Budget 2018 expectations: What is in store for health sector

The health care sector is high on hopes in the run-up to the Union Budget 2018, which is the last full plan pitch by the current NDA government.

The hospital industry in India logged a 17% compound annual growth rate (CAGR) in the five years through fiscal 2017 to reach the Rs 4 trillion mark. CRISIL Research expects the industry to maintain the pace, at 16-17% CAGR, in the next five years to touch Rs 8.6 trillion. Increasing penetration of health insurance and demand for quality healthcare are among the factors fuelling growth.

Due to the low penetration of health insurance, a vast chunk of the population is bearing health care costs themselves. Healthcare providers and medical devices and pharma industry have been seeking changes in tax regulations and duty structure. And there is a call for initiatives to widen the health insurance coverage for individuals.

Also, India continues to have a large and young middle class population, which will go on to expand and become the biggest by 2025, even as social determinants like quality of workforce, health, and educational attainment remain abysmally low.

Given this situation, Dr Amir Ullah Khan (Health Economist and Professor, Maulana Azad National Urdu University, Hyderabad) pinpoints the expectations the nation may have from the Union Budget. Let us have a look at the fact sheet.

Expectations from the outlay of Union Budget 2018:

• Health and education must occupy centre space.The outlay for both these should go up significantly.

Presently, the total expenditure on health is below 4% of the GDP while the government expenditure is below 1.3% of GDP. The new National Health Policy (NHP) promises to increase this to 2.5% by 2025. On education again, the government expenditure is below 4% of GDP and must go up to 6.5% quickly.

In last NHP (2002) had aimed at improving expenditure on health to2% of the GDP without specifying a date. The financial requirements are actually much larger than what is targeted in the new policy; the government must spend about 3.8% of its GDP on health.

Pertinent pre-Budget questions

• Will the honourable Finance Minister(FM) allocatefunds for Health Special Economic Zones which he has been talking about?

• Will he deliver on the "Health Assurance for All" whichfeatured in the manifesto in 2014?

• Union Budget 2017 talked of renaming Primary Health Care centres as "health and wellness centres,"which will cater to non-communicable diseases, mental health challenges, geriatric and palliative care, and rehabilitative care services. What are the allocations one may expect towards these concerns now?

• The NHP, which was announced in 2017, came after 15 whole years. Can one expect the FM to talk about its progress or plans for implementation during the Budget speech? Will he be able to allocate additional funds for most goals that the policy ambitiously targets?

• Today, the government spends 1.3% of GDP on health, though some estimates put it to 2%. The new policy wants to improve this to 2.5% of GDP by 2025 while the global average is 6%. Will we see any indication towards reaching this global target in the Union Budget 2018?

Proposed Goals

• As per theSample Registration System (SRS) Statstical Report 2016, India's Infant Mortality Rate, i.e. the number of deaths of infants under one year oldwho die per 1000 live births (in a year), is now at 34. The Ministry of Health and Family Welfare, Government of India, aims to bring this down to 28, by 2019. Athough there has been progress, without sizeable allocations towards vaccination and nutrition, this will not be possible.

• The SRS report also mentions India's under-five mortality rate (probability of dying between birth and exactly 5 years of age, expressed per 1,000 live births) has come down to 39. To reach the goal of reducing this to 23, what improved allocations, can we expect to see? Also, what will be the allocations specifically towards the health and development of the girl child?

• India's maternal mortality rate is 174 per 1000 live births (as per World Bank data),indicating the large number of women dying in this country during child birth. While the objective is to bringthis number down to 100 by 2020, these goals still seem unacceptably high.Will we see improvementsin allocations towards the Ministry of Women and Child Development?

Some reflections in anticipation

• India's abject failure in improving health allocations and expenditure and in providing essential public services has depressed living standards, and continues to be a persistent drag on growth.

• On most indicators, India performs worse than many of its South Asian neighbours and sometimes even worse than Sub Saharan Africa - annually more than 3.5 lakh children in India die from infectious diseases like pneumonia, tetanus, and diarrhoea each year; more than 4 lakh people die of tuberculosis, whilediseases like diarrhea and malaria continue to be huge public health challenges across the country. Will we see some discussion on these in the budget?

• The Union Government has announced some more targets in the health sector -for example, life expectancy in India is at 68.35 years now, whole the new policy aims at improving this to 70. Even this target keeps us below countries like Sri Lanka which is already at 75.

• The fact that close to 50%Indians defecate in the open, more than 50% children are malnourished and only 62% are immunized makes for poor comparison even with much poorer countries like Bangladesh and Nepal. China has done much more by way of interventions in health and is way ahead on all such counts. With less than 19 doctors and nurses for 10000 people, India is in a crisis situation as per WHO standards.

• The only aspect on which the country seems to be doing well is on fertility rates. The new policy notes that fertility rates, or the number of children per young woman, is already down to 2.3. And the policy aims at reaching 2.1 by 2025. In fact, if present trends continue we should reach this figure by 2021 itself. The policy states that the government will eliminate leprosy, kala azar, elephantiasis and TB over the next 8 years. Where are the funds?

• The Public Health Foundation of India has pointed to the fact that in primary health care around rural India there is no qualified doctor in most cases and the centres are run by paramedics and unqualified doctors trained in traditional forms of medicine. The new Medical Commission has been tasked with improving these numbers. However this too will need improved allocations of funds to set up new institutions.

• There is already growing pressure from international investors, pharma companies, and domestic players that the government withdraw the price controls and drug price lists that they claim have reduced investment in the healthcare and pharma sector. Will the FM buckle under this pressure?

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