India needs to raise public health spending to 2.5-3.5% of GDP: Report

India needs to raise public health spending to 2.5 - 3.5 per cent of GDP to support healthcare transformation, according to a report released on Thursday. As per the Union Budget 2021-22, the total public health sector allocation stood at 1.2 per cent of the gross domestic product (GDP).

The FICCI and KPMG in India report titled 'COVID-19 Induced Healthcare Transformation in India' said the pandemic saw the country undergo a paradigm shift from traditional legacy systems to cloud-based applications last year.

The crisis proved to be a catalyst for increased adoption of digital healthcare systems across the world.

"With a healthcare spending of 1.5 per cent of India's Gross Domestic Product (GDP) in 2018-19, there is a need to increase the public health spending to 2.5 - 3.5 per cent to support healthcare transformation," said the report.

It also highlighted the need to incorporate alternative financing models to address the financial gaps in the health sector and ensure mandatory health coverage for all to support the Universal Health Coverage (UHC) targets.

The report also suggests establishing a district level Health System Index to assess health system maturity, modifying existing district hospitals to implement a hub-and-spoke model, ensuring adequate diagnostic services across all districts and promoting convergence of public health scheme.

It calls for leveraging make-shift and alternative health infrastructure and strengthening primary care though collaborating with private sector to strengthen existing health system.

Alok Roy, Chair, FICCI Health Services Committee and Chairman, Medical Group of Hospitals said, "The COVID-19 pandemic exposed weaknesses in our health systems and amplified already existing challenges pertaining to gaps in health infrastructure, workforce and accessibility and equity in health services."

"But at the same time, it also reinforced an urgent need to make greater investments in augmenting health preparedness and quality of care," he added.

Lalit Mistry, Partner and Co-Head - Healthcare Sector, KPMG in India said, "The pandemic has transformed the way the government and private players are planning to bring change in the healthcare system."