While startup community is eagerly awaiting a resumption of focus on entrepreneurship in the Union Budget 2017, big hospitals across the country needs accorded industry status on a priority basis, to look at the preventive healthcare with a long term view of building the nation, Health Research as new industry
After two successful years of Modi Government and achievements acquired in many different sectors, the expectations are much higher. In 2017, Indian Healthcare industry wants to become the most efficient health-care delivery model across the world and industry needs a financial boost to tackle the problems like lack of infrastructure, skills and manpower
With the New Year on the beginning and budget on the corner, Health Technology.in, talks with few stalwart’s of the health industry. Here are the excerpts;
Dr. Rajendra Patankar, COO – Nanavati Super speciality Hospital
“The Indian healthcare sector needs to be accorded industry status on a priority basis. The affordability quotient for healthcare services should be increased by exempting tax on expenditures incurred on preventive health check-ups. The tax exemption window on new healthcare establishments in tier II and III towns needs to be increased to 7 years. The income of all PG medical personnel who can prove that they have worked in rural areas immediately after their PG training should be declared tax-free for 5 years. There is an urgent need to increase the number of post-graduate seats in government medical colleges to bridge the demand and supply mismatch between doctors and patients. Non-corporate private entities like nursing homes and private hospitals operated by doctors-turned-entrepreneurs need to be brought within the purview of existential regulatory framework to monitor their working. For new entrepreneurs wanting to set up new healthcare projects, a Single-Window Clearance system with clearly defined TATs should be developed. Medical education should emphasize on imbibing communication skills in doctors which will help ease interactions with patients and their kin and ease treatment procedures significantly. The government needs to formulate suitable policy measures for placing India on the global healthcare map as a major outsourcing hub and a bustling medical tourism center.”
K. M. CHERIAN, Chairman and CEO – Frontier Lifeline Hospital Founder – Frontier Mediville
“Healthcare Research” should be declared as an industry. India depends upon import for more than 75% of medical device requirements and patented drugs, as there is no investment from private sector or government into R&D. Underlying long gestation period is the key deterrent. Declaring “healthcare research” as an industry and establishing sector specific policies and incentives will pave the way for a quantum leap in promoting indigenous R&D in healthcare, which is fundamental to affordability. In most cases, indigenous development can bring down costs by more than 60%, sometimes even by 90%”.
Dr. P. M. Bhujang, President, Association of Hospitals
“I emphasized that the import duty rates on medical equipment used by hospitals for life saving treatments are very high and ranges from 24% to 26%. There is an urgent need to bring down these fiscal rates to a single digit if not total exempting them.”
“I also believe that the government must encourage to build more and more hospitals in the country and to do so the government must keep the services rendered to a hospital away from the ambit of service tax. The exemption on service tax on the inputs will reduce the cost to the hospitals and consequently cost of medical services to a patient. Moreover VAT on medicines, implants and consumables used for patients in the hospital in the course of his/her treatment should not be applicable since those are obviously not sold separately.”
“In some parts of the country the Service Tax Department is of the view that only services rendered by the doctors to a patient is exempted from service tax and not the services rendered by the hospital. A patient cannot get medical treatment only from the doctors without the infrastructure provided by the hospitals. For instance, for conducting a surgery an operation theatre is needed by a surgeon to do the necessary surgery. Many hospitals face this threat of unjustified service tax demands, a clarification circular/amendment needs to be issued at the earliest.” he further added
Mr Pawan Gupta. Co-founder, Curofy
The last budget saw Mr. Jaitley announcing a slew of tax cuts and commitments for easing the clearances. The last budget was successful in establishing the commitment of the current government to the startup ecosystem of the country. This year the expectations are much higher. For a startup, more than income tax, service tax is what hurts the most. The current exemption limit of Rs. 10,00,000 p.a. is too less. More than income tax, service tax reduces the competitiveness of a startup. Then, with increasing digital payments, TDS is one complicated area for startups especially with international payments. Most of the times, startups are ignorant of the TDS rules and end up violating them unintentionally. More than anything TDS rules make doing business and payments highly complicated for Indian startups. Next, govt should take the first step and make quotas for startups in their procurements. Further incentives could be given to PSUs and corporates for procurements from startups. Last, one of the most talked about reforms has been a single window clearance system. But even after so much talk, little can be seen on the ground. Either the marketing of such efforts has not been good, or the action is lacking. But for a new entrant, it is impossible to wade through all the regulations and compliances. We have high hopes from this budget and are eagerly looking forward to it.
Dr Shikha Sharma, Founder, Dr. Shikha’s NutriHealth
Preventive Healthcare is one of the undeserved areas which can have serious repercussions on the demographics of our Nation, and instead of the Young population being a demographic asset; it can become a demographic liability due to the explosive rise in lifestyle induced diseases. Hence following are the suggestions
Government should look at the preventive healthcare with a long term view of building the nation . For example – introduce/extend the Tax Holiday Deduction (Under Section 80) to newly setup Wellness & Health Industry as it has given to other sectors like Hotel & Convention, Developing SEZ and promoting & construction of Housing Projects etc. Under this deduction Government should relax the newly setup company(Wellness & Health Industry) from paying tax for few years so that the Industry gets a boost and more and more startups come into this field .
– Special Income Tax rates , should be put into effect for wellness & health industry which are more aligned to the Healthcare sector .
– As we are moving towards GST, so under GST ACT the tax rate (Indirect Tax) on wellness & health industry should be minimum so the cost to End Consumer will be less and the middle class also gets into preventive healthcare mindset .
– Preventive healthcare should not be equated with the Luxury Industry , because health is not a Luxury but a necessity
– Government should encourage low Cost Tele- Medicine and Tele-Healthcare models
Mr Satish Kannan, CEO & Co-Founder, DocsApp
A lot has been spoken about the Union budget right from changing the presentation date to the multiple polls on Twitter. However, some important avenues are getting away from the limelight, health care being one such avenue.
Anecdotal reports suggest that a whopping 700 million people have no access to specialist doctors in India, 80% of the population live in rural areas of the country and have minimal or no access at all to primary health care. Even though central and state governments have initiated various universal health care programmes, successful implementation of such schemes is still a distant dream. Government hospitals offer treatments and drugs free of charge, but the poor infrastructure and the lack of skilled staff makes it difficult for people to avail these services.
Startups like us (DocsApp) are working hard towards making universal health care affordable to the masses. The government must work on implementing its plans with regard to startups and provide support to these establishments that work for the welfare of the people. Digital healthcare is the future, there is potential for high growth in this field and that is why the government needs to invest in this field.
The Union budget 2017 must allocate more money to the healthcare sector, this sector is in desperate need of funds to grow at an accelerated pace. The healthcare sector needs a financial boost to tackle the problems like lack of infrastructure, skills and manpower. The allocation of funds needs to be made more transparent, so that there can be no leakages of the funds at various levels.
The rapidly growing healthcare sector in India needs regular attention, so that everyone can stay hale and hearty and in return contribute to the economical progress of the nation.
Ms Jyotsna Pattabiraman, Founder and CEO, Grow Fit
I expect the Union Budget to take cognisance of the tremendous economic cost of lifestyle disease, which falls disproportionately on middle-class families. As lifestyle disease primarily affects working adults, India faces an economic burden of almost 12 million years of productive life lost. The Union Budget must allow for tax relief not just on treating disease but also place emphasis on preventing lifestyle disease. Incentivising the use of disease prevention programs like regular health checks or nutritional counselling will go a long way in improving the quality of life for Indians everywhere.
Amit Sharma and Nilesh Aggarwal, Co-Founders, eMediNexus
After a rattling year for startups and unique macro level intervention towards the end of the year via remonetisation, the startup community is eagerly awaiting a resumption of focus on entrepreneurship in the Union Budget 2017. Early signals of upcoming tax concessions on ESOPs, convertible instruments, and unlisted securities are highly welcome. The regulatory backdrop of healthcare legislation (the impending National Medical Commission and Medical Devices Regulation Bill for instance) is an area where further formalisation would bring the healthcare sector out of uncertainty. Health technology would benefit from a greater push on the healthcare supply side to digitise in addition to standards for areas outside of Electronic Medical Records. Also ecosystem support via greater academic investment, incubation support, low cost debt funding, and international partnerships would significantly bolster the fortunes of entrepreneurs in India in 2017.
Mr. Amol Naikawadi, Joint Managing Director, Indus Health Plus says ,
“The way healthcare services are enjoying exemptions in service tax, same should continue in the proposed GST. Since the tax rate is expected in the range of 18%, it will hugely impact the cost of healthcare of the common man. We propose that preventive healthcare should either be not taxed or continue the same exemption at a lowest rate.
We recommend that tax exemption should increase up to Rs. 20,000/-, so that more people can avail preventive health checkups and keep themselves healthy by reducing health burden due to diabetes, cardiac and cancer diseases. The tax exemption of Rs. 5000/- is a negligible amount when considered for an entire family of the assesse. Assuming that the assesse has a family of four members then the amount comes to a meagre Rs.1000/- for each family member which is really very less considering the benefits of preventive health checkups.
Moreover, infrastructure status for the healthcare industry is a long pending demand and should be given priority by the government in the new budget. Specific tax benefits should be given to corporates only for preventive healthcare, so that they can invest in their employees’ health and wellbeing.”
Ms. Vidushi Daga Founder and Director, Clone Futura
“Firstly Credit and debit cards need to work across all growing list of locations. Issuers should be able to meet this need by using channel-agnostic payment credentials that work in a fast, safe and convenient way across any channels the customer chooses to use. A digital payments strategy must take an integrated approach to the various POS channels available to consumers. Secondly, unavailability of quality education facility is not an issue. At school level, there must be options available for skill development courses and they must be provided in the secondary stage of schooling. Integration of skill development and education is essential for skilling to take wings. Skill development will remain a dream if carried out in isolation through centres alone. It has to be imparted in schools alongside academics as a part of their current curriculum. Thirdly, technology has changed our traditional education system in more ways than one. There should be an awareness or some boom for start-ups and Ed-tech companies which facilitate the consumers with online classes, Communication evolution, interactive textbooks, expanding audience, disappearance of the chalk board, rise of web-based research, and gamification”,says Ms. Vidushi Daga who is an Indian businesswoman, Founder and Director of Clone Futura Education.
Abhimanyu Bhosale, Co – Founder, CEO at Livehealth
The year started amidst the wave of demonetization and we are anticipating effective execution of the roadmaps laid by the Modi movement. Clear and measurable timelines is what is most important. Supportive financial systems and an uncomplicated process in getting clearances along with the provision of tax are some of the key expectations for the startup ecosystem to thrive and boom in the country. The interesting thing to look forward for this budget would be, how the government promotes and incentivise electronic payments to minimize economic slowdown as much as possible. We are hopeful that the government promotes authentication of e-based payments, where the entire process from signup, authentication and transfer is smooth, simple and secure. We are hopeful that the union budget 2017 will be positive for the entire startup ecosystem
Gautam Khanna, CEO, P. D. Hinduja Hospital & MRC
The Indian healthcare market is currently worth around US$ 100 billion and is expected to grow to US$ 280 billion by 2020. The funds allocated to healthcare in the 2016 budget were about 1.5% of GDP. According to the World Bank, in 2014 the US spent 8.3% of their GDP on public healthcare while Brazil and China spent 3.8% and 3.1% of their GDP respectively. The global average spending on public healthcare was 5.5% of GDP. Considering the rapid growth of the Indian Health sector and our public spending vis – a – vis other countries, we look forward to the upcoming Union budget 2017 and hope that the budget allocation will increase to at least 3% of GDP.
2016 witnessed the introduction of several initiatives; however, this sector is in dire need of funds to reach its full potential. More funds need to be allocated for the urban poor and the government should initiate Public Private Programs for tertiary care or specific needs. Today, hospitals like ours are making it our mission to reach remote areas of our country where basic medical facilities are not available. Additional funds would enable more hospitals to invest in the latest medical technology and treatment methods and make them accessible and available to more people at an affordable cost.
Adequate funding and PPPs would also provide the boost to health care organisations thereby providing them with an opportunity to focus on medical innovation and play a synergetic role in advancing healthcare in India.
Demand v/s Supply:
Our country faces a serious shortage of doctors and nurses. It is estimated that by 2025 India requires 15 to 20 million new doctors, nurses and healthcare professionals. It is high time that we start working towards meeting this demand in the future. Incentives like concessional land to help set up medical and specialized colleges can help create opportunities for several aspirational individuals. An increase in the budget can help establish the required infrastructure and assist in closing this growing gap.
Proactive v/s Reactive:
There is an increased need for the Government to encourage medical organizations to focus on and implement preventive healthcare in addition to disease treatment. Presently, the rural and urban areas are witnessing an astonishing growth of non-communicable diseases (NCD’s), especially in the younger population. India is bearing the dual burden of NCD’s as well as communicable diseases. According to the Global Burden of Diseases published in The Lancet in Oct. 2016, cardiovascular diseases and chronic respiratory diseases were the 2 leading causes of deaths in India in 2015 (2.7 million and 1.18 million deaths respectively). An economic loss of $6 trillion from NCD’s alone, is expected by 2030. In addition to this, 75% of the population doesn’t have a medical insurance and 58% of total health spending is out of pocket.
A proper nationwide implementation of preventive care would not only improve the quality of life, but also help the citizens as well as the nation’s economy from huge financial burdens imposed by prolonged treatment of NCD’s. Besides prevention of NCD’s, there is an urgent need to spread awareness about nutrition, sanitation, institutional birth and immunization to control and reduce the incidence of chronic diseases among the rural and the urban poor.
Growth and spread of infectious diseases:
The Government must also prioritize growing diseases like tuberculosis that are responsible for a large number of deaths in the country. India has the world’s highest burden of TB with 2.8 million cases in 2012 according to WHO. As the disease grows stronger with the number of antibiotic resistant patients, the lack of availability of vital medications is only making the situation worse. To reduce the incidence and death toll caused by the disease, our country needs the support of the Government to secure technologies which will help in diagnosis and provide patients with effective treatment.
There should be no GST on healthcare services provided directly or indirectly with a final purpose of providing healthcare by the hospitals.
Any imposition of high GST on medical equipment would affect the overall cost structure of healthcare. Any increase in GST rate beyond the current tax structure, may dis-incentivize future investments in the private healthcare sector. No exemption is presently available for services offered for aesthetic / beauty enhancement purposes. This leads to disputes as to when can a treatment be called for curing illness or beauty enhancement, especially in areas such as cosmetology, dermatology, dentistry etc. GST needs to provide more clarity and exemptions in certain cases.
Taxes on equipment cost
Tax incentives could be provided to domestic manufacturers of medical devices and thus augment Hon. Prime Minister’s ‘Make in India’ initiative. Currently, the import duty differs in the current classification of medical equipment leading to variations in import duties for similar set of products. There should either be a complete tax rebate on importing these machines or lower the overall tax structure so as to provide quality and affordable healthcare.
Currently, 75% of India’s population doesn’t have a health insurance. The major reason for the low penetration of health insurance is that it is currently optional. With the successful launch of schemes like Pradhan Mantri Suraksha Bima Yojana, Pradhan Mantri Jeevan Jyoti Bima Yojana & Pradhan Mantri Jan Dhan Yojana targeting the poor, the government is moving in the right direction. The government can now also explore making health insurance coverage mandatory, starting with the organised sector. Employees could be given the option of either paying their contribution or purchasing insurance from any IRDA regulated insurance company.
With a vast majority of people in our country not being able to access primary healthcare facilities, it is of prime importance that the Government increases its expenditure in digital healthcare. Digital Healthcare can be beneficial in several ways: enabling analysis of an otherwise vast and unorganized healthcare information which could provide better insights for the government and healthcare providers about diseases incidences, treatment and public health; improving communication and accessibility; increasing affordability and raising the quality of healthcare.
Such a move would help in the development of a healthy population, which in turn will help fuel the growth of the Indian economy.