In his speech during the Union Budget 2016, Finance Minister Arun Jaitley stressed on the importance of healthcare segment and spelt out incremental schemes for improving healthcare coverage and some duty sops for selected treatment segments.
However, the measures have been met with mixed reactions from the healthcare industry with some stating that it is a progressive budget, whereas others being left disappointed on the larger schemes such as National Health Mission and universal coverage in the sector.
Nilaya Varma, Partner and Head of Healthcare, KPMG India, told International Business Times India: "It's a progressive budget but we also need to work on healthcare delivery, to make it more accessible and equitable because at the end of the day the out-of-pocket expenses have to come down."
Talking about the requirement of a five year roadmap for healthcare focusing on delivery of healthcare services, Varma added: "Improving rural infrastructure, addressing the shortage healthcare professionals while bringing down healthcare costs are equally essential therefore the government should create a universal healthcare plan as India cannot be a developed or progressive country without having health for every Indian."
Highlighting the endeavours, which focus on reviving the rural economy and continuing with spending on infrastructure that will boost economic growth, Jyoti Vaswani, Chief Investment Officer, Future Generali Life Insurance, believes the Budget to be well balanced one. "Adhering to fiscal consolidation target of 3.5% in FY2017, no Long Term Capital Gains tax on equity investments and no increase in service tax are the key positives from the Union Budget presented today," she said in a statement.
Stating the overall budget to be balanced, one that boosts growth sentiments and revives domestic economy, Hari S. Bhartia, Co-Chairman & Managing Director, Jubilant Life Sciences Limited, said, "The Finance Minister has taken the reform process forward with emphasis on nine pillars. Mr. Bhartia particularly welcomed the focus on agriculture, rural economy, social & infrastructure sectors. The focus on rural economy will generate demand, increase consumption & create opportunities for the corporate sector."
Shashank ND, Founder & CEO of Practo, believes that the announcements made in the budget indicate incentives to be made available to every Indian, irrespective of age or income. "The Budget is a clear indicator by the Government to bring development at the grass root level for its citizen. The Finance Minister's focus on health as one of the key pillars proves to show that everyone should have the right to live a healthy lifestyle," he said in a statement.
Providing better health coverage
During the speech, Jaitley announced his plans to launch a new health protection scheme with the proposal to extend health insurance cover of Rs 1 lakh to economically weaker families, with senior citizens above the age of 60 getting an additional healthcare cover of Rs 30,000.
"A health insurance scheme which protects one-third of India's population against hospitalisation expenditure is also being announced," Jaitley said, while talking about the major schemes to help the weaker sections of the society
Quoting a report by the Insurance Regulatory and Development Authority of India (IRDA) report, Avinash Lodha, Associate Director, India Ratings & Research, told IBTimes India: "About 28.8 Cr persons are covered under health insurance and the government is proposing to increase it to 75 percent, which is a big positive for the healthcare sector as it increases the addressable market and thereby increasing the number of people covered under the healthcare."
M Ravichandran, President Insurance, TATA AIG General Insurance, highlighting the impact of the new health insurance scheme on the common man, said that with the announcement to launch a new health Insurance scheme, the government has reiterated its focus on the importance of health insurance, which will incentivise health insurance and assure adequate health cover for all. "This scheme will not only help strengthen the footprint of health insurance within the country but also help in reducing the burden of healthcare expenses for senior citizens as it also provides a top up cover for the Senior Citizens," he explained.
However, Dr. Mandar Kulkarni, Chief Technological Officer, Cancer Genetics India, believes that the only healthcare related component of the budget, remotely addressing the sector is health insurance, with no commitment towards improving healthcare services or creating a greatly improved infrastructure for healthcare. "The rural population is highly underserved for healthcare needs and we must invest in an 'Aarogyashali Bharat' along with 'Swachchha Bharat'. We cannot wait too long to establish a state-of-the-art health infrastructure across India," he stated.
Sandeep Patel, MD & CEO, Cigna TTK Health Insurance, said, "The budget proposal to launch a new health protection scheme will ensure penetration of health insurance and promote financial inclusion. The proposal for additional Rs 30,000 health cover for senior citizens will help reduce the burden of healthcare expenditure for the aged."
Arijit Basu, MD & CEO, SBI Life Insurance, believes that the implications of providing health insurance cover is that people will be more aware of the need for insurance and Life Insurance companies can capitalise on the same.
The exact contours of the scheme including income eligibility, medical underwriting, coverage for pre-existing illnesses and cashless network, are however, yet to be spelt out.
Reducing treatment costs
The finance minister also announced that in order to provide more people with quality medicines at affordable prices, 3,000 Jan Aushadhi stores will be opened in 2016-17.
The Budget proposal has also mentioned a national dialysis service programme along with excise duty waiver for dialysis equipment. "About 2.2 lakh new patients of end stage Renal disease get added in India every year resulting in additional demand for 3.4 crore dialysis sessions. With approximately 4,950 dialysis centres in India, largely in the private sector and concentrated in the major towns, the demand is only half met," Jaitley said. The funds for the same will be allocated through PPP mode to reduce the overall cost of the treatment.
Commenting on the dialysis scheme, Varma said, "It's a very specific area and though it's true that it's one of the areas with a huge burden and any effort to reduce the cost is good but I think that there are many such segments, not just renal care but other segmentsl like oncology or cancer related." He believes that the focus should be on bringing down the cost and service delivery.
Saurabh Arora, Founder & CEO, Lybrate, said in a statement: "The 'National Dialysis Services Programme' under National Health Mission is a remarkable measure to fix the issue of non-availability of renal dialysis centres in the country and the government's effort to introduce facilities of renal dialysis in every district hospital will save hassles of many who have to travel to metro cities for getting the procedure done again and again."
Even with sky high expectations for budget 2016, the finance minister focused on multiple facets of the economy stated Nilesh Aggarwal and Amit Sharma - Co-Founders, eMediNexus. They were, however, hoping for some focus on healthcare education, a major bottleneck to increase the supply of healthcare providers in the country. "These include freezing accreditation standards for continuing education, increased incentives for the pursuit of further medical studies, and solutions to the chronic lack of educators at medical college projects across the country, all of which would boost patient outcomes," they said in a statement.
Malvinder Mohan Singh, Executive Chairman, Fortis Healthcare Limited, believes that the finance minister has done well by recognising the importance of a healthy population. "Higher allocations under the Swacchh Bharat programme will help in lowering the burden of communicable diseases. Additionally, the availability of LPG to rural households for smoke-free cooking will alleviate the burden of respiratory diseases and associated cancers. Also, the encouragement provided to organic farming, will in the long term go towards healthier diets and the reduction of chemical residues in our food chain," he said
MN Rao, Chairman MediSys Edutech, a start-up working at the intersection of healthcare, technology and education in the country said, "In the healthcare sector, the failure to allocate a higher GDP spend is disappointing since without adequate budgets, preventive health education, providing quality medical care to even the lowest strata of the society as well as focusing on overall wellbeing and improving one's quality of life would be distant dreams." He believes that the government should consider a National e-health Authority to look into integrating ICT in healthcare and making it more accessible and affordable as the deployment of smart technology would help improve efficiency.
Sarabjit Kour Nangra VP Research - Pharma, Angel Broking, told IBTimes India, that the overall impact of the budget is positive, but the proposal of reduction of tax benefit on R&D expenditure from FY2018 and then freezing it at 100 percent from FY2021 will impact all pharma companies as their tax liabilities will go up. She stated that the impact will not be significant as the quantum of outsourcing of R&D work for most companies is low, although some companies in particular might be impacted marginally.
Welcoming the endeavours undertaken for the sector, Dr. Prathap C Reddy, Chairman, Apollo Hospitals Group, said, "The Health Protection Scheme to cover unforeseen illness in poor families is a long-awaited and welcome step in deepening access and the announcement of a National Dialysis Services Programme could not have come at a better time, given the burgeoning growth of non-communicable disease, which the Finance Minister said will be made available in all district hospitals on a PPP model."