Published on April 24, 2018
India has quietly generated a healthcare crisis. The small victory, however, is that the recent budget announcement and urgency surrounding the broken system have dragged healthcare out of the wings. The underlying question—is it too late?
Healthcare’s begun to find mention in quotidian discourse, too. The other day, my car cleaner asked me some razor-sharp questions on Modicare, leaving me a bit stumped. Sensing my defeat, he changed tack to the purchase of health insurance and how he could go about it.
Why am I pushing for this healthy India conversation? In any community, 1- 3% people will be sick at any given time. Now you do the math for a country of 1.3 billion. Our approach to healthcare needs to be more broad-based, deliberate, and participative.
So, where should we direct our attention? As someone who’s been in healthcare for 25 years, I’d like to talk about four major challenges.
Our first national challenge is the shift in global disease patterns. India bears almost 20% of the global disease burden. Not only are we tackling more disease, but also more kinds of disease. Back when I was training to be a doctor, 25 years ago, the biggest causes of death were infection or communicable diseases such as malaria, diarrhoea, and so on. But now, we’re seeing a mass epidemic of non-communicable diseases (NCDs) such as cardiovascular, diabetes, kidney, and pollution-related damage to the body. This is a combination of many things including our unhealthy eating habits, sedentary lifestyles, environmental impact, and quite frankly poor genetics.
The second point of concern, counter-intuitively, is burgeoning affluence. India’s GDP will go from US$ 2.25 trillion at present, to US$ 10 trillion by 2030, and per person average income will go from US$ 1,800 (INR 1 lakh) to US$ 6,600 (INR 4 lakhs). Not surprisingly, the gains won’t be equally distributed. As has always been the case in India, the rich will get richer and the poor, poorer still. Money will undoubtedly go into healthcare, not to make it more accessible, but the opposite. We’ll have better healthcare for fewer people. So whereas our massive population will ensure that we never run short of patients, the question persists – how are we going to pay for their care?
This takes us to number three—the historical underspend on healthcare. The numbers are abysmal—India spends not even 3% of its GDP on healthcare, compared to 17% in the United States, or even China’s 6%. Public sector infrastructure constitutes about 70% of the total infrastructure, but only takes care of 30% of patient care. This automatically means that the overstretched 30% private healthcare in India caters to 70% of the patients. To compound this, while 70% of the population lives in the rural areas only 20% of doctors actually practice there!
My fourth and final point—the power and role of prevention. We are at the medical inflection point of catching diseases early because of the great advances in pathology and radiology. Effective public screening utilizing these tests could have a multiplier effect in reducing the disease burden before they become serious. Add to this, effective public health education and implementation at the primary healthcare level, especially in the rural and urban slum contexts.
The situation’s not all bleak though—there is a promising spend on healthcare and a strong per capita healthcare spend growth too. Indian healthcare companies grew at almost 10% plus year on year, compared to the OECD average of not even 2%.
In sum, my view is that the government should spend its money on primary healthcare and prevention through public health awareness. The private sector should cater to tertiary and more expensive care but get compensated by universal health insurance. We in the private health space need to pull up our own socks by self-regulation, non-predatory pricing, and adherence to medical ethics. Adding technology will help drop costs and improve efficacy manifold.
Cumulatively, this might just help us sidestep the crisis that’s coming for us.
Dr. Amit Varma is co-founder of Quadria Capital, one of Asia’s largest healthcare private equity firms.