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The NEXT in Healthcare

June, 2017

Rana Kapoor, MD&CEO, YES BANK and Chairman, YES Global Institute, shares his views on what would be the game changing enablers in healthcare

Mens sana incorpore sano - the oft repeated Latin adage from school days is translated as ‘a healthy mind in a healthy body’. To bring that to fruition, we need an entire value chain – healthcare – in place as the facilitator. Physical well being is indeed a precondition for nurturing resourceful minds that can go on to contribute to the economic well being and in turn the future prospects of any nation or society. Thus healthcare has assumed national importance and commands a significant share of the public discourse and policy making. The conundrum still persists about how to guarantee access and affordability of healthcare services while ensuring financial viability of the overall healthcare delivery apparatus.        

Healthcare in India is constrained by significant out-of-pocket expenses. Several studies have estimated that almost 60-70% of the healthcare expenditure in India can be attributed to such means. This has placed our country among the top ten in global lists of nations with high out-of-pocket spending.

This is a cause of consternation. The effective way out of this anomaly would be to facilitate universal health coverage in India. The recently announced National Health Policy 2017 (NHP 2017) strives to set the policy imperatives in that direction. In association with technology interventions and unique delivery models for healthcare, the new policy would be the NEXT thing to happen in healthcare.

N         – National Health Policy

EX       – Explore new healthcare models

T          – Technology: The Next-Gen Enabler       

National Health Policy 2017

NHP 2017 has outlined the twin objective of access and affordability of healthcare services in India. For equitable access, the focus of primary care has been shifted from selective care to comprehensive coverage. In tandem, public hospitals would have to progressively provide assured and free medication, diagnostic and emergency services to all. The government would also involve the private sector through ‘strategic purchasing’ and make up for the gap in the public system.

To ensure affordability, the government would rely on the exchequer to fund healthcare. The States can also mobilize resources to arrange for incremental finance. Another source for capital could be the funds earmarked towards Corporate Social Responsibility (CSR).

These measures when effectively implemented can significantly reduce the burden of out-of-pocket expenses while providing quality healthcare services to a large, deserving section of the population.   

EXplore New Healthcare Models

NHP 2017 has also prioritized the alignment of private sector with the goals of public healthcare system. A laudatory effort indeed, this calls for greater engagement between the stakeholders, both public and private sectors. New and innovative avenues of engagement can be explored that can eventually further the cause of universal health coverage in India.

There is budgetary allocation for healthcare and subsequent roadmap for outlay in this regard. Yet it is the inefficiency in public delivery system, and systemic leakages that hinders healthcare services from being rendered as per the desired mandate. The private sector can partner the governments to improve the public healthcare system with its proven efficiency and globally benchmarked service standards.

PIPO Model

One such avenue of engagement is the Publicly Invested-Privately Operated (PIPO) model for healthcare administration. The state invests in the necessary infrastructure and for capacity building in this sector. The private sector is roped in as a strategic partner to manage the set up.

With skills and expertise in successfully managing healthcare enterprises, pre-defined accountability norms, and revenue sharing agreements with the government, the private sector can yield better results towards last-mile delivery. The healthcare budget would be spent more judiciously and ensure improved access to healthcare.

CSR Pooling

Healthcare is included in Schedule VII of the Companies Act, 2013 which qualifies it to be part of the CSR mandate of corporate entities. This provides another avenue to explore public-private or private-private partnership.

Many corporate organizations would be inclined to direct their CSR spends towards causes related to healthcare. But their lack of knowledge or familiarity with this sector acts as an inhibitor from doing so. At the same, there are healthcare players who would benefit if this capital is channeled into their ventures.

Banks in particular can act as a facilitating intermediary. Corporates can be asked to park their CSR mandate funds with the bank. The bank can pool the funds from different entities through an escrow arrangement into a dedicated corpus. With due diligence and proper appraisal, the funds can be disbursed to deserving players in the healthcare sector. The bank would actually be doing a ‘match making’ between donors and recipients for the overall progress of the sector. 

Technology: The Next-Gen Enabler

Improving healthcare services through technology is a sequitur. The question confronting us today is not if but how to leverage technology. There are myriad issues to be addressed in order to fully utilize the benefits of technology that can accrue to healthcare.

Basic Healthcare

Telemedicine is making distance or remoteness irrelevant. People from far flung areas hitherto did not have access to quality medical counsel or specialized treatment. They are now able to do so courtesy the advancement in technology. Remote consultation with medical experts is bridging the physical distance and can potentially make the primary health centers effective touch points for healthcare delivery.

The initial plan of operating around 400 telemedicine nodes was not met. It has been possible to operate around 100 nodes so far. Union Health Ministry signed an MoU with ISRO last year to augment the telemedicine network through satellite communication. It is a welcome step which would help complement the existing mobile telephony network used for telemedicine.

Equally important would be to deploy adequate resources and sustain the telemedicine network. The private sector has an important role to play in this regard. Private healthcare providers bring along expertise and requisite man power. Their partnership with the government would enable telemedicine to develop and strengthen the public health system. In fact, the Himachal Pradesh government and Apollo Hospitals have collaborated and are successfully running such telemedicine nodes. More concerted efforts between the state governments and the private sector would help build an effective telemedicine system and cater to the under-served or un-served population.                 

Critical Care

e-ICU is a technology innovation that can significantly impact critical patient care. It marries modern connectivity with medical expertise to serve critically ill patients in far flung areas or when the patient’s mobility is constrained.

With India facing a dearth of specialist healthcare professionals, critical care is the most affected. In such circumstances, technology like e-ICU enables remote patient management. A centralized team of specialist is remotely connected to the patient location and can provide 24X7 supervision of an intensivist. Even when smaller hospitals do not have adequate facilities or specialist hospitals are unable to expand their outreach, they \can provide life saving critical care.

Installing an e-ICU system is capital intensive and comes with the additional high costs of operation and maintenance. Independent studies conducted in the US have shown that it costs upward of USD 2 million to set up the centralized command and other components for e-ICU with the operating costs in the range of USD 0.5-1.5 million. With significant capex and opex involved, healthcare service providers would at some stage take recourse to institutional financing.

Technology innovations are becoming game changers for healthcare. But they are accompanied by unique requirements for supporting infrastructure or paraphernalia. This makes a strong case for revisiting our notion of infrastructure. In fact, funding for capital intensive technologies such as e-ICU or even robotic surgery can be brought within the ambit of infrastructure  finance. This can accelerate funds flow from financial institutions to support adoption of high-end technology in healthcare.

Analytics & AI

Another area to watch out would be data analytics and artificial intelligence (AI) in healthcare. With the rapid strides in computational power and automation, technology enabled services is expected to play a significant role in patient care. Data analytics can sift through volumes of patient data and help in diagnosis. Next level of abstraction from the data would be provided by AI. Healthcare professionals can better chart the course of treatment based on the predictive analysis of patient data through AI.

To align the healthcare sector with this evolving technology paradigm, adequate skill development of the service providers would be essential. The National Skill Development Corporation and the Healthcare Sector Skill Council would have a vital role in steering the skill development framework in India to produce skilled workforce suitable for the rigour of such high technology jobs.


NHP has its intent at the right place. Technology is going to be the differentiator in healthcare. Innovative delivery models should be considered in earnest to bridge the deficit in healthcare services. Long term planning, considered investments and efficient execution hold the key to reap the benefits that can be accrued from these three critical levers for the healthcare sector.    

The opinions expressed in this article are the author’s own.