First step in the long journey towards universal healthcare

What the FM said
New Healthcare scheme under Ayushman Bharat to set up 1.5 lakh healthcare delivery centres across the country.

What it means for you
The government is projecting this as an ambitious plan to achieve universal healthcare for Indian citizens.


If efficiently executed, it is likely to bring good news for all stakeholders - patients, pharma companies, as well as health-care providers. The move, coupled with increased insurance coverage, would increase both access to and affordability of healthcare.

The fine print
However, the government needs to address key challenges, including the funding required for these centres as well as qualified human resources required to run them.

According to Vivek Srivastava, CEO, Heathcare at Home, an in-home health-care provider, the fixed cost of setting up a basic clinic in a city such as Lucknow would be about Rs 1-1.5 lakh. The variable cost of running this clinic, with a junior medical practitioner, a medical nurse and attendant, would come to about Rs. 1 lakh per month—or about Rs 12 lakh per annum.

The government plans to fund their education and health infrastructure projects through 4% health and education cess which will result in a total revenue of INR 11,000 crores. If we split the revenue here based on the allocation of national schemes for health and education, of the total 48% allocation, the health-infrastructure schemes only get close to Rs. 5,300 crores. This implies that each of the proposed healthcare centres would manage to secure only Rs 3,55,000 against the required Rs 13-14 lakh in the first year.

“Even though the move to open 1.5 lack health centres is good, the meagre allocation…will not be sufficient. Still, the Indian Medical Association promises to support this move [through] the public-private partnership model”, said Dr Ravi Wankhedkar, president of the association.

Therefore, the government may have to depend heavily on CSR and philanthropy activities of private players to get even close to its ambition of universal healthcare.

Another issue that may burn right through the FM’s proposed healthcare centers is the paucity of human resource, especially doctors.

The doctor:patient ration in the country is an abysmal 1:1668. More than 80% of India's registered medical practitioners are concentrated in urban areas. Setting up 1.5 lakh centres will require at least 1.5 lakh doctors. In June 2016, there were only about 9.9 lakh doctors practicing in India.

According to Srivastava of Healthcare at Home, the government might need to address this shortage by using technology. It needs to involve experienced technology vendors and not get into delivery themselves.

An interesting question: Has the government used the Budget proposal to push its plan to allow AYUSH practitioners offer basic preventive care?

According to Srivastava, this can be a viable option if government restricts AYUSH practitioners to basic preventive care. Not only will it will help increase the availability of medics but also help reduce the variable cost of running these centers.

The government can further optimise the cost of these centres by trimming the infrastructure cost. For instance, post offices and other public spaces can offer scalable infrastructure for such initiatives at no additional cost.