Building a Robust Health Care System – Expectations from the Union Budget

By Dr V P Chandrasekaran, COO,  SRM Global Hospitals, Chennai:

"As a healthcare provider, I believe the forthcoming Union Budget presents an opportunity to address long-standing challenges in our healthcare system and make impactful changes that will ensure quality care at par with international standards.

India’s healthcare sector has made significant strides, but the financial framework supporting it lags behind. At the core of this issue lies the inadequate reimbursement rates for medical procedures under schemes such as CGHS (Central Government Health Scheme) and ECHS. For instance, while a coronary artery bypass grafting (CABG) procedure costs ₹4.5 to ₹5 lakh, CGHS reimburses only ₹1.4 lakh, and CMCHIS offers even less. Similarly, an appendectomy, which costs ₹60,000 in reality, fetches reimbursements of only ₹20,000 to ₹24,000. These rates barely cover variable costs and fail to account for overheads such as maintenance, infrastructure, and staff salaries.

This financial disparity has several repercussions. Hospitals face financial strain, and healthcare professionals, particularly doctors and trained staff, receive compromised remuneration. This creates a brain drain as skilled professionals migrate to Western countries, where their expertise is valued and remunerated appropriately. Ironically, the same surgeries in Western nations cost tenfold what they do in India, highlighting the gap in how healthcare is financed here.

If India truly aims to elevate its healthcare quality to international standards, the government must revise reimbursement rates for medical procedures to reflect the actual costs, if not at par with global benchmarks, then at least at realistic Indian market rates. Additionally, the taxation on medical instruments and other essential supplies remains high, further burdening healthcare providers. Waiving or reducing taxes on medical products is essential to make quality healthcare more accessible and sustainable.

Beyond institutional concerns, the government must also prioritize the needs of taxpayers, who often feel overlooked in policy decisions. While numerous schemes support non-taxpayers, taxpayers, who contribute significantly to the nation’s revenue, face limited benefits in return. It is time for the government to offer comprehensive health insurance schemes tailored for taxpayers, with premiums and benefits aligned to their tax contributions. Such a scheme would not only secure the health of taxpayers but also ensure they can maintain a standard of living commensurate with their contributions, particularly during times of need.

The upcoming Union Budget must reflect a vision for a resilient and equitable healthcare system that values both providers and beneficiaries. By addressing the financial challenges faced by hospitals, revising reimbursement rates, reducing taxation on medical products, and extending meaningful health insurance benefits to taxpayers, the government can take a definitive step toward creating a robust healthcare ecosystem.

Healthcare is the cornerstone of a thriving society. It is time for the government to prioritize this sector and ensure that every stakeholder – from providers to patients – receives the respect and resources they deserve."