By Varun Gandhi

Healthcare in India is a story of insufficient resources and poor outcomes. Investment is well below WHO guidelines in both qualitative and quantitative terms. Bed density is low (less than 1.5 beds per 1000 persons as compared to WHO guideline of 3.5), doctors few (less than 1.8 per 1000 as compared to WHO guideline of 2.5), and out of pocket spend high (86% as compared to an average of around 40% for low income countries). Rural India lags even further behind, with around 30% of the rural population having to travel over 30km for treatment.

Significant inequality in access is worsened as the existing healthcare workforce is inadequate and under-utilised. With low salaries, insufficient incentives, lack of career growth, inadequate training and inconsistent policies, the majority of the medical workforce chooses not to practice in the formal sector. India’s regulatory system hardly keeps up with the very diverse set of medical practitioners.

Meanwhile, infectious and chronic diseases continue to prevail. Health indicators continue to lag, healthcare spending is growing slower than GDP growth, out of pocket spending continues to be high, and infrastructure gaps remain substantial.

Universal healthcare offers the one solution, by extending access to healthcare as widely as possible and providing quality care through minimum standards. Soviet Union implemented it in 1937, with the UK following nearly a decade later. Most nations have funded it through general taxation, supplementing it by specific levies and private payments.

Compulsory insurance utilising common risk compensation pools and a choice of insurance funds, such as in the US and Switzerland, have helped reduce inequality and increase access. Lives have been saved, with resultant growth.

India’s government needs to play a stewardship role. By focusing on universal healthcare as a long term journey, with consensus on political backing and hard choices along with secured long term funding, universal coverage for good quality healthcare can be achieved. By building an effective regulatory framework and consistent policies across states and the Centre, workforce shortages can be overcome, along with integrating healthcare facilities across the village, town and district levels. Patient interest can be kept as a primary focus by reforming such bodies as the National Rural Health Mission and Rashtriya Swasthya Bima Yojana (RSBY).

Private sector can help improve India’s healthcare infrastructure. But without faster accreditation, few private players will gain credibility, or raise standards, resulting in low customer satisfaction, longer hospital stays and poor governance. The National Accreditation Board for Hospitals and Healthcare Providers needs to roll out incentives encouraging accreditation and make it a mandatory process.

Public-private partnerships or build-operate-transfer or operations and maintenance contracting schemes can utilise private capital for provisioning healthcare services. With our growing population, the need for treatment of non-communicable and lifestyle diseases will increase, particularly in Tier 2 and 3 cities. Affordable healthcare programmes (rolled out as public-private partnerships) will offer significant margins (in volume) for private players, while helping to address talent resourcing and under-utilisation issues. Initiatives like Ayush Graham Bahawali Project, in Nainital, running on a build-operate-transfer mode, provide alternative medicine and low cost affordable healthcare, partly based on land grants by the government.

Insurance coverage is also abysmal in India, with just around 25% of the population covered. To achieve universal access, a coverage ratio of around 75% needs to be targeted, with the remainder offered access through government payments via RSBY. Access with low out of pocket spending can be achieved through an expansion of healthcare insurance, with the government playing a payor or guarantor role instead of providing services.

Social insurance schemes really need to be rolled out at scale, with the government deploying a greater share of healthcare funds for RSBY. Pilot programmes launched at a state level can help us determine the best model for the Indian market. Community health insurance schemes like those launched by the Karuna Trust in Karnataka help improve access and utilisation of health services by the rural poor. Those left behind in India’s growth should be offered a helping hand.

Universal healthcare requires cheaper drugs. Capping drug prices has become controversial. But pharma firms are coming under pressure to lower drug prices across the world.

Our inconsistent drug pricing regime offers high volatility. The last drug pricing control order fixed the prices of 348 drugs based on the simple average market price of the product, with no relationship to manufacturing cost. The latest order adds a further 100 drugs to this scheme, with little consultation. Such ad hoc policies create uncertainty, reducing incentives to foster innovation or bring new drugs to the Indian market.

While drug providers could crib about purported losses, the domestic pharma market is 75% of the volume exported. Drug providers should take a price cut and benefit from India’s healthcare expansion. Public interest can also be private interest, in greater volumes.