Demonetization is a master stroke by PM Modi. It has done to Healthcare what all Transformation consultants put together couldn't achieve in 75 years.
These are few of my observations. Maybe isolated incidents and may not represent a wider trend; But this is what I saw...'pratyaksh athwa pramanit'.
Cash payments in Hospitals have gone Digital! Patients come and say 'cash nahin hai saab ji'. Hence acting as a filter between need and want. Will pay Digitally for only what is required and not what can be postponed. What was under the table has come overboard. Only 5% of the GDP is spent on health and 80% of this is in the form of out of pocket expenditure. Almost all of this out of pocket was cash; out of which I think 70% will get converted to Digital that will show in the books and attract relevant tax. Over 80% bed utilization is usually considered profitable. However I have seen bed utilization falling by 30% in the demonetization period. I think this could be a short term shock effect, hope not a long term trend!
The biggest impact is on Doctors in private practice for primary and secondary Healthcare. They can no longer hide some of the cash payments. Their cut practice will stop or be washed overboard. Labs, Pharmacy, Specialists, Hospitals have stopped paying cash [cuts] back to the practitioner. 'aap ko pata hai, cash to ab hai hi nahin Doc saab'. As per some estimates cut practice forms 80% of their income but hidden from income tax. About 60% of total health expenditure in India was paid by the common man from his own pocket. Almost all of this out of pocket was cash, out of which I think 70% will get converted to Digital that will show in the books and attract relevant tax.
Sales of OPD prescriptions and OTC has become Digital! Pharmacies were already geared for Digital payments but now the % of Cash payments has gone down to minimal. This is a good thing because now the traceability of the sale has gone up. Each transaction has a unique number and can be traced by batch number. Out of all health expenditure, 72% in rural and 68% in urban areas is for buying medicines for non-hospitalised treatment. Almost all of this was cash, out of which I think 70% will get converted to Digital that will show in the books and attract relevant tax.
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