Indian health care is at an inflection point. Today governments’ spending on healthcare needs is one of the lowest amongst the Developing countries . India spends about 5% of the total expenditure on Health which is around 1.7% of the GDP. Public healthcare growth has slowed down over years. In 1998 about 43% of population was served by Public Hospitals and today only 30% use the Public health care system.  That means almost 70% of the health care needs are serviced by Private players, trust hospitals and non-profit institutions. This has led to the rapid growth of Private players who are growing at the rate of CAGR 16.5% year on year . The costs of procedures or hospitalization has increased anywhere from 83% to 263% in 10 yrs. i.e. 2004 to 2014. There is also a wide variation of the cost for the same procedure in different hospitals . It is also noted that 86% of rural Indian patients and 82% of urban Indian patients do not have access to any form of employer-provided or state-funded insurance.
Government of India is cognizant of this gap and is taking a 360-approach to help people of India get affordable, accessible, quality healthcare. They have capped prices for certain lifesaving drugs, stents and implants. They have created a common entrance examination throughout India. The Medical council of India is being replaced by National Medical Commission which has more representation across different states. Ayushman Bharath is world’s biggest and ambitious project to cover 10 lakh family appropriately 50 crore people based on socio economic status defined by the Socio- Economic caste census 2010.
Some of the states are also proactively implementing systems to monitor delivery of the healthcare services through State medical establishment acts.
Being an integral part of the healthcare delivery system, we are not only responsible for treating patients but also understand our role and responsibility in the way care is delivered. We are the primary drivers, who can steer the system in the most cost-effective way, with good clinical outcomes or remain oblivious of costs! In order to help the patient and the hospital, it is important we understand what goes in to the revenue and costs of running a hospital and how each factor plays a role in escalating and deescalating the costs. In a study done by IMS (Intercontinental marketing company- Parent IQVIA) institute on avoidable costs in healthcare they attributed avoidable costs into six major buckets: They are:
– Medication Non compliance
– Non/Delayed adherence to Evidence based medicine
– Antibiotic misuse
– Medication errors
– Suboptimal use of generics
– Mismanaged polypharmacy in elderly
If the above mentioned are the six major causes in the delivery of care, the following are the major factors in inappropriate utilization of services i.e. inappropriate admissions, overuse of outpatient services, misuse and abuse of prescriptions and unindicated ER visits.
Medication non adherence:
Medication non adherence alone contributes to $68billion to $148billion dollars in costs. Patients usually are non-adherent to prescriptions due to costs, lack of information on the long term effects of noncompliance, cultural beliefs, side effects and lack of social support. It is noted that only 75% of patient fill their prescription when written first time. And 32% -40% do not fill up their prescriptions on subsequent follow up. Government initiatives in capping the prices and fixing the selling price do help in improving compliance. But as Doctors we can play our role by educating patients, prescribing low cost, quality product so that we do not burden our patients.
Nonadherence or delayed adherence to Evidence Based Medicine protocols:
Avoidable costs due to delayed or non-adherence to evidence based medicine costs anywhere from $19 billion to $64billion. Not able to timely diagnose, start treatment and lack of follow up are the major contributing factions. Guideline adherence is seen only on 61.9% in Diabetes and 20% in Hepatitis C patients. The importance of keeping ourselves updated with recent changes in the standards and protocol and use them appropriately in order to avoid such wastage cannot be stressed enough. Educating patients on long term complications and help patients understand that prevention always costs less than the actual treatment, goes a long way.
Antibiotic misuse, the cost opportunity for the antibiotic misuse ranges from $27 billion to $42 billion. Prescriptions for viral infections and usage of broad spectrum antibiotics tops the list of Antibiotic misuse. The common reasons are pressure from patients, defensive medicine. Being more responsible, while prescribing antibiotics, understanding the communities’ microbial nature and their sensitivity pattern helps to decide on the antibiotic needs.
Similarly medication errors, suboptimal use of generics and mismanaged polypharmacy in elderly also contribute to approximately $50billion in costs.
Apart from patient and clinical factors, administrative factors adds on to $126 to $315 billion in cost for delivering health care. The cost are majorly coming from ineffective claims process, staff turnover, ineffective IT systems and paper prescriptions.
There are tools available to calculate the healthcare wasteful spending in USA. These tools assess spending at the micro level, helps to develop specific targets and to assess the results of specific Interventions.
Another trend that is catching up is on payments based on value of care given rather than quantity. Value based payment models are slowly, but surely catching up across many developed countries and in India it is in its nascent stage enforced by few Insurance companies.
While we are grappling with inadequate funding, inefficient systems, lack of standardization, there is whole new wave that is going to make its presence felt sooner than later which is on “Information technology” in health care. There is already quite a bit of information technology solutions used in public sectors such as national health portal, online registration system, Central drug standard control organization so on and so forth. In private sectors the use of technology is far advanced in the form of electronic medical records, apps, call center, point of care devices, internet of things etc… The growth of this sector in health care will continue to see upswing as they try to help us find out solutions for each of the problem case in Health care.
The hospitals of the future will move from hospitals to home, utilize mobile technologies to stay connected with patients, care pathways to help standardize delivery of the care. The hospital beds probably will get restricted to use for post-operative care, intensive care and such other high end work. Public insurance will gradually increase the spectrum of population they cover and public private partnership has to happen in order to deliver care for such huge population base. Becoming cost effective is the need of the hour.
 Rising income level, ageing population, growing health awareness and changing attitude towards preventive healthcare is expected to boost healthcare services demand in future, but in a different areas, than what it is today. We need to understand these trends and prepare ourselves better so that we are not caught unaware.
The article was first published in American college of Physician-India chapter in their 3rd annual conference, Lucknow and has been republished here with the author’s permission.
1. World health organization and world health statistics 2017
2. National sample survey office(NSSO)
3. Frost and Sullivan LSI financial services, Deloitte
4. BMJ Open. 2013; 3(6): e002844.Published online 2013 Jun 11. doi: 10.1136/bmjopen-2013-002844 PMCID: PMC3686227 PMID: 23794591 Costs of surgical procedures in Indian hospitals Susmita Chatterjee and Ramanan Laxminaraya
5. IMS Institute for healthcare informative: Avoidable costs in Healthcare.
6. Analysis by PricewaterhouseCoopers’ Health Research Institute: the price of excess.
7. American health policy institute: using data driven disruption to reduce wasteful spending in health care.
8. NAT health PWC funding Indian healthcare, catalyzing the next wave of growth.
9. An HFMA value Project report: Strategies for restructuring costs structure.
10. India brand equity foundation
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