Union Budget gives thrust to healthcare sans clarity and adequate allocation

February 3, 2020 0 By FM

The union budget for fiscal 2020 has given a thrust to healthcare, but the recommendations still lack complete clarity and remain inadequate in terms of fund allocation.

Considering healthcare as a priority area, the government has tried making provisions for increased infrastructure and creating skilled resources. As part of this, the budget has recommended viability gap funding for setting up new medical colleges attached to district-level hospitals in tier 2 and 3 cities through a public-private partnership. This would apparently help to widen the coverage of the central government’s medical insurance scheme – -Ayushman Bharat-Pradhanmantri Jan Arogya Yojna, to additional facilities, adding 112 more districts that currently lack hospitals impaneled to this insurance scheme. Currently, there are about 16000 hospitals and others, including public and private, impaneled under this scheme.

The budget has announced a total outlay of Rs 69,233 crore for healthcare (government spend). This allocation, which is just an increase of 4.2% to the existing Rs 66416 crore, also includes spending for healthcare-related research activities and the Rs 6400 crore for Ayushman Bharat insurance scheme.

In order to overcome the shortage of medical professionals, including general practitioners, specialists and others, the government has also announced the creation of a special bridge course. It has also proposed that large hospitals can start offering DNB and SNB courses to increase the number of specialists.

However, the budget has proposed a 5% cess on the imported medical devices to fund the creation of additional healthcare infrastructure. This will increase the prices of such devices in the country, which is still predominantly import-dependent.

Reacting to the budget recommendations, Satish Reddy, president of Indian Pharmaceutical Alliance- – the association of large Indian pharmaceutical companies, and Chairman of drugmaker Dr. Reddy’s Labroatory, said, “I am happy to see that healthcare continues to be an integral part of the Government’s key priorities. The announcement on the expansion of the Ayushman Bharat program by setting up additional hospitals in tier 2 and 3 cities is a welcome move. Other measures in improving the healthcare infrastructure and capacity building in the sector are also commendable.”

But, he added, “The industry had high expectations of this budget as it was seen to be an opportunity to announce big, bold reforms given the state of the economy. On that count, there is a degree of disappointment in some quarters as expectations have not been met.”

The healthcare proposals of Union Budget 2020 though titled ‘Caring India’ is a mixed bag, said Shravan Subramanyam, Managing Director (India and Neighbouring Markets), Roche Diagnostics India.

“While the marginal increase in healthcare allocation to Rs 69,000 cr is welcome, it still is a very small percentage of our GDP and does not supplement the government’s plans to enable affordable and accessible healthcare to all in the country,” he said.

According to Subrahmanyam, the proposal to establish hospital infrastructure across select districts under the PPP model can help provide access to formal healthcare to millions of patients, who today travel far to avail of basic hospital care. The partnership-driven approach is a sure step for the entities to bring to these hospitals their inherent areas of strength, thus building a quality model of care. This also allows the private sector to take part in addressing the health needs of the country more effectively. But, it is imperative that implementation quality and timelines meet the intent of this proposal.

However, he added that the proposal to introduce a health cess on import of medical equipment does not fit the narrative. Currently, the Indian medical devices industry draws on the strengths of international technology to a large extent. The healthcare spends burden on the common Indian almost instantly tends to increase with this cess, in an almost completely out-of-pocket market that India is still. It is my expectation and belief that the Finance Minister adopts a consultative approach building in recommendations from the industry and patient voices before this is implemented.

Gautam Khanna, CEO of P.D. Hinduja Hospital and Medical Research Centre, said “As a health provider I am pleased that the government has taken significant measures to lay focus and cater towards the needs of the healthcare industry. Our existing TB program at the hospital will further help the country strengthen its fight against TB and support governments campaign TB Harega, Desh Jeetega. The schemes introduced to provide assistance to 20,000 empanelled hospital under the flagship of Ayushman Bharat in tier 2 and 3 cities will benefit to make healthcare accessible and affordable to the citizens.”

He added that “We are delighted with the budget allotment of Rs 3000 cr for the skill development sector as this will help to further develop skills of Indian healthcare practitioners to match the international standards. Also, district hospitals been attached to medical education institutes is a good thought out step by the government that will help to increase the number of doctors in our country which is the need of the hour.”

However, we will need more clarity on how the big hospitals will increase its students for the DNB Courses as this will require more professors which is a limitation today, he reacted to the new Budget recommendations.