India Needs To Leapfrog To An Integrated Healthcare Ecosystem
If health is wealth, we are the poorest nation in the world. Healthcare is a story of exclusion, unaffordability, and poor-quality.
What is understood and appreciated well is that when the economy improves, so does the health of its citizens. However, less understood, and rarely appreciated is the less obvious; that the opposite is equally true.
Most believe health is the ‘absence’ of illness. Our policymakers have misdiagnosed the healthcare ecosystem and focused on short-termism. They look at healthcare from the narrow prism of ‘operational and technical infrastructure (hospitals and doctors) when the solution is social and economic. India’s current provision of just two per cent of GDP on healthcare expenditure is lamentable. Not only is the volume inadequate, the character of the investment equally demonstrates ‘short-termism’. Hospitals and the other ‘physicals’ are more ‘visible’ and a vote catchers and do increase the GDP, but the real multiplier is the investment made in the preventives.
*Good health is an asset, has intrinsic value, and instrumental virtue
Health is a catalyst for a broader and virtuous growth cycle; and must be an integral part of economic discussions. And yet, investment decisions around health are evaluated purely as a cost.
A Crux study across 14 states, with 1,500 people, 120 practitioners (policymakers, health professionals and economists), highlights a co-integration between healthcare investment, health proxies (life expectancy, workforce productivity, happiness, upward mobility) and economic growth.
It has a lesson or two. A unit change in healthcare expenditure can potentially enhance life expectancy by 10 per cent, and increase GDP by 0.5 to one per cent depending on the timing, geography, character of investment and the presence of the other enablers (governance, tributaries) etc.
About half the economic growth differentials between developing and less developed geographies can be attributed to poor health. The study used cost curves and articulates that it will take less than Rs 2,000 per capita to improve healthcare by 50 per cent. The investment will pay back in three years through the labour market, both by optimal labour-force participation and productivity gains. Several other economic indicators improve too.
Health is a precursor to better income. It leads to higher productivity across several contexts. Lower absenteeism, better morale, ability to take risks, are all contributors to productivity and income. They encourage and enable individuals to work more, earn higher incomes over their lifetime. Similarly, health optimises human resources, is key to upward mobility, reflecting in an individual’s investment in nutrition, preventative healthcare, sanitation, education and a better life.
*Economic burden, lifetime inequality
The impact of good health starts early: healthier children attend school regularly, enhancing their potential and translating into ability and cognitive development. A healthier workforce is more enthusiastic and engaged; invests in knowledge and has better learning outcomes and enhanced output. Another significant dimension of health is its impact on savings and investment. Good health increases life expectancy, motivates saving. Equally, it encourages entrepreneurial pursuit. Both savings and investment trigger economic activities and are long-term economic positives.
Inadequate public infrastructure, poor facilities, deplorable services have kept most poor unhealthy, pulling down the other social indicators. Inadequate insurance coverage, lower penetration of healthcare adds insult to ‘injury’.
Indifferent health affects individuals in several ways. The cumulative cost is substantial and the price one pays over a lifetime is staggering. The unhealthy earn significantly lower (income-health gradient), due to fewer earning days (92 per cent vs 68 per cent) and 35 per cent lower earnings per day. This perpetuates. The accumulated effect of bad health reflects as a substantially lower asset at retirement.
The non-monetary cost of poor health and health inequity is even more distressing, triggering a vicious cycle. It lowers life expectancy, diminishes capability, return on investment and reduces the earning potential of the individual, increasing inequality. There are several other negatives, including untenable economic and flawed life decisions, perpetuating lifetime inequality, and hurting the next generation too. The study estimates that poor health drags down the GDP by a tenth.
An interesting insight from the Crux study is the enhancement of human and physical capital that triggers higher spending on health, revealing complementarity rather than the substitutability relationship.
The cause and effect of investment in health and economic growth is virtuous and meaningful; and occurs both at the micro and macro levels. It enhances human capital, triggering higher productivity and helping robust growth. Similarly, an increase in healthcare expenditure creates awareness at one level, prompts action on the other. This drives an integrated and regular health intervention (both prevention and cure).
*Enabling framework and institutional capability are catalysts
Timing, geography, and character of investment is important. Institutional weakness and the absence of enablers result in the misallocation of funds, inefficient and suboptimal outcomes. We also need far-reaching institutional reform.
Institutions must envision a broader set of common priorities, formulate plans well, and implement them better. They must design innovative funding and procurement models, and create wider partnerships and collaborations with other stakeholders. The pharma and the diagnostic entities have a bigger role than imagined.
Policymakers need to prioritise prevention, expand access, and create healthcare infrastructure. India needs decadal goals, implementable strategies and holistic plans.
The key to scale and access is to create a robust technology and futuristic health ecosystem that will prevent, detect, and cure. We need to invest in capacity, and intelligence (non-invasive digital health record), identify and operationalise appropriate technology, to predict and take precautionary action, and shield ourselves from future pandemics and health disasters. Similarly, we need to operationalise a tech-enabled delivery and diagnosis framework.
*Health is key to upward mobility. A multiplier
We are only beginning to understand and appreciate the fact that investment in health is an important determinant of economic development. Good health develops capacity, enhances potential, and yet it is much more than a personal issue. It’s an economic multiplier and an influential factor in establishing a robust economy. Other indicators flourish too, notably positive effects on social cohesion and well-being.
The key lesson is that well-designed, effectively implemented, judicious healthcare investment is a GDP booster. It sustains a better economy. Good health and wellness are key to upward mobility. It determines and enables several drivers to life and living.
Universal access to healthcare must be an agenda on every policymaker’s mind.
