A healthcare prescription for India’s growth story

India’s economy is posting among the fastest growth rates globally even as the country strives to unleash reforms to get to full potential. However, there is a silent threat that could derail India’s journey towards becoming a developed nation.

It’s health—or the lack of it. Without Aarogya Bharat, or healthy India, the benefits from faster growth will be seriously compromised.

The numbers are frightening. Non-communicable diseases (NCDs) have become the largest cause of mortality, and the morbidity cost to India is estimated at $6 trillion between now and 2030—three times today’s gross domestic product (GDP). There are over 60 million Indians suffering from diabetes, 30 million patients of cardiovascular ailments and a million new cases of cancer yearly, straining an already under-par healthcare system which is still battling old foes such as dengue, malaria and tuberculosis.

Beyond short-term

Clearly, India grossly underspends on health and offers poor access to care even as the bulk of its population—not just the poor but the middle classes, too, remains heavily exposed to diseases.

But health is still not a top government priority. Public health spending is around 1% of GDP while overall, the country spends over 4%. Rwanda and Peru do better.

Will the government do the right thing—allocate scarce resources and define a clear and actionable roadmap for Aarogya Bharat? That is its real test of leadership: Steering away from near-term political pay-offs to policymaking that improves the life and productivity of Indians for decades.

Our current health system is geared towards secondary and tertiary care, where the focus is on treating very sick patients. Primary care, which is significantly less costly, is unorganized and largely not covered by insurance. This paradigm is dangerously inverted. Take diabetes: Early diagnosis and treatment is one-tenth to one-twentieth the cost of late-stage care, which requires costly treatment, hospitalization and has significant comorbidities.

Grim—and grimmer

Most Indians accessing the existing healthcare system pay out of pocket—that is nearly 60% of health expenditure, three times the global average.

Insurance penetration is just 25% overall, of which barely 5% comes from private players. Our infrastructure is also woefully inadequate, as we are short of 2 million beds and doctors and 4 million nurses.

This grim scenario becomes formidable in rural areas. Urban India accounts for around 30% of the population but has 80% of healthcare infrastructure. Our healthcare quality is poor and variable as the bulk of delivery in India is unorganized, and only 1% of hospitals and diagnostic labs are accredited.

As a result, outcomes remain poor. Indians continue to have high maternal and infant mortality rates (falling behind the millennium development goals) while diagnosis rates for cancer and diabetes are only 30- 50%. The challenge is accentuated by lack of appropriate care received for chronic diseases such as cardiac and respiratory illnesses, which are rising sharply. Unsurprisingly, the average Indian’s life expectancy is only 66 years versus 75 in China and 74 in Brazil.

India right now has a wide open but swiftly closing window to define the rules of its nascent health system. Unlike developed markets, its norms are not quite set.

Also, India has a young, net-savvy population—which makes technology a great healthcare enabler towards increasing access and addressing quality issues.

Some states such as Kerala, where outcomes are five times better today, can show the way to laggard states and the centre. And learnings can come from countries that have built a future-ready and sustainable health system.

Five-point focus

To address these challenges, India must focus on five key health priorities:

First, the government must spend more on healthcare, from the current 1% of GDP to 2.5–3%. It must focus on public health and achieve 100% vaccination and push harder to reduce child and maternal mortality. By focusing on institutional births, training ASHA workers to emphasize neonatal care and providing basic food and iron supplements, India can prevent 80% of its 1.5 million child deaths annually.

Second, all players—government, nongovernment and the private sector—must declare war on NCDs. At the same time, citizens must be supported with universal health insurance for primary care and catastrophe coverage. Incentives must be created for healthy living and emphasis given to screening, early diagnosis, treatment by generic pharmaceuticals as well as lifestyle modifications. We must change the paradigm to ensure wellness over treating sickness.

Third, we need to improve healthcare quality. The way ahead is through institutionalizing minimum standards for healthcare products and services and publishing results achieved. This can set the groundwork for eventually “paying for outcomes”.

Fourth, we must unleash technology to increase access and affordability. Frugal innovation—devices such as Swasthya Slate and 3nethra—can be a game changer in creating screening and testing solutions for the populace. Telehealth can expand reach and help scale scarce clinical talent, while mobile health can engage the population and improve adherence.

Finally, we need greater clarity on the role of stakeholders, especially the government, and also on health policy and regulations so that the private sector can commit to greater investments for affordable and accessible healthcare and earn “reasonable” returns. The private sector should also be key in enhancing the effectiveness of public infrastructure via public-private partnerships.

In defining its health system, India should consider lessons from other countries. Indonesia has underestimated the costs and budgetary implications of universal healthcare for comprehensive care. But Singapore has focused on prevention and early intervention, coupled with insurance that encourages individual accountability, and focuses on outcomes via capitation. Unsurprisingly, Singapore has achieved first-world outcomes by spending around 4% of GDP on health.

India cannot afford to sit back if it wants a healthy workforce for a strong economy. Let us seize the opportunity today for Aarogya Bharat tomorrow.

The writer is the managing director of Bain & Co. India, and a member of the firm’s Asia-Pacific Healthcare practice. He is also the co-author of Aarogya Bharat: India Healthcare Roadmap for 2025, a Bain report.