Healthcare sector needs innovative modes of funding: PwC report

To take healthcare expenditure to 2.5% of GDP by 2030

April 10, 2017 09:09 pm | Updated 09:09 pm IST - MUMBAI

Wealth for health: The report recommended investments by pension funds, REITs and through long-term debt.

Wealth for health: The report recommended investments by pension funds, REITs and through long-term debt.

Conventional modes of resource mobilisation must be aided by an innovative funding mechanism to improve healthcare investments in India, a Healthcare Federation of India (NATHEALTH)-PwC report has said.

The report said funding should be mobilised from pension funds and that investments should be routed through public-private partnership and long-term debt.

It has also suggested funding through business trust entities such as Real Estate Investment Trusts along with funds sourced through bilateral investment treaties.

Underlining the need for huge funding requirements, the report said, “FDI in the sector has significantly increased in the last three years. However, healthcare expenditure’s share in GDP remained around 1.6% in FY16 and innovative funding modes would support the target of taking it to 2.5% by 2030.”

‘Quantum leap’

It has also highlighted the fact that private equity deals were supporting funding in the sector and the value of transactions had increased from $94 million in 2011 to $1,275 million in 2016, a jump of 13.5 times.

“Access to capital has been one of the biggest roadblocks to the growth of the Indian healthcare sector,” said Dr. Rana Mehta, partner and leader, healthcare, PwC India.

“Today, the Indian government spends only about 1.5% of its GDP on healthcare, which is among the lowest globally for any country,” he said.

“Along with building highways, firing up power plants and ensuring there is a roof over every Indian’s head, there is a need to focus on the healthcare needs of the country.”

Anjan Bose, Secretary General, NATHEALTH said, “While the opportunity for improvement of health services in India is huge, it is for the government and the entire healthcare ecosystem to work together so that benefits percolate to the segment that require them the most."

The New Health Policy 2017 too had highlighted that innovative modes of funding were needed to meet the requirements of the healthcare sector, the report said.

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