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Financial intermediation, not free healthcare, is the key to India's health security: Dr Devi Shetty

22 Sep 2021

Press release on healthcare session

Covid's third wave – if at all - will be relatively benign: Experts

India needs more financial intermediation in its healthcare sector than free government healthcare, says Dr Devi Prasad Shetty, Chairman and Executive Director, Narayana Health. Speaking in a panel discussion during the 48th National Management Convention of All India Management Association (AIMA), Dr Shetty argued that free healthcare offered by the government is not scalable. "Where is the money?" he asked.

However, Professor K Srinath Reddy, President, Public Health Foundation of India, said that insurance-based healthcare alone would not work in India. He argued that insurance can only supplement the system and not substitute government healthcare. "Most of the funding (for healthcare) has to come from the taxes," he insisted. He pointed out that the countries with universal healthcare rely on public funding, such as the UK where 84% of the healthcare is paid by the government. Professor Srinath pointed out that salary deductions towards health insurance would not work in India where 90% of the workforce is employed in the informal sector.

Dr Azad Moopen, Chairman and Managing Director Aster DM Healthcare, argued that India must increase its government spending on healthcare from 1.5% of the GDP to at least 4% quickly to achieve public health security. He pointed out that the share of healthcare budgets in Europe is about 10% of the GDP, in the US it is 17% and even in Bangladesh it is about 4%. "Health security is as important as any other form of national security. The government must lead and the private sector will follow," he said.

Ms Suneeta Reddy, Managing Director Apollo Hospitals Group, who moderated the session, pointed out that private health insurance was only 5% of the country's healthcare spending, which had created an opportunity for the NBFCs to offer EMI-based loans for cardiac surgeries and such treatments.

The panel had a consensus on the potential impact of a third covid wave. The panellists believed that a third wave, even if it materializes, will not be as devastating as the second wave. "The herd immunity is increasing, plus there is vaccination now," argued Dr Moopen. However, he said that covid has become endemic and people have to live with it. Dr Srinath said that though the exposure level of the people was still high, a third wave was unlikely, and even if it did occur, the impact will not be as devastating.

Mr Hemant Nerurkar, Past President, AIMA and Chairman, Crompton Greaves, NCC Ltd and Director, Adani Enterprise Ltd, said that if there is one good thing about the covid pandemic, it was that it had woken up India about the need for a decent, dependable public healthcare system. He argued that the shortage of healthcare during the pandemic had imposed a massive cost on both the government and the business and both should learn that without public healthcare their finances would never be stable.

Ms Suneeta Reddy raised the concerns around diagnostics services and diagnostics insurance. She said that during the covid diagnostics availability and expenses became a major issue.

Professor Srinath said that 70% of the out-of-pocket healthcare expenses go to diagnostics and drugs at the OPD stage. He said that affordable, near-home and reliable diagnostics and drugs were a basic necessity and given the poor procurement system of the government, it could be done by the private sector, which could pass on the benefits to the patients. He said that the government has responded to the covid pandemic and created covid diagnostic centres across the country, but it is specific to covid only.

According to Dr Shetty, covid is not one off and there are hundreds of virus lurking in animals that could cross over to humans. His solution to the problem of tackling pandemics is to create a mobile workforce of young doctors, nurses and allied workers who could be quickly deployed at the place of outbreak, where the government hospitals lack the staff to deal with the problem. He argued that pandemics begin locally and at any place they peak for 1-2 months.

Dr Shetty ranked skilling at the top of his health security priorities. He said that India should permit the youth from poor families to acquire parallel education in hospitals by working there and 48 hours a week combined with online education.

Dr Moopen's solution to medical personnel shortage was to force medical graduates to serve in rural areas for a couple years before joining their post-graduate courses. He also suggested creation of an Indian Medical Services on the lines of IAS and IPS.

Professor Srinath insisted that investing in the primary healthcare system had to be the foundation of national health security. He suggested that the frontline workers be trained in technology-enabled distant healthcare and more investment be made in training the workforce at district hospitals and medical colleges.

Elaborating on his view on the situation, Dr Azad Moopen said, "Strengthening the healthcare infrastructure is the first step towards building a dependable healthcare system that promotes National Health Security . Capacity building by investing more in healthcare infrastructure and increasing the pipeline of healthcare professionals is very crucial to address a situation like the one created by Covid 19. Active Vaccination campaign to achieve herd immunity is the most important priority now."

The session was attended by many thousand delegates of the National Management Convention and continues to get excellent inline traction.

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