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Budget Has Put Healthcare Firmly On Govt's Agenda

If implemented effectively, the NHPS will be transformative for the Indian economy as it aims to provide health insurance to over 50 crore individuals, which is nearly 40% of India's population

The low priority accorded to healthcare in India over the years has resulted in a grave socio-economic challenge for the nation. About 60% of healthcare expenses are borne by Indians out of their own pockets, according to the World Bank. High healthcare costs act as a huge drain on financial resources, pushing as many as 70 million Indians into poverty every year. In fact, poverty caused by expenditure on health has doubled in India in the past 15 years. To break this cycle of disease, death and destitution, India urgently needed a robust universal healthcare programme that ensures equitable access to essential medicines, vaccines and technologies of assured quality, safety, efficacy and cost effectiveness. Moreover, it is estimated that poor healthcare impacts GDP growth by as much as 1.5% due to loss of productivity.  Surely, this is a priority that we cannot afford to ignore as improvement in health indicators will automatically add to GDP growth.

In the light of this, it was very good to see that this year's Budget has put healthcare prominently on the government's agenda for the next fiscal year.

The announcement of the National Health Protection Scheme (NHPS), which provides a health cover of Rs 5 lakh per family per year for 10 crore poor families, is a big step towards introducing universal health coverage in our country.

The premium for NHPS has been estimated at Rs 1,000-1,200 per family per year for a cover of up to Rs 5 lakh. India would thus have to spend up to Rs 10,000-12,000 crore (USD1.5-1.9 billion) annually on premium payments.

The funding for the programme could hinge on the kind of model the federal government choses to opt for, and some media reports are saying it may favour a trust-based model for implementing NHPS. Trusts, funded by the Centre and states, handle the processing and settling of claims of hospitals under this model.

The best example of trust-driven group health protection model is Karnataka's Yeshasvini scheme, which is run by the Yeshasvini Cooperative Farmers Health Care Trust. Under the Yeshasvini scheme, beneficiaries are entitled to over 800 surgical procedures identified in 13 medical specialities apart from emergency treatment. Members of this scheme can seek treatment at any one of the nearly 500 participating established government and private hospitals, including some leading corporate hospitals and clinics.

Media reports also suggest that the federal government may ask states to incentivise private hospitals and healthcare chains to bolster infrastructure and human resources for the successful implementation of NHPS.

I believe private hospitals should be encouraged to adopt government hospitals and be paid a management fee to improve the systems, functioning and delivery efficiency of government hospitals.

Another noteworthy measure announced in the Budget was the allocation of Rs 1,200 crore for transformation of 150,000 sub-centres into Health and Wellness Centres by 2022 to provide comprehensive primary care services ranging from health promotion and disease prevention to provision of basic clinical services along with free drugs and diagnostics.

Similarly, the decision to set up 24 new government medical colleges and hospitals by upgrading existing district hospitals in the country is noteworthy. This would ensure that there is at least one government medical college in each state, which augurs well for overall clinical practice and clinical research in our country.

This Budget has made a good beginning to improve the healthcare ecosystem of our country, however effective and timely implementation of NHPS is extremely important to ensure the fruits of this transformative reform reach the beneficiaries. The increase in deduction for health insurance premiums and critical illnesses for senior citizens is also a welcome measure announced in this Budget.

If implemented effectively, the NHPS will be transformative for the Indian economy as it aims to provide health insurance to over 50 crore individuals, which is nearly 40% of India's population.

Time is of the essence.

Disclaimer: The views expressed in the article above are those of the authors' and do not necessarily represent or reflect the views of this publishing house. Unless otherwise noted, the author is writing in his/her personal capacity. They are not intended and should not be thought to represent official ideas, attitudes, or policies of any agency or institution.


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Union Budget 2018


Kiran Mazumdar Shaw

The author is chairman and managing director of Biocon

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