On October 23rd, 2014, we updated our
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Community health centres are funded by different methods across Canada. Most CHCs serve
a specific geographic catchment area for the purposes of planning and financing.
In Quebec, CLSCs are funded by global budgets determined by the number of people in the
geographic area. They are funded almost entirely by the provincial Ministry of Health and
In Ontario, CHCs receive an annual operating budget from the provincial Ministry of Health
for primary care and health promotion services. The funding is program-based, with the
budget for each program determined on a line-by-line basis. About two-thirds of Ontario
CHCs receive small time-limited grants from other sources for specific activities.
Approximately one-third are multiservice centres, receiving between 30 and 50 percent of
their annual budgets from other sources, including the ministries of community and social
service and skills development, municipal governments, the United Way, Health and Welfare
Canada, and the Ontario Legal Aid Society. In addition, many centres engage in a variety of
Community health centres in other provinces receive varying degrees of financial support
from the government. Some are run entirely by volunteers and rely largely on fundraising
from private sources.
Staff in community health centres, including doctors, are usually paid on a salary or sessional
basis rather than a fee-for-service basis. Some physicians may have a contract in which their
income varies with the financial viability of the organization or with other factors. Fee-forservice billing is not the primary source of revenue, but it does constitute an additional source
of income for some physicians.
CLSCs are funded by the provincial government on a global budget basis to serve a defined
geographic area. The funding mechanism for Quebec CLSCs is sometimes referred to as
capitation or needs-based funding, but it is important to note that funding is set according to
the population of the catchment area and not according to the number of individual users of
the centre. CLSCs do not roster members; they are automatically responsible for providing
services to people who live in the catchment area. While people must use the CLSC in their
neighborhood, they can choose a provider (doctor, social worker, homecare nurse etc) within
that CLSC or elect to use a family physician outside of the CLSC network.
In the last budget, the Quebec Ministry of Health and Social Services reduced hospital
funding by $207 million and overall health and social service spending by $386 million.
Funding for CLSCs was increased by $57 million to a current allocation of $783 million or
6% of the total health and social services budget.
Union Budget 2013 – Implications for healthcare sector
Published on Tuesday, 02 April 2013 20:34
Amit Mookim, Partner- Healthcare, KPMG in India gives his take on the Union Budget 2013
and analyses its implications and impact on the healthcare sector
The Indian healthcare industry is witnessing growth at a rapid pace and it is
expected that the sector will touch $280 billion by 2020. The hospital
services market is expected to be worth $81.2 billion by 2015. The major
factors driving the growth in the sector are increasing population, growing
lifestyle related health issues, easier accessibility to healthcare, thrust in
medical tourism, improving health insurance penetration, rise in middle
income group population, increased disposable income, government social
sector initiatives on penetration of health insurance and focus on public
private partnership (PPP) models.
As the Indian healthcare industry has been displaying strong growth
prospects and in view of the prevalent optimistic atmosphere, many foreign companies have
been displaying eagerness for investment/setting up their base in India and looking to have an
access to the untapped market in Tier-II and Tier-III cities. During the period April 2000 to
June 2012, the foreign direct investment (FDI) in hospitals and diagnostic centres is $1395.82
million, medical and surgical appliances is $523.54 million and drugs and pharmaceuticals is
The year that went by – A quick glimpse
India’s gross domestic product (GDP) growth for 2012-13 was projected at around 7.6 per
cent; however, the actual GDP growth estimate is only five per cent. At the same time, the
expenditure on health has been increased from 1.27 per cent of GDP in 2007-08 to 1.36 per
cent of GDP in 2012-13.
The demand for hospital beds in India is expected to be around 2.8 million by 2014 to match
the global average of three beds per 1000 population from the present 0.7 beds. India needs
100,000 beds each year for the next 20 years.
The Government of India (GOI) has launched a large number of programmes and schemes to
address the major concerns and bridge the gaps in existing health infrastructure and provide
accessible, affordable, equitable healthcare.
During the period from April 2000 to November 2012, the share of hospital and diagnostic
centres in cumulative FDI equity inflows amounts to 0.82 per cent.
The GOI has introduced a new medical visa category for the foreign tourists coming to India
for medical treatment. The GOI has also formulated guidelines to address various issues
governing wellness centres, covering the entire spectrum of the Indian systems of medicine.
Research & Development (R&D) occupies the second position in India’s GDP with
consistently high growth at near 20 per cent in the last few years. The GOI has also stressed
the need to enunciate a policy for synergising science, technology and innovation and has
also established the National Innovation Council. The GOI has announced the Science,
Technology and Innovation Policy 2013 and has proposed to increase the gross expenditure
on research and development to two per cent of GDP from the current level of less than one
As the Indian healthcare industry has been displaying strong growth prospects, many foreign
players are eager to make investments in India. The private equity (PE) firms have made
three major investments in the healthcare sector during the calendar year ending December
31, 2012. During the year, the PE investments have made investment of $100 million in the
hospitals and clinics sector. The healthcare and life sciences industry attracted $581 million
across 14 investments made by the PE investors. The PE investors have quadrupled their
investment in India’s primary healthcare, betting the sick and ailing will stop approaching
family doctors as the migrants in cities look out for a brand. During the year, the PE investors
have invested $520 million into India’s basic healthcare industry and there is a prediction
that PE investments will surpass $1 billion in 2013.
The Parliamentary Standing Committee on Health and Family Welfare tabled a report in the
Parliament on May 8, 2012 on the functioning of the Central Drugs Standard Control
Organization (CDSCO). CDSCO is the agency mandated with the regulation of drugs and
cosmetics in India. The report covers various aspects of drug regulation including
organisational structure and strength of CDSCO, approval of new drugs, and banning of
drugs, among others. Subsequent to submission of the report, the Ministry of Health and
Family Welfare has constituted a committee to verify the procedure of drug regulation.
Policy measures in the Budget speech by Finance Minister
Recognising the importance of the healthcare sector, the Government has allocated Rs
3,73,300 million to the Ministry of Health & Family Welfare as well as Rs 2,12,390 million to
the New National Health Mission. Education in health remains a priority and the
Government has allocated Rs 16,500 million to AIIMS-like institutions and Rs 47,270 million
for medical education, research and training.
Additionally, given the landscape of talent availability in medical profession in India, the
Government plans to make Ayurveda, Unani, Siddha and Homeopathy (AYUSH) practitioners
mainstream and the Budget 2013 proposed to allocate Rs 10,690 million for the same. An
allocation of Rs 6,58,670 million is made to the Ministry of Human Resource Development,
which is an increase of 17 per cent over the revised estimates of the current year. The
National Programme for the Health Care of elderly is being implemented in 100 selected
districts of 21 states. The Budget 2013 proposes to provide Rs 1,500 million for this
The Budget 2013 proposes to allocate a sum of Rs 1,100 million to the Department of
Disability Affairs for the assistance of disabled persons scheme in 2013-14 as against the
revised expenditure of Rs 750 million in the current year.
The government is taking numerous measures to encourage investments in the sector.
There has been a focussed approach to increase supply of all healthcare professionals,
strengthen primary healthcare delivery by incentivising government health workers and to
increase health insurance coverage among the lower socio-economic population. In addition
to these, some initiatives by the government have been taken, primarily to support private
sector participation. There is a growing appreciation for the role that the private
involvement may have in meeting public demand, and government are considering the use
of PPP models to help improve infrastructure and healthcare provision.
The National Rural Health Mission (NRHM’s) allocation has been increased to $3.82 billion in
2012-13 from $3.32 billion in 2011-12. Under NRHM, over 1.4 lakhs health human resources
have been added to the health system across the country upto September 2012 and 10,473
sub-centres, 714 primary health centres (PHC’s), 245 community health centres (CHCs) have
been newly constructed. The total plan outlay for the year 2012-13 under the NRHM, is Rs
2,05,420 million and Rs 27,127 million for schemes/ projects in the north eastern region and
The Indian system of medicines is also being developed and promoted by integration of
AYUSH in national healthcare delivery through an allocation of Rs 9,900 million plan outlays
Tax proposals for healthcare sector
No change in corporate tax rate. However, increase in surcharge from five per cent to 10 per
cent on domestic companies (e.g. shipping agency companies, other domestic companies
incorporated in India) and from two per cent to five per cent on foreign companies where
taxable income exceeds Rs 10 crores. Also, surcharge increased from five per cent to 10 per
cent on Dividend Distribution Tax (DDT).
Direct Taxes Code (DTC) Bill is intended to be introduced at the end of budget session after
considering recommendations of Standing Committee.
Provisions of General Anti Avoidance Rule to be applicable from AY 2016-17.
TDS on royalty and fees for technical services income payable to non-resident increased
from 10 per cent to 25 per cent. However, the tax rate in case of treaty shall prevail
wherever applicable. In context of Healthcare sector, this may have huge tax implications in
respect of payments for brand, hire charges for equipments etc. especially to non-treaty
entities, e.g. Hong Kong.
Tax to be deducted at source at one per cent on the value of the transfer of immovable
properties where consideration exceeds Rs 0.5 million.
Extension of concessional tax rate at 15 per cent on dividend received by Indian Company
from foreign company for AY 2013-14. Further, no DDT shall be payable by Indian holding
company to the extent of dividend income received from its foreign subsidiary. This would
be beneficial in respect of outbound investments where dividend is receivable from foreign
Profits distributed by unlisted companies to shareholders through buyback of shares shall be
subject to final taxes (similar to DDT) at 20 per cent payable by the Company. The income
arising to shareholders shall be exempt.
Progress in Goods and Service Tax (GST) legislation introduction with consensus reached
between Central and State Governments for drafting Constitutional amendment Bill and
respective State GST Bill to be placed before the parliament in few months.
MRP-based assessment in respect of branded medicaments of AYUSH and bio-chemic
systems of medicine to reduce valuation disputes under Excise Regulations.
In light of the strong growth prospects of the Indian healthcare industry and the foreign
players displaying eagerness for investment and setting up their base in India, the
Government of India and the Ministry of Finance have allocated a substantial amount for
health sector. However, certain other expectations of the industry such as granting
‘infrastructure status’ to the sector, extensions of tax incentives for setting-up hospitals in
Tier II and Tier III towns of India, etc. have not been met. The Budget thus falls short of
direct tax clarifications on the issues faced by the healthcare sector.
Cost of health services provided at a primary health centre.
Anand K, et al. Show all
RESULTS: The total cost incurred for one year was Rs 777,020 (US$ 24,250). Curative care
accounted for 32% of the total costs followed by communicable disease control (17%), child
care (17%), maternal care (11%) and family welfare (10%). An expenditure of Rs 24 was
incurred on each outpatient. The cost of giving full primary immunization to a child was
estimated at Rs 131, while Rs 127 was incurred on providing antenatal, natal and postnatal
care to each pregnant woman. Tuberculosis-related activities in the community cost Rs 3 per
head per year and malaria-related activities Rs 2 per head per year. The cost incurred
annually on family welfare services to an eligible couple was Rs 19.
CONCLUSIONS: Our findings suggest that the cost estimates from this primary health centre
are comparable with the estimates from other developing countries. These cost estimates may
be used to determine user fees by health agencies or for premiums for community health