Healthcare and Lifesciences
Technology can plug the gaps in last mile healthcare delivery
27 Dec 2019

A 65-year old woman in a small village in Pune had to be carried over a makeshift stretcher for about 2 hours across 8 km to get basic primary healthcare after a snake bite. With luck by her side, the snake's venom was not so poisonous as to kill her before she made it to the doctor’s doorstep.

Healthcare is among the top sectors attracting FDI in India. However, with about 80 per cent of medical workforce concentrated in top 8-10 cities and serving only 28 per cent of the total population, access to healthcare still remains an aspiration for many. In rural India, a patient may have to travel even about 122 km to meet a doctor. Deep investment from both, government and private, needs to be routed to the bottom of the pyramid, connecting the last mile.

Not just access, India needs to solve affordability as well. A good 70 per cent of healthcare delivery is owned by private channels, which has led to a high out-of-pocket expenditure (OOPE) of 67 per cent, making healthcare unaffordable. With just around 4 per cent of household disposable income going towards healthcare, the per capita healthcare expenditure is just $64 -- one among the lowest globally. Indians need someone to fund and deliver their healthcare.

Can public schemes such as Ayushman Bharat solve India’s health problem?

Traditionally, India had two principal approaches towards healthcare – A) It is a state responsibility and B) Free medical care for all, irrespective of paying capacity. As a result, insufficient funds were allocated to related human resource and infrastructure, available public health system was over-burdened, workforce migrated from public to private healthcare, reliance on private care grew, access in rural India declined and health indicators fell.

Last year, Prime Minister Narendra Modi launched his flagship healthcare financing programme, Pradhan Mantri Jan Arogya Yojna (PMJAY), popularly called Ayushman Bharat, to provide free healthcare to about 50 crore Indians. The scheme is targeted to improve healthcare affordability and accessibility of people who cannot afford treatment at the hospital of their choice. However, with an acute shortage of healthcare personnel and infrastructure, limited participation by private players and limited funding, the scheme’s scalability is being put to test with each passing day.

India spends about 1.1–1.2 per cent of its total budget on healthcare whereas countries with universal health scheme spend more than 5 per cent. The estimated cost of PMJAY is about Rs 1,713 per patient and therefore, the government will need to spend close to 4 per cent of its GDP (gross domestic product) on healthcare.

With a limited budget, the government had no choice but to cap reimbursement rates for hospitals to a tenth or more leading to a demotivated private sector and limited participation. It is imperative for the government to increase healthcare budget allocation in the coming few years and rebuild its plan towards universal health coverage.

Primary care and family physician

According to research by Oregon Health Authority, the US, for every $1 invested in primary care, a health system (such as the US) can save $13 in downstream cost. India too needs to build up and invest in its primary care and re-establish family physicians (FPs).

Interestingly, there are only about 1.7 million family doctors (including AYUSH physicians and unqualified caregivers) in the country, which implies some 1.3 FPs per 1,000. Efficient health systems such as Canada have about 10 FPs per 1,000. On the contrary, OPDs (Outpatient Departments) of a tertiary care centre in a metro city such as Gurugram contribute about 20 per cent of the hospital revenue. Some 60–70 per cent of these OPD consultations are about basic infections or cardiac and metabolic disorders such as blood pressure and diabetes, which can be addressed in a neighbourhood clinic.

Average consultation in a tertiary care centre can cost a patient anything between Rs 500–1,500 whereas, in an FP clinic, it can be as low as Rs 200. Further, such referral mechanism will bring operational efficiencies in tertiary care, allowing a specialist there to better manage IPD (Inpatient Departments) patients and focus on the related outcome.

While the government, on the sidelines of PMJAY, also announced the building of 150000 health and wellness centres (HWCs), the progress has failed to keep pace with growing users of Ayushman Bharat. Till July this year, only 19,576 HWCs were operational in the country whereas the number of beneficiaries of PMJAY has gone up to 65.76 lakh in the year gone by.

The private sector has taken note and jumped on to the opportunity, leveraging technology to open the funnel wide. Many of the established players such as Practo and Lybrate have developed essential key services around family physicians with clinics being the first point of care. They offer a host of services such as location-based doctor search, appointment scheduling and payments.

Further, banking on the need for quick and cost-effective access to a doctor, many companies are now offering video consultations optimising the cost of care for the patient. Similarly, the Wish Foundation has successfully blended offline and online healthcare delivery, leveraging video conferencing to deliver primary care. The firm is working closely with Rajasthan, Madhya Pradesh and Uttar Pradesh governments.

Investors too have backed these technology-enabled solutions. In a recently published report, ‘Healthcare Investment Sentiment 2019’, 21 per cent of healthcare investors were found interested in digitally-enabled healthcare models while 24 per cent showed interest in neighbourhood speciality clinics such as eye and dental care. “Early-stage funds bet heavily on digitally-enabled healthcare models,” the report stated.

Leverage patient data to enable outcome-based reimbursements

With nearly one-fifth of the world’s population and about 21 per cent of the disease burden, India reports only 2 per cent of the total adverse events reported globally. Unfortunately, the health system in the country does not capture enough patient data to report critical adverse events in totality. Given the opacity of the system, it’s just not the patients, but other stakeholders (such as insurance) that suffer too.

With just about 15-20 per cent penetration, many standalone health insurers in the country have been reporting a loss. Net incurred claim ratio for public health insurers was about 115 in 2017-18 whereas it was 94 for the overall health insurance industry. Clearly, the government insurers are paying more reimbursements than the premiums they collect. Unfortunately, they have limited tools to monitor the performance of hospitals and check the quality of care for enrolled patients.

Similarly, average visit per patient to a doctor has gone up by 20 per cent during 2017–18. In metros, average visits per patient increased from 3.7 in 2017 to 4.8 in 2018 and overall, it rose from 2.7 to 3.2 during the same period. Increasing awareness can be a driver for increased clinic visits while poorly managed outcomes need serious attention.

Realising the importance of patient data, NITI Aayog has announced the National Health Stack to facilitate collection of comprehensive healthcare data and integration of different patient registries across the country. With a unique digital health ID, movement of patients will be easy to track, and the performance of healthcare providers will be analysed. Creation of such repository can lead to a shift from the current fee-for-service reimbursement model to outcome-based reimbursements, optimising the cost of delivery for the government and private insurers and putting enough checks and balances on providers to deliver quality care.

Technology is going to be a key enabler in addressing access and affordability issue of Indian healthcare. With the current construct of the domestic industry, private players are going to play an important role while the government will become an enabler and a facilitator. There should be better coherence between the two to achieve a common goal – the right to healthcare.

Authored by (at the time of writing): 

Dr. Anuj Gupta, Member, Healthcare Practice 

This post first appeared on money control and has been published with permission. Read the original here.

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