Business Today

Tipping Point for Healthcare

Payment should be based on value, not activities.

Capitalism 101 stipulates that prices for products/services are set by market mechanisms. Buyers try to get the lowest prices possible and sellers try to get the highest. Depending on supply and demand, they eventually negotiate a deal. Not so with healthcare where prices are made up depending on who the payer is.

Healthcare expenditure as a percentage of gross domestic product (GDP) is the highest in the US at 17.5 per cent where the availability of medical insurance has driven up the costs steadily for years now. Healthcare expenditure in India is just 4.9 per cent of GDP, but 75 per cent of this is paid as an out of pocket expense by private citizens. The government spends just 1.2 per cent of GDP on health, which is lowest among BRICS nations. Worse,

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