Former Finance Commission chairman bats for setting up health DFI

Former finance commission chairman N K Singh on Friday pitched for setting up of development finance institution (DFI) in the health sector and moving health from state to the concurrent list of the Constitution for better outcomes in the crucial sector.

“Health is not part of the concurrent list. In light of the pandemic, it’s high time we move health as a subject in the concurrent list,” Singh said in his keynote address to the NATHEALTH annual summit.

He said the right to health in practice would, in the course of time, enable the health sector to be assigned the obligation and spirit of the directive principles of the Constitution.

“To begin with, however, and not going as far as to make it a fundamental right, to take it into a concurrent subject would enormously reinforce the obligation of all stakeholders. It would also give the central government much greater flexibility in the enactment of multiple regulatory changes,” he suggested.

Singh also said the health sector is in dire need of a health developmental financial institution (DFI).

Recently Parliament cleared setting up of DFI for infrastructure projects. Besides, there are many sector specific DFIs in the country.

READ MORE: DFI goes back to the future: Will changes boost infra funding in India?

“The need for a health-sector-specific DFI is much needed on the same lines as that of DFIs for other sectors like NABARD (agriculture), NHB (Housing) and TFCI (tourism). Such a health sector DFI would increase healthcare access in tier-2 and tier-3 cities and also come in with technical assistance that ensures proper usage of funds,” Singh said.

Singh also flagged the issue of different laws governing other medical services such as dentistry and pharmacists, etc.

“There is a multiplicity of Acts, rules and regulations and mushrooming of institutions, yet the regulation of the sector is far from adequate. There needs to be rationalization and streamlining of these rules, regulations and institutions,” he said.

This multiplicity of Acts covers both the Centre and the state governments.

“There is huge asymmetry. We need to have a standardization of healthcare codes for both the Centre and States. We need to have a uniform Health Care Code (HCC)entailing both health ecosystems of central and state governments. This has been done, for instance, in other segments like the Securities Market Code,” he said.

Singh also raised the issue of the universalization of the healthcare insurance system.

“While the PMJAY covers the bottom two income quintiles, commercial insurance largely covers top income quintile, thereby creating a ‘missing middle’ class in between. This refers to people in the middle two income quintiles, where the population is not rich enough to afford commercial insurance and not poor enough to be covered under government-sponsored health insurance schemes,” he pointed out.

Singh also suggested constituting an All India Medical and Health Service

“Given the inter-State disparity in the availability of medical doctors, it is essential to constitute the Service as is envisaged envisaged under Section 2A of the All-India Services Act, 1951,” he said.

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