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poorly maintained or have outdated medical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 • Tax breaks, profit margins might reduce but compensate
• Better healthcare through volumes
• Progress for country High HDI • Require lesser investments as will operate on Govt. premises.
• Higher growth • 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
Losses
(but infra development on • Delays due to beaurocracy
cards) • Initials years might not be profitable
• Tax losses
 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