2018 – A year of hope and apprehensionFebruary 5, 2019
The year 2018 was an extraordinary year for the Indian healthcare industry for the attention it received from both the highest levels of the government as well as the regular public, and for the aspirations, apprehensions, anxiety and even the agony it created among different stakeholders. Undoubtedly, healthcare has never been in so much limelight in the past, and no one remained untouched by the heat and the hope it generated. The most defining feature of last year’s developments, for me, was the irreverence with which the agenda of affordable healthcare was being pushed by governments (at the centre and the states). Naturally, this meant striking a blow to the status quo and the prevailing order. This naturally resulted a diversity of perspectives among different stakeholders, depending on their assessment of themselves as victims or beneficiaries from the intended change. To sum up my thoughts within the limits of this column space, I have picked what I believe are a few good and some not-so-good aspects of what happened during the year 2018.
1. Scope and Political will behind Ayushman Bharat: I have always believed that providing government-sponsored health for BPL population is necessary, though far from sufficient, in the Indian context, where there is a large segment of the population above the poverty line for whom the prevailing healthcare services are prohibitively expensive. Hence, the intent of AB to progressively cover up to 70 percent of the population, starting with approx. 40 percent, and its focus on rural areas is most appropriate. So is the coverage amount of Rs. 5 lakh per family. But what is truly unprecedented is the political capital invested behind the scheme by a highly image-conscious and the most popular leader that India has seen in several decades. This has, in no small measure, helped the adoption of the scheme by states and smoothened its roll out, though we still have a long way to go. More importantly, this has led to an unprecedented focus among private players on non-urban expansion and on evolving appropriate affordable healthcare models with much greater urgency and seriousness than before
2. Changing mindset towards “Health”care from “Sick”care: I am most happy to see a real and tangible increase in people pursuing good health, more than ever in the past. Importantly, this is seen across all age groups. A simple survey among your friends and neighbours will reveal the increasing number of people adopting yoga, exercise regimens, smart fitness trackers and a generally more proactive approach towards health management. This is a very welcome and significant change. Of course, this attitude is getting further catalysed by technology products that have made measuring and monitoring much easier, leading to more effective health management.
3. Coming of age of the Indian medical device: Except in pharmaceuticals, where Indian companies have built a robust capability that has significantly contributed to cost competitive and MNC-equivalent products, Indian companies have been marginal players in other medical categories like implants, medical equipment and consumables, with a reputation for manufacturing inferior products. Hence, the conclusions of a 10-year study by a German cardiologist that rated Indian stents on par with their higher-branded global counterparts is a very significant development which has the potential to unleash unprecedented aspiration and investment into developing the local medical device industry along the lines of the Indian pharmaceutical industry, seen today as the pharmacy of the world.
1. Populism overshadowing patient safety: The flip side of the political relevance that affordable healthcare is gaining is the unbridled populism guiding health policies. An overwhelming focus on cost, without an appropriate framework for defining and enforcing quality standards, has the potential to compromise the quality of the healthcare provided. In a country where clinical pathways can be highly subjective and the regulatory regime does not assure equivalence between equally qualified medical products, such populism is a serious threat to patient safety.
2. Health of corporate hospital chains: Private sector healthcare has contributed to 70 percent of the capacity growth in the last decade, with a vast majority of the population depending on them for high-end care. However, the financial health of the corporate chains is under severe stress, with leverage moving north of 5 times the EBITDA for several chains. This is owing to challenges in growth from traditional markets and pricing pressure, coupled with increasing costs and interest burden. I see this as a part of transient turbulence accompanying any transformational change. I am sure the industry will focus on efficiency and redesign their operating models to come out stronger and bigger with time.
3. Patient Voice is still fragmented and powerless: I am a firm believer that more than regulations, it will be the voice of the patients that will transform the industry in the times to come. Something like a TripAdvisor for representing the patient voice is a crying need of the hour, but I am yet to see any initiative of great promise in this regard.
1. Budget for AB: I think it was unfortunate to see the government and policy makers quote completely irrational and inadequate numbers as the required expenditure for a project of such significance. Very unfortunate. Period.
2. Make in India: There was a lot of hope that the “Make in India” programme will unleash an environment of much-needed localization of medical products, particularly medical devices and equipment. With four years of the current regime already over, the sad truth is that Make in India has not delivered anything at all for the industry in the absence of a compelling value proposition.
3. State of public healthcare: The less said about this, the better. Barring a few states in the South, and perhaps with the exception of Delhi which has witnessed some degree of improvement, public healthcare in the rest of the country continues to be in a state of apology. With the
inherent dependence on public health for the success of the AB scheme, this is a very serious concern.
The author has long-standing association with EY India but the views are strictly personal.