Ravi Bhandari, CEO, Shalby Hospital
On the healthcare market in India vis-à-vis the global market
In recent years, healthcare has assumed a predominant status among sectors in India, in terms of employment and revenue generation. Availability of well-trained medical professionals and staff helps the private sector to provide majority of secondary, tertiary, and quaternary care with remarkable cost advantage compared to its most economical peers across the globe. When it comes to the cost of surgery, India is at one-tenth of cost as compared to the United States of America and Western Europe. The Indian private sector healthcare accounts for about 74 percent of the country’s total healthcare expenditure and the presence of world-class hospital set-ups boosts India’s position as a preferred destination for medical tourism.
However, the Indian healthcare market is getting highly competitive in the urban settings due to focused concentration of healthcare providers in these markets, considering purchase power parity, health awareness, and cosmopolitan nature of these cities. The development of twin cities also contributes to this phenomenon. As compared to global peers, Indian healthcare is far low priced which makes it difficult to meet the growing customer expectations amidst shrinking profitability.
The cut throat competition also affects the availability of qualified staff and their retention. However, there exists a huge opportunity in the country for serving the 1.25 billion population, inclusive of the rural mass. In this endeavor, healthcare providers should also make a fast move in developing the Tier II and III cities as well, with suitable business models, for providing all-inclusive healthcare to a larger segment. In India, healthcare insurance is under-penetrated so far and in case of rural areas, the picture is much grimmer. In India, it is evolving as compared to well-developed in the western world and under-developed in third-world countries. Most economical still amongst the best. Even more economical than under-developed markets.
On budgetary allocation in healthcare
Budget allocation traditionally has been low. Focus on this sector has been missing. The estimated budgetary expenditure on health, education, and social protection for 2018–2019 thus stands at Rs. 1.38 lakh crore which is 13 percent higher than that of 2017–2018.
In budget 2018–2019, substantial weightage is given to the National Nutrition Mission – a program that seeks to reduce stunting, under-nutrition, anemia, and low birth weight of babies – under the women and child development ministry. The budget provisions rose over three times, from `950 crore in 2017–2018 (revised estimates) to `3000 crore in 2018–2019 (budget estimate). This restores the government’s commitment to improving nutrition status among Indian children.
The government should act aggressively on the acute shortage of super specialists. Actions now will bring results in 3–4 years’ time. Effective implementation of recently announced NHPS is the key. Engaging the private sector by announcing a win-win formula is important as till now largely the pricing and payment situations have been actually acting as a deterrent for the private sector.
On planned budgetary allocation for the fiscal year 2018–2019, and proportion allotted for the procurement of medical equipment and devices
In last 10 years we have expanded from 200 beds to 2000-bed capacity. We intend to grow at a similar pace. Typically the outflow for medical equipment and instruments is around 20–25 percent of the overall spending.
With the novel aim of bringing healthcare within the reach of every citizen, the Government of India has introduced and implemented various health schemes and programs. We still have a long way to go from current dominance of service geography to metros and Tier I cities; it has to be effectively cascaded further to Tier II/III cities and so on. The huge trust deficit between government and private sector providers needs to be bridged, particularly on the pricing part. This can be done by open discussion on input costs. Further, appropriate pricing for government schemes coupled with timely and complete payments will encourage the private sector to participate more.
On monitoring the quality of private healthcare
Quality of health deliveries is the most important marker of success and sustainability of healthcare organizations. Efficient and hassle free healthcare deliveries help to increase loyalty, develop trust, and create customer satisfaction of provider organization which in turn results in profitability, reducing cost, and gaining competitive advantage. Quality, which is especially important for an organization such as a hospital, can yield positive results in indicators such as length of stay and bed turnover. In recent years, due to increased awareness and expectations of patients from health services, paying attention to quality has become inevitable. However, there is no doubt that quality of healthcare services is improving day by day with the corporatization of hospitals and advancements in technology. Quality council of India is playing a pivotal role. Accreditations such as NABH and NABL etc. enable hospitals to consistently track and monitor daily quality parameters.
On importance of public private partnership in making healthcare a success
PPP can play a pivotal role in efficient healthcare deliveries, especially in developing countries or countries where the healthcare industry has not made rapid strides. India, by contrast, has adopted more comprehensive service delivery PPPs, where not only are the facilities developed and improved by the concessionaire but services are also provided. An example of this approach is one of a private hospital built on public land with a requirement to make a certain number of beds/treatments available to publicly funded patients. The rest of the facilities can be used for private patients. In some cases the concessionaire will pay the government a fee for the right to operate the concession; in others it will require a subsidy. Typically the bids are evaluated based on the lowest cost to government.
Local authorities, often cash strapped, are looking to PPPs to allow them to provide the health facilities that they find unaffordable. As with many sub-national PPPs, they utilize land available to them to develop a partnership with the private sector that they expect to benefit their citizens. However, we are yet to effectively implement as well as adopt PPP models which can immediately give boost to capacities. This indicates that a lot more needs to be done in this area.
On areas where government should invest to make healthcare available to all
India has made rapid strides toward increasing access to health services in the past few years through a number of initiatives, including the flagship National Rural Health Mission (NRHM), launched in 2005. This was expanded to the urban population through the National Urban Health Mission (NUHM) in 2013. To provide financial protection to targeted populations, including those below the poverty line, the government has implemented the Rashtriya Swasthya Bima Yojana (RSBY). It covers the cost of secondary-level hospitalization.
These apart, government should invest heavily in fortifying primary healthcare, increase medical post-graduation seats, raise subsidy level on huge CapEx investments, and reduce tax burden on such investments. Investing in the skill development of support staff should also be a priority of the government.
On policy intervention that the healthcare sector in the state needs to align with healthcare objectives at the national level
Government policies and interventions making primary healthcare services available to each individual, creating awareness amongst people about their health needs, and encouraging their involvement and participation in the planning and implementation of the health programs, including improving the standards of environmental sanitation and personal hygiene can lead to reduction in the incidence of diseases and foster a healthier life.
The main objective of primary healthcare will be to provide better healthcare services to the rural areas and urban slums. The government and the medical profession together can help people to realize their responsibility by providing a large band of health volunteers from among the community itself to take care of the basic health needs of the community.
Such a system will facilitate a more equitable distribution of health resources, and correction of past imbalances, if any. The primary emphasis of a primary health system will be on prevention, promotion, and rehabilitation aspects of health.