Pune, January 21, 2019
To create a robust healthcare ecosystem in the country and to take Pradhan Mantri Jan Aarogya Yojna (PM-JAY) under Ayushman Bharat Mission to the next level,apex healthcare body NATHEALTH urged the government to make health insurance coverage mandatory for all citizens in a phased manner initially covering the organised sector. NATHEALTH, in its pre-budget recommendations to the government, also suggested introduction of a Healthcare Infrastructure Upgradation Fund and sought ‘National Priority’ status for healthcare sector.
In view of very low penetration of health insurance in the country, out-of-pocket spending for healthcare services is very high. For an effective management of population health universal health insurance would act as a powerful catalyst.
“The major reason for the low penetration of health insurance is because it is currently optional. While the Government has taken laudable steps to introduce a health insurance scheme for weaker section with PM-JAY, it is requested that the Government could also explore making health insurance coverage mandatory for all citizens,” said Mr Siddhartha Bhattacharya, Secretary General, NATHEALTH.
In its Pre-Budget recommendations NATHEALTH said, “Starting with organised sector, employees could be given the option of either paying their ESI contribution or purchasing insurance from any IRDA regulated insurance company. Scaling up PM-JAY to all citizens including middle and upper middle class needs to be done in the next phase.”
According to NATHEALTH, adequate funding in the healthcare is a major concern, hence a priority sector status would push financing and funding to the sector. Underlining the importance of Priority sector status, the apex industry body said, “This will channelize funds from the banking sector to create necessary healthcare infrastructure and meet societal objectives of the Government of India.”
Though healthcare was included in the harmonized master list of infrastructure sub sectors by the Reserve Bank of India in 2012, long-term financing options are still not available for healthcare providers.
“Priority Sector status to healthcare will help in the process of enabling development of innovative long-term financing structures for healthcare providers apart from creating an attractive environment for domestic production of medical equipment, devices and consumables while also catalysing research and development,” added Mr Bhattacharya.
Access to timely credit with priority status and funding by creating a specific fund for healthcare infrastructure and innovation would facilitate access to capital for the sector. These funds would encourage entrepreneurship and newer business models which are the need of the hour for improving access, availability and quality, especially in Tier 2, Tier 3, Tier 4 cities and rural areas. The government can consider providing the seed capital for such funds.
“It is a well-established fact that a robust healthcare system drives GDP growth in the presence of adequate investments and a conducive environment, by not only acting as a productivity and employment generator, but also as a magnet to attract foreign exchange earnings and provide opportunities for innovation and entrepreneurship. Healthcare sector is faced with the challenges of establishing hospitals at high costs with real estate prices surging. Further, there are also associated issues such as the relatively high cost (capital and operational) of providing healthcare services including medical technology upgradations, which results in stretched payback periods, thus limiting the investment appetite of players in the healthcare value chain,” NATHEALTH said in its recommendations.
Other recommendations of NATHEALTH include incentives to medical value tourism, Zero rating GST on healthcare services and health insurance premiums, incentivising capacity building, promotional policies for private providers, and exemption of custom duty on medical cyclotron among others.
These are long standing suggestions from the Industry and are critical to expedite investment in capacity building especially in Tier 2 & 3 cities, which will go a long way in ensuring that the dream of Universal Healthcare is translated into reality for the citizens of the country.