Even today, India accounts for about 27% of newborn deaths all over the globe and about 16% of maternal deaths. Despite the progress in the healthcare industry, deaths continue to happen due to communicable diseases that include a large global share. The non communicable diseases on the other hand hold accountability for about 60% deaths in the country.
The most common non communicable diseases in India include obesity, diabetes and hypertensions. The statistics for obesity in the country show that it has increased by as much as 22% in the last few years and it’s not surprising that one out of every four adults in India suffer from hypertension. Cardiovascular diseases like stroke and hypertension account for about 45% of all deaths caused by non communicable diseases.
There is a huge scope for funding in the healthcare industries. India is emerging as one of the most suitable healthcare investment destinations but there is still huge potential left unharnessed in the public private partnerships. The success rates of the initial public offerings like Dr Lal Pathlabs have regenerated the confidence of investors.
A large proportion of our population is living below the poverty line or can be considered poor as they can hardly afford two square meal a day. Yet, the direct expenditure for all health expenses in the country sums up to more than 60%. Moreover due to this lack of enough financial resources to secure their healthcare needs, more and more people keep falling in the category of poor each year. An estimate suggest that about 63 million people fall in the category of poverty every year in India.
While the healthcare expenditure in countries like USA totals to about 17.1% of the GDP, in India the percentage share is just about 4.7%. On the other hand, the out of pocket expenditure on these facilities is about 11% in USA and 62.4% in India, against a global average of 18.2%. This is according to a report published in 2014 by the World Bank.
It is an astonishing fact that even today, about 50% of the individuals in need for medical care have to travel more than 100km to receive it and even then, the quality of the treatment is an issue. There is not only a shortage of primary health centres and community health centres, the number of beds required for each patient are also not sufficient. India has about 1.1 beds per 1000 population whereas the world average stands at about 2.7.
The quality as an issue has been raised previously and it is also true that the top 20 cities are home to 70% of the total healthcare infrastructure. India lacks the amount of surgeons in community health centres by as much as 83%, the numbers for physicians, paediatrician and gynaecologist also stand at 83%, 82% and 76% respectively.
There has also been a tremendous shift in the preference for private healthcare centres instead of public healthcare centres, both in the rural and urban areas. If this is not questioning the quality of public healthcare centres then what else could the possible reason be. Since there is a great scope of investment in this sector, some interesting and innovative can be utilised to improve the funding. These methods include financing through pension funds, which gives access to a large pool of money and can be set up through funds of funds.
Fund of funds includes the sources of funding like pension funds amongst others. It functions like a body appointed by the government to handle functions related to the funds that include handling the portfolio, allocation and management. India currently has 74 bilateral investment treaties and has a huge potential for investment in this area too and there is scope for huge capital inflow as it also has a low cost financing.
A country like India is liable to offer higher returns compared to countries like Japan. There is also potential for huge capital flow through participation from retail investors. Another method can be through dividing the asset operations and medical operations which would inevitably trigger faster actions. Moreover, it would help in overcoming the real estate costs.
The government also has a role to play when it comes to promoting investments in the sector. The primary thing to be done in India is increasing the spendings on the health care centres assigning the role of payer to the government. The increase in the public sector for health care should be at least 2.5% of the GDP by the year 2025. As it has already been noted that most of the healthcare infrastructure is in the top 20 cities, the tier 3 cities and below must be provided fiscal incentives by the government.
A fund similar to the provident fund should be introduced for salaried employees for health savings. The healthcare services should be provided with zero tax as it is currently under GST. Furthermore, healthcare schemes should be introduced and carried out with sincerity. The National Health Policy 2017, works towards providing quality healthcare for all citizens of the country. It focuses on allocating a major proportion of the resources on primary care and works towards the promotion of the quality of care provided along with an emphasis on the emerging diseases and promotion of investment in the healthcare.
While trends like technological advancements, globalisation and demographic shifts continue to affect every sector, the healthcare industry is also facing the same issue. It is expected that this would lead to formation of new business models that would industrialise the medical sector and consequently, the focus on reward of outcomes would be more. At the same time, investment in medical education is also important to produce the number of doctors that are required while focusing on building up the infrastructure as per the needs of the population.
There is a need to combine both technological investments and traditional means to achieve the best results. More traditional hospitals need to be built while services for non critical patients must be available at home, reducing their stay. Methods for early diagnosis and prevention need to be devised and it's paramount to make individuals aware about them. This sector would inevitably generate employment and about 340 million more people would end up having access to quality healthcare. There would also be tremendous savings if the early diagnosis methods and prevention methods are put better in place.