Healthcare As A Unique Economic And Electoral Proposition

In 1997, my mother, who was a class one government employee, died of T4 stage cancer. In the one-and-a-half years of treatment, we spent all the money we had, and in a matter of hours after her death we were reduced to a family below poverty line (BPL). We had the dead body, but no money to conduct the last rites.

Last year, it was reported that 50 million people went below the poverty line due to high healthcare costs. Healthcare expenses can be devastating and can push a family into poverty. Prime Minister Narendra Modi is concerned about the healthcare sector in the country, and has launched the National Health Policy (NHP) in 2017, and in 2018, National Health Protection Scheme (NHPS). These two are the boldest steps in the history of healthcare reforms in India.

If one looks at the overall vision of the government for healthcare, it looks like a perfect solution to tackle the complex healthcare challenges, which a large low and middle-income country like India faces. On the one hand, there is a plan to have NHPS for 50 crore population and set up 150,000 health and wellness centres. On the other hand, the government is committed to immunisation programmes, expanding the low-cost pharmacy chains, national screening programmes, national nutrition mission and nutrition provisioning for those suffering from tuberculosis.

The Ministry of Health and Family Welfare is working on setting up health helplines, wherein people can talk on a toll-free number and seek advice on medication, based on standard treatment protocols. So, if we look at connecting all the dots in the Union budget for this year and the various programmes initiated by the ministry, one will be convinced that this budget is the ‘budget for health’ in the past seven decades, and the government has a comprehensive plan to address the challenges in the healthcare sector.

A Unique Economic Proposition

There has been a lot of talk about how healthcare will impact the lives of poor, and two years ago, when I authored the book, Health Care Reforms in India – Making up for the Lost Decades, I dedicated the first chapter healthcare and how it is a unique electoral proposition (UEP), and how political parties – be it in the United Kingdom or the United States – have made healthcare a key electoral strategy, and won elections. What a coincidence that the NHPS scheme also comes a year before the general election. But, we must look at the other side as well. On the face of it, this scheme is all about healthcare, but from an economist’s point of view, I am reminded of this quote, “In health, there is wealth’.

Just consider the following statistics:

• Healthcare sector is the largest employer in the US;
• More than 40 million new jobs are expected to be generated in the next two years in India by the healthcare industry;
• For a crore rupee invested in any sector, the healthcare industry creates highest number of jobs directly and indirectly.

Also, a healthy workforce is an economic asset and an unhealthy workforce is an economic liability. We cannot afford to grow at double digits without investing in health and education.

Now, let us examine the economic impact: once this scheme, which takes care of secondary and tertiary inpatient services, is rolled out there will be utilisation of services and infrastructure, which will need massive investments and scaling-up in the next decade. For every Rs 10,000 of healthcare services provided, there will be a need to create matching infrastructure, and a need for utilisation of logistics (travel of patients and transporting products will prop up the logistics industry). Also, information technology (IT) will get a big boost due to its integration across the continuum of care; nurses, doctors and other allied professionals will be needed, which means more institutional capacity will be created to cater to the increased demand. More beds will mean more investment to produce them. Medicines, medical devices, consumables, hard infrastructure like hospital building, will help grow the realty sector, which means associated industries will grow commensurately. Hence, availing just Rs 10,000 worth of inpatient services under the NHPS will call for at least 100 to 1,000 times the investment in healthcare.

So, without a doubt, I can say, that this one insurance scheme will lead to an additional investment of $100 billion in this industry and the economy. Investors are in a rush to make the best use of this opportunity, and to realise the growth potential in healthcare services and in medical tourism. With NHPS, this sector becomes more attractive where the ‘strategic buying’ will be done by the private sector. This sector will witness high growth in terms of investment and employment. So, this is not just a healthcare reform, but also a massive economic and employment reform.

There is an interesting case study of Muni Seva Ashram Hospital in Goraj (Gujarat) on how a hospital can prop up a complete economy. This hospital has created a self-reliant model around a 50-kilometre radius. Post the launch of NHPS, we will see a jump in foreign direct investment in this sector, at least 10 times for the next few years. So, the flawless implementation of the scheme will pay rich dividend to the nation’s economy.

Regulation And Supervision

Enough checks and balances must be put in place to ensure that there is no misuse, cartelisation and lobbying in healthcare. Else, the very purpose of the scheme will be defeated. We need to look at case management protocols (symptom-based diagnostic protocols), screening guidelines for all age groups, diagnostics and treatment guidelines with proper decision support systems using information technology. With NHPS, the healthcare costs are likely to fall and the utilisation likely to increase drastically as economies of scale will come into play.

Right now, some reports indicate that about 40 per cent of the population cannot afford healthcare when it comes to secondary and tertiary care. This insurance scheme will bring them under the net to avail the services, which means the industry is likely to grow phenomenally. This also calls for self-regulation by the industry, and a close monitoring by regulators.

A lot is in store for all in healthcare and the economy, and the correct and timely implementation of NHPS will make all the difference. The Prime Minister has taken the biggest bet on healthcare in the election year, and the government has the right strategy on healthcare. It is now for the administration to deliver, and to help realise the grand vision of Prime Minister Modi. There are enough reasons to cheer for the success of ‘NaMoCare’.