Industry recommends doubling of Govt spending on medicare

While the increase in FDI cap in the insurance sector from 26 per cent to 49 per cent has brought cheer to the healthcare sector — as it would bring many more Indians under health insurance cover, with multinational players entering the country — disappointment prevailed as healthcare was not accorded industry status by the Finance Minister in his Budget.

Vishal Bali, co-founder of Medwell Ventures India and Asia Head – Healthcare, TPG Growth, told BusinessLine : “The FM has not given industry status to healthcare. Getting industry status means that healthcare should be made a priority sector where the government makes investments in creating infrastructure and talent. Although 12 new govt medical colleges have been announced, it should have been coupled with a strong reform policy around medical education to enable the private sector to play a much bigger role in the creation of medical talent.”

India has very few medical colleges as private sector participation is limited, resulting in a severe shortage of 1.5 million doctors.

“Reforms are required to make it easy for private sector to participate. Why do you need 6-7 acres of land to set up a medical college? We need to make medical education a good business opportunity for future growth, just like education itself is a good business opportunity, with lot of private enterprises being set up. That will create better talent and better infrastructure because most of these medical colleges set up their own small training hospitals,” observed Bali.

The healthcare industry lauded the allocation of ₹3,650 crore for safe drinking water, as it would reduce the incidence of water-borne diseases in the country; the announcement of four more AIIMS-like institutions and the ₹37,800-crore allocation to National Highway development, which would improve healthcare access to patients.

Manasije Mishra, CEO, Max Bupa, said, “The hike in FDI limit in insurance will deepen health insurance penetration in the country. The opening up of the sector will pave the way for greater innovation and better quality healthcare.

Also, the decision to invest in credible medical institutes and colleges along with digitisation in rural areas will enable utilisation of technologies like telemedicine to enhance quality of healthcare and healthcare access in the country.”

Government spend on healthcare at present is just 1.2 per cent of GDP, whereas industry is pushing for a doubling of healthcare expenditure to 2.5 per cent of GDP, said Bali, who was part of the CII recommendation committee for healthcare.

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