The Economic Survey 2020-21 on Friday called for a healthcare sector regulator to undertake "regulation and supervision" considering the bulk of healthcare in India is delivered through the private sector and out of pocket expenditure on health is the highest.

The survey noted that 74 percent of outpatient care and 65 percent of hospitalisation in India is provided through the private sector in urban India.

The Economic Survey, tabled by Finance Minister Nirmala Sitharaman, also said that the quality of treatment in the private sector does not seem to be markedly better when compared to the public sector. Yet, the costs of treatment are not only uniformly higher in the private sector, but the differences are also humongous for in-patient treatments of severe illnesses.

The survey said, “The healthcare policy must not become beholden to "saliency bias", where it overweighs a recent phenomenon” adding that better healthcare infrastructure is no insurance against communicable disease and future pandemics.

The survey also pushed for an increase in public spend up to 3 percent of GDP, particularly for the richer states, adding that the expenditures are highly variable across states.

Here are the salient features of Economic Survey on Healthcare Sector:

Need for Sectoral Regulator

The bulk of healthcare in India provided through the private sector in urban India

Critical for policymakers to mitigate information asymmetry in healthcare which creates market failures

Information asymmetry renders unregulated private healthcare sub-optimal

Quality similar between public & private, yet costs of treatment not only uniformly higher in the private sector

Differences in cost of treatment humongous for in-patient treatments of severe illnesses such as cancers (3.7x), cardio (6.8x), injuries (5.9x), gastro (6.2x), and respiratory (5.2x)

Suggests creating agencies to assess the quality of the healthcare providers – both doctors and hospitals

The Quality and Outcomes Framework (QOF) introduced by the National Health Service (NHS) in the United Kingdom in 2004 as well as other quality assessment practices introduced by NHS provide a good example

Healthcare Policy

India’s healthcare policy must continue focusing on its long-term healthcare priorities

Healthcare Budget

India ranks 179th out of 189 countries in prioritisation accorded to health in its government budgets

Richer states spending a lower proportion of their GSDP on healthcare

2.5-3 percent increase in public spending can substantially reduce out of pocket spend to 30 percent from 65 percent currently

Richer states should especially target increasing healthcare spending as a per cent of GDP to 2.5-3 percent.

In conjunction with Ayushman Bharat, the emphasis on NHM should continue

India's performance

On quality and access of healthcare, India was ranked 145th out of 180 countries according to the Global Burden of Disease Study 2016.

Despite improvements in MMR and IMR, India still needs to improve significantly on these metrics

At 3-4 percent, the hospitalisation rates in India are among the lowest in the world (Average for middle-income countries is 8-9 percent and 13-17 percent for OECD countries)

India has one of the highest levels of Out of Pocket Expenditure in the world

Digital Health

Both Central and the state governments need to invest in telemedicine on a mission mode to complement the government’s digital health mission

(Edited by : Aditi gautam)

First Published:Jan 29, 2021 5:04 PM IST