Benchmark spending on healthcare should be around 8%: NITI aayog member Vinod Paul2 min read . Updated: 20 Nov 2020, 12:11 AM IST
- Dr Vinod Paul said that not only the Union Government, but also the state government should enhance spending on health
The benchmark spending or acceptable level of funding towards healthcare should be around 8% of the budget, Dr Vinod Paul, Member NITI Aayog said on Thursday. He was speaking at the second day of Confederation of Indian Industry’s (CII) Asia Health 2020.
Paul said that not only the Union Government, but also the state government should enhance spending on health. “There has been a provision for priority spending for banks on healthcare to be increased from 5 crores to 10 crores particularly directed towards Ayushman Bharat related work focused on tier 2 cities," said Paul.
The experts deliberated on need of increasing health spending on semi urban areas in India. “Developing countries show lesser of public health spending than developed countries, however, Private healthcare spending in developing countries has contributed to the healthcare viability and accessibility in urban areas and is now moving towards semi-urban area," said Vishal Bali, Executive Chairman, Asia Healthcare Holdings, Senior Advisor - TPG Growth.
Talking about the viability of the healthcare sector in smaller cities, Srini Nagarajan, MD & Head – Asia, CDC Group said that that running a commercially viable healthcare model in tier 2 and tier 3 cities is very difficult. “There are five key areas that affect these models; difficulty to get talent, patient affordability to pay is lower, weak physical infrastructure, clinical standards and business integrity," Nagarajan said.
Venkatesh Ratnasami, Managing Director, Temasek said that though there is secular growth in healthcare, drivers keep changing over periods of time. Regional players are becoming stronger and largely as healthcare is ultimately a local business, you try to create regional brands. Talking about shrinking revenues during the covid-19 pandemic, Dr Prem Pavoor, Partner & Head of India, Eight Roads Ventures said that from a services perspective, there has been a clear shift to tier 2 and tier cities. Healthcare services in certain tier 2 and tier 3 cities have not seen a drop in the revenue.
Speaking at another session on The Untapped Potential of E Pharma sector and ways to leverage it for Growth, Dr Rana Mehta Senior Partner and Healthcare Lead PWC said that Pharma Industry is India’s 3rd largest in volume and 13th largest in value. Pharma segment is fragmented. India is the only country where medicine is sold in strips where there is issue of counterfeit drugs and inventory is not managed properly. The pandemic has brought to light that physical access to healthcare is not really a necessity. With respect to telemedicine he said that unless there is proper regulation and clarity financial investment will not come in.
Prashant Tandon Founder 1MG remarked that Covid has made online buying necessary. He also said that trackability and traceability in healthcare will become important over the years. Vishwananthan NS CFO Mfine, an online consultation platform said that digitisation is the way to solve problems. What we are building today with the help of technology is a huge aggregation channel. Correct regulation and clarity is needed for financial investment to come in especially in the telemedicine segment. The government should make the draft regulation for e-pharmacy clear for everybody.