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Union Health Budget 2016-2017

Health In Focus   - G J E 4
Union Budget 2016: Stress on Health Insurance for Families, Dialysis Centers & Generic Drug Stores
  • 3,000 generic medicines stores under Prime Minister Jan Ausidhi Yojna to be started
  • New health care scheme with Rs 1 lakh cover for each family to be initiated
  • Government proposes to exempt part of dialysis equipment from customs duty
Finance minister Arun Jaitley presented the union budget for 2016-17 at the Lok Sabha in New Delhi. He announced the budget for various sectors including, health, education, agriculture, energy, tax, personal finance, social, investment and infrastructure, and banking.
Union Health Budget 2016-2017
Union Health Budget 2016-2017
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Promoting Generic Drug Stores

To tackle the shortage of drugs in rural areas, as many as 3,000 new generic medicine stores will be set up by the government across the country under the Pradan Mantri Jan Aushadhi Yojana, said Finance Minister.

‘The government will provide health insurance of up to Rs 1 lakh per family, said Finance Minister Arun Jaitley, while presenting the budget for 2016-17.’
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"For the better availability of generic medicines in the country, especially in the rural areas, the government has decided to open 3,000 new generic medicines stores," said Jaitley.

Helping Kidney Failure Patients

In India, about 2.2 lakh new patients of End Stage Renal Disease are in need of dialysis every year. This results in additional demand of 3.4 crore dialysis sessions. There are approximately 4,950 dialysis centers in the country. Most of the centers are located in major cities, largely in the private health care centers, so the demand is only half met.

Dialysis the artificial replacement for lost kidney function on an average costs about Rs 2,000, which lead an annual expenditure of more than Rs. 3 lakh per year. Besides dialysis cost, most families need to travel long distances to access dialysis services, incurring heavy travel costs.

A National Dialysis Program will be launched to address the high costs involved in the renal dialysis processes. Two thousand new dialysis centers will be started in the country under the program. The government will provide the facilities of renal dialysis in every district hospital, so that patients do not have to travel to the expensive hospitals of metro cities.

To provide dialysis services in all the district hospitals, the funds for the dialysis program will be made available through Public-Private Partnership (PPP) mode under the National Health Mission.

Health Insurance for Family

An illness of a family member(s) can affect the financial status, especially among the poor and economically weaker families. The government will launch a new health protection scheme to help such families. Under the health protection scheme, the government will provide health cover up to one rupees one lakh. An additional top-up package up to Rs 30,000 will be provided for senior citizens of the age of 60 years and above.

"Catastrophic health events are the single most important cause of unforeseen out-of-pocket expenditure which pushes lakhs of households below the poverty line every year. Serious illness of family members cause severe stress on the financial circumstances of poor and economically weak families, shaking the foundation of their economic security," said Jaitley in his speech.

Reaction from the Industry to the Health aspects of the Budget

Poonam Muttreja, Executive Director, Population Foundation of India said that many of the announcements in the health budget are very welcome. The allocation for health in this budget has been increased by 22% over the previous year's budget estimate to Rs. 39,533 crores. This is a very significant move given that last year, the allocations for health were substantially reduced. More specifically, the budget for family welfare budget (which includes family planning) has been increased by 67% over previous years. Though details of eligibility are not yet known, the announcement in the budget to finance a health insurance scheme that offers financial protection of Rs 1 lakh per family is a good move. It is bound to save millions of Indians from slipping into penury due to catastrophic illnesses. The provision of 3,000 new generic drug stores is also likely to ease the availability and affordability of medicines for the poor. These are important steps towards the eventual realization of universal health coverage.

She also said that despite the increase in budgetary allocations this year, the under-funding of health by government remains a concern. The relative importance to health in the budget remains the same. The share of Family Welfare has increased only marginally from 4% last year to 5% of the health budget this year. The 2016-17 health and family welfare budget estimate for 2016-17 is 3.7% of the total central government budget (net of transfers to states and UTs) which is similar to last year's proportion. These increases are insufficient to offset the 54% decline in allocations by the central government to family welfare between 2013-14 and 2015-16. Much higher health allocations are necessary to carry forward the family planning agenda and reorient it towards reproductive health and rights, paying greater attention to quality and spacing methods.

Ms. Ameera Shah, MD & CEO- Metropolis Healthcare said,"Overall a promising budget. Its heartening to see the fiscal discipline and a slew of initiatives for the under privileged. A lot of emphasis on infrastructure has set the right tone for overall economic reform. When it comes to healthcare, the union budget has rightly addressed the issue of unexpected healthcare expenses being a burden and pushing families in to poverty."

She added that it is important that the leaders from this industry are heard in the policy process where they can join hands with the Government to spearhead more planned and regulated funds for health and healthcare. She felt that "This by far has been the most disappointing budget for health. It is time that the government realizes that Health is an important indicator of economic development and work towards an overarching vision for healthcare."

Mr. Anjan Bose, Secretary General, NATHEALTH said, 15% increase in government spending on the social sectors with focus on healthcare should go a long way in ensuring universal health coverage. However, the health care industry is concerned since the Government has not addressed the issue of recent increase in import duty on medical equipment and devices. The medical technology sector is in an infancy stage with manufacturing limited to less complex devices. More than 75% of medical equipment / devices is still imported and hence the duty increase will result in increase in healthcare cost.

Rajit Mehta, Managing Director & CEO of Max Healthcare, said, "I welcome the steps being taken to promote penetration of affordable and accessible healthcare. Allocation of 9,000cr towards Swachh Bharat Mission will further strengthen the Government's commendable vision for a better and cleaner India. However, we await more details and clarity on norms for PPP models, funding of government led schemes, expanded physical infrastructure for medical education and the easing of norms in this regard."

Dr.PM Bhujang, President, Association of Hospital said, "Out of the nine pillars of Union Budget one was social healthcare. The major highlight in healthcare sector was the introduction of National Dialysis Programme. Also, the government has announced an exemption on basic dialysis equipment from custom duty, which is in line with AOH's recommendation. However, the government should also consider exemption of custom duty on critical medical equipments."

Many of the moves of the government are welcome in the current budget, however the finer prints will still needs to be deciphered. Implementation of all the promises is going to be a challenge. Do we have any information on how was the last years budgetary allocation utilized. It would be useful if there is a session in the parliament before the budget session for the government to announce the promises that have been accomplished from the previous year's budget.

Source: Medindia
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