The Union Budget 2023-2024 will be presented by Finance Minister Nirmala Sitharaman February 1
For the upcoming budget, health sector urges the government to give adequate importance to the healthcare sector and highlights that while we are still battling to reach the pre-pandemic levels in terms of numbers, the upcoming budget may be helpful to designing and covering numerous aspects of the healthcare industry thoroughly.
Below are the industry expectations for healthcare sector from this year’s budget:
Urgent need to allow CSR funds to flow into blended finance for telemedicine and e-health to improve affordability
The Union Budget 2023-24 comes at a favorable time, with over 4,000 startups registered in the healthcare space, but the larger challenge of affordability and accessibility remains a constant concern. Lack of access to public and philanthropic funds is a concern. Smart healthcare initiatives such as telemedicine and e-health are seen as potential solutions to this due to India’s widespread smartphone adoption and improved mobile connectivity.
The government has taken a lot of positive measurements for the public healthcare system. In 2022, NITI Aayog released a report titled “Reimagining Healthcare in India through Blended Finance,” which discussed combining funds from various sources, including public, private, and philanthropic sources, to catalyse financing for some of the critical challenges confronting the healthcare sector.
While accessibility has significantly improved, there is an urgent need to allow CSR funds to flow into blended finance for telemedicine and e-health to improve affordability. Daycare procedures require similar funding to encourage early access to health care services.
Given the hybrid work culture, mental health awareness is very critical these days. The government should consider expanding the 80G specifically for donations to local government projects aimed at improving primary care affordability and accessibility or carve out separate 80D limits of up to Rs 20,000 for primary health care subscription packages that include mental health for self and extended family. Sideways, mandatory health insurance programmes for employers, including primary health care access provided by telemedicine/e-health companies, should be implemented. A portion of this can also be funded through blended finance in the case of SME/MSME.
With the development of the Prime Minister’s Ayushman Bharat Scheme, the Government should exercise caution in allowing CSR funds to flow into the scheme, which would add an extra layer of protection to primary healthcare programmes. It is also important to note that this recognition of healthcare start-ups as service providers would go a long way toward improving early access to healthcare, thus managing the cost of the Ayushman Bharat scheme. Not to forget about the fact, that the government should allow insurance companies to distribute primary health care services as embedded benefits and in this case, a standard package could be developed in collaboration with industry and regulators.
-Satish Kannan, Co-founder & CEO, MediBuddy
Government should push the UHI across all the public and private medical establishments
Public Health policy in India is the need to ensure that all citizens have access to health services and facilities. The first step in this direction was taken with the launch of the Unified Health Interface (UHI), which facilitates data exchanges between different sources of information such as hospitals, primary care centers, and laboratories. It serves as an intermediate layer between these disparate sources of information so that they can exchange data in real-time. This will result in timely identification of patients with common diseases like infectious or chronic and allow them to be treated more effectively. This also helps in Real Time Disease Surveillance which aims at collecting real-time data on diseases so that they can be treated faster than ever before, leading to optimal resource utilisation. Government should push the UHI across all the public and private medical establishments in this budget.
-Vikas Gupta, Co-Founder and Chief Product Officer, MyDiagnostics
It is time the government looks at minimum quality standards for the industry and also appoint a nodal agency to standardise lab tests across the country
The 2021 Economic Survey recommends that the government spending on healthcare should at least be 2.5 per cent to 3 per cent of GDP. It also suggests that over the past 15 years, private health insurance expenditure has jumped from 1.6 per cent (2004-05) to 6.6 per cent (2018-19). India’s out-of-pocket expenditure on health remains high even as government expenditure on health has also gone up over the years. The health budget needs a significant and a transformative push to protect our citizens from plunging in to poverty due to debt related to unexpected medical expenses. Over 40 per cent of health expenditure is medicines and pharmaceuticals and any improvement in funding in this area will be a significant positive move. Preventive healthcare expenditure has remained abysmally low even with enough evidence that mass preventive screening can bring down overall healthcare costs in the long run.
For the diagnostic industry, it is time the government looks at minimum quality standards for the industry and also appoint a nodal agency to standardise lab tests across the country. Standardising test codes by adopting LOINC Codes and homogenising lab report formats can help patients as well as clinicians. Taking a cue from the CLIA standards in the US for lab developed tests, our regulatory bodies like CDSCO can open up the regulatory framework that will help laboratories build indigenous test customised to the Indian population, encourage more research and foster innovation. This will reduce our dependence on imported kits for laboratory tests. India could become self-reliant in test kits in a few years with the right kind of support from the policymakers and the government. Reducing the high custom duty on the import of diagnostic equipment and kits can help large laboratories like SRL to improve efficiencies and increase investments in R&D. Easing the cost burden by giving input tax credit for GST will aid the entire healthcare industry to reduce input costs.
The government could look at increased allotment of budget to public private partnerships and move from a provider role to an enabler role. This is the fastest and most efficient route to deliver quality healthcare to the masses. Policymakers can customise health delivery to districts, cities and towns by harnessing the big data generated by laboratories. PPPs for such collaborations could be useful as labs can provide actionable health insights that can improve the health indicators of a particular state. We also hope that the government will look at instituting an official council that can help establish credibility and credentials of medical laboratory professionals and allied health professionals. In absence of any regulatory legal mechanism to oversee the educational and professional standards, educational institutions have been mushrooming unabatedly across the country. As seen in the pandemic, along with doctors, medical lab and allied health professionals are the backbone of the industry and it is important to provide avenues for up-skilling and reskilling by way of continuous technical education.
– Anand. K, CEO, SRL Diagnostics
Public-Private Partnership (PPP)s are the way forward for creating a more sustainable healthcare system
The COVID-19 pandemic has placed our healthcare system to the test. We successfully addressed some of the critical challenges with the government’s assistance and swift regulatory action. However, more needs to be done, beginning with an increase in public healthcare spending. We urge the government to allocate more funds for achieving universal healthcare across India.
The pandemic transformed the way we think about medical emergencies, while also highlighting systemic flaws in our health-care system. Healthcare in India is undoubtedly underfunded and underutilised. We need a plan to build an equitable and sustainable medical infrastructure, which can only be delivered by increasing investment (both public and private).
PPPs are the way forward for creating a more sustainable healthcare system. It combines the best capabilities of both sectors: the public sector’s regulation and subsidies, as well as the private sector’s expertise. This can also provide a runway for allocation of money wisely and clear accountability structures in place at all times. Implementation of the PPP model: Identifying opportunities for PPP models and establishing a sound PPP framework could increase private sector investment, boost public capacity while enhancing efficiency, and facilitate care.
The government should think about zero rate GST on healthcare services, allowing service providers to claim Input Tax Credit. As GST is not payable on healthcare services, service providers are not eligible for input tax credit. Enabling this would ensure that input taxes are not added into the cost of the services, and will provide some relief to the patients.
The government may consider to incentivise the citizens to opt for a higher medical insurance coverage by: increasing the existing tax deductions limit on medical insurance premium may result in savings, which can then be used to improve medical insurance covering all dependents in the family; reducing the GST rates on health insurance and phasing it out gradually. These measures may encourage the citizens in the overall adoption of health coverage. Also increase the health checkup deduction limit from the present Rs 5000 to encourage preventative health checkups.
Invest in technology to overcome the rural-urban healthcare divide and make healthcare available to all citizens by expanding our universal healthcare programmes.
While we are still battling to reach the pre-pandemic levels in terms of numbers, the upcoming budget may be helpful to designing and covering numerous aspects of the healthcare industry thoroughly. A rock-solid healthcare infrastructure is the need of the hour. We envision and strive for a future in which healthcare is not classified as public or private, but is simply known as healthcare.
-Felix Fernandez, Finance Director, Holy Family Hospital, Mumbai
Healthcare organisations must be given access to working capital and preferential funding
The outbreak of COVID-19 has taught the healthcare sector some important lessons. The healthcare sector has and will continue to play a crucial role in saving lives, treating other ailments while tackling the pandemic. With the disruption caused to the healthcare sector during this period, we urge the government to give adequate importance to the healthcare sector in the upcoming Union Budget 2022 by considering:
- Special schemes that should be provided for formal training of doctors and nurses to enhance skills and bandwidth to offer care to a larger population which will help strengthen the quality of healthcare resources in the longer run
- Building capacity for intensive care by enhancing skills of nurses and by providing better equipment and infrastructure
- Significance to be given to appropriate screening for Non-Communicable Diseases (NCDs) to ensure timely diagnosis and treatment which will help in reduction of hospitalisation in the last minute
- Upgrading infrastructure at primary healthcare level for early outpatient treatment thus reducing hospitalisation time and cost
- Benefits to be given to manufacturers of healthcare equipment & consumables under the ‘Make in India’ campaign for high quality products and healthcare equipment to be manufactured at reasonable costs
- Healthcare organisations must be given access to working capital and preferential funding to ensure that the overall cost of operations is reduced
- Healthcare sector needs to be considered as a priority and an essential service. Various subsidies and benefits should be given on land rates and other necessities such as electricity, as it will pave for accessible and affordable healthcare with better infrastructure and high quality treatment improving access to care and better patient outcomes.
-Dr Alok Khullar, CEO, Gleneagles Global Health City, Chennai
Government should reduce import duties on necessary components to facilitate the production of dependable medical cold chain chains
As we carefully tread into 2023, it is crucial to focus on the events that made major headlines this year. The pan-Indian vaccination drive, which resulted in the immunisation of approximately 100 crore people, saw commendable success achieved by the Indian government. Nations praised this heroic act all around the world. This year, we excitedly await the financing announcement for the initiatives we want the government to prioritise. Increasing immunisation spending, particularly across the entire healthcare system, is one of the goals. The nation must be well-prepared since the fight against COVID-19 is far from ending. Alarmingly slipping numbers of the infant immunisation also require immediate attention.
Any vaccination program’s success also hinges on a reliable medical cold chain. We believe that establishing a separate industry and separating the medical cold chain from commercial refrigeration could benefit the sector’s expansion. The government should reduce import duties on necessary components to facilitate the production of dependable medical cold chain chains.
-Jesal Doshi, Deputy CEO, B Medical Systems
Incentivisation of online and specialist medical learning and training providers by way of a range of financial and tax subsidies
While the government’s push in the last budget on Ayushman Bharat Digital Mission as also augmenting overall healthcare infrastructure is indeed welcome, the pandemic battle has further exposed the acute deficit in terms of the availability of trained healthcare workforce in the country. As such, we hope that the government in the upcoming budget suitably incentivises online and specialist medical learning and training providers by way of a range of financial and tax subsidies. This would help the latter to bring in the most advanced and sophisticated training programmes for not only doctors and nursing staff in the country but also paramedics and others who are usually present on the ground in emergencies and critical care situations. In addition to catalysing access to top-class learning and skill sets to smaller towns and the hinterland, it would also help the cause of Continuous Medical Education (CME), an integral part of the upskilling of healthcare professionals. In fact, we hope that online and digital educational platforms providing both basic and niche training services for medical students and professionals are completely exempted from GST. In the budget, while the finance minister is likely to focus on chronic care, expanding health insurance and further accelerating ABDM, it would also continue with and expand the scope of PLI-type financial support and clustering programmes for infrastructure support for pharma and medical device segments with a view to achieve Atmanirbharta for the country.
–Deepak Sharma, CEO, MedLern