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Committed to India: Healthcare funding imperatives for a post-COVID world

Joydeep K Roy, Partner & Leader, Financial Services, India and Global Health Insurance Leader, PwC

Every nation on earth which we call economically developed with large opportunities for people to aspire to for great careers and quality of life invariably have two common factors. Number one, high literacy and access to quality education. And the other one is universally accessible and affordable, high quality healthcare funded between government and insurance companies. With increased longevity in India, where the life expectancy at birth has now reached 70 years and actually far more for the productively employed youth in the country, the need for healthcare funding has never been more pronounced for the growth and development of India.

The need for healthcare funding can be essentially measured by the out-of-pocket expenditure (popularly called OOP) levels of which have reached 63% in India, which is funded individually. And therefore the need for a journey towards an affordable universal health funding program was necessary. Just to put it in perspective - that is an amount in excess of INR 3 lakh crores or USD 40Billion, also increasing at a high inflation rate. Hence, the PMJAY, or its more popular name, Ayushman Bharat, is a first step towards that. Technically, the entire bottom of the pyramid population of over 500 million is in its ambit. And so far about 16 million people have been brought under it with over 20 million hospital admissions so far. While it is still early days for an implementation of this size and importance, this program has been very useful to strengthen the network of hospitals and service capabilities and is laying the foundation of the implementation of universal health in India. 23,000 hospitals have got empanelled out of which 60% are private hospitals. Never before in the history of the country did the poor, the ability to avail of healthcare up to a half a million rupees worth. That means something and can fuel the growth of medical structure and talent both.

Innovative funding mechanisms, no doubt, will evolve as one moves up the value chain for universal health care. Public-private partnerships will become necessary. The rollout of the ambitious National Digital Health Mission, the Permanent Health Records, Cowin for vaccination tracking, Arogya Setu for contact tracing, coupled with the world's largest payment network - UPI - emphasis has never been larger for healthcare than before. We have seen the focus earlier on physical infrastructure in the previous decades. This is a combination of digital infrastructure and medico-financial infrastructure, which is so critical for the India growth story.

Sanjeev Krishan, Chairman, PwC in India

As the world goes through the  pandemic, insurers went through a tough initial phase where they concentrated on digitising and virtualising all their operations

Then they bounced back to grow substantially and with distributors and customers having now settled down to a different and remote relationship with their insurer, they are looking forward to much more accelerated growth helped by the same digitization fulcrum

Health insurance is one of the fastest growing segments in the insurance sector and also a critical area for our country and its commitment to achieving Universal Healthcare for all by 2030, which is fundamental to achieving the other Sustainable Development Goals.

At PwC, we look forward to building on our learnings from the pandemic to partner with the Insurance industry  in 2022 and beyond to build a thriving digital health insurance ecosystem in India and make a meaningful contribution to India’s growth story.

Contact us

Joydeep K Roy

Joydeep K Roy

India Financial Services Advisory Leader, Global Health Insurance Practice Leader, PwC India

Tel: +91 83 3486 0711

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