Home / News / India /  Just what the doctor ordered: How reforms transformed healthcare

MUMBAI/NEW DELHI : Dr Prathap C. Reddy, 88, returned to India from the US in the 1970s and realized that specialized healthcare was out of reach for the average Indian. In 1983, he founded India’s first corporate hospital, Apollo Hospitals, in Chennai and expanded across the country. Reddy and his daughter and vice-chairperson Preetha Reddy tell Mint how healthcare in India has changed over 30 years.

What are the ways in which you found doing business in India different in the pre- and the post-liberalization era?

Prathap Reddy: When I came back to India, automation essential for cardiology was deficient. Often, I had to send patients abroad, and not everyone could afford this. I thought to myself: How many are going to die because they can’t raise money? I decided to set up a hospital here. I made quite a few trips to Delhi. The major change came in 1985. The government said hospitals could be funded like industry. Customs duty for medical equipment, which was over 300% as a luxury item, was brought down. The first medical equipment I imported was a CT scan machine. Today, we have thousands of them. All this happened because of the reforms that started then. Today, India’s healthcare is equivalent to the world’s best.

Would you say this was a direct consequence of the reforms started in 1991?

There’s no doubt. All this is because of the ’85 reforms—that hospitals should be funded like trade or industry, that health insurance would get a tax deduction, and the rationalization of customs duty. These three, for us, were the biggest thing. Then because of the 1991 transformation, people started looking for better things, and better health was also necessary.

What are the urgent pending reforms in your sector?

Preetha Reddy: What will happen in 2030 is what we have to think about. We’ve got great enablers. We’ve said we will make Bharat atmanirbhar, we’ve got Ayushman Bharat. We need to be cognizant about building infrastructure because we don’t have adequate infrastructure to treat everyone. We need to find innovative means to build that infrastructure quickly. We need to look at innovative financing, innovative modelling. Second, we have to be realistic about how healthcare is delivered. The point of care is shifting from brick-and-mortar systems to smartphones. 5G is coming, so the regulations around digital have to be faster and forward-thinking. Skilling is another important aspect. We need more doctors, nurses, healthcare personnel. We have the youngest workforce globally, the largest English-speaking workforce—how can we harness this? Again, when we’re talking about making in India, we can do more medical devices. Right now, we’re importing 75%. In short, we need to scale up infrastructure, manpower and manufacturing. Economics and health are directly proportional. Unless we are able to take care of the health of the nation, we will have a larger economic crisis.

India has never had public healthcare. What happens to the bottom of the pyramid?

Prathap Reddy: How do we treat this large number of people? Insurance is one way. Telemedicine is another. It is low-cost but gets the best health advice to all. It is necessary the government meets the cost of hospitals so they can use technology.That will bring down the cost.

Preetha Reddy: We need to pick best practices from a neighbour, like Singapore. The model should be such that those who cannot afford to pay will still be taken care of. If you look at data, when we started 80% of our revenue was people paying cash upfront; 20% was third-party payment. The equation has flipped because insurance models have become better. There will be a time in the next three years when everybody will have some kind of insurance. People will have access. But what we are not looking at is how are we going to build the infrastructure when people have access. To me, that is where the focus has to be. Policymakers have to look 5-10 years ahead.

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