ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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Role of the Private Sector in Escalating Medical Inflation

​ The dominance of the private sector as the provider of healthcare induces inflationary pressure on the household budget and potentially on the government health budget through the insurance route. Analysing 75th round NSS data, it is found that treatment costs in private commercial hospitals as well as in private charitable hospitals are manifold compared to public facilities.

Health Insurance in Private Hospitals

Private hospitals are expected to play a key role in the implementation of government-sponsored health insurance schemes in India. Examining the availability and spread of private hospitals in the country and an analysis of their empanelment in government-sponsored health insurance schemes reveal that in low-income states of the country, empanelment of private hospitals by insurance companies is low and concentrated in a few pockets. This may indicate differences in entry conditions or low willingness of private hospitals to participate in these schemes, which has implications for the access to healthcare and insurance for the poor.

Medical Devices Manufacturing Industry

Not much is widely known about the market size and dynamics of the Indian medical devices industry. The size of the market for medical devices and equipment in India and its dependence on import is estimated. The market size of medical devices and equipment has been estimated for the period from 2010–11 to 2013–14, which was found to have accelerated from $2.7 billion to $4 billion, while imports served 70% of the total domestic needs in 2013–14. The share of medical devices-based diagnosis in households’ out-of-pocket expenditure on health has increased from 2.2% in 1993–94 to 7.6% in 2011–12. Regulatory mechanisms must be put in place to bring all key medical equipment under price control in order to drive down prices.

Tobacco Taxation

The tax hikes on smoking tobacco in 2014 appear large in the aggregate, but have little effect on the price of single cigarette sticks, a popular mode of retail in India. Analysing the seemingly large tax hikes on smoking tobacco, it is argued that taxes can and must go higher to ensure substantial increases in single cigarette stick prices.
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