Budget inadequate for health sector

The general understanding of the possible impact of Union Budget 2017-18 on the healthcare sector is that the sector got due significance in the Budget.

But a closer look at the budgetary provisions for it reveals that the Budget did not discuss the sector in detail. Also, there is no clarity about the structural reforms the government plans in the health sector. The Budget allocation for the health sector for 2017-18 is Rs 48,853 crore, 23% higher than last year. Finance Minister Arun Jaitley did announce initiatives to widen the availability of essential drugs across the country, reduce the cost of life-saving drugs and promotion of generic medicines.

The government’s plan to eradicate diseases like Kala Azar (visceral leishmaniosis), filariasis, measles and tuberculosis over a short-term period was unveiled in the Budget. The decision to add 5,000 new post-graduate medical seats every year in the medical colleges, the setting up of two new All India Institute of Medical Sciences (AIIMS) in two states - Gujarat and Jharkhand - and the steps announced to roll out DNB (Diplomate for National Board) courses in big district hospitals are aimed at improving the health manpower infrastructure in the country.

The target of transforming 1.5 lakh health sub-centres into health wellness centres is indeed the need of the hour .The renewed focus on rural sanitation is a shot in the arm for public health provision in the country. Expanding the reach of telemedicine and the commitment to bring down infant and maternal mortality rates are indeed laudable.

Though these are all welcome measures, various stake holders and the healthcare services industry believe that the measures announced in the Budget and the budgetary outlay are insufficient for a crucial field such as the health sector. There are also some short comings in the Budget. Nothing is mentioned on Universal HealthCare(UHC) and the much-needed upgradation of infrastructure in the sector.

Currently, India ranks very poor in basic health indicators. Large number of Indians do not have access to affordable healthcare. Most announcements in the Budget are mainly in the nature of incremental steps targeted towards access and affordability, including proposed changes in pharmaceutical and medical devices regulations.

Continued neglect of the sector has resulted in massive deficiencies in health infrastructure and a shortage of qualified health care providers. Public healthcare facilities are insufficient and are of poor quality. Available facilities are overcrowded.

If the public health facilities are not strengthened by budgetary support, there will be increased demand for services from private providers. Many poor and lower-middle class patients cannot afford private healthcare services.

The healthcare outlay in the Budget is inadequate to meet the requirements of the sector. Lifestyle diseases that account for 53% of the disease burden should have been prioritised. The government’s initiative to widen the availability of essential drugs across the country, to reduce the cost of life-saving drugs and promotion of generic medicines etc, is going to face several technical obstacles.

These road blocks include the outdated Drug and Cosmetic Act of 1940, absence of a reliable mechanism to ensure the quality of generic medicines and the stiff opposition from monopoly combinations of Pharma Companies and health services providers.

Universal healthcare

The healthcare services industry had several pre-budget expectations such as introduction of universal healthcare coverage with due weightage to quality of care delivered and effective programmes to address the growing burden of non-communicable diseases. The industry expected viable reimbursement models for the private sector.

The industry was expecting to see an increased share of the GDP for health expenditure to address the growing burden of non-communicable diseases such as diabetes, heart diseases, asthma and cancer. Providing impetus to innovation such as newer healthcare delivery models, digital technologies and molecular diagnostics is needed to increase accuracy and efficiency in diagnosis and treatment of these diseases.

The healthcare expenditure should increase substantially from its current allocation, which is less than 2% of our GDP. Under-funding in healthcare system will not deliver desired outcomes. To cater to the healthcare needs of the population, a minimum allocation of 5% of the GDP is necessary. The government’s spending on the health sector is the lowest amongst the Brics (Brazil, Russia, India, China, South Africa) nations. Marginal increases in the budgetary allocation are inadequate to make any significant strides in the provision of healthcare.

The private sector, which provides 75% of the diagnostics requirements, and the private pharmaceutical industry are not happy with the Budget. There is nothing for them by way of tax incentives and other fiscal relief. It  should have offered incentives to private players to make healthcare affordable. Budget 2017-18, like earlier budgets, does not offer much to revive the health sector.

(The writer is a Bengaluru-based professor of health economics)
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