Delivering a better picture of health for India

With universal healthcare, public health and sanitation flagged as core components of the Bharatiya Janata Party’s pre-election healthcare policy in 2014, the forthcoming budget should commit to building a healthcare system that meets the country’s needs. Since India is saddled with an already underperforming healthcare delivery system, announcements of intent will not suffice. Instead, the government needs to implement specific initiatives.

That the country faces a dual burden of communicable diseases and non-communicable diseases (NCDs) is well known. NCDs are expected to cost $6.2 trillion by 2030, and will irrevocably expose the poor state of healthcare delivery across primary, secondary and tertiary care. To face this challenge, the government must prioritize two critical healthcare-delivery objectives—increase investment in healthcare delivery and shift to smarter solutions.

Grow and fund healthcare delivery

With one functional hospital bed per 1,000 people in 2012, India is well below the global benchmark. According to estimates, healthcare providers will require around two million new beds by 2025, a monumental task. Infrastructure shortages are even more acute in smaller towns and villages. In 2012, Indian metros and larger cities had four hospital beds per 1,000 people, compared with 2.5 in small towns and a national average of 1.3 beds. Large regional variances add to the challenge.

Changing demographics will add to the burden. By 2025, around 11% of the population will be over the age of 60—and most in need of care—compared with 7-8% in 2012. Since 60% of an individual’s lifetime healthcare spending occurs after the age of 65, the total cost of healthcare delivery will increase significantly.

The country, therefore, needs to create infrastructure in a regionally balanced manner across primary, secondary and tertiary care, with increased capacity to manage the health of high-risk groups such as NCD patients in need of chronic care and the elderly. According to estimates, realizing 2025 aspirations will require a cumulative $3 trillion in spending, including $600 billion in capital expenditure. The budget is a good time for the government to signal its intentions to meet these expectations.

Move to smarter solutions

Increasing investment in healthcare delivery alone is not enough; the government also needs to focus its efforts towards smarter solutions. We discuss five of them. Other measures—the shift to protocol-based care and better use of data—are worth considering as well.

Shift to primary care: In India, the bias towards curative care reflects a culture where prevention and wellness receive limited focus, and investments in primary care and public health have long been inadequate. In addition, interventions are rarely made during early stages of disease detection, happening instead much further down the treatment corridor.

Look at diabetes care. On average, the number of outpatient visits for an inpatient admission in urban India is 10, compared with around 70 in the US. Clearly, Indian diabetics only visit a care facility much further down the treatment corridor, when treatment costs could be as much as 10 times higher than with early-stage detection. Moreover, state-run primary health centres (PHCs), which primarily serve rural areas, are critically short on staff. According to estimates, there is a 45% shortfall in health assistants and a 10% shortage of doctors.

A major culture shift is required to move from a tertiary-intervention focus towards prevention and early arrest of diseases. To this end, the government needs to rejuvenate the PHC infrastructure and work with the private sector, through partnerships and by adoption of new technology.

Minimum standards of care quality: Less than 1% of hospitals in India are accredited by the National Accreditation Board for Hospitals and Healthcare Providers, and 60% of these alone are in the top 10 cities. Yet, there is clear evidence that accredited hospitals provide better clinical outcomes. In Jordan and Spain, for example, Joint Commission International-accredited hospitals demonstrated a 30% decrease in caesarean sections compared with other hospitals. However, accreditation isn’t mandatory in India, and outcomes are neither measured nor communicated broadly, resulting in poor and variable quality across the system. The government needs to build consensus and ensure regulation around 100% accreditation requirements and mandate quality standards.

Towards greater integrated care: Healthcare everywhere has historically been largely event-based, treating symptoms that a patient exhibits at a care facility. However, integrated and continuous care models have proven effective at improving patient outcomes and controlling costs. For example, CareMore, an integrated care provider in the US, realized 24% lower hospital admission rates, 38% fewer hospital stays and 60% lower diabetic amputation rates compared with the national average.

Technological advances, such as increasing smartphone and Internet penetration, have increased the scope for integrated care. For example, Diabetacareis utilizing increased smartphone penetration in India to trial its new blood-sugar device with remote monitoring capability.

Build innovation and promote new care models: Delivery format innovation can ensure affordable and quality care for all and go beyond major cities. Some providers have successfully tested lower-cost nursing homes or single-specialty delivery formats in larger and smaller cities that require ₹ 40-50 lakh of capital expenditure per bed, nearly half the standard cost of a tertiary hospital bed in the metros.

Out-of-hospital formats, such as home care, rehab and ambulatory care, also provide means to improve access and affordability. In fact, estimates show cost of care after an acute stroke is 50% lower at a rehab centre compared with a typical tertiary hospital. These are nascent models for India, but are likely to see significant growth.

Value-based delivery to address low affordability: The current fee-for-service approach does not provide the right balance of incentives for providers and practitioners, and can lead to spiralling healthcare costs. India requires a new approach based on primary care, care coordination, care protocols, thorough patient monitoring, transparent performance reviews and aligned incentives for caregivers and individuals. These are essential to making healthcare more affordable.

We hope that the government begins the journey towards two long-awaited shifts. First, giving healthcare the priority it deserves and increasing funding, and second, making a significant move towards smarter prevention-oriented healthcare interventions.

Parijat Ghosh, based in Mumbai, is a partner with Bain and Co. and leads Bain’s India healthcare practice. Satyam Mehra is a Bain principal in the same practice and is based in New Delhi.