The Power Of I 2020

Building a future-ready, innovative healthcare industry

India’s scientific excellence provides us the opportunity to achieve self-reliance in pharmaceuticals, biopharma and holistic care

RA Chandroo

The COVID-19 pandemic has put a spotlight on the resilience and resourcefulness of India’s healthcare industry. In response to the most significant crisis the world has experienced in our lifetime, the Indian healthcare industry responded swiftly with innovative and indigenous solutions.

Consortiums were set up to pool complementary skillsets. Task forces hunted for promising leads for COVID-19 vaccines and treatments. R&D labs, academic institutions, start-ups and small enterprises came forward with innovative ideas, found industry partners and scaled up quickly.

Combining their skills in immunology, molecular biology and various other aspects of biological sciences, research agencies and our national laboratories were able to quickly come up with very innovative scientific ideas to develop RT-PCR testing and rapid antibody detection kits. Leveraging this indigenous knowhow, these research labs tied up with industry to manufacture diagnostics test kits at scale, thus helping ramp up domestic capacity and make COVID-19 testing affordable in India.

Scientists in India also worked overtime to come up with innovative solutions to both big and small problems across a range of bio-medical fields: From mathematical models to mass production of masks and personal protective equipment (PPE), vaccines to ventilators.

The pandemic has brought the competency of the Indian healthcare industry to the fore. The Indian government now has the unique opportunity to make healthcare a national priority and help build a future-ready industry, which is innovative, quality conscious and can be scaled up to meet global demand.

Building self-reliance
The Indian healthcare industry has expressed its willingness to partner the government to help it deliver on the agenda of ‘Health for All’. The government, on its part, needs to invest much more if it wants to attain the target of healthcare spending reaching 2.5% of GDP by 2025 from about 1% currently. The mission to make India self-reliant in healthcare will need strong political will and decisive administrative action. We should:

To come up with advanced healthcare products and technologies, India needs to invest in creating world-class research institutions and infrastructure, high-end technical skills, and incentivize private investments in R&D.

Despite a historically low public expenditure on R&D at just under 1% of GDP, India is home to a large number of scientists and over a 100 research centres. These scientists and research centres are leading the way in the development of vaccines, anti-virals, diagnostic kits and novel therapies for COVID-19.

Prestigious institutes established by the government and supported by national agencies such as the Council of Scientific & Industrial Research (CSIR), Indian Council of Medical Research (ICMR), and Department of Biotechnology (DBT) have been at the forefront of the battle against COVID-19.

The government needs to increase funding to these institutes, establish new research parks, support more incubators and cooperate closely with academia and industry to leverage the latent R&D prowess in the country.

India must make itself very competitive in the manufacturing of pharmaceuticals, medical devices and other healthcare products because we already have the necessary skills and capabilities. Take for example, antibiotics and active pharmaceutical ingredients (APIs), where the Indian pharma industry was quite self-reliant till around 1990. We ended up ceding our position to China because the incentives that Chinese pharmaceutical companies were receiving from their government were not matched in India.

Considering that this is a highly capital intensive sector, there is a need to provide incentives for investment in greenfield and brownfield projects and pharma parks; fast tracking of clearances for pharma projects based on jobs and investment; and subsidies for improvements in quality infrastructure.

For healthcare innovation to flourish, ideas must be funded and taken to market. Without a funding-financing ecosystem, even the most transformative ideas can die.

What India needs is a national innovation ecosystem that puts in place a financing cycle: academia generate ideas, especially those based on science and technology, which are incubated to proof of concept through government-sponsored seed and incubation funding and then taken to market through business intervention backed by venture funding.

Ease of accessing a market, both primary and secondary, and being able to raise capital with greater flexibility would spur healthcare innovation in India.

The COVID-19 crisis has made it evident that India will need to invest massively in expanding its hospital infrastructure. India cumulatively had approximately 1.9 million hospital beds, 95,000 ICU beds, and 48,000 ventilators, The Center for Disease Dynamics, Economics & Policy (CDDEP) and Princeton University had estimated in April.

The capital cost to build a 200-bed multispecialty hospital, excluding land, is estimated between Rs.1.4 billion – 1.6 billion as it typically costs Rs.7 million-8 million per bed (Source: Narayana Hrudayalaya RHP). The upfront investment for hospitals assumes 40-50% of the capital expenditure for land and building. The rest is towards equipment costs that require periodic capital investment for upgradation / maintenance/replacement. 

With COVID-19 crisis spurring indigenisation of ventilator production and local manufacturing of high quality ICU instrumentation, the cost of setting up ICU beds will come down. Still, the government will have to offer the right kind of fiscal incentives to attract private sector players to invest.

The government’s decision to provide 30% viability gap funding (VGF) to public-private partnerships for hospitals in Tier-II and III cities instead of 20% previously is a welcome step. However, it is important to understand that VGF for only capex is not enough for the health care sector, both capital expenditure as well as operating expenditure financing should be considered.

In addition to building and improving hard infrastructure such as hospitals and medical equipment, there needs to be a focus on soft infrastructure.

India needs to urgently build its healthcare workforce by adding more doctors, both general practitioners and specialists.

There has been an urgent need to shore up the number of post-graduate medical seats in the country as there are ~50,000 post-graduate seats under the Medical Council of India and the National Board of Examinations. This means that every year nearly 120,000 doctors who fail to get one of these seats end up pursuing coaching classes instead of attending to patients in accredited government or private hospitals.

The Indian government recently approved the introduction of two-year post-graduate diploma courses in eight broad specialties for applicants to pursue after completing their MBBS. This is a very important reform as there is currently an 80% shortage of medical specialists in government hospitals. The introduction of this new program could add at least 30,000 to 40,000 specialists in the next two years, thus helping plug the deficit in medical personnel in public hospitals.

As the courses can be run by any well-equipped public or private hospital with over 100 beds and senior medical specialists among its staff, this will give 700 district hospitals in the country an opportunity to become post-graduate institutions and ensure high quality training for a future generation of specialists.

The hunt for effective treatments and vaccines for COVID-19 has demonstrated the importance of having a strong clinical trials industry.

India’s clinical trials industry, which was projected to reach a size of $1 billion in 2016, had suffered a setback due to regulatory uncertainties between 2013 and 2015. With regulation streamlined and clinical trial approval timelines reduced, the future is again starting to look up.

Re-establishing India as a clinical trials hub, can generate a million potential CRA jobs and give a boost to the healthcare industry as a whole. 

The groundwork for digital transformation of healthcare in India has already been laid. India leads in the adoption of digital health technology with 76% of healthcare professionals in the country already using electronic health records (EHRs) in their practice, according to the Future Health Index (FHI) 2019 Report.

Through the National Digital Health Mission, India can address the huge deficits we have in healthcare infrastructure and resources. Creating repositories for longitudinal data through EHRs can improve healthcare planning in the country. We need the following:

The Ayushman Bharat program can be leveraged to create longitudinal health records of each empanelled individual right from the level of the primary health centre (PHC). That is because if data is being collected only at the hospital level, then the process will abruptly stop if a patient does not come back to a particular hospital or if a patient dies. Therefore, collection of longitudinal healthcare data must start from PHCs.

With all health centres interlinked to each other under this model, a patient visiting a PHC can now easily access healthcare services at the medical college level. When the patient visits the medical college his/her health card will be easily accepted and all data will be readily available with the medical college system. As a plus, each government PHC should also be connected to partner private hospitals thus reducing the workload of government doctors.

Such a model should also allow the transmission of diagnostic images (X-Ray, CT scans, MRIs and angiograms) and medical data from remote locations to any specialist or super-specialist hospital. Doctors and hospitals should be able to access the health data of people at the time of tele-consultation for preliminary diagnosis, patient counselling and expert opinion.

Then, there is a need to create over-arching healthcare guidelines so that data collected through individual EHRs can finally get into the national repository.

A strong digital healthcare ecosystem will enable monitoring and evaluation of the health status of the population and improve the quality of healthcare interventions. Also, data captured both in terms of health and expenditure will enable the creation of a powerful database for health economics. 

Ensuring inpatient care to all or even 40% poor citizens under Ayushman Bharat will require huge funding. Since it places a substantial burden on the exchequer, the focus needs to shift from inpatient and tertiary care to primary and preventive healthcare if Ayushman Bharat is to be sustainable in the long run. The steps required are:

Strengthening the primary healthcare system through Ayushman Bharat while providing financial protection to families from significant illness that might require secondary/tertiary care could herald a system level transformation of nation’s healthcare system.

The experience of the National Health Services (NHS) in the UK, and studies in Thailand and Brazil have proven that the most cost-effective way of achieving universal healthcare is by providing a comprehensive set of primary healthcare services as well as facilitating access to affordable, high quality tertiary care when needed. Closer home, a study from Tamil Nadu has demonstrated that strengthening primary healthcare delivery led to a reduction in out-of-pocket expenditure for the patient, as well as, costs of care for the entire healthcare system.

Under Ayushman Bharat, the government has plans to expand access to comprehensive primary health care by upgrading Sub Health Centres (SHCs) and PHCs to Health and Wellness Centers (HWCs). While upgrading 150,000 SHCs and PHCs into HWCs by 2022 the government should equip them to provide comprehensive primary healthcare services. 

Currently, most PHCs are understaffed, with insufficiently trained community health workers (CHWs) and retrofitted with inadequate infrastructure. The closest that technology has gotten to addressing these challenges is to equip CHWs with tablets and apps that help them collect data for district, state and national level analysis, but don’t serve to streamline work.

Now that the government aims to upgrade PHCs to HWCs with an expanded mandate of screening for non-communicable diseases like cancer, diabetes and cardiovascular ailments, the deployment of Artificial Intelligence-based (AI) systems can make a huge difference. AI has imaging, identification and screening abilities, natural language processing and speech recognition. Many of these abilities of AI can be leveraged to make PHC functions such as routine laboratory tests for haemoglobin screening, urine testing, blood grouping for expectant mothers more efficient and accurate.

AI innovators can develop quicker technology-enabled testing and screening modalities to replace traditional methods that require expensive equipment and specialist human technicians.

Thus, AI-based PHCs can be equipped to provide screening, wellness, awareness, and diagnosis.

The HWCs can act as an ideal platform to implement an effective national healthcare model based on behavioural economics. The use of health coupons/vouchers can deliver a financially sustainable model by driving positive societal behaviour through incentivising ‘wellness’.

A good way to ‘nudge’ people into healthy behaviour, therapy compliance, and better health management is to incentivise them with rewards, which can translate into top-up insurance. This would actually prevent people from being hospitalized and result in a more sustainable universal healthcare model.

When people are diagnosed for any disease that can be controlled with simple medication, diet and exercise, the attempt should be to try and keep them out of the hospital by making them compliant with the medication and ask them to come for routine checks. For this, Health Coupons or Health Vouchers should be an integral part of the health and wellness program.

Estimates show that it will cost about Rs.2 million to set up and run an HWC per year, which works out to about Rs.300 billion per year for 150,000 HWCs. Funds available under Corporate Social Responsibility (CSR) may be tapped to support infrastructure strengthening and service delivery at HWCs.

Corporates should be allowed to adopt a certain number of PHCs through a partnership model with the state governments to upgrade them to HCWs.

In oncology, the treatment of patients outside of hospitals has become imperative due to difficulties in financing mounting health expenditures. Treatments have become less “invasive”, with greater precision and efficiency. Patients can therefore receive most of their care in an outpatient setting rather than through hospitalisation. Cancer patients coming for routine chemotherapies should be given health coupons/vouchers that will allow them to top up their insurance premiums or avail of higher cost reimbursements for their treatment. This will also nudge them into better compliance with therapy and regular check-ups.

HCWs should be strengthened to provide every level of care, including education, prevention, diagnosis, treatment and monitoring for cancer patients.

India’s value advantage and scientific excellence provides us the opportunity to achieve self-reliance in pharmaceuticals, biopharma, medical supplies and primary, secondary and tertiary care. This will call for a reprogramming of national economic priorities towards building a future-ready, resilient healthcare industry in India on mission mode.

The author is Executive Chairperson, Biocon. You can reach her on Twitter at @kiranshaw.