Budget 2024: What healthcare sector wants from Sitharaman's budget?

As Finance Minister Nirmala Sitharaman gears up to present the Interim Budget 2024, the healthcare sector stands at the forefront, anticipating pivotal measures to address the unprecedented challenges posed by the ongoing global health crisis. Healthcare providers, grappling with the aftermath of surging demands, look to the imminent budget announcement as a beacon of hope, holding the promise of crucial policy directions and funding allocations that could reshape the trajectory of healthcare delivery in the country.

In the Union Budget 2023, the healthcare sector received a budget allocation of ₹89,160 crore, marking a marginal uptick of less than 3% compared to the previous year's ₹86,606 crore allotment. In the preceding fiscal year (FY23), healthcare expenditure constituted a mere 2.1% of the GDP, even amidst the challenges posed by the pandemic.

In her fifth budget, the Finance Minister unveiled plans to establish an additional one hundred and fifty-seven nursing colleges, strategically colocated with the existing 157 medical colleges established since 2014. Citing data from 2019 provided by the Ministry of Health and Family Welfare, it was revealed that India had a deficit in nursing personnel, with only 1.7 nurses for every thousand people, falling short of the required three nurses per thousand people.

In a conversation with Fortune India, Girdhar Gyani, the founder and director of Association of Healthcare Providers (AHPI) shed light on the current state of healthcare infrastructure in the nation and articulated anticipated developments within the sector. "Healthcare infrastructure is far from satisfactory. It is only in the last 15-years that the nation has begun focusing on healthcare and it is also beginning to become an election agenda," says Gyani.

He says that the nationwide momentum surged with the 2018 launch of Ayushman Bharat by the government of India. This initiative extended coverage up to ₹5 lakhs per family for approximately 50 crore individuals from underprivileged sections of society. "It was at this time that the government realised that unless there was adequate infrastructure, in terms of the number of hospital beds, the coverage of ₹5 lakhs would not be relevant," Gyani adds.

The Covid-19 pandemic further highlighted the chasm within our healthcare system. Gyani pointed out, "Currently, we have a little over 1.4 beds per 1,000 population, in contrast to the World Health Organisation (WHO) norm of 3.5 beds per 1,000 population. Therefore, we need to more than double the current number of beds."

He stressed that achieving WHO compliance necessitates an increase in budget allocation, currently standing at less than 2% of the GDP, well below the global average of around 9% of GDP.

Advocating for strategic incentives, the AHPI founder says, “The government needs to bring in incentives such as: making available cheaper CAPEX, providing electricity at industrial rates as compared to commercial rates, introducing a single-window clearance system for numerous statutory compliances, fast-tracking the availability of specialist doctors, and facilitating the acquisition of land or alternately providing built premises. These incentives must be rolled out on priority, especially for Tier-III towns.”

Highlighting the significance of digital technology adoption, Gyani states, "The Ayushman Bharat National Digital Health Mission has been rolled out by the government. We need to provide financial incentives, subsidies, or tax benefits to hospitals adopting digital solutions." He highlighted the need to regulate Electronic Health Record (EHR) systems for electronic patient record maintenance.

In the realm of preventive healthcare, Gyani asserts, “We need to include credible NGOs and hospital associations to work alongside local bodies such as Municipal Corporations, Zila Parishads, and Gram Panchayats to operate promotive and preventive care. The focus needs to be on providing safe drinking water, ensuring cleanliness through sanitation, and, finally, educating on nutrition.”

Delving into the realm of medical education, Gyani states that while strides have been made toward achieving the vital goal of having one doctor for every 1,000 individuals, a notable deficiency persists in meeting the requisite number of specialists.

"The government needs to fast-track the opening of exclusive PG colleges, similar to PGI Chandigarh. Nurses constitute the backbone of any health system, and our nursing schools currently fall short in producing skilled professionals."

Vishal Bali, Executive Chairman of Asia Healthcare Holdings (AHH), emphasises that India, currently the world's most populous country with 66% of its population below the age of 35, envisions achieving a GDP of $30 trillion by 2047. Given the current population growth rate, this translates to 1.65 billion people, requiring the country to grow at a Compound Annual Growth Rate (CAGR) of 8% during this period.

“In Budget 2023 the health sector was allocated ₹89,155 crore, a hike of around 13% as against ₹79,145 crore allocated in 2022. Since 2020 the share of the health sector as a percentage of total union budget expenditure has continuously decreased,” Bali states.