Not as per expectation

 

Union Budget timeline: Revisiting healthcare expenditure from 2019-2022

The Indian healthcare sector is expected to triple in size between 2016 and 2022, growing at a CAGR of 22 per cent to reach $372 billion in 2022, up from $110 billion in 2016. Health insurance companies too grew 13.3 per cent, recording a three-fold rise, growing at a CAGR of 22 per cent between 2016 and 2022 to reach $372 billion in 2022, up from $110 billion in 2016.

ETHealthWorld February 01, 2023, 09:31 IST

    

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New Delhi: The COVID-19 pandemic highlighted the importance of repairing our ailing healthcare infrastructure. As a result, according to the Economic Survey of 2022, India's public expenditure on healthcare was 2.1 per cent of GDP in 2022, up from 1.8 per cent in 2021 and 1.3 per cent in 2020. Countries like France, Japan, and Canada spend 10 per cent of their GDP on public healthcare, while neighbours like Pakistan and Bangladesh surpass us by spending over 3 per cent.

The Indian healthcare sector is expected to triple in size between 2016 and 2022, growing at a CAGR of 22 per cent to reach $372 billion in 2022, up from $110 billion in 2016. Health insurance companies too grew 13.3 per cent, recording a three-fold rise, growing at a CAGR of 22 per cent between 2016 and 2022 to reach $372 billion in 2022, up from $110 billion in 2016. But despite these splendid achievements, there are incendiary challenges as well. The pandemic has put the focus back on primary healthcare systems. For centuries, primary healthcare in India has been confined to the neighbourhood family doctor. From baby boomers to generation X, a nearby family doctor was always around. But for gen Z (millennials), that has been replaced by big hospital chains. Healthcare professionals have a firm belief that this phenomenon of OPDs in big hospitals is becoming counterproductive due to a lack of diligence and scarcity of time. It is not only leading to a delayed response to a disease but is also the reason behind high out-of-pocket expenses (OOPE).

India stands among the highest in the world in terms of OOPE, with a whopping 63 per cent of the points. High OOPE on health is impoverishing some 55 million Indians annually, with over 17 per cent of households incurring catastrophic levels of health expenditures every year, according to a World Health Organisation (WHO) report from March 2022. This can lead to patients drifting toward alternative remedies that may not be scientific at all. ETHealthword takes a look at some of the most critical areas of the Union Budget, covering the major heads of expenditure over the past couple of years.

Overall Union Health Budget trends since 2019 (pre-COVID vs post-COVID)

The Fifteenth Finance Commission, in its voluminous report titled, ‘Finance commission in COVID times—Report for 2021–26’, specifically identified critical areas in healthcare that need the government’s attention, including low investment, sharp inter-state variations in the availability of health infrastructure and outcomes, supply-side problems of doctors, paramedics, hospitals, and an inadequate number of healthcare centres like primary healthcare centres (PHCs), subcentres, and community health centres (CHCs). To achieve these targets, India needs to burn the candle at both ends in terms of increasing the overall capital expenditure in healthcare but also needs to have a focused strategy to meet the specific challenges as well.

The National Health Policy 2017 (NHP 2017) has proposed the ramping up of public health expenditures to 2.5 per cent of GDP by 2025. In 2019-20, the centre’s expenditure on healthcare was Rs 64,258 crore, which is around 1.4 per cent of the country’s gross domestic product (GDP). The percentage of healthcare in GDP rose to 1.8 per cent, with the centre spending Rs 80,694 crores in the budget for 2020–21. Following that, the GDP increased by 0.3 per cent in the years 2021–22, to Rs 86,001 crores (accounting for 2.1 per cent of the GDP). The 2022–23 budget estimate (BE) stands at around Rs 86,201 crore. The annualised change in budget expenditure is approximately 8.94 per cent (from actuals 2019–20 to BE 2022-23). The report of the Finance Commission recommends unconditional funds of Rs 1 lakh crore for the health sector between 2021 and 2026.

Lack of attention towards primary healthcare

Primary healthcare acts as a foremost protection layer against the spread of diseases, both on an individual and community level. Although in India, health is a state subject and the responsibility for primary healthcare vests with the states. Since it is a unitary federal system, the central government also tries to focus on primary healthcare through its two initiatives: the National Health Mission (NHM) and the Pradhan Mantri Aayushman Bharat Health Infrastructure Mission (PM ABHIM). There is a three-tiered system in primary healthcare, including sub-centres (SCs), primary health centres (PHCs), and community health centres (CHCs). According to the findings of the Rural Health Statistics, India still has a long way to go before standardised SCs, PHCs, and CHCs become a reality. The centre has set a goal in the 2017-18 Union Budget to convert existing SCs and CHCs into 150, 000 health and wellness centres (HWCs) by 2022. As of now, we are stuck at around 90,000 HWCs. The Fifteenth Finance Commission has recommended intensifying the focus on primary healthcare by increasing the budgetary allocation to Rs 70,000 crore at the primary level between 2021 and 2026.

Combining the budget of both NHM and PM ABHIM for years 2022–2023, the budget estimates for which stand at Rs 42,846 crore, which is far less than what the Finance Commission envisaged. The 2021–22 budget’s revised estimates for both schemes combined were Rs 35,457 crore, an overall 82 per cent lesser than 2022–23 BE. Before 2021, there was no PM ABHIM; the NHM solely focused on primary healthcare. The actual expenditures for the NHM in 2020 and 2019 were Rs 37,080 crore and Rs 31,745 crore, respectively.

High out-of-pocket expenditures vs lower penetration of health insurance




India’s out-of-pocket expenditure (OOPE) is considerably high if we compare it with the rest of the world. Although it has come down substantially, as per the National Health Estimates (NHE) 2018–19, from about 64.2 per cent in 2013–14 to 48.2 per cent in 2018–19, the road is still ahead to achieving the World Bank’s global average of around 18.1 per cent. According to the WHO’s India health system review report, high OOPE impoverishes around 55 million Indians annually. According to the Economic Survey 2020–21, out-of-pocket healthcare costs in India account for 60 per cent of all public health spending, which is one of the highest in the world.

Intensified capital expenditure on public health insurance can be one way to take on this problem. The penetration of public health insurance in India is very low. According to the NITI Aayog report 2021 titled ‘Health Insurance of India’s Missing Middle’, a population of around 40 crore individuals is still devoid of any health insurance financial protection. The Indian government, through its Ayushman Bharat—Pradhan Mantri Jan Arogya Yojana (AB-PMJAY), is trying to proliferate public health insurance in India.

The budgetary allocation for the AB-PMJAY scheme has consistently been above Rs 6,000 crore net since it replaced the Rashtriya Swasthya Suraksha Bima Yojana in 2019. However, due to lower penetration of public health insurance and poorer utilisation of funds, the scheme gets downsized every year by 50 per cent in the revised estimates. The Fifteenth Finance Commission's report on Ayushman Bharat (2019) anticipated the demand for and costs associated with PMJAY over the following five years. According to the report, the overall PMJAY costs for 2019 (centre and states) might range from Rs 28,000 crore to Rs 74,000 crore.

Human resources and government investment in institutions
The targets set by the WHO in terms of the doctor-to-patient ratio are 1 doctor for every 1000 patients. The Government of India (GoI) controversially claimed in parliament in December 2021 that India's doctor-to-patient ratio had significantly improved to 1 doctor for every 834 patients by including 5.65 lakh AYUSH doctors alongside allopathic practitioners. Although figures from 2019 suggest that India’s doctor-to-patient ratio stood at 1:1511.

Entrusted with the objective of correcting regional imbalances in the availability of affordable and reliable tertiary healthcare services, the Pradhan Mantri Swasthya Suraksha Yojana (PMSSY), introduced in 2003, supervises the formation of institutions like AIIMS and upgrades certain state government hospitals. The scheme covers 20 new AIIMS and 71 state government hospitals. PMSSY has been given Rs 10,000 crore for 2022–2023. This is a 35 per cent rise from the revised estimates for 2021–2022 (Rs 7,400 crore). In 2020–21, the revised estimate for PMSSY was Rs 7,517 crore, 25 per cent higher than the budget estimate of Rs 6,020 crore. Apart from this, there is an overall nine per cent increase in the budget allocation to autonomous institutions like AIIMS, New Delhi, the Postgraduate Institute of Medical Education and Research, Chandigarh, and the Jawaharlal Institute of Postgraduate Medical Education and Research, Puducherry, from 2020–21 actuals (Rs 12,197 crore) to 2022–23 budget estimates (Rs 15,200 crore).

National AIDS and STD Control Programme, Family Welfare Scheme, and COVID-19




Beginning in the form of ‘sero-survillance’ in 1985, India’s response to diseases like AIDS became a full-blown measure with the passage of the HIV and AIDS (Prevention and Control) Bill, 2017, and the launch of the ‘Test and Treat’ policy for HIV patients in April 2017. The Union Cabinet continued NACP Phase V, a Central Sector Scheme, from April 1, 2021, to March 31, 2026, with an outlay of Rs 15471.94 crore. The actual expenditure on the NACP programme in 2020–21 was Rs 2,815 crore. A year later, it was increased to Rs 2,350 crore, and in 2022–23, the scheme was allocated Rs 2,623 crore. The rate of change from 2020 to 2022 was 11.6 per cent positive.

The Family Welfare Scheme also gets major attention from the centre. It is an umbrella scheme covering several initiatives run by the government, ie, the Urban Family Welfare Programme, the urban revamping scheme, the green card scheme, the rural family welfare centre etc. Budgetary provisions for Family Welfare Schemes have not changed significantly since actual spending in 2020-21.

In 2020–21, the actual spent was Rs 2,815 crore; thereafter, in 2021–22, it was around Rs 2,350 crore; and finally, in the previous budget, the BE was set at Rs 2, 623 crore.

The central government allocated around Rs 11, 941 crore for COVID-19-related initiatives, which witnessed an over Rs 5000 crore increment to about Rs 16, 545 crore. As the pandemic started to slowly fade out, the budgetary allocation came heftily down to Rs 226 crore in the Union Budget 2022–23.

This year there may not be any major attribution of funds towards the COVID-19 counter-initiatives; experts believe that the government is going to use these funds for some other major purposes.

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Industry Budget timeline urban family welfare programme ayushman bharat Union Budget 2023 24 Union Budget healthcare infrastructure healthcare expenditures Health news Health Budget trends Budget 2023

Govt may bring new law to ban tobacco products: Min

The state government had in 2013 imposed a ban on tobacco and gutka products, using a temporary provision under the Food Safety and Standards Act, 2006. The ban was subsequently extended every year through notifications. Recently, the Madras high court had quashed the temporary notification.

TNN February 01, 2023, 10:45 IST

    



Coimbatore: Health minister Ma Subramanian on Tuesday said the state government would amend the Food Safety and Standards Act, 2006, or pass a new legislation, if required, to continue the ban on tobacco products.

The minister, who was in the city to attend the white coat ceremony at the Coimbatore Medical College and Hospital and the ESIC Hospital, and administer Hippocratic oath to the medical students there, also appealed the shopkeepers in the state not to sell tobacco products, as they were posing serious health risks to people.

“Shopkeepers should ponder over whether to sell something that will endanger people’s health and use the proceeds from the same for their livelihood. When there are many other items in the shop, why indulge in selling tobacco products? I appeal them to stay away from selling the same,” he said.

The state government had in 2013 imposed a ban on tobacco and gutka products, using a temporary provision under the Food Safety and Standards Act, 2006. The ban was subsequently extended every year through notifications. Recently, the Madras high court had quashed the temporary notification.

A M Vikrama Raja, president, Federation of Tamil Nadu Traders Association, had recently sought the state government’s response to the court order and whether tobacco products could be sold in shops.

“The state government will appeal against the high court order. We will amend the act or pass a new legislation, if required, to continue the ban on tobacco products,” Ma Subramanian clarified.

He said chief minister M K Stalin would open 500 health and wellness centres across the state in February. While Coimbatore has been allotted 72 health and wellness centres, 50-60 of them would be inaugurated then, he said. At least 64 of the 72 health and wellness centres would be in the city corporation limits.

The minister said the number of outpatients in the government hospitals had doubled now compared to 2018-19. “To provide better care for the increasing number of patients, vacancies are being filled up. The chief minister will issue 4,308 appointment orders to fill various posts in the government hospitals at an event to be held in Chennai on February 3.”

Subramanian said efforts were on to make Tamil Nadu a tuberculosis free state by 2025.

The minister dedicated medical equipment worth 2.73 crore to various hospitals in the state under the ‘Innuyir Kaapoom-Nammai Kaakkum 48’ scheme on the day. The ESIC Hospital got medical equipment worth 56 lakh. He said 1, 41, 923 people had benefited from the scheme so far. The state government has spent 125.42 crore
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Policy Tobacco ban food safety and standards act coimbatore tobcco products Health news

Union Budget 2023-24: Budget not as per expectations

Healthcare stakeholders are dismayed that there was no increase in the budget allocation, no revision/reduction in GST, no tax exemption and missing out on the crucial aspect of universal health coverage.

Prathiba Raju&Prabhat Prakash  |  ETHealthWorldUpdated: February 01, 2023, 19:27 IST

    


New Delhi: Healthcare leaders and experts shared their views on the Union Budget 2023-24. Informing that the new initiative like setting up 157 new nursing colleges, centres of excellence in AI, strong emphasis to promote innovation and R&D, PPP in healthcare and MedTech specialised workforce, and mission to eliminate sickle cell anaemia is a step in the right direction.

On the other hand, industry stakeholders are of the view that success will be determined by how well it is implemented. At the same time, the healthcare stakeholders are dismayed that there was no increase in the budget allocation, no revision/reduction in GST, no tax exemption and missing out on the crucial aspect of universal health coverage.

Sharing his views on the Union Budget announcement, Gautam Khanna, CEO, PD Hinduja Hospital & Chairman FICCI Health Services, mentioned, “Budget 2023-24 focused on enhancing India’s capabilities and resources through increased manpower, R&D, and PPP in the healthcare sector. Setting up 157 new nursing colleges is welcome, in view of the severe shortage of nurses in the country. However, the current state of existing nursing colleges must be evaluated for upgradation & better job opportunity for nurses to be identified to curb international migration.

The idea of setting up a centre of excellence in AI for health along with the strengthened impetus towards medical education will accelerate the development of new-age, technology-driven medical solutions for better disease management and encourage start-ups to come up with innovative solutions in the healthcare delivery space. Creating awareness of prevention and early screening is not only essential in eliminating sickle cell anaemia but would also be a great stepping stone for similar diseases, however, its success will depend on effective implementation.

The increased focus on encouraging medical education and PPP will aid the industry’s growth. The budgeted increase in healthcare expenditure of 15 per cent does not seem enough to tide over the current challenges of the upgradation of infrastructure and providing accessibility and affordability for quality healthcare in the country.
  
We are looking forward to clear indications of the steps to be implemented for healthcare infrastructure development and moving closer towards universal health coverage with increased expenditure as a per cent of GDP. It would have been better if there were tax exemptions for healthcare, which is vital to reduce healthcare expenses & out-of-pocket spending.”

Dr Shravan Subramanyam, President, NATHEALTH remarked, “It is encouraging to see the importance that the healthcare sector has got in this year's budget. Skilling of healthcare nurses and allied workers has been a long-standing gap, hindering healthcare delivery expansion, and the union government has taken a step in the right direction to address this. A significant increase in nursing and medical colleges, a strong emphasis to promote innovation and R&D, PPP in healthcare and MedTech specialised workforce will lay a stronger roadmap for the future.

Subramanyam continued,
“The initiatives announced to strengthen the digital healthcare infrastructure will prove to be beneficial for the healthcare sector in the years to come.
The mission to eliminate sickle cell anaemia by 2047, income tax rebates and disposable income to be channelled to essential items - healthcare being one, are laudable efforts undertaken by the government.

However, the long-standing requirements of the sector to increase healthcare spending as GDP per cent to 2.5 per cent, custom duty reduction to balance demand with supply and the nascent healthcare manufacturing base in equipment scheme, streamlining embedded indirect taxes like GST in healthcare making a smooth flow of credit difficult across the value chain and low-cost financing schemes to strengthen healthcare infrastructure, primary care and improved working capital has not been addressed. In the last couple of years, a big positive is the partnership spirit with the private sector in healthcare and coherent initiatives undertaken to take these goals towards reality for a healthier prosperous India. NATHEALTH looks at working closely with governments at all levels to take this aspirational healthcare agenda forward towards Arogya Bharat and beyond.

“This year’s budget has set the pathway for India to achieve universal health coverage. We welcome various initiatives announced by the honourable Finance Minister to address the long-standing gaps in the Indian healthcare ecosystem. On the healthcare front, the budget focuses on opening 157 new nursing colleges and using existing facilities in select ICMR labs for research by public & private medical facilities. The announcement of dedicated multidisciplinary courses for medical devices in existing institutions to ensure the availability of skilled manpower for futuristic medical technologies and high-end manufacturing will play a pivotal role in strengthening the healthcare sector. We also welcome the mission to eliminate sickle cell anaemia by 2047 which will immensely benefit a large population. The government’s greater emphasis on R&D, innovation and results-based financing towards more effective PPP will prove to be beneficial in creating the much-needed shift towards quality and higher value. In view of the G20 presidency, overall, the announcements provide a strong impetus to strengthen the Indian healthcare ecosystem,” shared Dr Ashutosh Raghuvanshi, MD & CEO, Fortis Healthcare.

Also Read: Union Budget 2023-24: Hospital CEOs expect increased healthcare spending, tax incentives & GST exemption

Emphasising the need for universal healthcare and the ever-rising disease burden in the country, Dr BS AjaiKumar, Executive Chairman, Healthcare Global Enterprises Limited opined, “The budget has again missed out on addressing universal healthcare which is very disappointing. The increase in budgetary allocation to this sector is yet off the desired mark, given the severity of the issues and challenges on the ground like high infant mortality rates, alarming out-of-pocket expenditures, and vulnerable public health infrastructure in rural areas and deprived regions. Given that the government has increased tax on certain forms of cigarettes by 16 per cent, it is important that this extra tax collection should be earmarked for healthcare, particularly for cancer care, as the victims of tobacco use are cancer patients.

“On the bright side, the announcement of opening new nursing colleges is a laudable move given the critical importance of the nursing professionals but such announcements should precede a summary of the earlier budget announcements and respective implementations on the ground. This context will lend more clarity and transparency to the budget announcements.”

“The renewed focus on the genetic blood disorder of sickle cell anaemia is a key step, but its implementation will hold the key to its sustainable success. It may be recalled that earlier budgets had focused on the ‘anaemia Mukt Bharat’ mission, pledging to treat anaemia through testing, point of care, and supply of fortified foods. A preface on the outcome of that scheme would have been apt while announcing the new measure.

The impetus provided for public-private collaboration is welcome, both through the ICMR lab initiative as also through the pharma centres of excellence. However, there is a pressing need to invest in tech-enabled systems using predictive genomics to strengthen India’s prevention, surveillance, and response capacities to pandemics and epidemics. I was also expecting a rationalisation of tax and duty structures around life-saving drugs and emergency treatments, revision of GST slabs, and SOPs for healthcare equipment manufacturers. High time, India makes health a top priority and extends all key subsidies and benefits to the sector to make healthcare accessible and affordable to one and all,” concluded Dr AjaiKumar.

Dilip Jose, MD & CEO, Manipal Health Enterprises Pvt Ltd, stated, ”It is a progressive budget with a focus on infrastructure development, which should in turn spur job creation. The steps to encourage environment-friendly consumption and businesses are very welcome too. The budget is also mindful of the expectations of the youth and the middle class.”

Adding to this Commander Navneet Bali, Regional Director Narayana Health-North said Union Budget 2023 looks progressive and inclusive for the healthcare sector. “The government has taken a holistic approach by focusing on the ‘Sapt Rishi’ model and our sector is aligned with all the seven pillars mentioned by the Finance Minister in her speech. For example, the healthcare sector plays a crucial role in inclusive development and reaching the last mile. We are glad to know that ICMR labs will be made available for research by public & private medical college faculty and private sector R&D teams. We were expecting some measures on capacity building in the sector and it is promising to note that the government has announced setting up 157 new nursing colleges. This would enhance our capacity and fill the gap in terms of human resources. The proposed mission to eliminate sickle cell anaemia by 2047 is a very positive step. The programme for research & innovation in pharmaceuticals is a well-appreciated need of the hour.”

Sugandh Ahluwalia, Chief Strategy Officer, Indian Spinal Injuries Centre said, “Provisions for the healthcare sector, announced by Union Finance Minister Nirmala Sitharaman, look promising. The creation of 157 nursing colleges, in combination with the existing 157 medical colleges established since 2014, would create a huge capacity for healthcare providers. Another important takeaway is a push for a public-private partnership by making available facilities in select ICMR labs for research by public and private medical institutions. As we were expecting some incentives in medical value tourism (MVT), the overall thrust to promote tourism, thereby extending facilities to overseas tourists, would also benefit medical tourism in the country. With the announced measures, the healthcare industry is hopeful to conduct more interdisciplinary research and develop cutting-edge applications and scalable problem solutions.

Dr Anil Krishna, Chairman & Managing Director, Medicover Hospital stated, “A bold budget that lays down a 25-year roadmap for India to become a truly successful economy. The announcement regarding the increase in healthcare-related expenditure with an increase of almost 10.91 per cent over the revised estimate of 2021-22 and 2022-23 is truly a massive move. It shows that the government has learned from the pandemic as they plan on spending Rs 39,44,909 crore in 2022-23. Furthermore, the actions made for collaborative public health management demonstrate that the government is finally looking at healthcare R&D through expanding facilities in select ICMR (Indian Council of Medical Research) labs. These will be made available for research by academics from public and private medical colleges, as well as R&D teams from the private sector, to encourage joint research and innovation. All in all, it is a very well thought out budget that will have a positive impact on the digital and health infrastructure of the country.”


under the scheme.