Address key issues

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Address key issues

Friday, 14 February 2020 | Shankar Narang

For Ayushman Bharat to be a success, hospitals must start delivering services at Govt-approved rates, but a lot needs to be done

The public healthcare systems in the country have shouldered the burden of providing affordable and accessible services to scores of Indians for long. However, the sheer expanse of the area and the number of people make it difficult for the Government to reach all those who need help. This is where private healthcare systems have emerged as a reliable partner over the last three decades. And now, with the advent of Ayushman Bharat, healthcare in the country has got a much-needed shot in the arm. Armed with a state-funded insurance scheme, the underprivileged were brought at par with their privileged compatriots. However, private participation in this ambitious healthcare scheme is stymied by several issues and the allocation of Rs 69,000 crore for the healthcare sector in this year’s Union Budget is only half of the Rs 1.12 lakh crore demanded by the Ministry. Having said that, the Government’s proposal to expand the reach of the Ayushman Bharat scheme in more Tier-2 and Tier- 3 cities with no empanelled hospitals brings some good news. The allocation for Ayushman Bharat for the Financial Year (FY) 2020-21 is expected to be Rs 6,429 crore and as per the NITI Aayog’s recommendation, the Government has aggressively promoted the idea of public-private partnership (PPP) for deeper penetration of the scheme.

Anyone, who has ventured or tried to venture into that coveted and yet uncharted territory of Tier-2 and Tier-3 cities, will know what it entails. A PPP model helps address many of the challenges faced by private healthcare providers, who want to set up new facilities — land acquisition, finance and permits are some of the challenges. With Government support, many of these issues can be eased out. However, making the operation part a win-win lies in managing finances and the optimum use of resources — the cost per bed of setting up a private hospital in a metropolitan city can be as much as a mind-boggling Rs 1.30 crore.

It takes more than 50 licences and approvals to open a hospital in India and all of these are a time-consuming process. For example, an approval for a building plan and an approval from the pollution control board takes several weeks. The single-window approval system proposed by successive Governments is still pending. There is also no clarity on how the land — one of the biggest assets of any business and a major cause of their concern in recent times — will be sourced and who will be primarily responsible for that.

Together with finding good doctors and nurses, providing necessary equipment and technicians to handle them, as well as training and retaining all such people, hospital operation and management is a far more Herculean task than it appears to be. It’s not only limited to the infrastructure of the hospital but also all other supporting amenities like good education institutes for the children of people coming to work in these institutions, in the same town.

The financial and reputational risks are too real to ignore. The problem of scaling up, the lack of adequate and trained workforce, the insufficient road and transport options — all of them together make Tier-2 and Tier-3 cities a lucrative but tough call. It is commendable that the Government has noted this and proposed viability gap funding, a very popular concept in the infrastructure sector wherein the Government provides support to infrastructure projects that are justified economically but fall short of achieving financial viability.

While the plan is to utilise the proceeds from taxes on medical devices to this end, the question is, as the widely-used medical devices and equipment are covered by National Pharmaceutical Pricing Authority regulations, thereby limiting the source of tax and fund, how will the fund create a corpus to help the private partners? Besides, whether the support will be one-time or funds will be released from time to time is not yet clear. A one-time support may be good to boost the physical infrastructure of setting up the hospital but sustaining quality healthcare delivery may need more than that.

Therefore, it brings us to an even bigger concern — operational viability, that helps sustain a hospital in the longer run. While Viability Gap Funding and other aids from the Government can help build the infrastructure, its purview is limited till the time the hospital becomes operational and starts delivering its services to the people at the Government-approved rates.

However, private partners have found the rates proposed for surgeries and other medical procedures unviable and no common ground has been achieved so far. If we want Ayushman Bharat to achieve its full potential, it is time to take this bull by its horn.

(The writer is COO of a chain of hospitals)

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