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Budget 2023

Budget Analysis 2023: Health Care

In News:

In the Union Budget 2023, the government has allocated a significant amount of funding for the healthcare sector, with a focus on creating a sound foundation for a robust healthcare system in the country. The budget emphasizes the importance of preventive healthcare and lays out a coherent plan for reducing the burden of diseases such as diabetes through smart public health management. The budget also seeks to promote the use of technology in the healthcare sector, including telemedicine and digital health solutions, to improve access to care for patients in remote or underserved areas.

The health sector has been allocated 89,155 crores in the Union Budget 2023-24, a 13% increase from 79,145 crores in 2022-23, with the government also announcing a mission to eliminate sickle cell anemia by 2047.

The government has also emphasized the importance of nutrition in the healthcare sector and has launched a new program called PM-Pranam to promote the use of millets, pulses, and oilseeds in the daily diet of the people. This program is aimed at improving the overall health and well-being of the population and reducing the burden of diseases such as diabetes, which has reached epidemic proportions in the country.

Overall, the Union Budget 2023 is a significant step forward for the healthcare sector in India. The increased funding, focus on preventive healthcare, investment in technology, and emphasis on nutrition are all important steps towards creating a stronger, more efficient, and more effective healthcare system in the country.

Some Statistical Views:

  • The Pradhan Mantri Swasthya Suraksha Yojana (PMSSY) was allocated INR 10,000 crore, a 43 percent increase over the previous year’s budget (INR 7,000 crore), to improve medical education infrastructure and establish AIIMS across the country.
  • Human Resources for Health and Medical Education received INR 7,500 cr, a 56 percent increase over last year’s budget (INR 4,800 cr), to help bridge the country’s healthcare professional shortage.
  • A budget of INR 72 crore has been allocated to strengthen the National Centre for Disease Control (NCDC) branches in order to improve disease surveillance of zoonotic diseases and other neglected tropical diseases.
  • Allocation of INR 37,000 cr for National Health Mission (NHM), an increase of 1.2 percent compared to 2021-22.
  • Ayushman Bharat-Pradhan Mantri Allocation The Jan Arogya Yojana (AB-PMJAY) budget is INR 6,412 cr, a 0.2 percent rise over last year’s budget (INR 6,400 cr); however, the revised estimate for 2021-22 is INR 3,199 cr, showcasing the requirement to further drive AB-PMJAY adoption. Giving a further boost to the efforts of the Ayushman Bharat Digital Mission (ABDM), and creating a more modern and inclusive Digital India, the allocation for ABDM was increased to INR 200 cr for developing the National Digital Health Ecosystem.
  • To strengthen blood transfusion services, a new allocation of INR 404 cr was announced to develop hospital-based or stand-alone blood centers.
  • Allocation of INR 5,156 cr outlay as part of the newly announced PM Ayushman Bharat Health Infrastructure Mission (PM-ABHIM) in October 2021 to strengthen health infrastructure at mission mode approach and improve primary, secondary, and tertiary care services.
  • Pradhan Mantri Garib Kalyan Package, launched in Oct 2021 to provide insurance to healthcare workers fighting COVID-19, was allocated INR 226 cr, a decrease of 72 percent (INR 813 cr in budget 2021-22).

What’s new?

The healthcare sector can benefit from a new budget compared to previous years’ budgets, as it can provide increased funding for various initiatives aimed at improving the quality and accessibility of care. Here are some of the key ways the healthcare sector can benefit from a new budget:

Modernization of Infrastructure: The budget can provide funding for the modernization of healthcare facilities and equipment. This can include upgrading electronic health records systems, improving technology and equipment in hospitals and clinics, and constructing new facilities. These investments in infrastructure can lead to more efficient and effective care delivery, which can cause improved patient outcomes and satisfaction.

Increased Access to Care: The budget can also provide funding for programs and initiatives aimed at increasing access to care for underserved populations. This can include providing funding for community health centers, expanding Medicaid coverage, and increasing funding for programs like telemedicine that can help reach patients in remote or rural areas.

Research and Development: The budget can also allocate funding for research and development in the healthcare sector. This can include funding for medical research, the development of new drugs and treatments, and the advancement of medical technology. This can lead to the creation of new and innovative ways to diagnose, treat, and prevent disease, and can cause improved health outcomes for patients. Budget 2022-23 assigned INR 3,201 cr to the Department of Health Research, a 20% increase over budget 2021-22 (INR 2,663 cr) and a 4.0 percent increase over expected expenses of INR 3,080 cr for 2021-22. A new allotment of INR 690 cr under PM-ABHIM is provided as part of this to ensure biosecurity preparedness, strengthen multi-sectoral pandemic research, and institutionalize the ‘One Health’ platform.

Workforce Development: The budget can also provide funding for workforce development programs aimed at training and educating healthcare professionals. This can include funding for training programs for nurses, doctors, and other healthcare workers, as well as programs aimed at increasing diversity in the healthcare workforce.

Improved Quality of Care: The budget can also provide funding for initiatives aimed at improving the quality of care delivered to patients. This can include funding for patient safety initiatives, programs aimed at reducing medical errors, and initiatives aimed at reducing healthcare-associated infections. These investments in quality improvement can lead to safer, more effective care, and can cause better health outcomes for patients.

Increased Investment in Public Health: The budget can also provide increased investment in public health initiatives, including funding for programs aimed at preventing the spread of infectious diseases, promoting healthy lifestyles, and addressing health disparities. This can help ensure that communities are better prepared to respond to public health emergencies, and can result in improved health outcomes for all populations.

Reduction in Healthcare Costs: The budget can also provide funding for initiatives aimed at reducing healthcare costs for patients, including programs aimed at reducing the cost of prescription drugs, improving the affordability of insurance coverage, and promoting the use of cost-effective treatments. These efforts can help reduce the financial burden on patients and can make healthcare more accessible to those who need it most.

In a nutshell, the new budget can provide a wide range of benefits for the healthcare sector, from increased funding for modernization and infrastructure improvements to increased access to care to improved quality of care, and reduced healthcare costs. By investing in the healthcare sector, governments can help ensure that patients receive the best possible care and that the healthcare system is prepared to meet the needs of communities now and in the future.

Implications for the sectors

  • The announcement of the National Digital Health Ecosystem will result in the development of a solid basis for managing online registries of healthcare providers and facilities, unique health identities, and universal access to health facilities in the healthcare industry.
  • While the government has expressed an interest in involving the private sector, clear guidance on how to incentivize the private sector in infrastructure development, medical education, and healthcare service delivery has not been considered. The increased allotment of 56% under PMSSY is expected to encourage the integration of district hospitals and medical colleges, as well as to improve the quality of medical education in the country.
  • The implementation of the PM-ABHIM scheme launched in October 2021 with an outlay of INR 64,120 cr is a step in the right direction to boost healthcare infrastructure. However, going forward the success would lie in how the components under the scheme are implemented to build a resilient health system.
  • Increased funding for the ‘One Health’ programme can aid in the design and implementation of multi-sectoral programmes, policies, legislation, and research aimed at various zoonotic diseases that have the potential to cross borders and cause infections in humans. With the increase in cases, the government should take stronger measures to strengthen the One Health resilience programme and strengthen surveillance by expanding the One Healthcare program to combat the transmission of emerging diseases.
  • Launch of the ‘National tele-mental health program’ including 23 tele-mental health centers of excellence with the National Institute of Mental Health & Neurosciences (NIMHANS) being the nodal center and IIT Bangalore (IITB) being the technical support is a first step toward better access to mental health counseling.
  • Parity sought to be brought between the two exemption regimes available to non-profit organizations including charitable hospitals under Section 10(23C) and 12AB.
  • Rationalization of compliances for charitable hospitals including accumulation, payments to specified persons (related parties), return filing, and taxes on accreted income.
  • Contributions by an employer-provided for medical treatment in relation to COVID-19 shall not be treated as perquisite in the hands of the employee.
  • Contributions provided by employers/contributions up to INR 10,00,000 by other persons on the death of an employee due to COVID-19 shall not be taxable in the hands of the family members.

Where are we lacking?

While the Union Budget 2023 for the healthcare sector in India has several positive aspects, it also has some shortcomings that must be addressed in order to improve the quality and accessibility of care for all citizens. Some of these shortcomings include:

Insufficient funding: While the government has increased the allocation for the healthcare sector, some experts argue that the funding is still insufficient to meet the needs of the growing population and address the challenges faced by the healthcare system.

It is disappointing that India’s public healthcare spending only accounts for slightly more than 2% of the country’s GDP, which is inadequate. The expectation is that the upcoming budget will significantly increase the allocation for public health with the goal of reaching 2.5% of GDP by 2025, with an emphasis on primary healthcare to decrease the number of diseases in India.

The budget should also enhance the infrastructure in smaller cities and address the shortage of healthcare professionals. Currently, there are only 0.6 doctors and 0.9 hospital beds per 1,000 people, making it difficult to access quality and affordable healthcare. The budget should encourage cooperation between the government and private sector to enhance the quality of skilled healthcare professionals and create a plan to attract healthcare professionals to work in Tier 2 and 3 cities. Additionally, the budget should provide for increasing the number of doctors by implementing a system similar to the one used in foreign universities where the number of seats in medical colleges is doubled through fall/summer patterns.

Medicine-related Tourism: To fully realize the potential of medical tourism in India, additional government support is necessary to develop it as a structured sector. This can be achieved by creating healthcare zones that integrate hospitals, hotels, recreation, and fitness facilities, and by offering incentives such as tax exemptions for income from medical value travel (MVT) and streamlined visa processes for patients from important countries. This would support the government’s “Heal in India” initiative and could be addressed in the upcoming budget.

Ease of doing business: To eliminate significant deterrence to investment and financing, the healthcare sector requires ease of doing business. The government must clarify the roles of state and federal governments on issues such as product enrollment and approval jurisdictions. The application request and tracking processes must also be streamlined.

To reduce the high cost of funding, the government may announce healthcare as a National Priority Sector, allowing banks to provide financing to private healthcare entities for longer periods of time at lower interest rates. To cut costs for both providers and patients, the government should reduce duty and cess on intensive care and life-saving facilities and drugs. Even though healthcare providers are not qualified for input tax credits, GST should be rationalized.

Limited focus on rural areas: Despite a focus on rural areas in the budget, some experts argue that more needs to be done to address the disparities in access to care between urban and rural areas, where many people still lack access to quality healthcare.

Lack of attention to mental health: Mental health is an important aspect of overall health and well-being, but it is often neglected in the healthcare sector. The budget could have provided more resources and attention to mental health services, which are in high demand but currently lacking in many parts of the country.

Challenges in implementing new initiatives: While the budget lays out several important initiatives for the healthcare sector, there are challenges associated with their implementation, including a lack of infrastructure, inadequate staffing, and limited resources. The government will need to address these challenges to ensure that the initiatives are successful and deliver the desired outcomes.

In conclusion, while the Union Budget 2023 for the healthcare sector in India has several positive aspects, it also has some shortcomings that must be addressed in order to improve the quality and accessibility of care for all citizens. The government must take steps to address these shortcomings and ensure that the funding is allocated in the most effective manner to meet the needs of the healthcare sector.

-TJEF Editor


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