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Three Years Of Modi Govt: Healthcare Sector

The government announced several good reforms, but without a roadmap or a time frame, they made little difference

Photo Credit : Shutterstock


First, a ministerial reshuffle, then two mute Budgets, and later a plethora of reforms. India’s healthcare sector has been a happening space under the Narendra Modi-government’s first three years. But unfortunately, several well-intended policies exist only on paper in the absence of clear guidelines on their implementation, argue critics.

They also question the government’s strong-willed decision to drastically slash prices of medical devices and to enforce a generic prescription mandate for doctors. The fact that the government’s attempt to reduce import dependence through ‘Make in India’, and its strong regulatory mechanism to ensure quality healthcare through enhanced public spending as well as better involvement of private providers didn’t deliver results as projected, didn’t help either.

Though it is too early to judge the potential of the government reforms, there’s certainly been quite a few hits.

National Health Policy 2017

A fresh national health policy after 15 years has been a commendable effort, even though it drew flak for its lack of clarity on the attainability of its targets. The policy has set several goals, including the progressive roll out of the universal health coverage (UHC), which will bring in a significantly large population under the public healthcare system. At least 80 per cent of India’s healthcare spend is still out-of-pocket for its citizens and 70 per cent of the expenditure goes to private providers at present.

Other targets include reinforcing trust in the public healthcare system, increasing average life expectancy from 67.5 years to 70 years by 2025 and reducing under-five mortality rate to 23 (per 1,000 births) by 2024.

The top priority of the policy, however, is to increase health expenditure by government as a percentage of GDP, from existing 1.5 per cent to 2.5 per cent by 2025.

Despite its good intentions, the policy has failed to lay down clear directions on the critical task of synchronising the relationship between public and private players, which is an essential component.

“It has rightly aspired for differential focus on primary care in less developed states, government-sponsored healthcare for 70 per cent population and increase in public spend on healthcare. However, as in the past, there is lack of clarity on critical details on how this will be achieved and in what time frame,” says M.Muralidharan Nair, partner (Performance Improvement) at global consultant EY India.

Budget Proposals 

Even though the government’s first two Budgets remained mute on the sector, finance minister Arun Jaitley’s third Budget in 2017 proposed making drugs more affordable by making amendments in the Drugs and Cosmetics Act and bringing wellness and preventive care to the forefront. Making certain structural changes in medical education was another key recommendation in the Budget.

But again, the execution plan wasn’t clear, say healthcare experts.

“Although more clarity on fund allocation and implementation is yet to emerge, the government’s intention to bring in changes needs to be recognised,” says Sumit Goel, senior management consultant, Healthcare Practices at EY India.

According to another industry expert, Indian healthcare sector needs a whole lot of reforms to address several issues — funding, service quality, education, trained manpower and infrastructure — it is struggling with at present.

“Though the last Budget had touched upon this vital area (medical education and infrastructure by recommending some structural changes), the discussions often revolve around the shortage of doctors, and the similar or more acute shortage of trained paramedics and nurses is mostly neglected. So, the impetus needs to be given to increase supply of the allied service personnel along with doctors,” says Gautam Khanna, CEO, PD Hinduja National Hospital and Medical Research Centre.

Need for Practicality

Keeping healthcare costs under control is important. But to make measures such as reduced prices of medical devices and generic drug prescriptions more effective, there has to be a deeper thought process.

“Such steps are certainly good and help widen access to modern healthcare. But, we need to ensure that such moves do not drive away quality products and latest technologies from the market,” says Vishal Bali, co-founder and chairman of Medwell Ventures.

The industry, healthcare groups and other stakeholders hope the government will come up with more practical solutions to make the reforms work, especially since India’s ranking in the world healthcare index is dismal. India was recently ranked 31 in a multi-country study—conducted by KPMG International — on transparency of global health systems across 32 countries.