The Chairman of the Fifteenth Finance Commission, N.K. Singh, recently addressed several prominent healthcare issues at the Confederation of Indian Industry (CII)’s 19th Health Summit 2022. The CII works tirelessly with the government, industry, and civil society to foster an environment that promotes India’s development through advisory and consultative processes.
Suggestions for Healthcare Reforms
Singh discussed various recommendations for improving the healthcare sector in India, including the need to incorporate ‘health’ into the Concurrent List of the Constitution, which will allow both the central and state governments to make decisions regarding health policies. He also suggested universalising health insurance to cover the ‘missing middle,’ a segment of the population unable to afford private health insurance yet not qualifying for government schemes due to their income level.
Increasing Public Outlays on Health
Singh highlighted the urgency to increase public outlays on health to 2.5% of GDP by 2025 which, though a significant leap from this year’s budget, is indispensable in improving healthcare. This would require states to allocate 8% of their budgets towards healthcare, posing a great challenge considering the current average stands at a mere 5.18%.
Addressing Inter-State Variations on Health Spending
There is a stark disparity among states when it comes to health spending and outcomes. For instance, states other than Meghalaya allocate less than 8% of their budget to healthcare. Moreover, Bihar, Uttar Pradesh, and Jharkhand contribute approximately half per capita towards health compared to states like Kerala and Tamil Nadu.
Establishing a Development Financial Institution
One of Singh’s recommendations was to create a development financial institution dedicated to the healthcare sector. These institutions provide development or project finance, particularly in developing countries, and are usually majorly owned by national governments.
Restructuring Centrally Sponsored Schemes
Singh believes that Centrally Sponsored Schemes should be restructured to provide states with greater flexibility to adapt and innovate, leading to improved healthcare services.
Overview of Healthcare Sector in India
The Indian healthcare sector comprises hospitals, medical devices, clinical trials, outsourcing, telemedicine, medical tourism, health insurance, and medical equipment. The healthcare delivery system can be categorized into public and private, with the public system focusing on basic healthcare facilities and the private sector providing most of the secondary, tertiary, and quaternary care institutions.
Potential of the Indian Health Sector
India’s healthcare sector has a competitive edge due to its abundant pool of well-trained medical professionals and cost-effectiveness. Further, with a large population, robust pharma and medical supply chain, 750 million-plus smartphone users, a flourishing startup ecosystem, easy access to venture capital funding, the sector has all the prerequisites for exponential growth.
Employment in the Healthcare Sector
As of 2021, the healthcare sector is one of India’s largest employers, employing about 4.7 million people and generating 2.7 million jobs between 2017-22.
Government Initiatives in Healthcare Sector
The government has launched several initiatives to improve the healthcare sector, including the National Health Mission, Ayushman Bharat Pradhan Mantri Jan Arogya Yojana (AB-PMJAY), National Medical Commission, PM National Dialysis Programme, Janani Shishu Suraksha Karyakram (JSSK), and Rashtriya Bal Swasthya Karyakram (RBSK).
The Way Forward
There is an urgent need to upgrade the infrastructure of public hospitals that are currently overburdened due to India’s large population. The government should encourage the establishment and expansion of private hospitals, as they contribute significantly to health care in India. Given the severity of the issues, collaboration between the private and public sectors is necessary for a sustainable solution.