A PPP approach to transform healthcare

Healthcare and education are basic to developing and sustaining a healthy, highly skilled workforce. Healthcare reforms in particular need special attention and we could take cues from the approach to financial inclusion, where a lot has been achieved in a limited period.

The Government has already initiated several measures . These measures span key areas such as affordability, infrastructure, standardisation and education.

Enhancing affordability : There has been a steady increase in the number of drugs under price control, to make medicines affordable. This is guided by evidence that drugs consist of 70 per cent of the out-of-pocket expenditure on healthcare. The National Pharmaceutical Pricing Authority (NPPA) has reduced the price of some cancer and diabetes drugs by up to 86 per cent and 42 per cent respectively. The scope of the NPPA has now been extended from essential medicines to medical devices, like stents — used in heart surgery. There is now a move towards prescription of generic drugs instead of branded generics by doctors to further reduce the cost of medicine.

Infrastructure: NITI Aayog has sought to infuse fresh life into PPP in healthcare delivery through a new model focused on district hospitals and new norms on pricing of procedures. While a lot shall depend upon States to implement this plan, the provisions for making available infrastructure of district hospitals to private providers for 30 years along with viability gap funding appears that we have got the design right for the PPP model. This could very much be the inflection point for quantum improvement in healthcare infrastructure beyond the top 10 cities of our country.

Standardisation and accreditation: It is essential that the allied ecosystem of treatment guidelines, patient records and costing of health services is agreed upon by all stakeholders and implemented across the country. Accreditation too has to reach beyond the leading facilities to tier II and tier III facilities for ensuring basic quality of care in delivery everywhere in the eco-system. While health is a ‘state’ subject, getting this allied ecosystem right remains a critical responsibility of the Centre.

Medical education: The biggest challenge is to address the acute shortage of doctors — India has 0.7 physicians per 1000 population compared to the WHO norm of 2.3. The structural issues plaguing the sector are sought to be addressed through the implementation of National Eligibility Entrance Test (NEET) and the proposed Bill to instil a new regulator, the National Medical Commission, to replace the discredited MCI.

These initiatives are dependent on the Government’s ability to implement in coordination with all stakeholders.

Much of the intent in healthcare reform over the years has been constrained by ideological debates including public vs private delivery and payer vs provider role of the Government.

There is no scope for divergence in the efforts of the public and private sector. This is more so because public expenditure in healthcare has remained in the range of 1.1-1.5 per cent of GDP despite (one of the lowest in the world). The intent is to increase it to 2.5 per cent of GDP. Pragmatic policy should therefore be the best guide to healthcare reform.

Against this backdrop, policymakers must aim for convergence of commercial and social interests to make a large on-ground impact. Structural moves in healthcare need to be in sync with the reality that about 70 per cent healthcare delivery is driven by the private sector.

Lessons can be drawn from financial inclusion — which has been driving the business models of scores of startups, MFIs, digital savvy banks and others. A radically different ecosystem through the JAM trinity and digital technologies has made commercial sense for the industry to make finance accessible at the bottom of the pyramid.

The reform push of the Government has to necessarily build a case for non-State stakeholders to take access to quality healthcare to people who don’t have access today.

The writer is MD & CEO of YES Bank