The healthcare sector has emerged as one of the fast-growing service sectors in India, contributing 6-7 percent to the country's Growth Domestic Product. However, the government has kept a tight rein on healthcare expenditure. India spends only ~1 percent of its GDP on public health, compared to 3 percent in China and 8.3 percent in the United States.

Healthcare in India has struggled to cater to domestic needs because of deficit in infrastructure and manpower. Physical reach of any healthcare facility, private or public, is a challenge in rural areas where only 37 percent of people are able to access IPD facilities within a 5-km distance, and only 68 percent are able to access the OPD.

On the other hand, healthcare has gained significant interest from investors. Several foreign companies are investing in the country. PE/VC funding has fuelled growth and expansion of the organized healthcare segment, which has begun to evolve and mature. Private equity investment in healthcare, coupled with private partnership with the government, has grown considerably as a preferred approach to strengthen healthcare delivery.

A national framework must be created by the government to facilitate transparent investment and better delivery. Private players could continue to be instrumental in bridging the demand supply gap in the industry, while social investments could act as the fulcrum to achieve international development goals.

The government could restrict its role toward disease prevention, improving access to primary care, increasing and improving the quality of the country's pool of medical manpower and incentivizing the private sector to invest in capacity building and improving access to healthcare services.

Health services could be outsourced to private players where possible, thereby supplementing government funding with private investment and improving expenditure in the area. Private partners could run sub-centers and primary health centers under the National Rural Health Mission, provide diagnostic facilities where possible, train human resources in health, and build hospitals and infrastructure.

The government must aggressively move toward re-shaping the Indian healthcare industry!


From the Editor's Desk

Anju Arora

Anju Arora is the founder and managing director of ADI Media Private Limited, a business-to-business (B2B) information provider. ADI Media’s B2B products include Medical Buyer, Communications Today, Broadcast & CableSat, and TV Veopar Journal

She is an Economics Honors graduate from Lady Shri Ram College, New Delhi and PGDP from Indian Institute of Foreign Trade. She has also participated in the OPM Key Executives Program at Harvard Business School.

Anju Arora is also the co-founder and executive director on the Board of ADI BPO Services Limited, the majority shareholder in MPS Limited, listed on all the major India stock exchanges and a Macmillan company till 2011.

Why is The Government So Bad at Health Care?

 

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