Medical tourism is a sector that India’s Narendra Modi government is eager to tap aggressively to drive growth in the country’s sunshine tourism industry. Very rightly, New Delhi wants to develop integrated tourism circuits, which would synergize leisure travel and medical care that India offers at a competitively cheap rate without compromising on the quality of treatment.
And the proposed medical circuit, which will connect hubs of modern medicine with that of traditional Indian Ayurveda down south, is expected to be a game changer. Indeed, an expanding private health-care system, augmenting state-run services, coupled with highly trained medical professionals, growing technical expertise, comparatively cheaper medical procedures, world-class health-care infrastructure and most importantly wholehearted government support are likely to draw half million medical tourists into India over the next few years.
However, at a time when India’s $3 billion medical tourism industry is expected to reach $6 billion by 2018, with the number of people arriving in the country for medical treatment set to multiply, a recent government survey revealing how a galloping health-care expense is bleeding India’s underprivileged should make the Modi administration sit up and take appropriate remedial measures. As more and more people are accessing health care from private facilities in India today, the high cost of treatment is becoming a burden to patients, especially those coming from low-income groups. In fact, the Indian health ministry has admitted that a whopping 63 million people are faced with poverty every year due to catastrophic health-care expenses, which unfortunately offset the gains of rising income and various government schemes aimed at reducing poverty gradually.
A national health policy draft, circulated by the government for public view and suggestions some time ago, clearly acknowledged the harrowing fact that health-care costs are more impoverishing than ever before and almost all hospitalization, including public hospitals, leads to catastrophic expenditures and massive indebtedness consequently. As the recent government of India statistics on the state of health care across the country shows, household income or personal savings is the primary medical expenditure source of 68 percent of rural folks while 25 percent of people in villages are heavily dependent on borrowings to fund hospitalization expenses. Most worryingly, a sizable chunk of inhabitants in India’s rural hinterlands are forced to sell off their physical assets for ensuring proper treatment of ailing family members.
Interestingly, even in urban centers 75 percent of citizens rely on their income or savings, while 18 percent on borrowings, which gives an impression of India being a gratified host to the most privatized of health-care systems in the world with out of pocket expenses — domestic household payments to practitioners of medicine, pharmaceuticals, therapeutic appliances and other medical goods and services retailers for restoring health status of family members — accounting for the bulk of medical spending. And an abnormal hike in the share of India’s out of pocket outlay on health care as a proportion of total household monthly per-capita expenditure is causing a significant drain on family incomes. With 70 percent spell of ailment being treated in the private sector currently, India is in need of a new health policy that is responsive to the crisis of burgeoning health expenditure.
One must not forget that the structural adjustment programs undertaken in India in the 1990s led to the central and state governments limiting their funding in the social sector. In the new era of liberalization, user fees were introduced in the public health-care sector, which incentivized runaway medical expenditure inflation. And to keep the cost of health care within the reach of the wider populace, progressive efforts like enforcing the drug price control order, meant to ensure affordability of some commonly used medicines, were initiated, without much success though. Liberalization of the health care and pharmaceutical sector, in fact, had sent health expenditure soaring upward. With 86 percent of rural and 82 percent of urban populace, according to government statistics, still not covered under any scheme, public or private, to support health expenditure, a steadily rising cost has left a large number of people in India unable to access proper healthcare facilities. Besides, official statistics also reveal that the outreach of private insurance players is extremely limited as only 12 percent of the population falling in the highest income group or 5th quintile class, that too in urban areas only, have entered into some arrangement for medical insurance with private providers. Adding to the woe, reimbursement of hospitalization expenses, as per available empirical data, has not been very encouraging, with policyholders in several instances unable to get back their invested money from the insurer. For all others in middle and bottom of the population list with limited financial capacity, the share of private medical insurance is virtually negligible, as the range of premium remains far too high for them to bear.
Surely, it needs a herculean effort to fix India’s tattered health-care system, where there are seven doctors per 1,000 patients and one government hospital bed serving 1,833 people on an average. Moreover, there has been a steady decline in Indian government’s capital spending on health, which has been extremely low as a share of its gross domestic product. However, the state of health care cannot be improved by merely hiking budgetary allocations. A holistic approach, involving medical education and practice regulations reform, conceptualizing affordable micro-health insurance schemes, synchronizing regular and alternative system of medicine and doing away with red tapism, is the need of the hour.
And the proposed medical circuit, which will connect hubs of modern medicine with that of traditional Indian Ayurveda down south, is expected to be a game changer. Indeed, an expanding private health-care system, augmenting state-run services, coupled with highly trained medical professionals, growing technical expertise, comparatively cheaper medical procedures, world-class health-care infrastructure and most importantly wholehearted government support are likely to draw half million medical tourists into India over the next few years.
However, at a time when India’s $3 billion medical tourism industry is expected to reach $6 billion by 2018, with the number of people arriving in the country for medical treatment set to multiply, a recent government survey revealing how a galloping health-care expense is bleeding India’s underprivileged should make the Modi administration sit up and take appropriate remedial measures. As more and more people are accessing health care from private facilities in India today, the high cost of treatment is becoming a burden to patients, especially those coming from low-income groups. In fact, the Indian health ministry has admitted that a whopping 63 million people are faced with poverty every year due to catastrophic health-care expenses, which unfortunately offset the gains of rising income and various government schemes aimed at reducing poverty gradually.
A national health policy draft, circulated by the government for public view and suggestions some time ago, clearly acknowledged the harrowing fact that health-care costs are more impoverishing than ever before and almost all hospitalization, including public hospitals, leads to catastrophic expenditures and massive indebtedness consequently. As the recent government of India statistics on the state of health care across the country shows, household income or personal savings is the primary medical expenditure source of 68 percent of rural folks while 25 percent of people in villages are heavily dependent on borrowings to fund hospitalization expenses. Most worryingly, a sizable chunk of inhabitants in India’s rural hinterlands are forced to sell off their physical assets for ensuring proper treatment of ailing family members.
Interestingly, even in urban centers 75 percent of citizens rely on their income or savings, while 18 percent on borrowings, which gives an impression of India being a gratified host to the most privatized of health-care systems in the world with out of pocket expenses — domestic household payments to practitioners of medicine, pharmaceuticals, therapeutic appliances and other medical goods and services retailers for restoring health status of family members — accounting for the bulk of medical spending. And an abnormal hike in the share of India’s out of pocket outlay on health care as a proportion of total household monthly per-capita expenditure is causing a significant drain on family incomes. With 70 percent spell of ailment being treated in the private sector currently, India is in need of a new health policy that is responsive to the crisis of burgeoning health expenditure.
One must not forget that the structural adjustment programs undertaken in India in the 1990s led to the central and state governments limiting their funding in the social sector. In the new era of liberalization, user fees were introduced in the public health-care sector, which incentivized runaway medical expenditure inflation. And to keep the cost of health care within the reach of the wider populace, progressive efforts like enforcing the drug price control order, meant to ensure affordability of some commonly used medicines, were initiated, without much success though. Liberalization of the health care and pharmaceutical sector, in fact, had sent health expenditure soaring upward. With 86 percent of rural and 82 percent of urban populace, according to government statistics, still not covered under any scheme, public or private, to support health expenditure, a steadily rising cost has left a large number of people in India unable to access proper healthcare facilities. Besides, official statistics also reveal that the outreach of private insurance players is extremely limited as only 12 percent of the population falling in the highest income group or 5th quintile class, that too in urban areas only, have entered into some arrangement for medical insurance with private providers. Adding to the woe, reimbursement of hospitalization expenses, as per available empirical data, has not been very encouraging, with policyholders in several instances unable to get back their invested money from the insurer. For all others in middle and bottom of the population list with limited financial capacity, the share of private medical insurance is virtually negligible, as the range of premium remains far too high for them to bear.
Surely, it needs a herculean effort to fix India’s tattered health-care system, where there are seven doctors per 1,000 patients and one government hospital bed serving 1,833 people on an average. Moreover, there has been a steady decline in Indian government’s capital spending on health, which has been extremely low as a share of its gross domestic product. However, the state of health care cannot be improved by merely hiking budgetary allocations. A holistic approach, involving medical education and practice regulations reform, conceptualizing affordable micro-health insurance schemes, synchronizing regular and alternative system of medicine and doing away with red tapism, is the need of the hour.
