Dr Girdhar Gyani, Director General, Association of Healthcare Providers (India) emphasises that a critical predicament confronting healthcare financing in India revolves around the absence of adequate financial safeguards for individuals seeking medical services

In recent years, healthcare costs in India have experienced a significant uptick, encompassing expenses related to medical procedures, treatments, equipment, and medications. This surge in costs can be attributed to a confluence of factors. Notably, the expanding population has spurred an unprecedented demand for healthcare services, thereby amplifying the overall healthcare expenditure. A contributing factor to this financial strain is the existing deficit in healthcare professionals and facilities across the nation. Despite its substantial population, India grapples with a scarcity of doctors, nurses, and medical institutions. Consequently, this scarcity culminates in overburdened facilities and protracted waiting periods for essential medical interventions, inevitably propelling the upward trajectory of healthcare expenses.

While India boasts exemplary hospitals and academic institutions that have garnered international acclaim for pioneering contributions, a stark contrast persists in the provision of healthcare for residents in rural and low-income regions. This divide results in an alarming dearth of accessible and cost-effective high-quality healthcare services. This article delves into the intricate web of financial healthcare challenges that our nation confronts, alongside proposing viable strategies aimed at fostering affordable healthcare coverage across India.

Challenges in healthcare financing in India

A critical predicament confronting healthcare financing in India revolves around the absence of adequate financial safeguards for individuals seeking medical services. The burden of healthcare expenditure falls heavily on individuals and families, with out-of-pocket payments constituting more than 60 per cent of the total healthcare costs in the country. This places a substantial economic strain, especially on those residing below the poverty threshold, who often find themselves impeded from accessing essential healthcare due to financial constraints.

While the central and state governments’ budgeted expenditure on healthcare exhibited a positive trend, reaching 2.1 per cent of GDP in FY23 and 2.2 per cent in FY22, up from 1.6 per cent in FY21, as reported by the Economic Survey 2022-23, this allocation remains significantly below the global average of 6 per cent. Despite this upward trajectory, the current financial commitment continues to fall short. This disparity in funding has contributed to a substantial deficiency in healthcare infrastructure and human resources. The resultant impact has been felt keenly in the realm of healthcare delivery, leading to compromised services and inadequate accessibility, particularly in rural regions.

A considerable segment of the Indian populace remains bereft of health insurance coverage, thereby compelling them to personally bear the financial brunt when availing healthcare services. Numerous government initiatives and private insurance schemes fall short of covering significant expenses encompassing medical tests, medications, and post-surgical care. The shortcomings and fissures within the healthcare framework were laid bare during the unprecedented COVID-19 pandemic, further highlighting the need for robust financial safeguards.

Yet another formidable challenge lies in the inadequacy of fund allocation towards preventative healthcare services. While governmental endeavors to augment funding for preventive healthcare, including immunization campaigns, are evident, they remain insufficient in comparison to the onerous burden imposed by preventable illnesses in the nation. Consequently, a substantial disease burden persists, particularly in rural regions where access to preventive healthcare services is restricted.

Strategies for enhancing health financing in India

To address the challenges and augment the healthcare landscape in India, a series of strategic measures must be undertaken:

Augmented public expenditure: Immediate attention should be directed towards elevating public spending on healthcare. Aligning with the recommendation of the National Health Policy 2017, the government should amplify its healthcare budget to a minimum of 2.5 per cent of the GDP. This surge in funding would alleviate the burden of out-of-pocket expenditures (OOPE) on households and pave the way for enhanced accessibility to vital healthcare services, especially among marginalised communities.

Strengthened healthcare infrastructure and workforce: Investing substantially in healthcare infrastructure is imperative. A two-fold approach is envisaged, encompassing the construction of new medical facilities, enhancement of existing ones, and bolstering the number of healthcare professionals, with particular emphasis on underserved rural and remote areas. Furthermore, incentivising healthcare practitioners to operate in these regions is pivotal to bridging the healthcare accessibility gap. This may include providing finance at cheaper rates, providing electricity at industry rates against commercial rates, and single window clearances for numerous regulatory and statutory clearances. Shortage of specialists is one of key hindrance in opening of new facilities in tier-III towns. Government may consider setting up of 4-5 PGI kind of institutes to fast-track availability of specialist doctors.

Prioritised preventive healthcare: Elevating the prominence of preventive healthcare services is paramount. Robust investments should be directed towards public health campaigns promoting healthy lifestyles, early ailment detection, and disease prevention. The government should extend free or subsidised vaccinations and screening tests to vulnerable demographics, particularly women and children.

Fostered Public-Private Partnerships (PPPs): Championing collaborations between the public and private sectors can revolutionise the healthcare domain. The government’s role should encompass incentivising private sector engagement in healthcare infrastructure and services. Scheme like PMJAY is one of excellent way of private public partnership in providing healthcare services to underprivileged population. However due to poor reimbursement rates and inordinate delay in receiving reimbursement, most of tertiary care hospitals have not joined this scheme. Government needs to get the reimbursement rates worked out through scientific study so as to ensure that hospitals get at cover operating cost. Also there must be provision to have nominal interest payable in case reimbursement were delayed beyond specified period. Concurrently, government may consider establishing independent regulatory body like TRAI which can objectively ensure that private healthcare services remain competitive, accessible, and adherent to quality standards.

Harnessing technological advancements: Embracing technology is integral to modernising healthcare delivery. Strategic investments in telemedicine, mobile health (mHealth), and electronic health records (EHRs) can streamline healthcare processes, curtail costs, and substantially improve access to essential medical services, particularly within geographically remote and underserved areas.

Concluding thoughts

Enhancing healthcare financing in India stands as a pivotal endeavor, serving as a linchpin in realizing universal health coverage and making significant strides towards the attainment of Sustainable Development Goal 3 (SDG3). The array of policy implications and recommendations elucidated earlier presents a pragmatic roadmap for surmounting existing challenges while harnessing latent opportunities in the sphere of healthcare financing within the nation. Through the diligent execution of these policies and propositions, India is poised to usher in transformative changes and India emerging as Vishva Guru in Healthcare@2047.









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