Tag Archives: 2016-17

Healthcare: Unwrapping The Union Budget (2016-17)

Posted on by
Reply

February 29, 2016 was the day of high expectations for many, especially to get to know the focus areas of public resource allocations of the incumbent governments in its third year of office. Healthcare sector too awaited eager to see something substantial in the resource allocation, that would make a fundamental difference in the public health systems and services in India.

The general expectation was high, as its main ruling party had promised to deliver a robust healthcare reform in its Election Manifesto 2014, when it will be voted to power. Some of those critical promises are as follows:

  • “India needs a holistic health care system that is universally accessible, affordable and effective and drastically reduces the out of pocket spending on health.
  • NRHM has failed to meet the objectives and will be radically reformed.
  • The Party accords high priority to health sector, which is crucial for securing the economy.
  • The overarching goal of healthcare would be to provide, ‘Health Assurance to all Indians and to reduce the out of pocket spending on health care’, with the help of state governments.
  • The current situation calls for radical reforms in the healthcare system with regards to national healthcare programs and delivery, medical education and training and financing of healthcare.”
  • The manifesto then went into the details of each reform areas, after stating, “the last healthcare policy dates back to 2002; India now needs a comprehensive healthcare policy to address the complex healthcare challenges, keeping in view the developments in the healthcare sector and the changing demographics. The party will initiate the New Health Policy.”

Over three years have passed since then, unfortunately even the new and comprehensive healthcare policy is not in place, just yet.

In that backdrop, we all witnessed in the budget presentation, a well-wrapped package for healthcare in India. The ‘attractive’ packaging label, listing each element of its broad content, was outwardly impressive and attracted almost instant eulogy from a number of industry commentators.

In this article, I shall first present before you, the healthcare measures announced by the Finance Minister Mr. Arun Jaitely in his Budget speech (2016-17), and then would unwrap the package to discuss briefly the implications of each of these three key elements, and the possible impact.

Union Budgetary Proposals on healthcare:

While proposing his Union Budget Proposal (2016-17), the Minister mostly covered ‘healthcare’ in points 52, 53, 54 and 55 of his speech, as follows:

A. Improving access to healthcare: 

While proposing a key measure to improve access to healthcare, the Minister acknowledged before the Parliament:

  • Catastrophic health events are the single most important cause of unforeseen out-of-pocket expenditure which pushes lakhs of households below the poverty line every year. 
  • Serious illnesses of family members cause severe stress on the financial circumstances of poor and economically weak families, shaking the foundation of their economic security.

In the above backdrop, the Minister proposed that, in order to help such families, the Government will launch a new health protection scheme, which will provide health cover up to Rs. One lakh (Rs. 100,000) per family. For senior citizens, age 60 years and above, belonging to this category, an additional top-up package up to Rs. 30,000 will be provided.

B. Availability of quality medicines at affordable prices:

Acknowledging the fact that making quality medicines available at affordable prices has been a key challenge for the country, the Minister reiterated that the Government will reinvigorate the supply of generic drugs. Moving towards this direction, 3,000 Stores under Prime Minister’s Jan Aushadhi Yojana will be opened during 2016-17. 

C. Addressing an important need of end-stage renal disease patients:

The Minister informed the Parliament that around 2.2 lakh new patients of End Stage Renal Disease gets added in India every year, resulting in additional demand for 3.4 crore dialysis sessions. With approximately 4,950 dialysis centers in India, largely in the private sector and concentrated in the major towns, the demand is only half met. Every dialysis session costs about Rs. 2,000 – an annual expenditure of more than Rs. 3 lakhs. Besides, most families have to undertake frequent trips, often over long distances, to access dialysis services, incurring heavy travel costs and loss of wages.

To address this situation, the FM proposed to start a ‘National Dialysis Services Program’. Funds will be made available through PPP mode under the National Health Mission, to provide dialysis services in all district hospitals. To reduce the cost, he proposed to exempt certain parts of dialysis equipment from basic customs duty, excise/CVD and SAD.

Unwrapping the healthcare budget proposal: 

Let me hasten to add at this stage that I have not seen the fine prints of each of these proposals, as yet. My analysis is solely based on the budget speech. 

A. Improving access to healthcare:

At Rs. 19,037 crores, the budgetary allocation for the ‘National Health Mission (NHM)’ remains almost the same as the previous year. Overall investments to improve healthcare infrastructure still remaining absolutely meager, the ad hoc strategy of the Government to improve access to healthcare is an insurance-centered, rather than universal, free and cashless health services, as was earlier suggested by the ‘High Level Expert Group (HLEG)’ constituted earlier by the Government. 

According to the analysis of National Sample Survey (NSS) data for 2014, published in the Economic&PoliticalWeekly dated August 15, 2015, only 13.1 percent of rural and 12 percent of urban residents are covered by government-funded insurance schemes, though the official data states 25 percent coverage. The NSS data also shows an increase in the out-of-pocket expenditure in these areas.

This has happened, even after the promotion of the Governments own insurance-based schemes, such as, the RSBY by the Central Government and also similar schemes by the State Governments, such as, Arogyasri in Andhra Pradesh, over a decade.

Additionally, there are many other reports, which clearly highlight that just pushing for increased insurance coverage, does neither help the poorest of the poor of society, nor does it ensure better and more efficient financial protection.  

A paper of October 9, 2013 titled, “Universal Health Coverage – Why health insurance schemes are leaving the poor behind” reiterates that funding through progressive taxation is the key to achieving ‘Universal Health Coverage’. Even the poorest countries can raise more revenue for health through taxes. Oxfam estimates that improving tax collection in 52 developing countries could raise an additional US$269 billion, which is enough to double health budgets in these countries.

The world over, and mostly in the OECD countries, serious doubts are still being expressed about the effectiveness of targeted insurance-based health schemes, instead of public funded focus on ‘Universal Health Care’. 

Looking in isolation, while the measure of incremental health insurance coverage, as proposed by the Minister, seems to be a good intent to improve access to healthcare to some people, but is devoid of a clearly charted holistic pathway, based on the lessons learnt from the past. Just the announcement of intent may, therefore, not be effective on the ground. 

Currently, India has the Rashtriya Swasthya Bima Yojana (RSBY), launched by the Labor and Employment Ministry on April 1, 2008, to provide health insurance coverage to ‘Below Poverty Line (BPL)’ families. RSBY coverage extends to five members of a family-head of the household, spouse and up to three dependents, who are entitled to hospitalization coverage of up to Rs 30,000 for most diseases. In this insurance scheme, the beneficiaries require to pay only Rs 30 as registration fee, while Central and state governments pay premium to the insurer.

It is still not clear to me, whether, the newly announced insurance coverage is a separate scheme all together with details to be announced later or a part of RSBY initiative.

Besides all these, the fundamental question, however, that would still keep haunting, how would the existing mostly rickety rural brick and mortar healthcare infrastructure; non-availability of right medicines at the right time and at the right places; acute shortages of medics and paramedics, satisfactorily address the incremental needs, thus created? 

B. ‘Pradhan Mantri Jan-Aushadhi Scheme’: 

This does not seem to be a new initiative, at all. Jan-Aushadhi is an ongoing campaign launched by the Department of Pharmaceuticals in 2008, in association with Central Pharma Public Sector Undertakings (PSU), to provide quality medicines at affordable prices to the masses. Jan Aushadhi Stores (JAS) are being set up to provide generic drugs, which are available at lesser prices, but are equivalent in quality and efficacy as expensive branded drugs. 

The Department of Pharmaceuticals had proposed to open at least one JAS in each of the 630 districts of the country, so that the benefit of “quality medicines at affordable prices” is available to at least one place in each district of India. If the initiative becomes successful, depending on the cooperation of all stakeholders, the scheme was to be extended to sub divisional levels as well as major towns and village centers by 2012. However, after 5 years, i.e. up to February, 2013, only 147 JAS were opened, and out of those only 84 JASs are functional.

More recently, according to a June 02, 2015 report, “under the new business plan approved in August 2013, a target of opening 3,000 Jan Aushadhi stores during the 12th plan period i.e. from 2013-14 to 2016-17 was fixed. As per the Standing Committee on Chemicals and Fertilizers report in March 2015, till date only 170 Jan Aushadhi stores have been opened, of which only 99 are functional.” 

The tardy progress of the scheme was largely attributed to:

  • A lackluster approach of State governments
  • Poor adherence to prescription of generic drugs by doctors,
  • Managerial/ implementation failures of CPSU/ BPPI.
  • Only 85 medicines spread across 11 therapeutic categories were supplied to the stores and the mean availability of these drugs was found to be 33.45 percent, with wide variations across therapeutic categories.

With all the available information, it appears that the same old and unsuccessful scheme, even during the tenure of the present Government, since the last 3 years, has been repackaged and announced with a new name “Pradhan Mantri Jan Aushadhi Scheme” in the Union Budget 2016-17. 

There is no doubt, however, the intent of ‘Pradhan Mantri Jan-Aushadhi Scheme’ of 2016 is as laudable as the “Jan-Aushadhi Scheme”, launched by the Department of Pharmaceuticals in 2008, was at that time, but will it start working now, all of a sudden, despite sustained failure?

Besides strong support required from the State Governments, and other factors as enlisted above, making the doctors prescribe drugs in generic names would be a critical factor to make the “Pradhan Mantri Jan-Aushadhi scheme’ a success and primarily to extend desirable benefits to a sizeable section of both the urban and rural poor. The question, thus, remains, how would the Government ensure that the doctors prescribe drugs in generic names?  

C. National Dialysis Services Program: 

The proposal for the ‘National Dialysis Services Program’ to provide dialysis services in all district hospitals, especially, due to a staggering number of around 2.2 lakh patients of ‘End Stage Renal Disease’ in India every year, is yet another laudable intent in isolation, though it emerges just as an ad hoc measure in the healthcare space of the country, sans the new National Health Policy.

Conclusion:

In my article last week titled, “Healthcare In India (2016-17): Whither Goest Thou?”, I wrote, as the new ‘National Health Policy’ is still not in place, we may, at best see in the Union Budget Proposals (2016-17), some ad hoc measures for healthcare.

While unwrapping this budget speech of the, it appears that on a broader perspective the measures proposed in the budget have turned out exactly that way.

Nonetheless, the proposal of the Finance Minister for a special patent regime with a 10 percent rate of tax on income from worldwide commercialization of patents, which are developed and registered in India, is an excellent one, by any standard, for the innovators.

With frugal public health expenditure of just around 1 percent of GDP, as compared to 3.5 percent of China and 5 percent of Brazil, with larger GDP base, successive Governments of India has been blatantly neglecting public healthcare, for far too long, which continues even today.

At a time, when the Government is mulling making health a fundamental right for Indian citizens, similar to education, and making denial of health an offense, besides its earlier other promises, these budgetary measures are disappointing to many.

Overall, the Union Budget Proposals, made by the Finance Minister for 2016-17, falls far too short of reasonable expectations of any deserving citizen of the country. Neither does any such healthcare measure appear holistic to me, besides being sustainable, as I unwrap the Minister’s healthcare package and take a closer look at it.

By: Tapan J. Ray

Disclaimer: The views/opinions expressed in this article are entirely my own, written in my individual and personal capacity. I do not represent any other person or organization for this opinion.

Healthcare In India (2016-17): Whither Goest Thou?

Posted on by
Reply

The Union Budget 2016-17 will be proposed today by the Finance Minister before the Indian Parliament. As many critical questions are currently being raised about the real health of the Indian economy, across the globe, the Union Finance Minister shoulders an onerous task to address all those apprehensions, beyond any further doubt.

Yesterday, in his monthly radio program ‘Mann Ki Baat’, Prime Minister Modi himself said, “Budget 2016 is my exam, 125 crore people will test me.” A large section of people also would probably view Union Budget 2016-17 in a similar way.

That said, we all know, that the system or the process of annual Union Budget presentation before the Parliament need not be considered as the primary platform to announce various policies of the Government to propel economic growth of the nation. Nevertheless, it certainly underscores the key focus areas, where the Government would prefer deploying country’s financial and other resources, through appropriate budgetary allocations, to effectively meet the key short and long term national goals.

Simultaneously, of course, the Finance Minister would also explain the measures that he proposes for raising the required wherewithal for the same.

The Economic Survey report 2015-16:

The Economic Survey report of the Government for 2015-16, tabled before the Parliament on February 26, 2016, reiterates a grim healthcare situation in India, for a vast majority of its citizens.

The report also underscores, that the average cost of treatment in private hospitals, excluding child birth, is currently about four times than that of public healthcare facilities. This alarming situation, fueled by the meager public health infrastructure in the country, severely limits healthcare access to many in the country. Its primary reason being, a large number of Indians are unable to incur so high out of pocket health expenditure. 

A situation like this, brings to the fore the challenges that India faces in providing affordable and accessible healthcare to all those who need it most, the Survey document commented.

Thus, with limited resources and competing demands in the health sector, it is essential for the government to prioritize its expenditure in the sector, the report recommends.

Healthcare deserves a priority focus: 

Healthcare, I believe, is one such domain that has been attracting a priority focus in all the developed and a large number of developing nations, since long. In this critical area, however, various national Governments in India have been just expressing its laudable intents, over a period of time. Unfortunately, no political dispensation, so far, has implemented anything hugely impactful to make its citizens feel a huge difference in this critical area, especially, by translating the promised intents into reality and keeping the nose to the grindstone.

Besides many other robust reasons, commercially too, the Indian healthcare industry is one of the largest growing sectors contributing around 10 percent of the GDP, employing around 4 million people. 

The D-Day:

Today is the D-Day for the Financial Year 2016-17. We shall get to know soon, in which direction would public healthcare go, as we step into another brand new financial year, and in the third Union Budget of the Government in power.

On December 7, 2015, I wrote an article in this Blog on this issue, titled, “Healthcare: My Expectations From Union Budget (2016-17)”.

My expectations on healthcare budget allocations:

In the above article, I articulated my overall expectations on the allocations for healthcare in 2016-17 Union Budget proposals, as follows:

  • Increase total public health expenditure from the current 1.2 percent to at least 2.0 percent of the GDP and then raise it 2.5 percent over a period of next three years.
  • The main source of financing for public health should remain general taxation by levying ‘Health Cess’, quite in line with with ‘Swachh Bharat Cess’ at the rate of 0.5 percent on all taxable services, besides adding a similar tax on non-essential and luxury items.
Primary focus areas:

If something similar to the above budgetary provision is made for public health in India, the details would require to be worked out, if not done already, in the following five primary focus areas, as I envisage:

A. Infrastructure and capacity building:

- Focused and well-identified investments in building high quality public health infrastructure and well-skilled human resources for rural India on priority.

- Villages, based on population, would be identified by the respective State Governments.

B. Increasing access to quality public healthcare:

- Free universal access to primary care services to start with, across the country,

- Free drugs, free diagnostics and free emergency care services in all public hospitals of the country and for all.

- Free emergency response and patient-transport systems across the country, for all. 

C. Strengthening the supply chain:

- Quality drug and diagnostics procurement system by the Central Medical Services Society (CMSS) of the Government needs to be modernized, strengthened and made more efficient with real time data, for easy availability of all required drugs and diagnostics in all public hospitals at the right time and in the right quantity.

-  Today, a large number of life saving drugs and diagnostics is highly temperature sensitive. Thus, adequate cold chain facilities are to be created right from transportation to storage in public hospitals for all such products, maintaining their required efficacy and safety standards for patients.

D. Increasing awareness for disease prevention:

- Intensive multi-pronged, multi-channel and door to door campaigns by the para-medics to increase awareness for identified disease prevention. 

E. Performance incentive: 

- To achieve the desired level of success and increase the motivation level in a sustainable way, budgetary provisions to be made for a system of well-structured individual and team performance incentive scheme, when the key implementers exceed expectations by achieving the set goals well before schedule.

- Commensurate punitive measures for failure also to be put in place, simultaneously.

I shall not broach upon the area of Research and Development (R&D) for drugs and diagnostics here, as that could probably be considered in a holistic way under overall innovation, science and technology budget allocation required for the country, as a whole.

Conclusion:

February 29, 2016 is the moment of truth, of yet another year-long expectation in the key focus areas of the Government for resource mobilization and its meaningful deployment. 

It is worth noting, however, that the much awaited “National Health Policy” has not been put in place before the Union Budget 2016-17, which could have given an indication to all, about the road map that the Government intends to follow in the healthcare domain of India.

Thus, it is possibly too late now to identify the specific health projects based on majority of citizen’s immediate health needs, from a well-articulated Health Policy for the country. Consequently, charting an action plan for joint implementation by the Central and the State Governments in unison, and making budgetary provisions accordingly for this year, to start with, may not just be feasible.

In the above situation, despite the recommendations of ‘The Economic Survey report 2015-16’, we may, at best see in today’s Union Budget, some ad hoc measures in this space. In any case discussing all these at this hour would just be a matter of speculation. Nevertheless, like many persons, I too keep my fingers crossed.

In any case, we all shall get to know today, the Finance Minister’s comprehensive budgetary proposals for this year, including healthcare. Till then, at least for 2016-17, the same question will keep haunting: Healthcare In India: Whither Goest Thou?

By: Tapan J. Ray

Disclaimer: The views/opinions expressed in this article are entirely my own, written in my individual and personal capacity. I do not represent any other person or organization for this opinion.

Heath Care: My Expectations From The Union Budget (2016-17)

Posted on by
Reply

India Celebrated its ‘Constitution Day’ on November 26 this year, as the Constitution of the country was adopted by the Constituent Assembly on November 26, 1949, which came into force on January 26,1950. 

On November 27, 2015, while addressing the Lok Sabha, Prime Minister Narendra Modi said, “If Constitution simply becomes a document to be followed by the Government then democracy will suffer, that’s why it needs to reach the roots.”

The Prime Minister also said, “It is important to strengthen rights and it is as important to strengthen duties.”

Looking at this laudable vision of Prime Minister Modi from the health care perspective, one finds that Indian Constitution also guarantees the ‘Right to Life’ to every Indian citizen.

This prompts two important questions:

- Has this specific ‘Constitutional Right’ – ‘‘Right to Life’, been upheld by any Government of our country, as on date, in its letter and spirit?

- Has this specific Constitutional Guarantee ‘reached the roots,” as the Prime Minister expects? 

A search for answers to these questions gets even more complicated, when one finds that health care, which is so fundamental for human ‘life’, besides driving the economic prosperity of any nation, is getting continuously neglected, even when the Prime Minister is reaching out to all, in pursuit of economic prosperity for the nation.

Better late than never:

As the Indian Parliament has taken a fresh vow in the current Winter Session to follow all the Constitutional provisions unhindered, I sincerely hope that the Union Budget 2016-17 would reflect some road map to uphold this important Constitutional Guarantee provided to all the citizens of India. 

If it truly happens, everybody would applaud the Government, in the right spirit of the good old dictum – it is ‘better late than never’.

What has the ‘Right to Life’ got to do with the Union Budget?

Yes, it is indeed a valid question, as what I am saying is a policy matter and is intimately related to ‘The National Health Policy of India”. 

As we know, a new draft of the ‘National Health Policy’ was prepared by the incumbent Government in 2015 for public discourse. However, the same has not been adopted, just yet.

Nevertheless, that’s not the reason why I am raising this issue in my pre-budget (2016-17) expectations. My argument is, any policy has to be supported by adequate financial commitment and that gets reflected in the Union Budget.

Repetition of the Union Finance Minister’s assertion on health care funding even for the next financial year, just what he did while presenting the Union Budget 2015-16, would no longer suffice, especially after the PM’s ‘Constitution Day’ speech.

Last year the FM had said that health care being a state subject, respective State Governments would make required financial allocations to address health related issues of the states.

Trying to substantiate his point the minister said, following the recommendations of the 14th Finance Commission, the Government has raised the States’ share in the net proceeds of union tax revenues from 32 per cent to 42 per cent.

In my view, not much progress in healthcare, pan India, can be expected with this approach of the Union Government. To implement the same robust ‘National Health Policy’ across the country effectively, the Central Government would require to work with the State Governments shoulder to shoulder in this regard and support them with all necessary resources.

Three fundamental pre-requirements:

I reckon, there are three fundamental pre-requirements to translate this specific Constitutional Guarantee into reality:

  • A robust “National Health Policy” should be put in place well before the Union Budget 2016-17, clearly charting a road map for health care in India. Going by the Prime Minister’s reported obsession on the speed of any decision making by his ministers, I hope, the ‘Health Policy’ rollout would commence soon. 
  • Prioritizing from this policy, the Central and the State Governments together should identify specific health projects, based on majority of citizen’s immediate health needs, for joint implementation. 
  • Allocate appropriate financial resources in both the Union and State Budgets for their speedy implementation, fixing accountability and commensurate reward to bring all these initiatives to fruition, ahead of schedule. 

My expectations on health care from the budget:

With the above backdrop, my overall expectations on health care allocations in 2016-17 Union Budget proposals are as follows:

  • Increase total public health expenditure from the current 1.2 percent to at least 2.0 percent of the GDP and then raise it 2.5 percent over a period of next three years.
  • The main source of financing for public health should remain general taxation by levying ‘Health Cess’, quite in line with with ‘Swachh Bharat Cess’ at the rate of 0.5 percent on all taxable services, besides adding a similar tax on non-essential and luxury items.

The key resource allocation would, at least, be in the following five key areas:

A. Infrastructure and capacity building:

- Focused and well-identified investments in building high quality public health infrastructure and well-skilled human resources for rural India on priority.

- Villages, based on population, would be identified by the respective State Governments.

B. Increasing access to quality public health care:

- Free universal access to primary care services to start with, across the country,

- Free drugs, free diagnostics and free emergency care services in all public hospitals of the country and for all. 

- Free emergency response and patient-transport systems across the country, for all.

C. Strengthening the supply chain:

- Quality drug and diagnostics procurement system by the Central Medical Services Society (CMSS) of the Government needs to be modernized, strengthened and made more efficient with real time data, for easy availability of all required drugs and diagnostics in all public hospitals at the right time and in the right quantity.

-  Today, many life saving drugs and diagnostics are highly temperature sensitive. Thus, adequate cold chain facilities are to be created right from transportation to storage in public hospitals for all such products, maintaining their required efficacy and safety standards for patients.

D. Increasing awareness for disease prevention:

- Intensive multi-pronged, multi-channel and door to door campaigns by the para-medics to increase awareness for identified disease prevention.

E. Performance incentive: 

- To achieve the desired level of success and increase the motivation level in a sustainable way, budgetary provisions to be made for a system of well-structured individual and team performance incentive scheme, when the key implementers exceed expectations by achieving the set goals well before schedule.

- Commensurate punitive measures for failure also to be put in place, simultaneously.

I would not broach upon the area of Research and Development (R&D) for drugs and diagnostics here, as that could probably be considered in a holistic way under overall innovation, science and technology budget allocation required for the country, as a whole.

Conclusions:

I sincerely hope and am also reasonably confident that all these would feature in the final version of the new “National Health Policy” of India. Hence, I have not suggested anything radically different from what the Government is currently mulling.

Thus, when my pre-budget (2016-17) expectations on health care, are read in conjunction with exactly what the PM has recently vowed on following the Constitution of India, and the criticality of taking it to the national grassroots level, it appears obligatory for the Finance Minister to ‘walk the line’, as drawn by the PM himself.

The Constitution of India guarantees ‘right to life’ for all, even in sickness.                                                                

By: Tapan J. Ray

Disclaimer: The views/opinions expressed in this article are entirely my own, written in my individual and personal capacity. I do not represent any other person or organization for this opinion.