ICRIER Impact of Preventive Health Care on Indian

ICRIER Impact of Preventive Health Care on Indian Industry and Economy Dr. Alka Chadha National University of Singapore September 12, 2007 New Delhi Preventive Health Care Seminar 1

ICRIER Preventive health care Today’s sedentary lifestyle of corporate employees invariably leads to long-term damage to health. Knowledge-based economies rely on intellectual capital which is critically dependent on the quality and health of employees. Preventive health care for employees is the need of the hour for the corporates to remain competitive. The first ever survey done in India to understand generate awareness regarding preventive health care measures in the corporate sector. Preventive health care is about the individual and refers to health check-ups and lifestyle changes. Preventive Health Care Seminar 2

ICRIER Relationship between disease and economic growth Disease Absenteeism, early retirement, morbidity and mortality Lower labour productivity Higher dependency ratio Shorter lifespan and rise in the rate of time preference Higher consumption and lower rates of savings and investments Lower national income and stagnant growth Preventive Health Care Seminar 3

ICRIER Survey methodology Preventive health care providers were contacted to share their experience of providing health check-ups. The first phase of the survey was carried out for private companies from March to June 2007 with 81 respondents. The next phase of the survey was targeted at individual employees for one working week with 288 responses. Preventive Health Care Seminar 4

ICRIER Preventive health care providers Apollo Hospitals Group emphasized the need for regular check-ups since a disease can develop at any stage in life. K. G. Hospital said a health check-up is like an “annual maintenance certificate”. Jaslok Hospital said preventive health care is required to reduce not just absenteeism but also “presenteeism”. Preventive Health Care Seminar 5

ICRIER Preventive health care measures offered by companies Preventive Health Care Seminar 6

ICRIER Mandays lost owing to sickness Preventive Health Care Seminar 7

ICRIER Major afflictions according to management grades Preventive Health Care Seminar 8

ICRIER Does preventive health care increase profitability of a company Preventive Health Care Seminar 9

ICRIER Employee survey 40% of respondents belonged to the manufacturing sector. 56% of respondents had undergone a preventive health check-up at some point. Interestingly, the same percentage of responding employees were white-collared, among whom there is greater awareness and practice of preventive healthcare as compared to blue-collared workers. Preventive Health Care Seminar 10

ICRIER Benefits accruing to employees from preventive health care Preventive Health Care Seminar 11

ICRIER Should employers provide vouchers for preventive health care? Preventive Health Care Seminar 12

ICRIER What employers feel about vouchers as a delivery system Preventive Health Care Seminar 13

ICRIER International comparisons Country Per capita total health expenditure ($) Per capita govt. health expenditure ($) Share of private health expenditure in total health expenditure (%) Share of outof-pocket expenditure in private health expenditure (%) Share of private prepaid plans in private health expenditure (%) Brazil 212 96 54. 7 64. 2 35. 8 China 61 22 63. 8 87. 6 5. 8 India 27 7 75. 2 97 0. 9 S. Korea 705 348 50. 6 82. 8 4. 1 Thailand 76 47 38. 4 74. 8 14. 6 Canada 2669 1866 30. 1 49. 6 42. 3 France 2981 2273 23. 7 42. 2 53. 5 Japan 2662 2158 19 90. 1 1. 7 U. K. 2428 2081 14. 3 76. 7 23. 3 U. S. A. 5711 2548 55. 4 24. 3 65. 9 Preventive Health Care Seminar 14

ICRIER Demographic dividend India is enjoying the competitive advantage of a young, English-speaking workforce while developed countries are facing the problem of ageing and rising health care costs owing to insurance charges. Companies have to ensure that the labour force remains efficient and productive. Thus, the need for preventive health care. Preventive Health Care Seminar 15

ICRIER Policy recommendations for the private sector Conduct health audit of all employees at regular intervals through check-ups. Follow-up with treatment and counselling. Organize awareness camps. Encourage employees to adopt a more healthy and preventive lifestyle. Preventive Health Care Seminar 16

ICRIER Policy recommendations for the government Section 17 of the Income Tax Act provides exemption for medical expenses up to Rs. 15, 000 for employees. This should be amended to include the whole range of preventive health care measures. Income Tax exemption under Section 80 D of the Income Tax Law is provided for health insurance and medical treatment. Provision for a similar exemption should be made for preventive health care measures. The government should provide fiscal incentives, like corporate tax breaks, to those employers offering preventive health care facilities to their employees. We recommend preventive health vouchers as a service delivery system. Preventive Health Care Seminar 17

ICRIER Preventive Health Care Seminar 18