India is committed to achieving Universal Health Coverage (UHC) for all by 2030. UHC entails ensuring all people have access to quality health services including prevention, promotion, treatment, rehabilitation, and palliation without incurring financial hardship. For India to achieve UHC, it is essential that both private enterprises and the government come together. India has already witnessed highly successful Public Private Partnerships (PPP) collaborations in areas like diagnostics and dialysis. For example, the Pradhan Mantri National Dialysis Program (PMNDP) introduced in 2016 has enabled private enterprises to set up PPP dialysis centres in over 21 States and UTs where the low-income group can avail of free dialysis, resulting in 20 million plus dialysis sessions annually. In the last few years, the private healthcare sector’s finest hour came during the Covid-19 pandemic when they collaborated with the government across multiple areas including allocation of nearly 80 percent of private sector hospital beds to Covid-19 patients; contributing to the majority of India’s Covid-19 vaccine production and achieving last-mile vaccine delivery to manage the crisis. There is thus vital proof that together private enterprises and government can
work synergistically and bridge the systemic demand-supply gaps in the current state of the healthcare sector.
Since 2010, the healthcare sector has attracted $39 billion plus private capital which has resulted in the industry growing from around $70 billion in 2010 to $200 billion in 2023. India’s healthcare industry today is the second largest recipient of private capital in the country. The attractiveness is underpinned by the five main healthcare-specific macroeconomic aspects of demographics (80 per cent of households will be middle class by 2030), dual disease burden (acute and chronic), rising affordability (63 per cent insurance penetration), gaps in infrastructure and positive government Initiatives. We estimate that the outcome of the above macro environment will lead to about $ 30-35 billion private capital investment in the sector over the next 5 years.
The private healthcare sector can play an integral role in the country’s Universal Health Journey across specific three aspects: improving access to healthcare services, tech advancements and skilling of health professionals.
Private enterprises generally address access in two ways — adding new centres and increasing bed capacities across the country and expanding insurance coverage and thereby reducing OOPE. Over the past decade, private capital addition of $10 billion plus invested in the hospital segment has aided in improving the bed density from 0.9 per 1,000 people in 2010 to 1.7 per 1,000 people currently. Despite this, there is still a big shortage of hospital beds in the country. It is estimated that the country needs an additional 24 lakh hospital beds to reach the WHO recommended ratio of 3 beds per 1,000 people. Given the wave of consolidation that is presently sweeping the private healthcare sector the present decade will likely see more hectic bed addition activity. With regards to expanding insurance coverage, India is still grappling with 55 per cent+ out-of-pocket expenditure (OOPE) towards healthcare. Alongside the government’s successful PM-JAY scheme to improve insurance coverage for the underserved, the private health insurance companies have also played a pivotal role in reducing the OOPE and ease of claiming insurance through product innovation, distribution, and technology. For example, many private insurance companies include OPD consultations and daycare procedures within the insurance cover.
The private sector has been at the forefront of advancements in telemedicine, digital health solutions, minimally invasive surgeries, and personalised medicine. Medical devices have been an area of focus for the government in recent years given the 80 per cent plus import dependency in the segment, we are seeing many innovative private companies leveraging the benefits such as PLI, med-tech parks, etc, to make in and for India. for example, in cardiac stents and orthopaedic implants, the market has flipped towards Indian manufacturers who have >55 per cent market share which was <10 per cent in 2014. Digital technologies in healthcare have attracted $6 billion plus in private capital since 2010 and have played a transformative role in areas such as integrating public and private sectors to connect urban and rural areas, physical to remote services, etc. These innovations not only improve the quality of care but also enhance efficiency and reduce costs in the long run.
While the government has taken steps to address physician shortages by doubling the number of MBBS seats in the country, the private sector has focussed on upskilling health workers which is critical to meet high care standards, adapting to healthcare changes, and ensure the well-being of both patients and professionals. It enhances patient care, improves worker efficiency, and prepares them for crises. For example Apex Kidney Care, a leading dialysis services provider in the country offers an AICTE-approved course in partnership with Tata Institute of Social Sciences for dialysis technicians. The company has to date trained more than 1,600 dialysis professionals.
The journey of universal health coverage rests in bringing complementary strengths of the government and mirroring them with the private sector. Only when complementary principals are brought to the same table, can India start walking the path towards UHC. Private capital is an important catalyst as a thriving private sector can bring expertise, innovation and resources to complement the government’s efforts which together will establish a robust healthcare system that caters to the diverse needs of the population.
(The writer is Managing Partner, Tata Capital Healthcare Fund; Treasurer, NATHEALTH. Views are personal.)