Getting to speak to the General Electric global Chairman and Chief Executive Officer, Mr Jeffrey Immelt would have been the most ideal thing to do, to learn about GE’s recent decision to integrate all healthcare units with its Wipro joint venture. But he is “on Barack Obama’s speed dial, and a member of several of Obama’s ‘advisory boards,’” whispers a Sarah Palin fan’s blog that shows up in a Google news search.

Be that as it may, I decide to touch-base with the President and CEO of GE Healthcare, South Asia, and Managing Director, Wipro GE Healthcare, V. Raja. During our earlier meeting in May, Mr. Raja had spoken about PPP (public-private partnership) in healthcare, the need for surgical corrections to quicken transformation, the role of a P and L approach in bringing focus to growth in different segments, infrastructure status for healthcare, and metrics other than traditional financial ratios and measures.

Four years from now, pharma industry has a huge potential, but students seem to be guided by what the seniors do, he had then rued; why not make medical insurance mandatory for everyone with a PAN card, he demanded; and as a chartered accountant in industry, he chided the CA Institute for still being a close coterie of practising professionals; and he suggested that an accelerated course from the ICAI may help engineering graduates gain a commercial insight.

Only, this time around, my questions to Mr. Raja were different.

Excerpts from the email interview.

What are the top three or five advantages that you see in the integration? And, apart from the regulatory clearances, what do you see as the key challenges to integration?

The top benefits of the integration are: (a) one face to the customer; (b) simplification of structure enabling us to bring all our operations including manufacturing, technology, engineering, distribution under one entity that would facilitate us to respond faster to the market needs as well as scale quicker; and (c) acceleration of our plans for localisation of products aligned to market needs. In a nutshell, we should be able to operate more like a local company despite being a large multinational.

I see challenges only in the mindsets of some of our people and stakeholders as this is a unique situation of a multinational merging its 100 per cent owned subsidiary with a JV partner unlike the traditional pattern of a multinational buying out its JV partner.

As a global player in the healthcare equipment sector, what are your observations as to the major changes that have been in the Indian healthcare scene, over the last few decades? Also, how do you see the Indian healthcare sector as being different from comparable countries?

Over the last decade the healthcare industry in India has been growing fast and maturing, though it significantly lags behind other economies in terms of sheer infrastructure needs.

The Government has been investing in healthcare significantly; the private sector has been actively adding beds in both metros and in smaller towns; and improvement in quality of healthcare delivery is being witnessed with a number of institutions getting themselves accredited by NABH or JCCI. Insurance is penetrating a larger population, and medical tourism has been growing and emerging as an important growth opportunity for the industry.

The cost of healthcare in India continues to be very low compared to the developed world while the quality especially in private sector has been increasing consistently. Overall the industry has been seeing some significant positive momentum and there is a lot of potential that remains to be harnessed.

The healthcare delivery market in India remains still very small and Government expenditure as a percentage of GDP continues to be very low compared to other parts of the world. While cost of treatments is low in India and clinical outcomes are good, we still have a long way to go before healthcare is made affordable and accessible to all.

Insurance penetration is very low and we are a country where almost everyone pays out of pocket for healthcare and that is probably the biggest deterrent to the access of healthcare in this country. We have the unique opportunity of creating a model of healthcare delivery that is affordable and accessible to all with active participation from the Government and the private sector.

Where are the hurdles to a more optimal leveraging of the advancements in healthcare technology? Is cost merely one piece of the jigsaw?

When it comes to treatments of diseases, technology plays an important role. The cost of early diagnosis and treatment would significantly reduce the cost of healthcare to a country, and that is something we ought to realise as a nation and pursue.

Even when the Government buys medical devices, the basis of buying is only price, after the tender specs are laid down by a tender committee. This results in the buying of always the cheapest but not the most valuable product, with no weightage given to technology, service and other differentiators, unlike as in the West where due consideration is given to these factors. This is one major hurdle we see in ushering in technology.

Secondly, there is very little incentive for the localisation of technology, and this inhibits investments in the same, resulting in most of the devices being imported. Lastly, low penetration of insurance – which makes individuals pay for their treatment – again acts as deterrent for investments in technology, unless it is affordable to the masses.

We hear of bold and healthy announcements such as that diabetes screening will be done in all villages. Do you foresee a greater role for PPP in such healthcare delivery initiatives?

PPP is clearly an answer to the crying needs of healthcare in this country. With Government spending less than 1 per cent of GDP on healthcare, and lifestyle diseases growing in this country, both the private and public sectors have to join hands to figure out the right model of healthcare to make it accessible and affordable.

There is no dearth of patient volumes in this country; at the same time, propensity to pay is limited. Hence the Government can take the role of regulator in healthcare delivery, provide the basic infrastructure and allow the private sector to deliver the healthcare efficiently and effectively at costs fixed by the Government to ensure that it is affordable to the common man.

This model will make it worthwhile for the patient, Government, healthcare delivery provider and medical device companies, resulting in the effective and efficient discharge of healthcare. The Andhra Pradesh Government model of healthcare delivery is a case in example of how healthcare could reach the masses with the State playing a catalyst’s role and not necessarily becoming the healthcare provider.

On what metrics should we judge the efficacy of our healthcare? And what are the best practices we may have to adopt, in the process?

Cost, quality and access are the three metrics on which we should measure our healthcare delivery system. Indians need good quality healthcare at affordable prices; and given the rural urban divide, we must have a model of healthcare delivery that brings access of the same to the larger population. We can and should create a unique model of healthcare delivery that is efficient and effective and becomes a model for other developing nations to embrace. While we can learn from the models of other Asian countries like Korea, and China (for rural healthcare), we need to create our own model that builds in the learning from some of these markets with the country’s unique needs.

Any other points of interest.

Healthcare industry needs more attention of the Government than what it gets today. To start with, this must be given infrastructure status to give it access to cheaper cost of funds for longer tenures.

Regulation must be ushered in to ensure that there is standardisation of protocols, and quality in healthcare delivery. Fiscal policy must promote local manufacturing of medical devices; and universal insurance must be the goal we must relentlessly pursue.

We must have more medical colleges and create avenues for more physicians and nurses to be graduated every year. It is a unique opportunity for us and we must rise to the occasion.

A nation that is young, which will create a large population of employable youth, must have the same population healthy to make this a demographic advantage. In the absence of affordable healthcare accessible to all, this potential advantage may end up instead as a burdensome challenge.


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