Diagnostics can help in effective implementation of healthcare budget

Challenges before the sector

A major challenge that we face in the industry is the employment of existing budgets to utilise the public expenditure fully. Surprisingly, diagnostics, which is a sector that is undervalued, can actually help in the effective implementation of the healthcare budget. What we lack today is a holistic plan for healthcare.

The Indian healthcare market is growing at a CAGR of around 16 percent and is expected to reach $ 280 billion by 2020. Though we have many schemes in place, they are all individual components that hold minimal weightage on their own. It is here that we need to emphasise the role of diagnostics. 

If government invests enough in diagnostics, we can propagate early diagnosis of many diseases which will in turn reduce the costs that go into tertiary treatment. Thus, it is needless to say that diagnostics play a huge role in reducing the casino approach which has proved to have more negative implications than positive. 

Much emphasis needs be laid on research and innovation as well. The Make in India policy should focus more on innovation and not just on manufacturing. The cost of chemicals used for testing is one of the largest cost items (around 35 percent) in the diagnostics P&L. These chemicals are all imported. This cost is highly variable today due to the depreciation of rupee and fluctuations in the USD, apart from the high level of duties and restrictions imposed on imports. 

We need to push for local manufacture of reagents as well apart from medical devices and equipment to control this cost and thereby reduce the burden to the patient by reducing the cost of the diagnostic tests. 

Industry’s recommendations to Finance Minister

Coming to research and development, India and Sweden are set to begin a collaborative research under medical devices, medical diagnostics and antimicrobial resistance. One of the major highlights of this collaboration is that it aims to improve health conditions, understanding diseases and disease processes at all stages etc. What is recommended is that this partnership needs to be tapped more efficiently in order to boost the diagnostic sector which thrives on new research and innovation. 

There is a clear opportunity here and the government needs to bring out an action plan immediately. A sound roadmap that entrusts the importance of research will help diagnostic centers and laboratories to expand their functions and cater to wider needs of the people. This will also help in outpatient healthcare insurance that facilitates early detection of many illnesses. 

In terms of percentages, it would be great to see diagnostics getting attention in the budget which will help to effectively put healthcare expenditure to use. With demonetisation having made an entry, incentives should be provided to healthcare providers in terms of usage of digital networks for their patients. 

Additionally, a digital card that combines the benefits of all healthcare schemes under the umbrella of the government will be a good initiative to make sure all sectors of healthcare work in coordination. Another recommendation would be look into geriatric medical care with a more sympathetic view in order to make sure that this section doesn’t suffer. Budget 2017, therefore, has to look into a wholesome approach to improve the healthcare statistics. This should be attempt to meet the requirements of both the providers of healthcare as well we as the receivers.

Crystal gazing for the budget

Post the provisions that came up in budget 2016, this year’s budget will also see relevance implied upon healthcare insurances. Much like the dialysis programs, there could be an inclusion of specialised schemes for other chronic illnesses as well. Tax incentives for initiatives which promote cutting-edge technology to the manufacturing segment could be one of the expected moves of this budget. 

There is a high possibility that the government will provide incentives to healthcare providers who shift all their services to the digital network. There could also be special emphasis on R&D as part of the growth plans under Make in India. It would be interesting to see what new factors will be taken into consideration and how the government aims to consolidate all the individual plans into one concrete strategy.
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Anand K is the CEO of Anand Diagnostic Laboratory