Reimagining Healthcare in India through Blended Finance

Reimagining Healthcare in India through Blended Finance

Recently NITI Aayog has released a report titled ‘Reimaging Healthcare in India through Blended Finance’.

Key findings of the report:

  • There is a need to increase the number of beds in hospitals by at least 30 percent. This will ensure equal access to healthcare for citizens.
  • 65 percent of the hospital beds are available to about 50 percent of the country’s population. This population is concentrated in the states of Uttar Pradesh, Maharashtra, Karnataka, Tamil Nadu, Kerala etc.
  • The hospital sector accounts for 80 percent of the total healthcare market in India.
  • Health care expenditure in India is the lowest among BRICS countries.
  • Pradhan Mantri Jan Arogya Yojana can increase the demand for services by patients admitted in hospitals.
  • Blended finance has been suggested in this report for the health sector.
  • Mixed finance is an approach towards financing. In this, motivational finance (for example, grants and concessional capital) from public and philanthropic sources is used to raise additional private sector investment. This will make it possible to achieve social goals and outcomes.

Suggested Principles for Mixed Financing:

  • All composite financing activities should be linked to a development goal.
  • Mixed financing should increase the accessibility of commercial financing.
  • Mixed financing should be as per the local context.
  • Mixed financing should focus on effective participation.
  • Mixed financing should be monitored for transparency and results.

Importance of Mixed Financing

  • It reduces dependence on government debt and sovereign guarantees.
  • Creates an outline of commercially viable social impact projects.
  • Reduces risk premium through co-financing and co-investment.

Source – The Hindu

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