TN urged to help cut healthcare costs

Increasing the Floor Space Index (FSI) for hospitals and healthcare institutions from the present 1.5 to 5 can bring down the rising healthcare costs, increase number of beds and healthcare talent pool in Tamil Nadu, said Dr Prathap C Reddy, chairman, CII National Committee on Healthcare, and chairman of the Apollo Hospitals Group.

"Relaxation in the FSI will allow hospitals and institutions to create more infrastructure in the same premises. They would not have to invest as much as 40-50 per cent of the project cost in acquiring new lands. Instead, they can invest directly in healthcare equipments or human resources and reduce healthcare cost," Dr Reddy pointed out in a statement issued by the Confederation of Indian Industry (CII) on Friday.

He added that at present there is only one bed for 1,100 people in Tamil Nadu, whereas the WHO recommends a minimum 1:500 ratio.

The additional FSI of 5, as in Mumbai, would increase the number of hospital beds by approximately 20-30 per cent, he said. FSI in Delhi and Karnataka is 3, compared to just 1.5 in Tamil Nadu.

Increasing land prices in Tami Nadu now mean that land costs constitute about 40-50 per cent of a hospital project, and with low FSI, hospitals are not able to increase beds in the same premises. They are not able to keep healthcare costs at affordable levels, when they acquire land to increase the number of beds, Dr Reddy said.

He suggested that FSI be made the same across the state to benefit smaller 20-bed hospitals which constitute 80 per cent of total healthcare services provided in the state.

At the national level, India needs to double its bed strength of 7 lakh to meet the WHO recommendation of 1 bed for 500 people.

As the country adds 25 million children every year, India needs to invest Rs 80,000 crore to create one lakh additional beds every year for the next 20 years, he said. In comparison, Japan has one bed for 90 people, while Russia and western nations have one bed for 110 and 250 people respectively.

"We cannot import healthcare like cement or steel. Hence, we have to improve our healthcare infrastructure on a war footing," Dr Reddy said.

He called on the government to provide healthcare sector incentives that are equal to those provided to the IT sector, as healthcare has the potential to create employment opportunities five to 10 times more than the IT industry.

The healthcare sector has the potential to increase direct employment from 4 million to 30 million and generate an equal number of indirect employment opportunities.

Healthcare is also a major foreign exchange earner with the inevitable growth of medical tourism. "In addition, over 10 per cent of Indian medical professionals, including paramedical staff, who are working abroad, send home about 60 per cent of their earnings," Dr Reddy said.

Dr Reddy also noted the acute manpower shortage in the people-intensive healthcare industry. Tamil Nadu produces 2,000 doctors a year, and for every doctor there is a need for five paramedical staff - the state needs to produce 10,000 nurses per year, he said.