 "Health sector's Budget wishlist: Increase spending to 2.5% of GDP")
The healthcare sector has rolled out a robust wishlist for the upcoming interim Budget, and it includes increasing health spending, rationalising the goods and services tax (GST), and better investments in local capabilities and personnel training.
According to the Nathealth-Hospital Federation of India, the sector is pushing for an increase in healthcare spending to 2.5 per cent of the GDP and a rationalisation of GST rates.
India’s current public healthcare spending is barely 1.6 to 1.8 per cent of the GDP, said Ashutosh Raghuvanshi, managing director (MD) and chief executive officer (CEO) of Fortis Healthcare, and president of Nathealth.
“These allocations are insufficient to tackle the magnitude of healthcare challenges,” he said.
The Budget allocation needs to be increased to 2.5 per cent of the GDP to augment social insurance schemes, boost healthcare reforms and infrastructure, and fast-track digital health services across India, Raghuvanshi added.
Also on the list is GST rationalisation, a longstanding demand of the sector. Currently, the sector faces a dichotomous GST structure, said Yatharth Tyagi, director of Yatharth Group of Hospitals.
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“A 12 per cent rate applies to primary and tertiary care services, while critical devices and equipment attract 18 per cent or 28 per cent GST,” he said. “This increases capital costs and operational overheads for hospitals.”
Rationalising GST rates would lead to affordable healthcare and foster improved facilities, benefiting both patients and the healthcare system, added Vinod Sawantwadkar, CEO, Jehangir Hospital, Pune.
Diagnostic gap
Diagnostic companies, meanwhile, want the government to rationalise import tariffs on healthcare products, “since 60 per cent of India's diagnostics segment is reliant on imports,” said Ameera Shah, promoter and MD, Metropolis Healthcare.
Emphasising the need to bridge regional healthcare disparities, Raghuvanshi said that the Budget’s key focus should be on the localisation of the healthcare value chain and building local capabilities to deliver healthcare services even in the most remote regions.
Low-cost financing schemes can enable private players to upgrade and add diagnostic infrastructure in tier 2 and 3 cities, Shah suggested. “These initiatives will not only enhance accessibility and affordability, but also lay the groundwork for a robust healthcare ecosystem that can effectively combat present and future challenges,” she added.
She also made a strong case for skilling healthcare professionals. The Budget, she added, should channel investments towards critical areas such as innovation, research and development, technology, healthcare infrastructure and bolstering patient safety measures.
“Equally important is the capacity-building and training of healthcare professionals, which is crucial to cater to our nation's increasing healthcare needs,” Raghuvanshi added. “These measures are fundamental to developing a resilient and efficient healthcare system in India.”
Hospitals hope for continuity of policies. “The healthcare sector is to be perceived as an ecosystem,” said Dilip Jose, MD and CEO, Manipal Hospitals. While care delivery is central, it’s intricately connected with aspects such as nutrition, sanitation, safe drinking water, pollution reduction and primary education – and the government has been viewing it from that perspective, with wellness and disease prevention as the focus, he said. “So, the expectation from the Budget is for the continuity of that framework,” besides adequate focus and funding support for all components of the ecosystem, he added
Healthy hopes
> Increase healthcare expenditure to 2.5% of GDP
> Rationalisation of GST rates for healthcare services, equipment
> Investment in strengthening local healthcare capabilities
> Investment in skilling of healthcare professionals
> Lower import tariffs for diagnostic equipment