Healthcare spending in India is at 1.8% of GDP, which is far below the global average of 6%.
Substantial and comprehensive changes in the healthcare ecosystem demand higher budgetary allocation. How can Healthcare services be more affordable and accessible, by lowering the pressure on the government and reducing out-of-pocket payments? What factors can act as a catalyst to bridge this gap? In the recent edition of AMPH Discussion Circle, Dr Yogitha Namasani and Bala Subrahmanyam Gollapudi from the AMPH Co 2024 invited experts and industry leaders to share their thoughts on Healthcare Financing in India. This online discussion forum was hosted by the Max Institute of Healthcare Management at ISB.
Key Takeaways:
Healthcare inflation in India is complex and fuelled by a confluence of factors on the demand and supply sides. The rise in lifestyle diseases creates a greater need for expensive treatments. Fluctuations in the prices of drugs and medical equipment impact overall treatment costs in India.
The Universal Health Coverage (UHC) model is a pathway to make insurance affordable via government subsidies and micro-insurance schemes.
Technology acts as a key enabler to improve access to quality healthcare. Utilising platforms like telemedicine, and digital health platforms for remote consultations and health education is the way forward.
Private sector helps to fill the gaps in public infrastructure, particularly in rural areas. This expands access to basic and specialized care, with support from India’s extensive private hospital network. The government-private sector partnership managed systematically with appropriate tariffs and timely payments can ensure the effectiveness of such programmes.
Innovation in treatment methods being offered and cost-effectiveness drives competition, as witnessed in India’s medical tourism industry.
Private insurance companies and financing schemes offered by hospitals ease the immediate financial burden on patients—a significant factor in India’s high out-of-pocket expenditure.
Learnings from Global Markets will help focus on preventive healthcare education and community engagement. Integrating preventive healthcare education into the school curriculum will be helpful.
Preventive Care models will help manage costs, improve patient outcomes and ensure finite resources are used optimally for the benefit of the population at large.
Nutrition guidelines help encourage healthy eating. Newer funding mechanisms, like levying higher taxes on aerated drinks and packaged food with revenues earmarked for healthcare funding, could be looked into.
Encouraging healthy habits and lifestyle modifications requires long-term public health initiatives. Spreading awareness shall lessen the impact of disease, and save healthcare expenses by funding a variety of preventative actions.
Risk transfer through insurance plays a crucial role in mitigating healthcare financing burdens, especially for curative care in India. Health savings accounts shield individuals and families from enormous medical bills. HSA is a proven model in the developed markets and has helped systematic funding into future healthcare needs.
Emphasis on value-based care by bundling payments attached to outcomes that matter to the patient will be essential. It’s time to pivot to a fee-for-value model. Future innovations should focus on affordability, tailored to help people at large to utilize the new developments in the healthcare segment.
Conclusion
In India, some states spend more than required to provide universal healthcare to people. For sustainable and equitable healthcare, it is not how much you spend but how and on what you spend that matters.