CSR And Healthcare

Introduction

Healthcare is a worldwide concern and not only an issue which alone can be handled by the government. With fast increment and complexity of medical problems it has turned into a critical requirement for corporates to step in and address these issues along-with the Government. Corporates along with other health related sectors should actively participate and indulge in Health Promotion Activities, Research, Health Camps, Policy Drafting & Implementation. Corporate Social Responsibility (CSR) in healthcare is not a very new concept but still seeks more attention due to the limited availability of resources and scientific literatures about CSR and Health. This paper revolves around why there is a requirement for CSR in Healthcare, how it benefits the general public and the corporate division by alluding to a few cases taken up in tending to the issue.

Dr. APJ Abdul Kalamji rightly considered Health Sector as one of the core competent area of India which will help India to transform from developing country to developed country.¹ The amount spent by the government on Healthcare is 1.5% of the total GDP which is relatively lower than other countries. However, recently the Ministry of Corporate Affairs in India, through Section 135 of the Companies Act, 2013 has made it mandatory for companies to carry out CSR with at least 2% of its profits from past 3 financial years. This policy has never been implemented by any government before in any country and India is the first one to step-up.

135. Corporate Social Responsibility². — (1) Every company having net worth of rupees five hundred crore or more, or turnover of rupees one thousand crore or more or a net profit of rupees five crore or more during any financial year shall constitute a Corporate Social Responsibility Committee of the Board consisting of three or more directors, out of which at least one director shall be an independent director.

(2) The Board’s report under sub-section (3) of section 134 shall disclose the composition of the Corporate Social Responsibility Committee.

(3) The Corporate Social Responsibility Committee shall, —

(a) formulate and recommend to the Board, a Corporate Social Responsibility Policy which shall indicate the activities to be undertaken by the company as specified in Schedule VII;

(b) recommend the amount of expenditure to be incurred on the activities referred to in clause (a); and(c) monitor the Corporate Social Responsibility Policy of the company from time to time.

(4) The Board of every company referred to in sub-section (1) shall, —

(a) after taking into account the recommendations made by the Corporate Social Responsibility Committee, approve the Corporate Social Responsibility Policy for the company and disclose contents of such Policy in its report and also place it on the company’s website, if any, in such manner as may be prescribed; and

(b) ensure that the activities as are included in Corporate Social Responsibility Policy of the company are undertaken by the company.

(5) The Board of every company referred to in sub-section (1), shall ensure that the company spends, in every financial year, at least two per cent. of the average net profits of the company made during the three immediately preceding financial years, in pursuance of its Corporate Social Responsibility Policy:

Provided that the company shall give preference to the local area and areas around it

where it operates, for spending the amount earmarked for Corporate Social Responsibility activities:

Provided further that if the company fails to spend such amount, the Board shall, in its report made under clause (o) of sub-section (3) of section 134, specify the reasons for not spending the amount.

Explanation. —For the purposes of this section ―average net profit shall be calculated in accordance with the provisions of section 198.

Companies should give preference to local areas for the spending of CSR resources. Most of these business houses are located in relatively well to do states and resource requirement is more in underdeveloped areas where there are no industries such as the north eastern states. A certain amount should be spent on development of the backward districts, such provision has already been made in the “Guidelines on Corporate Social Responsibility and Sustainability for Central Public Sector Enterprises.”³

The world business council for sustainable development has defined Corporate Social Responsibility (CSR) as: “The continuing commitment by business to behave ethically and contribute to economic social development while improving the quality of life of the workforce and their families as well as the local community and society at large. ⁴ CSR has introduced a new perspective to understand the relationship between business and society – one where corporate growth and social welfare are not treated as a zero sum game.⁵

The theory of the social responsibility of the firm oscillates between two extremes: one that reduces the firm’s responsibility to the obtainment of (the greatest possible) profit for its shareholders (Friedman, 1970), and another that extends the firm’s responsibility to include a wide range of actors with an interest or “stake” in the firm – the shareholders themselves, managers, employees and workers, suppliers, customers, interest groups, unions, competitors and so on, broadening out via the local community to society in general and, eventually, the whole world.⁶

CSR is an important area which should be leveraged for filling health infrastructure gaps in public health facilities across the country. The private sector could use the CSR platform to play an active role in the awareness generation through campaigns on occupational health, blood disorders, adolescent health, safe health practices and accident prevention, micronutrient adequacy, anti-microbial resistance, screening of children and ante-natal mothers, psychological problems linked to misuse of technology, etc⁷. The policy recommends engagement of private sector through adoption of neighbourhood schools/ colonies/ slums/tribal areas/backward areas for healthcare awareness and services. International Organizations established the relevant standards that should be followed, including the UN Global Compact and the OECD Guidelines for Multinational Enterprises, corporations that have been instrumental in implementing CSR Strategies in their operational and organizational values for the society.

Investors no more only rely on financial data but also look at how a company deals with the relevant social and environmental issues. If a company is not prudent enough to pay any attention to these issues, with time it will lose credibility and no investor wants to invest in a company that has no credibility or stakeholder trust. In order for a healthcare service provider to attract investors who can fund their expansion, they need to focus on social, environmental and economic performance in addition to financial performance. to improve their images and enhance the stakeholder engagement by making their performance indicators available to public.

Not just the rural hinterland, remote villages and tribal areas, quality tertiary healthcare is not available even to a bulk of urban population living outside a few glittering metropolitan cities. For example, in north India while Delhi NCR remains a hub of the best multi-specialty hospitals, even a 100 km move outside the region will leave you without a decent tertiary care hospital. This is evident from the fact that the Delhi NCR hospitals are crowded with people coming from Uttar Pradesh, Bihar,

Haryana and even West Bengal. A lot of people have to travel long distances to avail of life-saving treatments like dialysis. In the absence of quality cardiac care in smaller towns and villages, many people fail to survive a heart attack as they are required to travel long distances to nearby cities with decent healthcare facilities.

The Health care system exists as a fundamental element that assures life and high standards of living, so it should be available to everybody and for everybody.⁸

The National Health Policy 2017 was affirmed by the Cabinet on 15^th March 2017 with a target to accomplish the most elevated conceivable degree of good well­being and prosperity, through a preventive and promotive medicinal services direction in every formative approach, and to accomplish universal access to great quality social insurance administrations without anybody confronting money related hardship. The policy has proposed an achievable target of raising the expenditure on public healthcare to 2.5% of the total GDP.⁹

The healthcare industry has a variety of challenges that the average person may not fully understand. Issues such as stringent regulatory compliance, intense labour shortages in nursing, increased and costly technological advancements, implementation of international quality standards and substantial community dependence make this industry one of the most operationally difficult. A review of the Fortune top 1000 companies list, reveals that among the 14 listed in the “Healthcare: Medical Facilities”, not one has issued any kind of non-financial reports. ¹⁰

Expecting the government to solve all problems is a convenient stance. There is much that companies can do to support health care as a part of their 2 percent mandatory spending. Companies focus significantly on healthcare. Study of India’s top companies for sustainability and CSR shows that the top 200 companies spend around Rs.1369 crores on healthcare and wellness. About 24% of the total spend on CSR is focused on healthcare. A few of the best CSR projects for promoting Healthcare in India-

• Sir HN Reliance Foundation and Research Centre

An initiative by Reliance industries Limited has provided over 200 charity patients with varied medical services including paediatric cardiac surgeries, cochlear implants and cancer therapies. It has advanced cutting-edge diagnostics and imaging facilities along with Robotic Surgeries. Last year it treated 10,000 patients through its subsidized and free services. It has successfully undertaken advanced Child Haplo-identical Transplant by TCR Alphabeta and CD45RA Depletion Method, the first such transplant in India. It conducted the first robotic kidney transplant in Maharashtra.

• The National Cancer Institute

An initiative by Oil & Natural Gas Corporation benefitting the rural communities in and around Nagpur providing support for Cancer treatment. A 455-bedded oncology centre situated in Nagpur, Maharashtra provides cancer treatment, patient care, research, training courses for staff. It uses all the updated equipment for detection and treatment of the disease.

• Maternal & New-born Survival Initiative (MANSI)

An initiative by Tata Steel Limited to overcome lack of access to institutional care for new-born babies and has recorded a 61%-63% decline in the mortality rate among the neonates and infants. It enhances the capacity of trained staff and health volunteers (ASHAs). Tata steel has collaborated with The National Health Mission, American

India Foundation and the Society for Education Action and Research in Community Health in this public-private partnership and cover 12 blocks across Jharkhand and Odisha.

• Comprehensive Healthcare Initiatives

NHPC under this project has deployed 20 Mobile Medical Units (MMUs) in Assam, providing better healthcare facilities in the remote areas. It also conducts Awareness camps, medical camos, cataract surgery camps and distribute free medicines to economically weaker families and individuals. The Company also provides Ambulances, Medical Equipment and other infrastructural support to Government Hospitals.

• Bright Smiles, Bright Future

A Colgate initiative committed in improving children’s oral habits, basic hygiene and diet. The company has been delivering oral health education by reaching out to its influencers like professors, Anganwadi Workers in the society. Each child is given a ‘Dental Health Pack’ after the program. This program has reached about 9.5 million children across India. ¹¹

Rana Mehta, leader of the healthcare practice at PwC India, envisages a strategic partnership among non-profits, the government and companies using CSR funds, but cautions that CSR funds aren’t a silver-bullet solution to India’s daunting healthcare challenges.

“CSR is not a panacea to all ills—it can only act as a catalyst or complement government efforts.” ¹²

New Investors no more only rely on financial data but also look at how a company deals with the relevant social and environmental issues. If a company is not prudent enough to pay any attention to these issues, with time it will lose credibility and no investor wants to invest in a company that has no credibility or stakeholder trust. The European Commission defined CSR ¹³as the responsibility of enterprises to have an impact on society not just economically but responsibly. In order for a corporate to attract investors who can fund their expansion, they need to focus on social, environmental and public healthcare in addition to financial performance¹⁴. CSR acts as a competitive advantage, it enhances the status of the company and is a hidden opportunity.

“A Healthy today for a wealthy tomorrow!”

Bibliography

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2. Companies Act, 2013.

3. Ibid.

4. (Worg. WBCSD — World Business Council for Sustainable Development. 2014. Available from: http://www.wbcsd.org/home.aspx.)

5. Sanjeev Gupta & Nidhi Sharma, ‘CSR – A Business Opportunity’ [2009] Vol. 44 No.3, Indian Journal of

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7. Argandoña, A. Journal of Business Ethics (1998) 17: 1093.
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8. National Health Policy 2017

https://mohfw.gov.in/sites/default/files/9147562941489753121.pdf

9. https://www.emerald.com/insight/content/doi/10.1108/eb045813/full/html

10. Abreu, R., David, F. and Crowther, D. (2005), “Corporate Social Responsibility is urgently needed in Health Care”, Social Responsibility Journal, Vol. 1 No. 3/4, pp. 225-

https://doi.org/10.1108/eb045813

11. National Health Policy 2017

https://mohfw.gov.in/sites/default/files/9147562941489753121.pdf

12. Tehemar, S. (2019). Corporate Social Responsibility in Healthcare – Health Works Collective. [online] Health Works Collective. Available at: https://www.healthworkscollective.com/corporate-social-responsibility-healthcare-sectors/ [Accessed 3 Oct. 2019].

13. Health Works Collective. (2019). Corporate Social Responsibility in Healthcare – Health Works Collective. [online] Available at: https://www.healthworkscollective.com/corporate-social-responsibility-healthcare-sectors/ [Accessed 3 Oct. 2019].

14. Manku, M. (2019). Can CSR funds make a difference in healthcare?. [online] Available at: https://www.livemint.com/Companies/boSuroFjWnoZq4yvly0itO/Can-CSR-funds-make-a-difference-in-healthcare.html [Accessed 3 Oct. 2019].

15. EC, Corporate Social Responsibility–A Business Contribution to Sustainable Development. Employment and Social Affair, pp. 6. 2002.

16. Health Works Collective. (2019). Corporate Social Responsibility in Healthcare – Health Works Collective. [online] Available at: https://www.healthworkscollective.com/corporate-social-responsibility-healthcare-sectors/ [Accessed 3 Oct. 2019].

Notes:-

1 Desai, P. and Chandawarkar, M. (2016). Aligning CSR activities of Health Care Sector to Developmental Needs of India. [online] Jpsr.pharmainfo.in. Available at: https://www.jpsr.pharmainfo.in/Documents/Volumes/vol8Issue09/jpsr08091611.pdf [Accessed 3 Oct. 2019].

² Companies Act, 2013.

³ Ibid.

4 (Wbcsd.org. WBCSD — World Business Council for Sustainable Development. 2014. Available from: http://www.wbcsd.org/home.aspx.)

⁵ Sanjeev Gupta & Nidhi Sharma, ‘CSR – A Business Opportunity’ [2009] Vol. 44 No.3, Indian Journal of Industrial Relations, 396.

6 Argandoña, A. Journal of Business Ethics (1998) 17: 1093. https://doi.org/10.1023/A:1006075517423

⁷ National Health Policy 2017

https://mohfw.gov.in/sites/default/files/9147562941489753121.pdf

⁸ https://www.emerald.com/insight/content/doi/10.1108/eb045813/full/html

Abreu, R., David, F. and Crowther, D. (2005), “Corporate Social Responsibility is urgently needed in Health Care”, Social Responsibility Journal, Vol. 1 No. 3/4, pp. 225-240. https://doi.org/10.1108/eb045813

9 National Health Policy 2017

https://mohfw.gov.in/sites/default/files/9147562941489753121.pdf

10 Tehemar, S. (2019). Corporate Social Responsibility in Healthcare – Health Works Collective. [online] Health Works Collective. Available at: https://www.healthworkscollective.com/corporate-social-responsibility-healthcare-sectors/ [Accessed 3 Oct. 2019].

11 Health Works Collective. (2019). Corporate Social Responsibility in Healthcare – Health Works Collective. [online] Available at: https://www.healthworkscollective.com/corporate-social-responsibility-healthcare-sectors/ [Accessed 3 Oct. 2019].

12 Manku, M. (2019). Can CSR funds make a difference in healthcare?. [online] Available at: https://www.livemint.com/Companies/boSuroFjWnoZq4yvly0itO/Can-CSR-funds-make-a-difference-in-healthcare.html [Accessed 3 Oct. 2019].

¹³ EC, Corporate Social Responsibility–A Business Contribution to Sustainable Development. Employment and Social Affair, pp. 6. 2002.

14 Health Works Collective. (2019). Corporate Social Responsibility in Healthcare – Health Works Collective. [online] Available at: https://www.healthworkscollective.com/corporate-social-responsibility-healthcare-sectors/ [Accessed 3 Oct. 2019].