Healthcare should be declared national priority: Suneeta Reddy

Healthcare should be declared national priority and infrastructure creation should be incentivised through a comprehensive set of tax and other capital benefits, according to Suneeta Reddy, Managing Director, Apollo Hospitals Group.

These should include the provision of land free of cost or at highly subsidised rates to set up facilities; higher FSI for hospital buildings as they are required to be located in central areas; rates for power to be reduced to about 50 per cent of applicable commercial rates; formulating modalities for declaring “Special Healthcare Zones” in key geographies with attendant benefits such as earning exemptions for facilities located there, infrastructure support, manufacturing incentives, etc, she added.

“Over the last four decades, the private sector has emerged as a pivotal supplier of healthcare services. It is estimated that over 80 per cent of new bed additions in the last 10 years was by the private sector. To truly position India as a global destination for healthcare and to bring the best of healthcare to our own citizens, the private sector needs to be an active partner. For this, it is important that the government puts in place forward-looking policy frameworks and incentives to help the sectorremain viable and bring further investment into it (including FDI), expand reach and bed density, invest in technology, foster a culture of innovation and retain the best clinical talent in India,” Reddy said in her pre-Budget recommendations.

This apart, there should be incentives for accelerated job creation and training of skilled workforce; extended tax holidays to enable ploughing back of earnings into infrastructure investment and provision of incentives for new health care projects.

‘Increase GDP share’

India’s share of public and private healthcare spending was estimated to be 3.6 per cent of GDP including both the public healthcare spending and out-of-pocket expenses. This is quite low as compared to various developed countries including the US, the UK, Japan, Germany, and Canada whose spending is nearly 10–18 per cent of their GDP on healthcare. While India’s population has grown nearly 15 per cent over the last decade, this growth has not been complimented by an equitable growth in healthcare spending.

It is time that healthcare is provided the requisite focus in India to help build a stronger public health system, along with appropriate support to the existing private healthcare infrastructure to create a comprehensive healthcare ecosystem, she wrote.

As per Union Budget 2021–22, the total public health sector allocation stood at 1.2 per cent of the GDP and it is expected to increase to 2.5 per cent of GDP by 2024–25. However, there is a need to increase the public health spending to 2.5–3.5 per cent at the earliest, she said. Further there is a need to incorporate alternative financing models to address the financial gaps in health sector and ensure mandatory health coverage for all to support the Universal Health Coverage (UHC) targets.

GST rationalisation for Hospitals

Since GST is not payable on health care services, health care service providers are not eligible to avail credit on the input taxes paid by it, which ultimately becomes a cost for the service provider. Under the current GST regime, the net impact of revised tax rates on inputs (goods and services) consumed by hospitals has increased.

The government should either consider zero rating and subsequently allowing output GST levy at 5 per cent to the health care sector or provide end-user-based exemption to major services consumed by the healthcare sector, said Reddy.

She added that GST rates should be rationalised for medical capital goods and hospital lease rentals should be GST exempt to foster creation of large REIT structures for hospital infrastructure.

Covid wrap

Telangana, which registered 3,877 new Covid-19 cases on Friday, is set to reopen all educational institutions including private, aided and government following all Covid protocols. As on January 28, Telangana had 40,414 active cases and total cases stood at 7,54,976.

Andhra Pradesh had 1,13,300 active cases as on January 28. The number of people cured or discharged was at 21,17,822 while the total deaths in the State was at 14,591.

West Bengal registered 3512 new Covid-19 cases on Saturday and the test positivity rate stood at 5.65 per cent. Total Covid cases in the State stood at 19,90,179 as on January 29, as per the State health bulletin. The state registered 35 deaths on Saturday and fatality rate stood at 1.03 per cent.

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