALS SECTOR - According to the Indian Brand Equity Foundation (IBEF), India is the third-largest exporter of pharmaceutical products in terms of volume. Around 80% of the market is composed of generic low-cost drugs which seem to be the major driver of this industry. Future of pharma to be shaped by - increase in ageing population, rising incomes of the middle class, development of primary care facilities.

UNDERDEVELOPED MEDICAL DEVICES SECTOR - Medical devices sector is one of the fastest-growing sectors in the country like the health insurance marketplace. The government has been positive on clearing regulatory hurdles related to the import-export of medical devices, and has set a few standards around clinical trials. The medical devices sector is seen as the most promising area for future development by foreign and regional investors; they are highly profitable and always in demand in other countries.

CLINICAL TRIALS - Availability of a Huge Patient Pool; Cost advantage with testing of drugs possible at 60% of the price.

India's shift from the agro-based production economy India earlier was to a service oriented economy that taking its steps towards becoming a developed nation. In the year 2014-15, the services sector contributed about 61% to India's GDP, growing strongly at approximately 10% per annum, making India the second fastest growing services economy in the world. When it comes to providing employment as well generating revenues, the healthcare industry is a fast growing sector of the market that is rapidly expanding.

India spends only about 30% of the money that is actually allocated as its total healthcare budget for the year. The share of the Indian healthcare today within the market can be rounded off to about US$ 100 billion dollars. Our growth rate is consistent enough that by the time we hit 2020, we can expect this number to rise up to a staggering US$ 280 billion dollars (this also includes the pharmaceutical companies and the healthcare delivery agents like the diagnostic centers and the nursing homes). India is expected to be a leader in e-health by 2019, according to a new report.

Indian healthcare industry is an opportunity waiting to be reaped; with integration of public and private efforts, it is possible to deliver quality and timely healthcare to all. The demand is definitely there; the supply just needs to be delivered. Demographic dividend, higher literacy are positive signs to boost healthcare services and delivery sector. Rising literacy in India is improving health awareness and therefore will increase demand for health products and services. 'Make in India' in healthcare manufacturing and services will bring new dynamism in the sector and help make India into a better health destination not only for the foreign customers but also for the domestic customers.



Technology and Indian Healthcare


Rise of technology is creating new business models in the healthcare industry. Healthcare through smart phones and fitness trackers is new trend. Information technology is automating and streamlining various healthcare processes. Big data is creating new ways of improving healthcare delivery. Startups in India are promising to provide best healthcare at affordable cost more effectively. Latest healthcare equipment is not only imported but also manufactured in India. Digital technologies are enhancing every aspect of healthcare. Technology solutions are able to modernise current medical practices, reduce costs, eliminate any duplication of tests as well as streamline processes and update medical records in real time.

Modern technology has great potential to increase access of healthcare services in rural communities, especially the ones where there is serious shortage of doctors. Tele-health provides basic consultation facilities where there are none, increases quality of care and reduces costs by reducing readmissions and unnecessary emergency department visits for rural communities. Tele-health allows small rural hospitals to continue providing quality care at low costs. Also, rural patients receiving care via telehealth can avoid driving long distances to access specialty care. Telehealth allows specialists to visit rural patients virtually, shortlist the emergency patients and reduce actual hospital visits and admissions.

Data from past studies and research shows growing use of technology in healthcare. According to research analyst firm Gartner, hospitals, clinics and ambulatory services will upgrade or deploy internal services, software, IT services, data centers, devices and telecom services. This trend is expected to continue well into the future. It said Indian telemedicine, though in its nascent stage, is showing robust growth at approximately 20%.

With the launch of 'Digital India' initiative, the government is stepping towards digital empowerment. India is expected to be a leader in IT use in healthcare (e-health) by 2019. Digital India campaign, which they view will help provide further impetus to IoT in rural healthcare. In fact, government will also be seen encouraging the use and implementation of IoT in the healthcare market very soon. The E-health initiative, which is a part of Digital India drive aims at providing effective and economical healthcare services to all citizens. The programme aims to make use of technology and portals to facilitate people, maintain health records and book online appointments with various departments of different hospitals using eKYC data of Aadhaar number.

One of the biggest drivers slated to accelerate the spread of potent medical products and services across tier I and tier II centres in India is the Internet of Things or IoT. The IoT is expected to have a profound effect on healthcare in India. Managing Big Data will be critical to ensuring consumers and healthcare professionals alike reap the greatest benefit from wearable healthcare devices. Investments in data and analytical tools, the cloud and network infrastructure will significantly improve the quality and efficiency of India's healthcare system. And devices tied to IoT certainly promise great potential, though their effect is just starting to be felt.

According to McKinsey's report, a rapid rise in growth for devices and systems for in-home monitoring of patients is expected, particularly for those with chronic conditions such as diabetes. These devices have already demonstrated their potential to improve health outcomes and reduce healthcare costs among patients with acute forms of chronic heart failure, diabetes, and chronic obstructive pulmonary disease (COPD). Related to this, an estimated 130 million consumers worldwide use fitness trackers today. The number of connected fitness monitors is expected to exceed 1.3 billion units in 2025 with the rise of smart watches and other wearable devices. More so, by implementing solutions such as radio frequency identification and mobile scanners connected with cloud technology, organisations can gain visibility into these assets, providing real-time information to people and transactions that require them ensuring hospitals have what they need, where they need it, when they need it. IoT also makes it easier to integrate data from consumer devices such as fitness band into hospital systems, which help organisations gather more data and deliver better care.

Various devices and enablers which can help in integrating technology in the healthcare segment towards vitality and advancement are cheaper consumer off-the-shelf (COTS) software applications. Within this, fitness bands would work as tracking devices for daily analysis of patients. From the data generated by third party administrators would be able to manage and oversee data warehousing and mine it when required. However, looking ahead, improvements in collaborative data exchange, work-flows and mobility and need for better financial management are the next phase of technological evolution in healthcare. In addition, the shifts occurring in mobile devices, wireless technology and cloud computing would need to be accounted for, as they would hold a crucial key towards spreading better healthcare for the masses.

Over 30 million have now been diagnosed with diabetes in India. In rural areas, the prevalence is approximately 3% of the total population. Large percentages of rural populations are still unable to access basic healthcare facilities. In rural India, where the number of primary healthcare centres (PHCs) is limited, 8% of the centres do not have doctors or medical staff, 39% do not have lab technicians and 18% PHCs do not even have a pharmacist. Technology can help bridge the gap.

Healthcare organisations need to streamline their technological infrastructure, to provide simple, quicker and more efficient healthcare service or delivery. The convergence of healthcare with upcoming technologies will play a key role in improving accessibility and mitigating manpower shortage. The coming years are expected to witness greater deployment of tools like telemedicine, teleradiology, hospital information systems/hospital management information systems, online or electronic medical records, etc.

The NHPS will have access to health information of 500 million people. This is an unprecedented amount of data and if curated well, it can have far-reaching applications. It can be used for comparative effectiveness research or understanding which treatments work in the real world rather than just in clinical trials. Treatments and interventions can be highly contextualized to local conditions. It can be used to advance personalized or precision medicine. That is, tailoring treatment based on individual genetic or other characteristics. It can be used to improve the health system and understand how different delivery and financing designs affect care outcomes and costs. It can be used to improve transparency by providing information on quality of care provided by different hospitals or clinics in India.

Tracking the NHPS will be extremely important to set priorities and shape future health policies in India. In a large and diversified country, health needs differ from state to state, and, within a state, can vary greatly from one district to another.



Universal Healthcare in India


India has demonstrated since long a commitment to offer comprehensive healthcare to all citizens. This has been reaffirmed in the 12th Five-year Plan, National Health Assurance Mission, and more recently through Ayushman Bharat Program. However, the challenges remain and this goal has not been achieved as of yet.

There are two critical components of successful healthcare systems. One is the financial aspects whereby citizens are protected against any eventuality and don't get into penury due to health spending. Second is the provision and delivery of healthcare services. It is imperative to ensure that healthcare infrastructure is sufficiently equipped to provide effective healthcare when needed by its citizens. Design of the health system and how it is implemented and run actually defines its success more than the financial resources that are put into it. Equity, access, quality, affordable cost, participation, informed choice of both healing system and provider are the important keywords for a liberal Universal Health Care.

A 2012 study by FICCI and EY estimated that universal health cover in India was feasible in a decade and would require government health spending to rise to 3.7-4.5% of GDP. When the entire population is covered, it would cost an estimated US$ 11.4 billion annually. Despite rapid economic growth in the last 20 years, the government spends only about 1% of gross domestic product on healthcare. That compares to 3% in China and 8.3% in the United States.

At 4% of gross domestic product, the country expends more than enough money to deliver good quality healthcare to all citizens. However, 70% of this money is spent on an out-of-pocket basis at the point-of-service (OOP-POS). The health spend varies between 0 to Rs. 10 lakh. The irony is that this amount is usually paid for unnecessary care or for conditions easier and less costly to treat when delected at earlier stage or conditions that have slow onset or are asymptomatic until they reach an advanced stage. This produces financial hardship for all but the top 1% of the population and leads to low levels of well-being across all income segments.

Even though there are a few notable exceptions at the state level, India, despite driven by a low tax-to-GDP ratio of 15%, allocates 10% for healthcare as a proportion of its total expenditure. Still it is unable to afford to pay for all the healthcare needs of its citizens through taxation alone. It will remain so until there is a sharp increase in the tax-to-GDP ratio or the government decides to increase its allocation towards healthcare disproportionately at the expense of other social services.

Most Indian governments have tried to improve the tax-to-GDP ratio and while they have maintained the level of health expenditure as a proportion to their total expenditure, they have not seen it politically rewarding to prioritize health over other expenditures.

India urgently needs high-quality comprehensive primary care that is free at the point of service and accessible to all. This should be combined with a smoothly functioning referral service for patients who require advanced levels of care, which is also made available for free at the point of service, thus ensuring that the variability associated with OOP-POS is zero.

Given its nature, if India is to provide good healthcare to its citizens, it would need to pay attention to the problems of financing and provision of healthcare. Given its large population, low per capita income, a high burden of disease and the need to ensure that people operate at their maximum potential to ensure economic growth, it is obvious that a Japanese-style hospital and a severe-illness centric healthcare design will not work for India.

India has an opportunity to view and understand from various models of healthcare that are applied in other countries, particularly those in developed nations where government and private sector has collaboratively come together to provide their citizens the best quality healthcare at affordable cost. India has to customize and create its own model considering its own strengths and weakness. One of the challenge that India has to tackle the brain drain in healthcare. It also has to manage the concentration of health human resources in urban centers while the rural areas remain deprived. The charm of serving has to be brought back in the healthcare. Health staff should be given proper incentives to work in rural and under developed regions.

In Japan's healthcare system, the market is flooded with healthcare providers, and with tight regulations they are able to keep prices low and quality high. In their system all the citizens are required to buy into a single national health insurance plan. Japan has emphasized its citizens to have general good health, maintain healthy dietary practices and with high levels of literacy it has ensured that consumption of healthcare is optimal.

Thailand offered such a system to all its citizens more than 15 years ago when its per capita income levels were comparable with those of present-day India and was thus able to lay the foundations of a high-quality, low-cost system. Replication of American healthcare model is not suitable for India as it eats up 17% of GDP, (half of which are public spend) and yet having all stakeholders dissatisfied. US continues to search for new and effective models of healthcare. In much of Europe, the welfare state is spending about 30-50% of taxes and 8-12% of this goes into health care. These systems are facing problems of ageing citizens, chronic ailments, high-technology and human resource costs and now scores of migrants.

There is need for a Universal Health Care (UHC) in India but with better citizen participation and contribution. PPPs are integral part of the solution. This is possible only with social health insurance systems prevailing in some European Union countries like Germany and France or even Singapore. These systems can be incrementally developed and improved, and they retain both provider and citizen control. Governments can and must share the costs for the poor families till they are poor, but the rest can be borne by middle and higher income groups.

Given the paucity of tax resources, it is clear that such a design cannot be implemented by the Indian government on its own for the entire population. However, if the government were to focus on developing a national scheme, which helps build a healthcare system with an optimal design centred on primary care that is not just free but allows access to hospitals only if referred by primary care providers, then it could become the bedrock of a strong universal healthcare system.

The government could then easily pay for the poor to access such a scheme and offer it to the non-poor at its full price as a government-sponsored and managed care scheme. It can be made mandatory for all in the formal sector to purchase it with the support of their employers. Such a scheme would work best if the government, directly through its health department, were to operate and manage both the healthcare system and the financing of it, including the collection of the insurance premiums for such a scheme from the non-poor.

In states where the public system's capacity to provide for such services is weak, the government could still be responsible for the payment of the scheme for the poor and for the collection of the premium from the non-poor. It could seek the support of the private sector to provide the necessary services but only from those providers who are willing to construct and operate a complete health systems, including primary, secondary and tertiary care, and be prepared to paid a fixed charge for each enrolled family or individual and not a variable charge based on the services actually provided to them.

Any such scheme must have three key components. First, the scheme should provide and pay for a comprehensive essential health package (EHP) and not just restrict its attention to maternal and child health or only to financial protection. The EHP should include both financing and care across the healthcare continuum, most importantly primary care, with its preventive and curative aspects that reduces the progress of disease and prevents expensive hospitalisation. Secondly, such a scheme would have to be designed from its conception stage to serve both the poor and the non-poor. This would mean the quality dimension would need to be paid attention to, as well as the look-and-feel of the facility itself. Thirdly, while the costs of the scheme for the poor would be paid for by the government, the premium for the non-poor would need to be collected directly from households as pre-payments for access to this scheme.

For the formal sector, payroll contributions deducted at source appear to be a tried-and-tested method that has been implemented in 68 countries across the world. Based on the collections from direct taxes on income in the current assessment year in India, such a system of pre-payments from the non-poor who are part of the formal sector could raise between Rs. 14000 crore and Rs. 34000 crore with a total contribution ranging from 5-12% of salaries. This amount on its own has the potential to contribute up to 18% of the required health budgets, without the deadweight loss associated with generalized increased in taxation that hurts growth.

In any developing economy, and India is no exception, there is a large section of the population that is above the poverty line but is not a part of the formal sector. Innovative pre-payment mechanisms can be designed to cover this segment, including explicit sale of the integrated insurance-healthcare product to them on a full-cost basis.

Historically, health insurance schemes in India, including those offered by governments, have restricted coverage to in-patient hospital-based treatments. They merely reimbursed expenses up to a pre-defined limit, acting almost as a financing scheme for the deductible or the co-pay instead of a true insurance scheme.

The successes of the Swavalamban Scheme and the microfinance movement in India suggest the informal non-poor have the willingness and the ability to pay for schemes that directly add value to them. The draft National Health Policy (NHP-2015) defers state commitment on rights-based health care, something socialist groups would find a soft target. National Health Assurance Mission (NHAM), the draft National Health Policy (NHP-2015) and the National AYUSH (Ayurveda, Yoga, Unani, Siddha, Homeopathy) Mission 2014.

The draft NHP2015 offered - Strengthen primary, secondary and tertiary care for rural and urban areas; Make available health human resources, including AYUSH and paramedics; Attend to production and use of drugs, diagnostics, technology, equipment; Provide a safety net for the below poverty line (BPL) population and ensure affordable services for above poverty line (APL) sections; Strengthen public and charitable health care facilities without directly disadvantaging the private and corporate sector in health care; Stimulate decentralization and good governance; Encourage state level fund-pools for free and affordable care; Promote AYUSH; Improve health determinants through better sanitation, occupational safety, de-addiction, pollution control and nutrition.

Public hospitals should be improved and public-private-partnerships (PPPs) developed for tertiary care. Together this makes a good policy and action plan. Choice of care must remain with the family and citizen - public or private/charitable, formal-informal, primary care or hospitals, AYUSH or modern etc.

NHPS (National Health Protection Scheme) is a good idea for Indian healthcare and is a significant move towards universal health coverage. Reasons for this include - India under-invests in the healthcare of its citizens and this is affecting the health and financial well-being of Indians. Out-of-pocket payments for healthcare services are very high in our country (about 70%, according to the National Sample Survey Office, 2014), which causes impoverishment to nearly 7% of our population; Although, the success of insurance programs is debatable, but there is sufficient evidence that if implemented well, insurance can save lives and improve financial well-being; Existing evidence shows that providing insurance to the poor not only saves lives but is also 'cost-effective'. That is, it provides good value for money as the benefits of insurance far outweigh the costs. However, cost-effective health coverage must cover primary care. This is where the second feature of Ayushman Bharat Programme - creation of 150000 wellness centres across the country - is a very significant and welcome announcement.

Sub-centres (and primary health centres) are the first line of contact of citizens to the public health system in India. Strong primary care is fundamental to keeping overall access to healthcare equitable and affordable in the country. Our biggest constraint to making this happen is not shortage of capital or infrastructure, but an acute shortage of human resources. Most public healthcare facilities (primary, secondary and tertiary) have significant shortage of doctors, nurses and other health workers, often higher than 50%.

Enrollment process and access to care once enrolled, both need to be streamlined. A program financed by public money needs to conserve resources. Government sponsored insurance should be provided only to those who cannot afford insurance on their own. Existing coverage data shows that while private health insurance is largely concentrated among the urban richest quintile in India, public health insurance is more equitable, covering bottom quintiles of urban and rural population of the country.

Evidence from prior studies suggests that insurance has much larger effects on health and financial well-being for the poor compared to the rich. In addition to targeting the poor, insurance should target health conditions where disease burden is high and effective interventions are available but underused.

Nearly 75% of out-patient department care and 55% of in-patient department care in India is exclusively from the private sector. Therefore, private hospitals and clinics provide care to a large fraction of the population and they need to be part of NHPS. Private hospitals should be monitored and right incentives should be created for them.



Future of India's Healthcare


Technology, public-private partnerships, access and affordability are the critical component in the future of India's healthcare. Better healthcare with policy, financial and physical framework will bring long-term benefits to the nation. Develop effective mechanisms to improve general health, and disease prevention strategies through campaigns, advocacy etc. To make India's citizens more aware about their health, inculcate better sanitization and cleanliness habits will help to improve overall health of India. Prevention before cure becomes the key for the country with the size and demographic profile like India. Health aware citizens, trained, sensitive and caring medical staff, cutting edge technologies and modern infrastructure, are the golden elements for a healthy future of India.

India need to upgrade its healthcare delivery system with collaborative effort between public, private and nonprofit healthcare players, and improve uniform access to achieve Universal Health Coverage (UHC). The promise of UHC is possible with strategic focus on all aspects of individual's health - preventive, promotive, curative, diagnostic and rehabilitative services. This also requires special attention to diseases that occur due to poor hygienic practices and inadequate primary health services. Swachh Bharat Abhiyan is also a step in the right direction to prevent diseases that are caused by poor hygiene and living conditions. Programs such as these help in reducing the burden on healthcare infrastructure and create a health aware society.

To achieve UHC it is imperative to strengthen rural healthcare infrastructure, particularly for primary healthcare. Rural areas are where majority of Indians reside. They had to travel significant distances to avail urban health facilities. Better rural health infrastructure will reduce the burden on urban healthcare facilities. Streamlining the healthcare continuum from primary to tertiary care services is also key to achieve smooth overall healthcare delivery.

Provision of quality health services through strong policy and regulatory regime is a must to proceed in the direction of mature and developed health system. Government and standard developing agencies should create laws and best practices that work for the development of effective and efficient health delivery processes and mechanisms. Better implementation of health insurance scheme by the government will help improve the financial component of healthcare ecosystem.

Healthcare delivery is a human intensive services, hence it is necessary to have quality of human resources with proper skills and expertise. There is a large scope for public, private and nonprofit players to work together in this area and deliver training to update and upgrade skills of all the constituents of the health human resources from assistant staff to the experts. There is a requirement of 1.54 million doctors and 2.4 million nurses to meet the growing demand.

Considering the vast size of India and lack of trained human resources, indigenous health systems that come under AYUSH, have to be strengthened and promoted. A bridge need to be developed between the various streams of India's health system so that they work together to reach a common goal of improving the overall health infrastructure and achieving better health of the citizens. Public programs in rural and poor urban areas engaging indigenous practitioners and community volunteers can prevent much seasonal and communicable disease using low cost traditional knowledge and based on the balance between food, exercise medicine and moderate living. Such an overall vision of the public role of the heterogenous private sector must inform the course of future of state led health care in the country.

Patient-focus in the delivery of health services is the key to achieving and ensuring accountability and transparency. Health system responsiveness and readiness to the need of citizens is an essential component of better healthcare. Technology can also play an important role at various levels of health delivery mechanism. From providing quality health content to streamlining health delivery processes, technology encompasses all aspects of healthcare. Telemedicine is a fast emerging sector in India. In 2012, the telemedicine market in India was valued at US$ 7.5 million, and is expected to grow at a CAGR of 20% to US$ 18.7 million by 2017.

Corporate tertiary hospitals are run as businesses and use business strategies to attract patients, often those at the top of the pyramid, those with sufficient health cover through insurance or general emergency cases of those that rely on loan or charity to pay for treatment. The standards of these hospitals are world class and have best experts and specialists on the payrolls.

India's pharmaceutical sector continues to perform well globally. It's competitive advantage also lies in the increased success rate of Indian companies in getting Abbreviated New Drug Application (ANDA) approvals. India also offers vast opportunities in R&D as well as medical tourism.

India is a big market for the consumption of healthcare products and services. The need is for forward looking policy makers, efficient healthcare providers, concerned medical staff and proactive citizens, to build a technology enhanced modern healthcare system.



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