The game-changers

Government regulations and programmes that are giving a thrust to accessibility and affordability

The central Government has been committed to decreasing the financial burden and
ensuring affordable healthcare for Indians, through various regulations and schemes. Below is a list of steps that Government recently took to streamline the industry and make healthcare more affordable. 

Ayushman Bharat
The Ayushman Bharat Pradhan Mantri Jan Arogya Yojana (AB-PMJAY), which is likely to benefit more than 10 crore poor  families across the country, is the most leading Government programme that is slated to impact healthcare delivery in more ways than one. The scheme launched in September 2018 brings 40% of population under the ambit of universal health coverage with insurance cover up to 5-lakhs per family.

This is slated to be the most disruptive initiative as hospitals would be required to restructure their healthcare practices to align with low rates of reimbursement. Based on initial reports most tertiary care hospitals are reluctant to accept these rates and have kept away from the scheme. A positive point is that Government has realised and has constituted a costing committee under the Department of Health Research.

Says Dr Girdhar Gyani, director general, AHPI, “This is first time that Government has set up committee to work out costing based on scientific criteria. Hopefully, by June-July there will be revised rates for 1354 medical procedures under AB PMJAY and that will enable a good number of secondary/ tertiary care hospitals to empanel under the scheme and make the scheme as world’s largest insurance scheme a grand success.” The second component of the scheme by which 1.5 lakh health and wellness centres are to be established at existing sub centres is going to be another game changer. “The work has already begun and in next three years and we may get all the centres functioning,” says Gyani.

Price ceiling
The Government has aggressively pursued measures to make healthcare affordable by way of fixing of ceiling price of essential drugs, medical consumables like stents and orthopeadic implants. Recently, the Maximum Retail Price (MRP) of some cancer drugs has been slashed by the National Pharmaceutical Pricing Authority (NPPA) by up to 60% . This is the second time this year that prices of some cancer drugs has been reduced. Earlier, the rates were brought down for around 380 drugs, with some cuts going to as much as 80-90% under trade margin rationalisation.

The reduction would help make cancer treatment more affordable to patients. The cancer burden in India has more than doubled over the last 26 years, the highest increase among all therapy areas. According to a report in The Lancet, between 1990 and 2016 the number of cancer deaths in India increased by 112%. At the same time, the incidence of cancer cases also increased by 48.7%.The opening of Jan Aushadhi outlets has also made availability of generic drugs at very cheap price for population.
Says Dr Mudit Saxena, managing director and CEO, Ovum Hospitals, “The price ceiling has made healthcare more affordable for the common man, though it has decreased the margins of hospitals and made them less viable. However, it's think to re-think ways and devise strategies of profitability from other areas."

According to Dr BS Ajaikumar, chairman & CEO, Healthcare Global Enterprises, “The Government’s move to provide relief to cancer patients regarding treatment costs is welcome but while it may appear to benefit the patients momentarily, it will be detrimental to them in the long run. We need to encourage cashless treatments and strive towards implementing universal healthcare for all sections of the society, irrespective of rich or poor- providing quality healthcare to everyone.”

AIIMS like institutes
The Government has announced the setting up of various All India Institutes of Medical Sciences (AIIMS)-like institutions in several parts of the country. This would help the common man access world class healthcare.
“Having more AIIMS like institute is a very progressive step by the Government. However, what has been lacking is the speedy execution of the plan. This step can pivot a big leap in the way healthcare is delivered in the country,” says Vishal Bali, Asia Head, Healthcare, TPG Growth. 

A model PPP
While the above strategies are initiated by the central Government, an endeavour by the state Government of Odisha in the domain of PPP is worthy of being emulated by other states. In an effort towards strengthening the supply side, the Government of Odisha is establishing 25 new hospitals across the state in the PPP mode. What is unique is that to ensure financial viability, the state Government has proposed to fund up to Rs 1,300 crore towards operational losses over the first seven years, including the VGF for initial CAPEX, which it approximately 2.5 times the project establishment cost. This is a first of its kind in the country. 

Says Ayanabh DebGupta, co-founder & director - Medica Group of Hospitals,  “Further to ensuring equity and affordability, the state has backed the project with a social health insurance programme that is planned to provide cover of up to Rs 7,00,000 per family per year and covers nearly 70% of the state’s 42 million population.”  

The state has thus addressed both demand and supply sides of this difficult balance.  “While the scheme has just been announced, marking the beginning of an arduous implementation journey, once implemented, this PPP model can be replicated across other states and possibly usher in a new era of health PPPs in the country,” he added.