Healthcare industry demands deeper reforms

28 February 2007

The Budget has reaffirmed the government''s commitment on enhancing spending on social infrastructure. A lot of focus had been given on education and healthcare, said prime minister Manmohan Singh.

He said the budget sought to lay emphasis on improving access to social services and social safety net. "Education and healthcare are the primary imperatives as far as this budget is concerned," Singh said.

The healthcare sector, however, does not seem all that satisfied.

"The overall thrust towards healthcare delivery in the national budget 2007-08 is marginal compared to the fundamental reforms that the healthcare delivery sector needs in India," said Vishal Bali, CEO of Wockhardt Hospitals Group

"The National Aids Program and the Immunisation Programmes are definitely constructive measures towards disease prevention in the country. A 21.9 per cent increase in health expenditure and the increase from Rs8,207 crore to Rs9,947 crore for the National Health Mission are positive steps and should help in reforming the primary healthcare system in the rural areas. The reduction in peak customs duty to 7.5 per cent will help healthcare providers in importing advanced medical technology into the country," he said.

What comes as the downside is that the FM has made no fundamental changes which will help in the faster growth of the healthcare delivery sector and thereby help the average Indian get access to better quality of healthcare. Industry''s demand of it being given infrastructure status has been ignored once again.

Although the FM has touched upon the much-needed health insurance at the micro level for the textile sector, there has been no mention about reforms in the health insurance sector which will fuel private sector participation and propel the reach of health insurance to the masses. The finance minister has acknowledged the successful ''public private partnership (PPP) models in various sectors.

He could have looked at creating the same in the healthcare delivery system for efficient and optimal utilisation of the increased health expenditure as also at giving a fillip to new healthcare infrastructure in semi-urban and rural regions. Customs duty exemption for life saving consumables has also been given a miss."

As a country on the path towards a developed nation, India needs a chronic focus on healthcare delivery transformation. Budget 2007 has missed the opportunity to create that transformation in this evolving sector, he added.