Healthcare Nitish Bhandari Mdi

Healthcare Submitted by: Nitish Bhandari Management Development Institute

Current Healthcare Scenario • Presently US$ 35 billion industry, expected to reach over US$ 75 billion by 2012 and US$ 150 billion by 2017 • $34 per capita, or roughly 6% of GDP. • Private sector accounts 80% of spending • 39 %Institutional delivery care coverage 2000-07 • Only 18% of rural population has access to improved sanitation facilities • 5.6 million child deaths every year • Half of children in India are underweight

Delivery Gaps • The healthcare Divide- The private sector accounts for more than 80% of total healthcare spending in India. • Lack of insurance- only 11% of the population has any form of health insurance coverage. • Lack of infrastructure- India needs 74,150 community health centres per million population but has less than half that number. • Lack of efficiency- most hospitals are short-staffed, poorly maintained or have outdated medical equipment. • Inadequate health care regulations- poor medical services & absence of corrective authority

Proposal Collaboration between government & private parties • Government provides already existing healthcare centers, dispensaries, PHCs etc to private parties • Premises provided is to be revived by the private players by investing into renovation , expansion and modernization of equipments • These Premises are to be provided on BOOT basis, i.e., Build Own Operate & Transfer in which private player returns the premises after a period of 15-20 years – Rationale: by 2030 India is expected to have three folds the per capita income and health & life insurance is expected to increase five folds • Private parties develop these centers & earn profits • Tax breaks on the profits • Tax break for doctors & support staff

Proposal continued… • Government to develop infrastructure like roads, schools near by so that doctors from urban areas are encouraged to come – Under government’s infrastructure developmental policies • Private parties will gain from large number of patients coming to them • Government to provide concessions for already existing urban hospitals, medical centers of these private parties provided they have opened rural hospitals , medicals centers in some ratio x:y in the same state Opportunity of selling third party health insurance • Due to availability bias there is high chance that patient’s family will buy it • Health insurance business is growing at 50% • Projected to grow to $5.75bn by 2010 • Building more awareness about health insurance will increase the probability of buying it

Proposal for Regulatory • Government to set up regulator in the lines of SEBI, TRAI, IRDA for: – Checking the prices – Hospitals to submit monthly/quarterly reports – Basic standards are being followed – Grievance cell – Transparency in the system through RTI – Systematic working

Win-Win Situation Government

Private Parties

Benefits

Benefits

• No subsidies • Better healthcare • Progress for country High HDI • Higher growth

• Tax breaks, profit margins might reduce but compensate through volumes • Require lesser investments as will operate on Govt. premises. • New & small private entities can be given opportunities • Affordable loans for expansion through PSU Banks • Health insurance to be sold through third parties

Losses • Incur expenditure on additional infra like schools, parks, etc (but infra development on cards) • Tax losses

Losses • Delays due to beaurocracy • Initials years might not be profitable

Impact • Medical facilities to the masses • Health awareness • 2% annual reduction in chronic diseases death rates over the next 10 years to 2015 will result in economic growth of $15bn • Increased penetration & decentralization of health services • Increase in quality of health care • Decrease in mortality rates in rural areas

What else …. • • • • •

Health awareness campaigns Reproductive & child health programs Awareness about health insurance Promotion of healthy life styles Strengthening capacities for data collection, assessment and review • Evidence based planning, monitoring and supervision

Thanks