The New Cabinet Package Announced By The Modi Government:

Dr Swadeep Srivastava Given that the private sector accounts for more than 70% of India’s healthcare market, a public-private partnership should be promoted to drive the expansion of access to healthcare

As PM Modi’s new cabinet clears ₹23,132 crore package for Covid management, all state governments will be consulted to chart out a future roadmap so that oxygen, beds, and crucial medicines do not pose a challenge in future.

The Union Government’s move to allocate an additional budget to boost public healthcare facilities by March next year to combat the expected third wave of Covid-19 is indeed laudable. Had such a step been taken prior to the second wave, India would not have witnessed a galloping death wave and a tsunami of Covid positive cases this year. But we learn by bitter experience, and it is never too late to take corrective and preventive steps.

The allocation will put in place a loan scheme, based on government guarantees, for the private sector to augment existing hospital capacity and create new facilities. This is another important step and signals a healthy public-private partnership – a much-needed move in times of the pandemic.

Given that the private sector accounts for more than 70% of India’s healthcare market, a public-private partnership should drive the expansion of access to healthcare. India needs human capital, financial capital and management. And all three are scarce in the government sector.

Despite that, the government must expand public health infrastructure first, no doubt. However, expanding India’s healthcare infrastructure also presents an opportunity for the private sector. A lot of private healthcare is provided by smaller setups – 10-20 beds run by individual doctors. So, there is a huge opportunity for private healthcare players, provided the government gives them the much-needed support.

Private healthcare also needs to be more affordable. From the patient’s point of view, there should be schemes whereby out-of-pocket expenses can be reduced, whether it is through Ayushman Bharat, community health schemes or CSR funding.

Reports indicate that medical debt pushes 66 lakh families to below the poverty line every year which makes an insurance scheme like Ayushman Bharat essential, and digitising it is the next step to make healthcare interoperable across India.

The recent budgetary allocation will focus on increasing availability of ICU beds and oxygen supply, in addition to ensuring adequate availability of equipment, medicines, access to tele-consultation, ambulance services as well as testing and diagnostics capacity.

There is no gainsaying that the outlook is immediate and medium term, but the effort is intended to create significant capacity addition in the health sector that will be useful even when the pandemic recedes.

In fact, India’s public healthcare system was built on augmenting medical facilities in small towns and villages – collectively called the under-served areas. Though this was given a serious thought in the initial stages, it later got diluted as state governments looked for growth in other areas.

The new plan envisages a credit guarantee scheme for private hospitals in cities other than the eight metros. This is again a laudable step.

It is easy to talk about ICU beds, ventilators and the machines we need to buy, but it’s equally important for us to talk about the human resources to run them. Because you cannot manufacture doctors, nurses and paramedical staff overnight.

A key element of the strategy is to fund augmentation of human resource capability, with help of medical and nursing students. The second wave had proved how vital are frontline workers in combating the virus.

This is not the first time that funds are being infused into the healthcare system. Last year too the finance ministry had stepped in to improve capacity.

The Rs 15,000 crore Emergency Health Systems project had helped in a 25-fold jump in Covid-dedicated hospitals, as well as over 40-times increase in isolation and ICU beds. The National Credit Guarantee Trustee Company will provide 50% cover for expansion, while the limit for projects has been fixed at 75%.

The finer details show that in the over 100 aspirational districts, 75% guarantee cover will be available for both new projects as well as expansion. Hospitals would now be eligible for loans up to Rs 100 crore, with interest rate capped at 7.95%. This is the latest move to boost health facilities with the Reserve Bank of India having already opened a special Rs 50,000 crore window for the sector.

But what needs flagging here is that a large chunk of the financial help is in the form of loan guarantees and not direct stimulus. Such a measure indicates that the centre was unwilling to accept demands for a large stimulus in the form of tax cuts or support to the private healthcare sector.

To make meaningful headway, digitising healthcare and reducing dependence on importing things is a must. About 30-35% of hospital project cost is medical equipment and technology. For a long time, the country has relied on international brands. Can we manufacture our own MRIs, CTs and ultrasounds, at least now?

The government’s production-and research-linked incentives can pay off. The government has looked at establishing four manufacturing zones for medical supply. Eventually, it’s about making India the manufacturing hub of the world for medical devices rather than importing them.

Prime Minister Narendra Modi had, not long ago, said ‘I’m going to give good drinking water to everybody’ and put more than Rs 60,000 crore into the budget this year. By 2024, every rural household will have water. Why can’t we have a similar programme for a massive upswing in health infrastructure over the next few years? There’s enough money, money is not the problem, it is the will, the mindset.

Dr Swadeep Srivastava,  ‘Public Health Communicator’, Founder of HEAL Health Group- a pioneering Healthcare Communications platform in India


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