What changes will we see to healthcare in India post Budget 2018?

By Sabe Tibbitts

"We are not only focusing on Ease of Doing Business, but also Ease of Living", Finance Minister Arun Jaitley announced in his budget.

Ayushman Bharat Programme

Healthcare under the Ayushman (blessed with long life) Bharat programme was a major topic in Jaitley’s budget speech.

New resources allocated to basic first line care aim for real change within the next four years in the health and well being of India’s population. This is coupled with the long-term aim of universal healthcare cover for Indians.

The two new initiatives announced are:

1. The National Health Protection Scheme (NHPS) the world’s largest Health Protection Scheme covering over 100m poor and vulnerable families across India; probably concentrated in rural areas; and
2. 150,000 health and wellness centres as a foundation to make healthcare more accessible to people across the country. These will provide comprehensive healthcare including in non-communicable diseases (cardiovascular, diabetes and cancer now a leading cause of death), maternal services and free essential drugs and diagnostics.

Points within Mr Jaitley’s speech for UKIBC members to note are:

• For the NHPS: “Adequate funds will be provided for smooth implementation of this programme”. Although the Finance Ministry’s budget has been increased by 11.5%, this modest rise means India’s health spend is still among the lowest in the world
• The NHPS is to be implemented across India, so it may be challenging to implement across all the areas and groups eligible for the scheme
• c.£135m (INR 1,200 crore) is allocated to the provision of free essential drugs and diagnostic tests
• c.£68m (INR 600 crore) is earmarked for nutritional support to all tuberculosis patients
• The levy of health and education tax has been increased from 2% to 4%.
• There will be 24 new government medical colleges and hospitals by upgrading existing district hospitals,
• These Ayushman Bharat Programme Schemes are also set to generate thousands of jobs, particularly for women

Interpreting the 2018 Budget

Where are the funds?

No specific budget has been allocated at this stage to the NHPS, so it is not clear how the scheme will be implemented. Experience has shown that rural insurance schemes are difficult to justify in purely commercial terms and there has been no relaxation of rules to attract overseas players to develop the market.

The Government of India may need to:
• Impose new taxes (it plans to increase the health tax levy to 4%);
• Impose uniform pricing systems for common health interventions, including diagnostics and medicines; and/or
• Encourage/demand the contribution of the private sector through CSR and may include ‘adopting’ Health and Welfare centres.

Less controversially, given the extensive use of internet-driven solutions in developed markets, the Government of India may encourage these solutions. Local insurers are already moving towards digital and mobile solutions to lower customer acquisition and servicing costs and provide improved access to information and convenience.

But some funds have been allocated

Mr Jaitley allocated £135m for free essential drugs and diagnostic tests and £68m for nutritional support for all tuberculosis patients. There may be increased calls for greater price controls to reduce costs in the supply of these services and products.

It is likely much of the 2% increase in the health and education tax will go towards an upgrade of existing district hospitals and into the 24 new government medical colleges and hospitals.

With up to 40% of health worker posts lying vacant in some states and most primary healthcare centres and district hospitals suffering from a shortage of doctors, there is a crucial need to expand health training particularly in rural areas. This means there will be opportunities for UK companies and NHS Trusts in healthcare education, diagnosis, testing, and health equipment in general.


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