Challenges faced by Healthcare Policies in India

With the Indian population adding over 450 million people over the last 25 years, with changing demographics and socio-economic mix, and with the economy growing at above 7%, there have been significant changes in the healthcare requirements of the country. The Indian healthcare sector has grown at a nearly 16.5 percent CAGR since 2008 to become a $110 billion industry in 2016 and is expected to touch $280 billion by 2020.

Over the years, the Indian Healthcare scenario has shown great progress on several health indicators like life expectancy and maternal and child mortality. The year 2014 marked a remarkable moment in the Indian Public Healthcare system with the World Health Organization (WHO) declaring India a polio-free nation. India was only the fourth such region in the world after the Americas (1994), the Western Pacific Region (2000) and the European Region (2002).

The Infant Mortality Rate (IMR) has significantly come down from 57 deaths per thousand live births in 2004 to 34 deaths in 2016. Life expectancy at birth during the same period increased from 63.80 years to 68.35 years. The significant progress made by the healthcare system in India is attributed to the combined efforts of the public and the private sector.

Despite the rosy picture painted by these numbers, the current healthcare system in India faces major challenges owing to several social, economic and political factors. Broadly speaking, the healthcare system faces the triple challenge of raising service quality and providing equitable access while addressing and tackling the changing disease incidence profiles.

Challenges faced by Indian Healthcare Sector

1.      Demographics

With the growing middle-class and working-age population, there is an increased incidence of lifestyle diseases like diabetes and cardiac ailments. The NCDs accounted for more than 50 percent of all deaths in 2015, up from 42 percent in 2001-2003. The peak occurrence in India is a decade earlier, majorly affecting the age group of 30-59 years.

2.      Public vs. Private Sector

As per the National Sample Survey Office (NSSO), between January and June 2014, 243 people out of 1,000 sought medical treatment within the public healthcare system, whereas 756 people out of 1,000 opted to visit a private doctor or private hospital.

The public sector accounts for only about 20 percent of the total healthcare expenditure with 80 percent contribution coming from the private sector which is one of the highest in the world. Between 1995 and 2014 India’s public expenditure on healthcare rose only from 1.1 percent of GDP to 1.4 percent.

During the period 1991-2003, private out-of-pocket expenditure on health grew at 10.9 percent per annum in real terms, while per capita income grew only by 3.8 percent during the same period. This poses a huge burden not only on poor families but also on the middle class who slide into indebtedness to meet their healthcare needs while some may let go of the need for medical care completely. On average, the poorest 20 percent of the Indian population is 2.6 times more likely than the richest population to forgo medical treatment when ill, due to financial reasons.

3.      Health Infrastructure

The country faces a severe resource shortage in both capital investment and manpower. India faces an acute shortage of hospital beds with a ratio of 0.5 per 1000 population for India as compared to 2.3 for China, 2.6 for Brazil and 3.2 for the US (Sinha, 2011). Huge regional variations exist with some of the more prosperous states with excess capacity while others with a huge shortage.

4.      Human Capital Crunch

The Healthcare sector requires highly skilled human resources from doctors to other medical support staff like nurses, lab technicians, pharmacists, etc. The physician’s ratio in India stands at 0.7 per 1000. Moreover, the majority of the healthcare professionals happen to be concentrated in urban areas where consumers have higher paying power, leaving rural areas underserved.

According to a KPMG report, although India meets the global average in terms of the number of physicians, 74 percent of its doctors cater to a third of the urban population or no more than 442 million people. Consequently, India is 81 percent short of specialists at rural community health centres. The 25,308 primary health centres (PHCs) spread across India’s rural areas are short of more than 3,000 doctors, with shortages up by 200 percent over the last 10 years.

5.      Health Insurance

India’s health insurance model excludes a large part of the population with over three-quarters of the population having no health insurance. 24 percent of the population that has some kind of medical insurance includes both private and public sector insurance and the central scheme for weaker sections, the Rashtriya Swasthya Bima Yojana. India primarily relies on commercial health insurance now. It almost entirely covers only catastrophic expenditures, such as the cost of highly restricted hospital treatments, which are offered without cost and quality regulation and external audits. Outpatient treatment and prescription medicines are not covered.

The healthcare sector in India is poised at a crossroads where the right policy action is extremely critical in determining the future course of the sector. The industry faces major challenges owing to the changing demographics of the country, the poor state of the public infrastructure, lack of financial resources, paucity of human capital and poor governance. The staggeringly low contribution of the public sector in the healthcare industry sits at the centre of all these problems.




Dr Shilpa Subramanian

Dr. Shilpa Subramanian is an MDS, Periodontist and currently manages Global Pharmacovigilance and Medical Affairs Operations at a Healthcare company in Mumbai. She is passionate about staying ahead of the curve in clinical and non-clinical advances in the field of pharma and healthcare.

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