Transcript File

Service Sector-Key drivers of India’s
Economic Growth-Health Sector
Dr.M.Arulpitchai Narayanan,
CHAIRMAN
ARMA MEDICAL FOUNDATION
Chennai, INDIA.
www.armafoundation.com
www.armaindia.com
Economy
Agriculture , Industry , Research Etc
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HUMAN POPULATION
Health
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What is 'Economic Growth'
• Economic growth is an increase in the capacity
of an economy to produce goods and services,
compared from one period of time to another.
It can be measured in nominal or real terms, the
latter of which is adjusted for inflation. Traditionally,
aggregate economic growth is measured in terms of
gross national product (GNP) or gross domestic
product (GDP), although alternative metrics are
sometimes used.
- investopedia
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BREAKING DOWN 'Economic Growth'
• In simplest terms, economic growth refers to
an increase in aggregate productivity.
• Often, but not necessarily, aggregate gains in productivity correlate with
increased average marginal productivity.
• This means the average labourer in a given economy
becomes, on average, more productive.
• It is also possible to achieve aggregate economic growth
without an increased average marginal productivity through
extra immigration or higher birth rates.
Population POPULATION
Population
POPULATION
- investopedia
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How big a part of the economy is
health care?
Healthcare accounts for about one-sixth of
the entire economy -- more than any other
industry and sector
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How big a part of the economy is
health care?
• The Cost, price and spending in India in Healthcare, is
Country Specific with the mix of Indigenous and
imported factors.
• Betterment of Indigenous to the International
Standards and substituting the Imports with Indian
products shall bring down the cost, price and
spending to a larger extent.
• In present Indian economy Healthcare expenses has
become catastrophic resulting in poverty , man
power and production loss and mounting debts.
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Health status of India in the world
• In all the health indexes out of 180 countries
in the world , India ranges in single digit in the
last few ranks between 170 to 180.
• Malnutrition , Maternity mortality , Anti- natal
and Pre-natal deaths … etc
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Healthcare manpower
• It is a team work
• Dynamic
• Healthcare team – manpower development ,
capacity building and skill development
• Physician makes the judgment
• Manpower needs the physical infrastructure and
function infrastructure
• High end technologies preferred for production –
irrespective of volume ie. One patient or multiple
patient
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Relationship between manpower and economic
growth
• Manpower is an essential ingredient needed in the
growth of the economy.
• When Manpower development is given priority, as
most of business sectors will experience tremendous
growth rate. Manpower development is that factor
that ensures we do not lack brain drain, that helps us
build leaders and industry chiefs of the future.
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Health  Economy
• Population
• Workforce
• Economy
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How do health care costs drag on the
economy?
• In USA , growth in overall health care costs,
including spending on the huge Medicare and
Medicaid programs, is out of control, limiting
how much money the federal government and
businesses have to invest in solving the energy
problem, developing products that can be sold
to other countries, creating technology that
can bring medical breakthroughs, building
infrastructure and more.
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How do rising health costs affect workers and
businesses?
• Health care cost has skyrocketed, making it evertougher for workers and employers to afford them. In
USA, workers income have barely kept pace with
inflation, more of the pay check is going to health
costs, and there's less left over for things like
vacations, dining out or home improvements -especially for low-wage workers and retirees. That
represents a huge drag on the economic growth,
considering that consumer spending powers about
70 percent of the economy.
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How do rising health costs affect workers
and businesses?
• For employers, particularly small businesses, rising medical
costs mean there's far less money for new equipment, better
facilities, research or expansion. That means fewer new jobs,
plus smaller raises and higher health premiums for workers,
further limiting consumer spending.
• Health care has been "one of the few engines of job growth
during the recession and during better economics."
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Intersections in/off Health
1. India is the Human Capital of the world with
quality
2. Health is wealth : Individual health to Health
of the Society
3. Health Mental and Physical Health
4. Prevention and Cure of sickness and
Rehabilitation
5. Prevention : Lifestyle Practices + Education
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Intersections in/off Health
6. Cure : acute care and Chronic Care
7. Acute Care: infection, Cancer, Injury, Non
Infection & non Cancer such as heart attack,
Asthma, Paralysis, Poison, joint replacement
8. Chronic Care: Diabetes, Hypertension,
Asthma, Rheumatic Pain,
9. Rehabilitation: post event to recover fully to
the normal or near normal
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Overview of the Distribution of
Indian Population: 120 crores
Overview of the Distribution of Indian
Population: 120 crores
• 60% Rural & 40% Urban with 15% Urban
Slums
• 40% young & 30% Geriatric
• 30% Below Poverty line
• 30% Poverty with impact of catastrophic out
of pocket expenses
• 30% Middle income & 10% Affordable
• 50% Educated
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Overview of the Distribution of
Indian Population: 120 crores
• Human Capital : Physical Manpower 50%
Intellectual & white collar 30%
• 80% of the 50% Total Population is Productive
• This amounts to 48 corers of the Indian Population
• This 48 corer Indian population , to be Productive,
must be Healthy.
• Their dependents must also be healthy, and not
disturbing them as burden
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Let's take a look at what the phrase "health care costs" really means. ??
It turns out that everybody uses the term to mean something different.
• Cost of the healthcare for the government =
Financial provision by the government –
spending
• Cost of the healthcare for the providers =
Production cost by the healthcare delivery
agencies or organizations – cost
• Cost of the healthcare for the consumers =
Purchase of the healthcare by the consumers
– price
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Cost for the provider – production cost
Capital cost + Operating cost + Manpower cost
+ Recurring cost + Maintenance cost +
Upgradation cost + IT cost
Consultation + Investigation + Diagnostics +
Hospitalization + Procedures + Medicines +
Devices + Physiotherapy + Daily medicines
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Valuation of Physician’s efficiency
• Physician judgment is an intellectual property
rights and an intangible asset.
• No one patient is similar to another patient.
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….. On the side line
Judicial Decision on compensation cap.
• The treatment is given to the human being and organ not to
the status , position of the human being and specific to the
status of the organ . Eg – the treatment given to the liver of
the individual irrespective of the individual who he is. i.e , the
cost to treat the individual or that organ is the same
irrespective of the social-political-economical status.
• So when the question of cost of the compensation arises, it
cannot be the productive of the individual which decides the
compensation
Cost Accountants please come up with your thoughts!
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Judicial intervention in Costing
• Recent Judgment of Supreme court has fixed the
salary of nurses in the private sector as 75% salary of
the equivalent in Government service .
• Naturally , the same will become rule of thumb for
the other members of the healthcare team in the
private sector.
This will become another crisis in Healthcare Cost
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Cost for the consumer ( price )
• Taken care by the employer or the insurance +
out of pocket expenses + incidental expenses
+ cost through loss of pay / revenue + cost
through lost productivity
• Preventive health cost + Lifestyle management
cost
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Poverty due to Health Care Expenses:
• As per World Bank, ill health in turn is a major cause
of poverty.
• This is partly due to the costs of seeking health care,
which include not only out-of-pocket spending on
care (such as consultations, tests and medicine), but
also transportation costs and any informal payments
to providers.
• It is also due to the considerable loss of income
associated with illness in developing countries, both
of the breadwinner, but also of family members who
may be obliged to stop working or attending school to
take care of an ill relative.
Poverty due to Health Care Expenses:
• In addition, poor families coping with illness might be
forced to sell assets to cover medical expenses,
borrow at high interest rates or become indebted to
the community.
• Strong health systems improve the health status of
the whole population, but especially of the poor
among whom ill health and poor access to health
care tends to be concentrated, as well as protect
households from the potentially catastrophic effects
of out-of-pocket health care costs.
• In general, poor health is disproportionately
concentrated among the poor.
Poverty due to Health Care Expenses:
• It is an established fact that health care
expenses today have become one of the
essential parts of daily important house hold
expenses of any individual and family
irrespective of the age, gender, caste, creed,
religion, social and economic status and
geographical location.
Poverty due to Health Care Expenses:
• It focuses mainly on governance and funding of
public healthcare in the country.
• It is expected that the educated youth population of
India, constituting 30 to 50 percent in forthcoming
25 years, will be facing financial difficulties, either
because of their personal health or family member’s
health.
• The so called powerful country America currently is
the notable example where health care finance has
become a major issue
Poverty due to Health Care Expenses:
• If the health care policy does not bring down
the present state of affairs of health care cost
pushing more individuals and families into
poverty by mere health care cost, as warned
by socialists and economists, it will result in
social violence in India in 20 to 25 years.
• The health care policy must aim poverty
alleviation, and avoidance of fresh poverty
group, because of bringing down health care
expenses.
Poverty due to Health Care Expenses:
• If the present health care delivery system
continues, health care induced poverty will
result in social unrest in another 20 to 25
years time.
• India needs political will, supported by
Bureaucratic system and Judicial system with
the principles o04-04-2017f liberalized
economy to have its plan of action for
affordable and quality health care for each
and every Indian.
Cost for the Government ( Spending)
• Sanitation + Drinking water + Environmental
management + Primary education +
Social and Physical infrastructure
development
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What's included in that spending?
• It covers money paid to health care providers -- hospitals,
outpatient centres, and other clinics, doctor and dentist practices,
physical therapists, nursing homes, home health services and onsite care at places such as schools and work sites. Also included are
retail sales of prescription and non prescription drugs, premiums
paid to health insurers, and revenues of makers of medical devices,
surgical equipment and durable medical equipment such as
eyeglasses, hearing aids and wheelchairs.
• It also counts out-of-pocket payments by consumers for health
insurance premiums, deductibles and co-payments, along with
costs not covered by insurance and "medical sundries" like heating
pads.
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What's included in that spending?
• US President Obama is a strong candidate for
healthcare system must be fixed first to repair
the economy.
• "Health care is the economy," and fixing it
would free up money for other priorities, such
as education and industrial innovation.
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What's included in that spending?
• The health care system is dysfunctional and full of waste -- as
much as 30 percent of all spending if not managed properly.
Unlike most other markets, consumers rarely know which
doctors, drugs or treatments are best for them, don't price
shop since they are stressed for cure and, if they're insured,
don't know the full cost of care. That all can lead to
unnecessary spending and wasteful expenditure.
• Health care costs have become pocketbook issues for
businesses. Periodic polls in US reveals what consumers worry
about find the cost of health care and insurance are equal
with job security, gas prices and being able to pay the
mortgage
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A Recent Report from US
• Cures Act Offers Tax-Favored Vehicle For Small Employers To
Pay Premiums, And More By Timothy Jost
• Title XVIII of the 21st Century Cures Act creates a new vehicle
for financing health coverage, the small employer health
reimbursement arrangement.
• Also, a new report analyzes 18 options for reducing federal
health care spending and a survey shows the percentage of
persons with problems paying medical bills dropped from
2011 to 2016.
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Healthcare Cost
Spending
Price
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Cost
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Healthcare Cost
Quality
Affordability
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Accessibility
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Healthcare Cost
Cost
Price
Spending
Quality
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Healthcare Cost
Cost
Spending
Price
Affordability
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Healthcare Cost
Cost
Spending
Price
Accessibility
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Public Health Audit on cost and
economy
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Nov 23 2016 : The Times of India (Chennai)
`Lower drug prices helped buyers
save 5K crore in 3 years'
New Delhi
TIMES NEWS NETWORK
• The government's told the Lok Sabha on Tuesday
that stringent measures to keep prices of
essential medicines at lower levels have led to an
estimated savings of around `5060 crore for
consumers over the last three years.
•
•
In 2015, the government revised the price control order to bring under its
purview more drugs.
Currently , the government has fixed prices of around 850 essential medicines
and is expected to cap prices of more drugs soon as part of its steps to make
medicines affordable
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Socio Economics Loss of
Pollution
This Data Is from ICIC
Lomboard .
Claim this year 9000*45000=40
corer .
30 insurance companies 40*30
= 1200 corer .
Only 8% of the population is
insured in India .
For 100% of the population the
claim will be 1200C*12.5= 150
00 C per year
This 15000 Corer can be spent
for the waste management and
pollution management .
This has to become a part of
health economics.
Other than this 15000C , there
is intangible production loss and
manpower loss.
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On the side line…..
Public Health Audit
• What is cost of constructing 1km two lane
road in India?
2 lane will be around Rs.2Crore 4 lane & 6
lane, it will come to Rs. 6 Crore and Rs. 8 Crore
respectively.
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As consumers are asked to pay more for health care services, understanding
and anticipating those costs may be increasingly important to them.
At the same time, consumers must be able to consume value through
shopping, by choosing lower-priced high-quality providers. Insurers,
employers, and governments also have an interest in greater price
transparency as they hope it will lead to lower spending on health care.
In general, two main arguments have been advanced for how price
transparency may lower spending on health care.
First, consumers will be able to know the full cost of services before receiving
them, and will be able to choose lower-cost services or providers, while
holding quality constant.
Second, when pricing information is publicly available, health care providers
will be incentivized to lower their prices to be more competitive.
This issue brief focuses on the first of these: the potential for consumer
activity to lower overall health care spending
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Economy
Agriculture , Industry , Research Etc
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Hello… Dating please…
• Healthcare in India is the virgin and it is high
time The Cost Accountants should land up
dating and marrying the Healthcare system for
the welfare and cost benefit of the population
and the better economy of the country India
enabling the Healthcare providers cost
efficient service.
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Where do Cost Accountants stand
in Healthcare?
• Healthcare is an important factor for the better economy of
the country.
• Healthcare is by the healthcare team and the physician leads
the team along with paramedical, allied and ancillary and
supportive staff. They are the direct contact with the patient.
• For the cost of the production , better price of the purchase
and cost efficient spending by the country has to be
supported by the economist and the cost accountants.
• Even the economists advice depends on the cost accounts
group.
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My Suggestion
• Countries economic growth needs healthcare.
• Cost effective healthcare in India needs the
service by cost accountants.
• This has to be understood by all the
stakeholders and it is upto the stakeholders to
impress the policy makers by gaining Political
Will and making the Bureaucracy and Judiciary
to understand.
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Summary
The Role of Cost Accountancy in the Health :
Direct:
1] In the Healthcare Provider Production Cost
Capital Cost :
Land and Building
Medical Equipments and Devices and Pharmaceuticals
Manpower cost & Others
2] For the Consumers bringing down his paying price for buying the Healthcare Service
making more portion of the same revenue available for buying the Healthcare by Tax
Incentives + bringing down the Production cost and passing the benefits to the
consumers + making the purchase of the insurance coverage with the better-reduced
cost for more coverage
3] For the Government on Spending through the GDP
Quality of Manpower , Equipments and Devices
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Summary
The Role of Cost Accountancy in the Health :
• Indirect:
Nutrition+ Sanitation and Water +Prevention
+ Lifesyle Practices at reduced cost or nil cost
+ Pollution control by environment issues +
Primary education + proper data, analysis of
the same and R & D , Human - Agri Veterinary - Marine safety linkages and many
others
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Thank you
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….. On the side line
Judicial Decision on compensation cap.
• The treatment is given to the human being and organ not to
the status , position of the human being and specific to the
status of the organ . Eg – the treatment given to the liver of
the individual irrespective of the individual who he is. i.e , the
cost to treat the individual or that organ is the same
irrespective of the social-political-economical status.
• So when the question of cost of the compensation arises, it
cannot be the productive of the individual which decides the
compensation
Cost Accountants please come up with your thoughts!
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Judicial intervention in Cost
• Recent Judgment of Supreme court has fixed the
salary of nurses in the private sector as 75% salary of
the equivalent in Government service .
• Naturally , the same will become rule of thumb for
the other members of the healthcare team in the
private sector.
This will become another crisis in Healthcare Cost
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