Awaiting a booster shot: here is what the healthcare sector wants from the Union Budget 2022
Healthcare professionals are demanding more funding from the Union Budget 2022-23; saying that affordable healthcare should be a priority
Anushruti Singh January 24, 2022
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Even as various policies and packages for the healthcare industry have been introduced, there are still a few areas where the industry requires more assistance. The healthcare industry seeks a slew of measures for the sector’s overall growth from the Union Budget 2022-23.
According to Deloitte’s pre-budget analysis, this sector expects the government to make the following three announcements: tax breaks and funding for hospitals and skill development; GST reforms and an ecosystem for innovation and research. However, achieving affordable healthcare for all is a daunting challenge and there are other issues as well.
Increase the healthcare budget
Last year amidst the pandemic crisis, the government increased the allocation to the healthcare sector by a whopping 137 per cent to Rs 2.23 lakh crores. Stakeholders are hoping that the focus on increased expenditure is going to continue.
“The government should continue to prioritise strengthening the public health infrastructure during this crucial period. Considering that the omicron variant is spreading all over India, administering booster shots to further strengthen the immunity of citizens should be a key focus for the government, and it should also lay out expansion plans to strengthen the country’s physical & digital healthcare infrastructure,”says Shanay Shah, President, Shalby Hospitals.
Shah feels that the vaccination budget needs to remain a priority.
Similarly, Pranav Bajaj, Co-founder of Medulance says that the increase in funding should be around 2.5 per cent of the GDP allocation to the healthcare industry. An allocation for establishing mini-Anganwadi centres in deprived areas is another factor. This will foster inclusive growth and lead to the welfare of the country.
“The existing healthcare gap can be filled by introducing tax benefits and relaxations for private players and public-private partnerships. It will also reduce the financial expenditure in the longer run. Finally, the pre-existing schemes such as Ayushman Bharat and NDHM must be strengthened in terms of their effectiveness and implementation for apparent results,” he says.
Debajit Sensharma, Group CFO, Paras Healthcare also weighs in saying that funding with subsidised loans, incentivising CSR investment by making it a tax-deductible expense, and allocating land for new hospitals is needed. “The government should also look at allocating a budget to include trauma centres in Primary Health Centers (PHCs) and Community Health Centers (CHCs) as trauma systems result in high financial costs,” he says.
At the same time Dr. Lalitha Reddy, Founder, ForMen, a wellness brand argues that last year’s budget was not enough, though it appeared to be so.
“When actually broken down and after inflation adjustment, there was no significant change as compared to the previous year, for actual ‘healthcare’. I sincerely hope that the 2022 budget will give importance to the ‘healthcare’ segment of the sector and allocate adequate inflation adjusted budgets, necessary for both the rural and urban areas. Sickness is a huge direct and indirect burden on the Indian economy,” she opines.
Make affordable healthcare a priority
Over the last two years due to COVID-19, medical expenses have multiplied. People have lost their jobs or had their salaries cut, putting financial strain on their families. To alleviate these issues, the government must make digital healthcare more affordable, suggest the experts.
Darpan Saini, CEO, Phyt.health suggests that the government should give special attention to making health insurance affordable by reducing GST on premiums from 18 per cent to 5 per cent.
“It’s a viable option. The government should make health insurance applicable for telehealth services such as doctor consultations or online physiotherapy to help patients recover from the comfort of their homes. This is crucial for patients who can’t visit a doctor due to COVID restrictions. Moreover, the FM could also look to increase the limit of deduction under Section 80D from Rs. 50,000 to 1 Lakh. This could help the common man combat the rising healthcare costs,” he elaborates.
Shah also says that the government should actively encourage public-private partnerships, giving a boost to self-reliance in the healthcare ecosystem. “Healthcare R&D also needs to be a key focus, to foster innovation and encourage the rapid growth of technology centric healthcare,” he adds.
Also, there was a suggestion by CII that investment by the public on health should be increased to at least 2.5 to 3 per cent of the GDP by 2025, from the current 1.29 per cent.
The measures can be in the form of setting up of Gram Panchayats and training local youth so that they can set up the necessary equipment for healthcare and connect the people needing medical attention with doctors in the rural & urban areas.
Furthermore, a significant emphasis needs to be placed on promoting collaborative efforts integrating different ends of the healthcare spectrum, such as hospitals and pharmacies to ensure a quicker response time.
Relief in taxes
The Medical Technology Association of India (MTaI) has urged the government to reduce GST and customs duties on medical devices, cold chain units and spare parts used in the healthcare appliances in the upcoming Union Budget.
The association sought the reduction of GST on medical devices and medical cold chains from 12 per cent to 5 per cent. This would lead to the expansion of the healthcare sector through reduced costs, improving patient accessibility. It also recommends streamlining of customs duty and GST on spare parts.
Currently, the custom duty and GST on spare parts of medical equipment are currently charged at a higher rate than the equipment itself.
MTaI also suggests an amendment in the Health Cess ad valorem imposition by removing the word ‘Ad-valorem’ so that the cess is implemented on Basic Customs duty (BCD) rate only.
The organisation has also sought the allowance of tax computation on CSR expenditure, a tax holiday for medical device research and development centres, the creation of budgetary provisions for the skilling and up-skilling of healthcare workers (HCWs) at all levels and expanding the width of healthcare insurance.
“The government is looking at improving healthcare affordability in India and spreading its benefits to as many as possible. However, high customs duties, the burden of additional health cess, a lack of incentives for R&D in the medical devices sector and an un-streamlined tax regime, need to be addressed first,”MTaI Chairman Pavan Choudary states.
The high customs duties have adversely impacted the costs of products in India which contradicts the government’s efforts to provide low-cost healthcare to the masses through ambitious schemes such as AB-PMJDY, he adds.
“Additionally, since the custom duty regime on most medical devices in the neighbouring countries of Nepal, Sri-Lanka, and Bhutan is lower than in India, the duty differential could lead to the smuggling of low-bulk-high-value devices,” Choudary points out.
The result will not only be a loss of revenue for the government but will also lead to the patient being beset with products which are not backed by adequate legal and service guarantees, he further adds. “We feel that the customs duty on medical devices and equipment should be brought down to 0-2.5 per cent,” he says.
Promote digital start-ups and medical tourism
Due to the pandemic, increased digitisation has taken over every sector, but it remains particularly integral to the growth of the healthcare domain.
Hence, the experts think that more measures are required to boost the digital start-ups in the healthcare sector.
Shah of Shalby Hospitals says that the government should encourage new age healthcare services, by giving a boost to start-ups and by assisting telehealth ventures in the country, especially in the rural regions.
Ankit Gupta, Managing Director at the Park Group of Hospitals recommends forming a Medical Innovation Fund to provide capital to companies promoting digital healthcare infrastructure.
“Many start-ups are utilising Artificial Intelligence and Machine Learning to provide detailed reports to patients regarding their medical conditions. This fund will assist start-ups to come up with more great ideas and solutions,” he asserts.
Gupta feels that the government should promote medical tourism more as India is a popular medical tourism destination due to the availability of skilled labour. Also, the Medical Tourism Association ranked India 10th out of the top 46 countries in the world in the Medical Tourism Index 2020-21. Which proves that India is a growing medical tourism market.
“The government should ease visa restrictions and create more green corridors to promote medical tourism. We hope that the upcoming budget will serve as a source of motivation for the entire sector, fostering new innovations and development,” he says.
Means to create health awareness
The pandemic has compelled us to become health conscious, and healthcare has become a priority for everyone. Given this scenario, there is a need to spend more on creating awareness about why preventive healthcare is important, says KR Raghunath, Senior Chairman, Jindal Naturecure Institute.
From the Union Budget, he hopes that there will be some announcements to promote AYUSH, the naturopathy sector and food as a medicine, which can’t be achieved without a nationwide education programme.
“PM Modi has given the much-needed push to the AYUSH sector as he encouraged the world-class R&D enablement and manufacturing capabilities of India. We are looking forward to more promising announcements from Budget 2022,” he says.
He recommends that there should be an allocation for strengthening communicable diseases surveillance. The budget should also provide for the up skilling of the youth to become Preventive Health Coaches to address unemployment.
“Apart from yoga, the government should promote naturopathy and make it a part of curricula and set up a committee to introduce naturopathy practices in universities. Standardising naturopathy practice is critical as it will enable us to lay down strict standards that have to be adhered to by all naturopaths. Legitimising naturopathy and conducting mass awareness campaigns to educate the masses is the right way forward,” he says.
More funds for NMHP
India’s mental healthcare system had several gaps even before the pandemic, and the situation has been exacerbated by the outbreak of COVID-19.
In the last budget announcement, the budget for the National Mental Health Program (NMHP) remained the same as last year – Rs 40 crores.
Medical practitioners are saying that Rs 40 crores for the NMHP will leave the country unprepared and unable to deal with the requirements of the population, especially with the increasing mental health impact of the COVID-19 pandemic.
Dr. Prakriti Poddar, Managing Trustee, Poddar Foundation says that while increasing the budget allocation for NMHP is the need of the hour, the other overlapping and related sectors such as social welfare schemes (example – NREGA, one stop centres for survivors of domestic violence, schemes for the welfare of persons with disabilities) also require additional funding.
“The government must set up counselling centres, drive aggressive promotional health campaigns encouraging people to consult with psychologists and psychiatrists as well as invest in community health physicians and public health professionals to strengthen mental health epidemiology and engagement in preventive care. The government also needs to set up bodies that recognise community level organisations and NGOs working in the mental health space and provide funds to them so that they can continue their work,” she asserts.
Gene mapping initiatives
Our country has the youngest workforce in the world, but with dropping fertility rates and increasing mutations, there will be a huge spike in healthcare expenses over the next couple of decades. The incidence of lifestyle diseases is doubling every 10 years.
Experts suggest that gene mapping can be a solution.
“It is imperative for the government to get genome mapping done, which will assist in collecting the much-needed data to discover cures for complex conditions. To achieve the same, the government should promote public-private partnerships for genome mapping projects,”says Sensharma of Paras Healthcare.
Agreeing with this viewpoint, Praveen Sikri, CEO of Ikris Pharma Network says, “In view of the rising frequency of infectious diseases, the government must allocate enough resources for genetic and genome research and epidemiological studies besides hiking allocations for general healthcare-related R&D.”
More measures for the sector
Currently there are 595 medical colleges in India, and yet there is lack of manpower in the health sector.
Sikri wishes that the budget should earmark funds for ramping up the infrastructure for medical education and training with an eye on elevating the quality and quantity of our healthcare manpower.
Advocating the same, Dr. Angeli Misra (MD Path), Founder & Director, Lifeline Laboratory, says that the healthcare sector needs funds allocation for every aspect, education being one of them. “The establishment of more medical education institutions and imparting of advanced training to enhance the skills of healthcare workers is of considerable significance and the need of the hour,” she avers.
Healthcare stakeholders such as Dr. Puja Grover Kapoor, Paediatric Neurologist & Co-founder, Continua Kids want the government to focus on the special needs healthcare sector as well.
She opines that with the onset of the 3rd wave and other issues, looking after children with special needs might get neglected.
“Obviously, when one has to choose between the saving of lives and the quality of lives, the balance will be tilted towards saving lives. Our request to the FM is that the focus of this government was to empower people with limitations and the disadvantaged population, so the emphasis should be maintained, and it shouldn’t get diluted or digressed from,” she says.
She recommends that autism therapies should be covered under health insurance. Similarly, with mental health disorders on the rise, there should be some announcements related to mental health as well.
“There should be the provision of outpatient treatment by insurers for patients taking help for mental health disorders and all neurodevelopmental disorders. We have been the torchbearers for patients with autism and we would request that the therapies provided to them should be somehow covered with medical health insurance,” she asserts.
Also, Dr Nishi Singh, a retired Major of the Indian Army, and the HOD of the Department of Infertility & IVF at Prime IVF Center wants a few measures for the IVF segment too.
“Healthcare should be a priority as far as budget allocation is concerned. It means better medical schools, hospitals, staff, resources, etc. Looking at the lifestyle changes and lower fertility rates in India, it is also important to understand the need for better resources and treatments in healthcare. So, to address the fertility issue, Lok Sabha recently passed the Assisted Reproductive Technology Bill, which now allows IVF clinics to work towards better facilities. Therefore, we hope that the experts and leaders keep in mind all these factors while finalizing the budget for the upcoming fiscal year,” she says.
Devir Singh Bhandari, Founder of DSB Group and Klover Healthcare India says that India has a key role in engendering herd immunity, and with the scale of the vaccinations here, the country is at the forefront in the war against the pandemic. In line with this, he says that the priority for India will be to revamp its medical infrastructure with greater access to life saving facilities in tier 2 & tier 3 cities.
“Learning our lessons from the pandemic, the focus for India will also be to curb pollution and reduce our carbon footprint. We will also be building a more self-sufficient & resilient India – vocal for local being the guiding slogan for us. We need to build at the grass root level, we need to build at the top of the corporate pyramid, we need to build the mid sections. Let 2022 be the year that India recognises it’s superpowers – let 2022 be the year of innovations – let’s mask up and let’s be unstoppable India!” he asserts.
Overall, healthcare professionals are hopeful that 2022 will be the year to look forward to! With Omicron cases surging, but also bringing the promise of marking the ‘beginning of the end of the pandemic’ in its wake, there is a lot that India can look forward to in terms of growth and the steering of the country’s future in a different direction.