Healthcare Infrastructure Funding
India is at the crossroads of an exciting and challenging period in its history. Making healthcare affordable and accessible for all its citizens is one of the key focus areas of the country today. The challenge is immense, as nearly 73% of the country’s population lives in rural areas and 26.1% is below poverty level1 . While on one hand, India lacks strong healthcare infrastructure, on the other hand, the country has several inherent weaknesses in its healthcare system. Though the overall level of funding allocated for healthcare nationally is comparatively high (4.1% of GDP2 ), the government’s funding is low (<1% of GDP3 ) compared to other emerging nations. The health care delivery segment is dominated by the private sector in India, with 70% of the total delivery market in India catered to by the private sector. However most of the organized private infrastructure is confined to the state capitals or Tier I cities. Very few have made inroads in Tier II and Tier III cities. This presents the country with both a challenge and opportunity to not only increase the penetration of quality health services but also be the growth driver in these regions. The central government has given priority to healthcare and is making significant investments to improve the infrastructure and delivery mechanism jointly with the state governments (who will act as the primary implementer) through National Rural Health Mission (NRHM). Before NRHM, the healthcare system in India was marked with significant disparities between urban and rural areas as well as between different states.
Synergise public and private funding in order to bridge the resource and infrastructure gap. Reduce the burden of healthcare costs on the rural and semiurban population by minimising out-of-pocket expenses and introducing customised and focused health plans. Improve the production and distribution of pharmaceutical drugs to make them more affordable and accessible to citizens.
The methodology that has been followed is to first assess the current state of healthcare in India: the socioeconomic and health indicators in India, infrastructure and resource deficiencies, and the central government interventions including health programmes, schemes and funds, partnership with World Bank, DFID, Asian Development Bank and European Commission, and the various PPP initiatives currently undertaken. This is followed by the various modes and areas of financing from the private sector for the growth and development of healthcare in India. A section is also dedicated to the emerging PPP models in healthcare and the trends of various channels to infuse funds in this sector. These formed the basis to identify the most appropriate avenues for healthcare financing.