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Economic Survey | To enable India to respond to pandemics, health infra must be agile

The healthcare policy must continue focusing on its long-term priorities, it says

The ongoing COVID pandemic has showcased how a healthcare crisis can get transformed into an economic and social crisis and how it is inter-linked with other key sectors of the economy, noted the Economic Survey 2020-21, tabled in Parliament on Friday. It says the healthcare policy must not become beholden to ‘saliency bias’, where policy overweighs a recent phenomenon. “To enable India to respond to pandemics, the health infrastructure must be agile,” it says.


Stating that COVID-19 has spread worldwide because it is a communicable disease, the Survey notes that the next health crisis may not possibly involve a communicable disease and that India’s healthcare policy must continue focusing on its long-term healthcare priorities.


“Following the COVID-19 pandemic, a key portfolio decision that healthcare policy must make is about the relative importance placed on communicable versus non-communicable diseases. To enable India to respond to pandemics, the health infrastructure must be agile. For instance, every hospital may be equipped so that at least one ward in the hospital can be quickly modified to respond to a national health emergency while caring for the normal diseases in usual times. Research in building such health infrastructure can guide how to build such flexible wards,” notes the Survey.

Telemedicine potential

It adds that the pandemic has shown us the potential of telemedicine to provide healthcare access in remote areas. “This needs to be harnessed to the fullest by especially investing in Internet connectivity and health infrastructure,” says the Survey, adding that the National Health mission (NHM) has played a critical role in mitigating inequity as the access of the poorest to pre-natal and post-natal care as well as institutional deliveries has increased significantly.

“Therefore, in conjunction with Ayushman Bharat, the emphasis on the NHM should continue,” says the survey.

Information asymmetry

The Survey notes that a bulk of the healthcare in India is provided by the private sector and suggests that it is critical for policymakers to design policies that mitigate information asymmetry in healthcare, which creates market failures and thereby renders unregulated private healthcare sub-optimal.

“Information utilities that help mitigate the information asymmetry can be very useful in enhancing overall welfare. The mitigation of information asymmetry would also help lower insurance premiums, enable the offering of better products and help increase the insurance penetration in the country,” the Survey suggests.

The Survey notes that India’s healthcare policy must continue focusing on its long-term healthcare priorities. It notes that countries with more fragmented health systems tend to have lower performance as reflected in higher costs, lower efficiency, and poor quality.

“Therefore, in addition to providing healthcare services and financing healthcare, a key role for the government is to actively shape the structure of the healthcare market,” it says.

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