Rs 50,000-cr loan guarantee for health not enough in non-metros: Industry

The Rs 50,000-crore loan guarantee scheme announced by the government on Monday is not enough to trigger health sector investments in non-metro cities even though it would help smaller players bridge the gap in building facilities in tier II and III towns, experts have said.
 
Finance Minister Nirmala Sithar­aman said the government would provide 75 per cent coverage for new projects and 50 per cent for those in expansion mode in the non-metros. A maximum loan of up to Rs 100 crore would be given for up to three years at the interest rate capped at 7.95 per cent.
 
“The scheme could greatly benefit smaller entities that form the majority of the private health care sector to access funding to create enhanced capacities and capabilities,” said Dilip Jose, managing and chief executive of Manipal hospitals. Gurpreet Sandhu, Presi­dent, Council for Healthcare & Pharma, called the package a sign of the government’s commitment towards improving the battered state of affairs in the health care sector.
 
“India’s Covid-19 catastrophe was a result of years of neglecting its public health care structure and a substantial investment to ameliorate the infrastructure is of utmost importance now.”
 
While the smaller players are likely to benefit from the loan guarantee scheme, some in the medical industry said no private hospital is keen on tier II and III cities as there is no availability of doctors. “The government has to think of ways to create a pool of qualified doctors. Unless there is the availability of medical personnel, no hospital would work,” said Girdhar Gyani, director general, Association of Healthcare Providers.
 
The announcement has also triggered criticism with the industry players saying the medical procedure rates under the Ayushman Bharat scheme are not viable.  “The Centre  does not know what the actual cost to deliver a particular medical procedure is. The rates are fixed ad hoc,” Gyani said.

The medical fraternity has pointed out that third-party payment systems such as the Ayushman Bharat scheme are important in the present context. “If the government says it will allocate their Ayushman Bharat patients in that district to this hospital, then it becomes viable. There also has to be a clear catchment area – like police station zones. All patients in that catchment are allotted to one particular hospital; this will ensure footfall,” said Alok Roy, chairman, Medica Hospitals. The industry has appreciated the government’s allocation of Rs 23,220 crore with a primary focus on children and paediatric care, especially in the backdrop of the preparations to manage the third wave. The FM has said this fund would be used in this financial year itself.
 
“With the predictions of an even more destructive third wave, these policy stimuli would give some momentum to health facilities and infrastructure in the immediate term too,” said Ashok Patel, CEO & Founder, Max Ventilator.
 
The additional allocation would finance equipment, medicines, access to teleconsultation, ambulance services, ramping up human resource capabilities. Besides child care, these funds would be used for ramping up testing capacity and supportive diagnostics and to strengthen capacity for surveillance and genome sequencing.
 
needs to be done to make up for the neglect of the sector over the past several decades. “There can be no better time than the present, to fulfil the long-pending demand of the sector to be accorded infrastructure status, in both letter and spirit, to enable the nation to frog leap to the next level of health care,” said Harsh Mahajan, president, NATHEA­LTH. Mahajan said the loans should be provided readily to the private sector for upgrading infrastructure and building new ones, at very low-interest rates, preferably zero. “... As the return on investment in this sector is very slow and low.”