Budget 2023 expectations: Time to upgrade healthcare facility and boost funding

As India battled COVID-19 during the last couple of years, the focus on healthcare infrastructure, technologies and innovation in care delivery has grown consistently. The shortcomings, as well as opportunities, have been identified, and concerted efforts to turn things around are being made by all stakeholders.

Any apprehensions or plans to take the foot off the accelerator now that the pandemic seemed to be under control in 2022, appear to be baseless, as we are seeing reports about another wave of COVID-19 causing a major surge of cases in China and other countries like Japan. That’s where it is crucial that the Hon’ble Union Finance Minister takes steps to fulfil the government’s earlier declaration of increasing the healthcare expenditure to 2.5% of the Indian GDP. For a long time, the expenditure has been hovering below 1.5%, and the increase in the allocation has been only nominal. Moreover, most of the budgetary outlay is spent on operational expenses and hardly any funds are allocated to research, development and building of new capabilities in the healthcare sector.

The existing and potential threats like COVID-19 imply that India has to holistically improve the healthcare infrastructure. Revamping the conventional approach to healthcare is the need of the hour. It is undeniable that institutional healthcare facilities and networks of hospitals, PHCs and CHCs etc., have to be at the core of medical services. However, instead of being the sole option for healthcare, institutional facilities need to operate in collaboration with technology-driven medical services. The large medical facilities should ideally serve as hubs of intensive and critical care. For disease management, long-term care, rehabilitation and preventive care, a support system of point-of-care service delivery has to be built. This can be seamlessly achieved through an integrated approach that brings innovators, hospitals, diagnostic centres, and out-of-hospital healthcare services together.

In this hub-and-spoke model of healthcare delivery, large hospitals can serve as hubs, and with smaller integrated facilities, world-class healthcare coverage can be expanded all over the country. Apart from technology, this requires investments in facilities like medical and nursing colleges, device research and manufacturing facilities, and in hiring more human resources for 24x7 deployment at the peripheral service delivery facilities like PHCs and CHCs.

This need for investments at an expedited level, makes it necessary that the government makes a substantial addition to the healthcare budget, especially with the aim of infrastructure and human resources development. The challenge so far has been that despite all the talk and intent, when it comes to budgetary allocation, healthcare services are considered low priority. This has to change.

A timely, adequate and well-directed increase in budget allocation for healthcare service delivery, infrastructure building, medical research and med-tech innovation can ensure that India is able to build the medical ecosystem needed by the soon-to-be largest population in the world. Further, other relevant steps such as rationalization of the GST are needed. Incentives for medical research, setting up of training facilities and out-of-hospital healthcare services should be announced. As of now, private hospitals and point-of-care medical services companies don’t get full input tax credits, but by standardizing GST at 5% on all services for all private players can help improve this situation.

Conclusion

The Union Budget 2023-24 is expected to be a major step in determining the future trajectory of healthcare improvement and capacity expansion in India. The government needs to see healthcare expenditure as capital investment in human resource development. A healthier Indian population would undoubtedly deliver superior output, reduce longer-term medical expenditure, and eventually add significant additional value to the annual GDP.

Author: Meena Ganesh, Co-Founder and Chairperson, Portea Medical