Why India needs to redefine its healthcare priorities and relook at budgetary allocations

Most industry bodies have recommended raising healthcare spends to between 2.5% and 3.5% of the GDP, according to studies

New Update

Healthcare is a matter of strategic importance to most nations. Many countries have established foundational health infrastructures to help them cater to the needs of their citizens. India is no different and has a structure for primary, secondary, and tertiary care, divided between the government and private sector. This infrastructure was heavily tested during the pandemic.


In January 30 2020, India recorded its first case of Corona Virus popularly known as Covid19. Since then, India’s healthcare infrastructure has been constantly tested – we went from scarcity of beds, oxygen cylinders, to closely monitoring cases and administering vaccinations using unique health IDs, and relying on home quarantine for mild cases. As I write this article, we are in the middle of the third wave of the pandemic caused by the Omicron variant, bringing questions around the state of our healthcare system to the center stage once again.

Despite the numerous challenges during the pandemic there have been some positives that have set in motion the transformation of the industry. In 2020, the medical council of India along with Niti Aayog, released guidelines for telemedicine consultations in India. Since then telemedicine usage by physicians has gone up by almost 80% and the telemedicine market is projected to be $10.6 billion by 2025. There are huge implications for other areas like tele-ICU's, online pharmacies and remote diagnostics. The success of the indigenous vaccine development along with digital health applications like Cowin have been some of the highlights of our success during the pandemic.

As we approach the budget, two things have become clear. The position of the hospital as being central to care provision has been challenged by the pandemic, and a large part of success in the pandemic has been found outside hospitals. The role of the government in care provision has changed by enabling regulations aimed at decentralising care, and by fostering trust in private parties, who have met expectations. With this backdrop, it is important to pay attention to how much budget is being allocated towards public health and towards what categories. 


Why is this budget critical?

Currently India spends about 1.2 percent of its Gross Domestic Product (GDP) on healthcare and there are expectations that this number will grow significantly in the current budget. (Most industry bodies have recommended raising healthcare spends to between 2.5% and 3.5% of the GDP). Comparatively, the United States spends around 16.9% of its GDP on healthcare. On average, the OECD (The Organization for Economic Co-operation and Development) countries are estimated to have spent 8.8% of their GDPs on health care in 2018, a figure unchanged since 2013. Despite the relatively high spends, the healthcare infrastructure in these countries also came under stress during the pandemic. The biggest learning from the experience of other countries is that we need to re-consider the way we structure our healthcare spends, while also increasing the overall spends. 

In my view the hospital should be the last port of call for patients and to achieve that, we need to invest heavily in building infrastructure and capabilities at primary health centers, community health centers and wellness centers . Further, healthcare professionals like ASHA workers and community helpers need to be trained in infectious as well as non-communicable disease management. This would ensure that preventive health at the ground level is available to citizens and major lifestyle diseases such as diabetes and hypertension can be better managed at the onset. 


From a technology perspective it is important to roll out health IDs and in-patient programs like the India health stack that would lead to creation of electronic health records. This has huge implications for portability like the open credit enablement network that is being rolled out in financial services. Investment in real time technologies and upgradation of the current Integrated Disease Surveillance program would be necessary to prevent large scale outbreak of disease in future. 

Lastly, the government should aim to consolidate existing medical apex bodies into one governance authority to monitor all aspects of healthcare including privacy and cyber security. This became obvious in the early stages of the pandemic when multiple apex bodies grappled with a unified response before deciding to prioritize patients’ needs. While the government has been working towards some of these recommendations and putting in place building blocks (such as the The Ayushman Bharat Yojana that aims to provide care, medicines, and diagnostics to citizens below the poverty line, which will necessitate robust record keeping and enhancing care across urban and rural India), one expects the budget to commit and fast track some of these initiatives.

The article has been written by Vikram Venkateswaran, Member, Healthcare working group, IET Future Tech Panel