Budget 2019 expectations: Affordable and accessible healthcare for all

Published: June 28, 2019 1:41:20 PM

Budget 2019: With the government pushing for affordable and accessible healthcare in its last term, we expect this year’s budget to take some concrete steps towards the same this year.

By Saurabh Agarwal

The healthcare sector is one of the biggest contributors to the Indian economy and accounts for 6% of the country’s GDP. However, it is also fragmented due to issues such as over-dependence on a few institutions, delay in access to timely and quality treatment, lack of primary care infrastructure, and high costs. The need of the hour is a complete overhaul of the country’s healthcare infrastructure that can provide access to quality and affordable services for everyone irrespective of where they are. The Ayushman Bharat scheme introduced by the government was a very favourable step towards this end. With Shri Narendra Modi assuming office once again as the Hon’ble Prime Minister, we are hopeful of some conducive policies for this sector in the budget ahead.

Following are our expectations from the budget:

Better healthcare access and infrastructure: We expect the upcoming budget to focus towards inclusiveness of new age companies and focus on ground level work in the healthcare domain. There is a need for a robust infrastructure that enables people to understand where they can get timely treatment nearby instead of relying on a few select institutions.

Health insurance and expanding reach of Ayushman Bharat: Another area of focus should be health insurance which typically covers charges in hospital in-patient expenses. We hope that the government will expand the cover under Ayushman Bharat to the next set of people from the current 10 crore + households. It can be similar to Pradhan Mantri Jeevan Jyoti Bima Yojana, where an applicant can participate by co-paying premium amount with Government. Increase in scope by including Pre and post hospitalization coverage and OPD coverage in a cashless manner can help in reaching to next level social security to people and new age technology players like Medlife will be ready to take up this task.

Also Read | Budget 2019: Not just tax cuts, here’s how Modi 2.0 can help companies without revenue loss

Approval of E-pharmacy rules to ensure availability of Medicines across the country: This aspect has been long pending. Addressing this with immediate effect will ensure the creation of affordable and accessible medical infrastructure for the entire country.

Focus on preventive care and diagnostics: Currently, preventive testing accounts for <10% of the overall market and this is growing at a CAGR of 20%. We hope that the government will increase incentives (including tax breaks – currently small portion is covered under Sec 80 D under preventive care) towards preventative testing, which will enable this segment to grow at a CAGR of 27% (FY19E-23E). It will also encourage more people to get preventive health screening done at an early stage.

Vaccination is another important aspect where we need to fight back with diseases such as Hepatitis, Chicken Pox etc. We need a strong communication and execution program like Polio vaccination program.

As per a recent study published by Goldman Sachs on 21 st May’19, A policy that could prove to be a gamechanger for healthcare services in India including the diagnostic services is the addition of outpatient settings like the BPJS1 scheme in Indonesia. Given the magnitude of the move, this could contribute to about 20 to 25% of the total industry growth within 4 to 5 years of its launch. Our estimates suggest that only 15% to 20% of the total diagnostics services (or 7%-8% of total TAM) delivered in such settings are being reimbursed via insurance claims.

Addressing violence against doctors
An extremely critical area of focus and one that we hope will get due attention is the security of doctors given the rising incidences of violence against them. Better healthcare can only be provided when those who heal to feel safe and secure.

In conclusion
There is an urgent and massive need for innovative, tech-based, large-scale as well as affordable healthcare solutions in the country. With the government pushing for affordable and accessible healthcare in its last term, we expect this year’s budget to take some concrete steps towards the same this year.

(The author is Chief Financial Officer at Medlife.com. Views expressed are personal.)

Do you know What is Wholesale Price Index (WPI), Public Debt, Finance Commission Grants & Other Transfers, Economic Survey, State Finance Commission? FE Knowledge Desk explains each of these and more in detail at Financial Express Explained. Also get Live BSE/NSE Stock Prices, latest NAV of Mutual Funds, Best equity funds, Top Gainers, Top Losers on Financial Express. Don’t forget to try our free Income Tax Calculator tool.