Pre-budget expectation and wish list from healthcare industry

Budget expectation:
Authored by: Dr. Rajeev Boudhunkar,
Vice President, Kohinoor Hospitals,
Kurla, Mumbai
Introduction-The benefits of modern medicine has still not penetrated the social periphery of our
vast country. The glaring contrasts in the state of health between the rural and urban areas and
between the rich and the poor can be labelled as gross “social injustice”. The new prime minister
has to wipe out the inequalities in the distribution of health resources and services and aim towards
attaining the millennium development goals. Healthcare is to be regarded by the new government
as an essential component of socio-economic development. The aim should be to provide a level of
health for all Indians that will permit all people to lead a socially and economically productive life. It
must be understood by the new government that that healthcare is a social science and politics is
healthcare on a large scale!! Hence, socialization of healthcare is the way forward. Health is not
mainly an issue of doctors, social services and hospitals; it is an issue of social justice.
The new government should have a new philosophy of health which should be reflected in its
healthcare policy, as stated under-
 Health is a fundamental human right
 Health is the essence of productive life and not the result of ever increasing expenditure on
medical care
 Health is inter-sectorial
 Health is an integral part of development
 Health is central to the concept of quality of life
 Health involves individuals, state and international responsibility
 Health and its maintenance is a major social investment
 Health is a worldwide social goal
Healthcare spending by the government
According to Human Development Report (HDR) 2011,the Human Development Index (HDI) for
India was 0.547 in 2011 with an overall global ranking of 134 (out of the 187 countries).We are still
in the medium human development category and countries such as China, Sri Lanka, Thailand,
Philippines, Egypt, Indonesia, and South Africa have better overall HDI ranking than us. There is a
need for much faster and wider spread of basic health and education. This will need overall
allocation increasing by 40 per cent in budget of 2014-15 over budget 2013-14. The last Budget
lacked the punch for accelerating inclusive development agenda.
There should be at least 40 per cent increased allocation in 14-15 budget , and thereafter Y-O-Y wrt
previous budget total plan allocation to aim at public healthcare expenditure to touch at least 3%
of the GDP by 2016 which is presently way below 1 per cent of GDP. We expect the government to
increase the same to somewhere around 5 % of GDP by 2020. Out-of-pocket (OOP) private
expenditure on health care by an average Indian is one of the highest in the world. Around 71 per
cent of the health care expenditure is borne through own resources as compared to average 15 per
cent spend by individuals in developed world. There should be no proposal in the next budget for
widening of service tax net to cover diagnostics and hospitalisation in hospitals, which will create a
larger hole in the pockets of patients. This is likely to be brought back in the budget of 2014-15 with
Goods and Service Tax which we in the industry dread.
NRHM, the flagship programme to improve health status, seeks to provide accessible, affordable
and effective primary care, especially to poor and vulnerable rural population.
2009-10 2010-11 2011-12 2014-15(we
Allocation (in
13,306 13,464 16,056
Increase over
previous year
1% 19% 30%
Since the launch of the NRHM, institutional deliveries have jumped from around 10 lakh to 90 lakh;
largely riding on the incentives provided under Janani Suraksha Scheme
(JSY). There should be increased plan outlay which will augur well for this scheme. Convergence of
this scheme with other related schemes is essential to reap greater benefits.
The key objective of the scheme is to ensure adequate nutritional and health care for pregnant and
nursing women; as well as children under six years. There has been significant progress in the
implementation in terms of increase in number of operational projects, anganwadi centres (AWCs)
and coverage of beneficiaries.
However, based on the National Health Family Survey 2005-06, the all India average for
malnourished children is 47 per cent and 58 per cent of pregnant women are anaemic.
These figures suggest how far we are lagging behind.
2009-10 2010-11 2011-12 2014-15(we
Allocation (in
8,155 8,700 10,330 –
Increase over
previous year
– 7% 19% 30%
There should be a proposal in the Budget 14-15 to raise the remuneration levels of anganwadi
workers and anganwadi helpers as well as ASHA’s. These are the back bones of the healthcare
delivery in our country. The increased allocation will be a good sign for the scheme and for the
common man especially the rural Indian population.
The RSBY has the prime objective of providing smart card based cashless health insurance cover of
Rs 30,000 per family per annum to BPL families in the unorganised sector where beneficiaries pay
only Rs 30, while the government pays the balance premium to the insurer. The plan allocation for
RSBY must be increased by at least 40% of previous year. It may be noted that that the un-organized
sector’s contribution to our national GDP is always under-rated.
The scheme should also cover the entire unorganised sector workers. Occupational diseases are
very common in this sector with no health insurance or any other health coverage. This will be
another welcome step for the working classes who give their lives for industrial development at cost
of their health. However, the plan outlay for the scheme is far below the expectation in the previous
The government should give tax holiday to hospitals. A few recommendations for the Health Sector
like streamlining policies and tax holidays to boost healthcare facilities across the country, especially
in tier two and tier three cities would help the health industry grow at a faster pace keeping
requirements of the population.
What can the new government do to improve healthcare? The transformation expected by the
healthcare industry continues to remain unfulfilled in all previous budgets, as the Healthcare
industry has failed to gain the priority infrastructure status. This may slow down private investment
and will adversely affect the spread of secondary healthcare in Tier 2, Tier 3 cities and rural areas
surrounding these cities. Giving infrastructure status to the healthcare sector would help it attract
more investments necessary to narrow the demand supply gap in hospital services. India is a
signatory to the Millennium Development Goals (MDGs). 3 out of the 8 goals pertain to healthcare.
India’s ability to achieve the healthcare related MDGs depend on her ability to narrow the demand
supply gap in healthcare services. Investments in healthcare infrastructure have not kept pace with
population growth and increasing urbanization. India’s average of around 70 beds per 100,000
people compares poorly to the world average of 396 beds per 100,000. Increasing the number of
beds to around 200 per 100,000 would mean creation of 1.3 million new beds, which would require
fresh investments of $80 billion. Health is a state subject in India and cash strapped state
governments are not likely to be able to provide budgetary support for such investment. The private
sector therefore will have to step in and provide bulk of these investments. This private sector
therefore needs impetus from the central government.
The healthcare sector’s break even period in India is long at 3-5 years. Given these constraints, the
private sector needs adequate incentives to enable them to make the huge investments needed to
narrow the demand supply gap. Providing infrastructure status to healthcare would enable long
term funding from agencies at low rates of interest. Providing infrastructure status to healthcare
would also exempt them from payment of service tax to commercial or Industrial construction
companies, reducing input costs of healthcare projects. Healthcare companies can also channelize
overseas capital to projects in India thru the ECB route. At this point, the ECB limit for hospitals is
$100 million per year; providing infrastructure status will raise this cap to $500 million per year.
Healthcare projects in select non- urban areas should enjoy a ten year tax holiday under section
80IB in the new budget. Infrastructure status to healthcare would enable them to enjoy a 10 year
tax holiday. This is particularly important for healthcare sector since a short period tax holiday is too
little given the fact that hospital projects take 3-5 years to break even. This will make healthcare
sector more attractive for investors. The previous budgets have not done anything in this regards.
At a macro level, the new government should bring forward a Comprehensive Policy on Public
Private Partnerships (PPP) for use by Central and State Governments which may help in
promoting the much needed PPP projects in Healthcare. A PPP policy for infrastructure already
exists which has shown quick results in terms of quick TAT for private investments. The healthcare,
too, requires a similar structured PPP policy and standard norms in place. This will remove
arbitrariness and corruption in decision making by bureaucrats in implementation of PPP projects.
The National Innovation Council, set up under the UPA government has not spurred any innovation
in healthcare and pharma sectors, as expected. The new government should re-look at this
aspect too and given the proper push, the healthcare industry will take a proactive interest in such
an initiative.
Medical Devices Regulation Act
The medical devices market is the most un-regulated market in the country vis-à-vis the healthcare
sector. There are no prescribed “gold standards” for manufacturing in India , no data on Indian
studies for “safety standards”, no studies showing efficacy and even indications of use in India, no
MRP is ever fixed and even the variations in cost prices is very wide. This scenario is made worse by
unscrupulous vendors and manufacturers offering incentives to doctors for use of their products.
Medical tourism too, is now looking to boom in India, which will bring in patients from across the
world; to maintain international standards of healthcare and earn our healthcare industry an
international reputation, we need to follow international standards in use of medical devices.
Hence to consolidate laws related to medical devices and for establishing and maintaining a national
system of controls relating to quality, safety, efficacy and availability of medical devices that are
used in India, whether produced in India or elsewhere , a regulatory body under the regulatory Law
is a must.
Having considered paramount the safety of the public in the use of medical devices, and the fact
that the content and scope of the present laws of the country including the regulations and
administrative provisions in force do not extend to and cover adequately the safety, health
protection and performance characteristics of medical devices, the regulatory body is essential.
Also, even in the amendments to the Drugs and Cosmetics Act, 1940, the scope of the definition of
the expression ‘drugs’ has not been extended to cover the entire spectrum of ‘devices’ fully and
does not adequately cover all the products which are covered by the current internationally
accepted definition of ‘medical devices’.
Thus, the regulatory body will cover the aspects of medical devices broadly covering the design,
manufacture, packaging, labeling, import, sale, usage and even disposal of medical devices in India.
Along with the regulatory body it is essential that a law should be in place for regulating medical
devices to give teeth to the body.
Therefore, it is found expedient in the larger public interest, that the Parliament under the new
government, should enact a law to bring under its control the safety and performance of all medical
devices which will be administered through the regulatory body.
To sum up, a regulation in this area of healthcare will help patients and the doctors alike.
National Programs
The National vector borne disease control program(NVBDCP) being implemented for prevention
and control of Malaria, Filariasis, Kala Azar, Japanese Enchephalitis, Dengue and Chikungunya, needs
to be made more intensive and budget outlays needs massive increase. For example, the
government has to fix targets by 2017 like at least 70% reduction in mortality due to malaria, at least
95% of those suffering from malaria should get appropriate treatment within 24 hours of reporting
to the health system. Lymphatic Filariasis is endemic in 250 districts in 20 states/UTs. About 600
million Indians are exposed to the risk of infection. The government should aim for elimination
(carriers less than 1%) of Lymphatic filariasis by 2015. The aim should be to have coverage of
population with annual mass drug administration (MDA) above 90% persistently for the next 5 years.
Kala Azar is endemic in 52 districts of Up, Bihar, WB and Jharkhand. The government should aim for
elimination of Kala Azar by year 2014 by giving 100% central budgetary support for this program.
Japanese Enchephalitis (JE) is a major public health problem in AP, Maharashtra, WB, Assam, TN,
Karnataka, Bihar, Manipur, Haryana, Kerala and UP. For controlling Japanese Enchephalitis (JE)
vaccination of children between 1 to 15 years must be taken up in the NVBDCP. The government
has to increase the number of sentinel surveillance hospitals with lab facilities for Dengue control
in the endemic states. The number of apex referral labs linked to these sentinel surveillance
hospitals has also to be increased in numbers. Presently, there are only 311 sentinel surveillance
hospitals and 14 apex referral labs. ELISA kits for early diagnosis of Dengue should be available
The government should give special attention and special financial aid to Bihar, Chhattisgarh and
Dadra Nagar, Haveli under National Leprosy Eradication Program. The aim is to reduce case load of
leprosy to 1 or less than 1 per 10,000 population in these states/UT. The final aim should be to
eradicate leprosy on the national level by 2015.
India is the highest TB burden country in the world it accounts for one-fourth of the estimated global
incidence of TB cases. More than 80% of burden of TB is due to premature death as measured in
terms of DALY’s lost. To control the menace of Tuberculosis in India, where one patient dies every
minute, the government should aim to see that number of people dying from TB in 2015 should be
less than 1 million.
The new government must see that the primary goal of National AIDS Control Program III is to halt
and reverse the epidemic in India over the next 5 years by integrating programs for prevention, care,
support and treatment.
The National Program for Control of Blindness must join the global initiative in right earnest for
reducing avoidable blindness by 2020. For this we need to have at least 25 centers of Excellence,
250 training centers, 2500 service centers and 25000 vision centers.
167 million Indians are exposed to the risk of Iodine Deficiency Disorders (IDD)( goiter, cretinism,
deaf-mutism, mental retardation, impairment of intellectual and motor functions) of which 71
million are having goiter, cretins and mild neurological disorders. IDD program has to be
strengthened in at least 106 districts of endemic states like UP, MP, Assam, HP.
The National Universal Immunization Program needs to be strengthened to control the child
mortality rate.
The 12th Five Year Plan
The 12th Five year plan (2012-2017) must re-strategize to achieve faster progress towards the goals
listed but not achieved in the 11th Five year plan, it must also define its healthcare strategy more
broadly. It must give priority to converge all the existing national health programs. It must give
priority to children and women related issues, population stabilization, health infrastructure and
human resources for health.
Some of the goals we suggest are as follows-
 Reduce Maternal Mortality Rate(MMR) to 1 per 1000 live births
 Reduce infant mortality rate (IMR( to 28 per 1000 live births
 Reduce total fertility rate (TFR) to 2.1
 Provide safe drinking water for all by 2015
 Reduce malnutrition among children of age group 0-3 to half its present level
 Reduce anemia among women and girls by 50%
 Raise the sex ratio for the age group 0-6 to 935 by 2015 and 950 by 2018.
 Suggested norms for health personnel
 Category of personnel Norms suggested
Nurses 1 per 5,000 population
Health worker 1 per 5,000 population
(Female and male)
Trained dai One for each village
Health assistant 1 per. 30,000. Population
(Male and female)
Pharmacists 1 per 10,000 population
Lab. technicians 1 per 10,000 population
ASHA 1 per 1,000 population
The thrust areas suggested for the new government are as under-
1. Improve health equity
2. Adopting a system centric approach rather than a disease centric approach
3. Increasing survival
4. Taking advantage of local enterprises for solving local health problems
5. Preventing indebtedness due to expenditure on health/protecting the poor from health
6. Decentralizing governance
7. Establishing e-Health
8. Improving access to and utilization of essential and quality healthcare
9. Increasing focus on health human resources
10. Focusing on neglected and excluded areas eg care of old age patients
11. Enhancing efforts at disease reduction
12. Providing focus to health system and bio-medical research


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