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Why India Needs Private Investment In Healthcare

09/08/2016 2:08 PM IST | Updated 13/08/2016 10:12 AM IST
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Anindito Mukherjee / Reuters

Over the last decade, India's disease burden has undergone a transition, with non-communicable diseases accounting for about 55% of the premature mortality in the age group of 30-69 years. Unhealthy lifestyles, rapid urbanization, accelerated ageing, physical inactivity, obesity, and growing alcohol and tobacco consumption are some of the major factors leading to chronic conditions such as cardiovascular diseases, chronic respiratory diseases, cancer and diabetes. For sustainable development of a nation, providing healthcare access should be the most important agenda.

India's public spending on health is one of the lowest in the world. The economic impact of non-communicable diseases is especially dire. Poverty is a significant risk factor for contracting NCDs, and these diseases can quickly lead to personal financial crises. Delayed diagnosis and treatment of NCDs such as diabetes, cardiac disease, lung conditions and cancers escalates costs, and amplifies long-term health and financial repercussions. Because of the limited availability of healthcare coverage and low public expenditure on health in India, an estimated 60-70% of healthcare services are paid out-of- pocket. Given the reliance on out-of-pocket costs, preventive care and early opportunities to manage health risks are often forgone, leading to greater severity of disease, higher costs for the individual, and significant economic losses for the nation.

A developing economy like India's can't afford to rely on a single public healthcare financing system to cover the entire population...

A developing economy like India's can't afford to rely on a single public healthcare financing system to cover the entire population, especially in view of rising healthcare costs, and the limited access to private insurance policies and other options to fund medical needs. We need a comprehensive and diverse system of healthcare financing that pools financial risk and shares the cost burden. For example, a social health insurance program designed to provide basic healthcare services for populations with limited financial means may be the answer for rural and underprivileged populations, whereas private health insurance schemes may serve employed urban groups more effectively.

Recently, the government announced a few measures for long-term commitment towards finding sustainable solutions to address the growing burden of NCDs. However, despite rapid progress on many fronts, the national goal to provide universal health coverage to India's 1.4 billion people remains unrealized. What's required today is that the government must attract private investment in the healthcare sector through incentives such as tax benefits, underwriting and facilitating bank loans to supplement care in remote and underserved regions. Unless national investments are made to mitigate the costs associated with NCDs today, the damage will increase multi-fold.

Given the magnitude and complexity of the NCD burden, India calls for a sharper focus and deeper engagement to stem the growth of chronic illnesses.

Key facts about NCDs

  • Non-communicable diseases (NCDs) kill 38 million people each year globally.
  • Almost three quarters of NCD deaths -- 28 million -- occur in low- and middle-income countries.
  • Sixteen million NCD deaths occur before the age of 70; 82% of these "premature" deaths occurred in low- and middle-income countries.
  • Cardiovascular diseases account for most NCD deaths, or 17.5 million people annually, followed by cancers (8.2 million), respiratory diseases (4 million), and diabetes (1.5 million).
  • These 4 groups of diseases account for 82% of all NCD deaths.
  • Tobacco use, physical inactivity, the harmful use of alcohol and unhealthy diets all increase the risk of dying from an NCD.

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