Ayushman Bharat: Ambitious 'Modicare' effort faces long, complex road ahead

Last Updated: Tue, Sep 25, 2018 12:24 hrs
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On Sunday, Prime Minister Narendra Modi announced the government’s most ambitious plan yet ahead of the 2019 elections – Pradhan Mantri Jan Arogya Yojana (PMJAY), a government funded healthcare scheme which aims to provide free secondary and tertiary care for 5 crore people across India. His promise – more than 50 crore people will get health insurance through this scheme. Of the plan he said in part, “A government scheme on such a grand scale is not being carried out anywhere in the world. Even the last person standing in the queue should get better health facility”.

Some like Tamil Nadu BJP president Dr Tamilisai Soundararajan have preemptively declared mission accomplished and proposed nominating the Prime Minister for the Nobel Peace prize.

The plan, called Ayushman Bharat, has garnered some controversy at this early stage as it takes effect. Five states have announced that they will not implement the government’s scheme as they still have concerns. Telangana, Odisha, Delhi, Kerala and Punjab have opted out. Kerala State Finance Minister Thomas cast doubt on the scheme and its feasibility calling it a ‘big hoax’. A political fight has already broken out over Delhi not adopting the scheme.

The scheme itself is definitely ambitious. Funding is shared by the centre and states in a 60:40 ratio. The scheme is essentially an entitled based healthcare plan that targets the poor as identified by the latest census. An individual who walks into an empanelled hospital can process cashless payments. This scheme offers Rs. 5 lakh per family for secondary care and tertiary care.

Various hospitals have previously agreed upon packaged rates under the scheme. Under PMJAY, there are about 1400 packaged rates for various medical procedures. Additional details that are provided for each package are number of average days of hospitalization for a medical procedure and supporting documents that are needed. With regards to the rates, PMJAY CEO, Indu Bhushan, in an interview to Livemint said the challenges was the low rates in the packages, “On packaged rates being too low, I want to understand how much of this is bargaining and how much of this is real. Of course we will also look at data and if the evidence suggests rates need alteration, we will be open to it”.

The state of healthcare, especially for the poor in India is desperate at times. This new scheme aims at increasing the purchasing capacity among the poor. One way is financing services to keep prices low and affordable; another is by financing the paying capacity of the people. With a majority of healthcare in India situated in the private sector, pricing mechanisms are out of government control. There are skeptics with regards to PMJAY. Modi has claimed this to be the world’s largest state funded healthcare scheme. Jean Dreze, visiting professor, Ranchi University, in a column for the Wire, claimed that the scheme wasn’t as rosy as Modi explained –

The term “largest” presumably refers to the proposed population coverage of 50 crore or so, but the wide coverage is achieved by reducing per-capita expenditure to a microscopic level. PMJAY trivialises the goal of universal health care (UHC)”.

Jean calls for a massive increase in public health expenditure, with a focus on primary health infrastructure. The amount public expenditure on healthcare is minimal. The implementation of such an ambitious scheme will be tough. 6000 people across 31 states and union territories which have agreed to implement the scheme will be tasked with ensuring that Ayushman Bharat functions smoothly. The government, with the assistance of National Skill Development Corporation aims to train one lakh people or “Arogya Mitras” to run and implement the scheme.

The complexities of such a plan are numerous and India has a chequered past when it comes health insurance schemes. During the Vajpayee government, the Institute of Health Systems (IHS), Hyderabad was commissioned to help develop a health insurance policy. As a result, in 2003, a Family Health Protection Plan (FHPP) was delivered. The main points in this plan were ambulatory primary care, out-patient consultation, clinical examination, curative services, and referrals.

The predecessor to PMJAY was the Rashtriya Swasthya Bima Yojana (RSBY). Academics, Jishnu Das, Yamini Aiyar and Jeffrey Hammer, write for the Centre for Policy Research on the roadmap for success of PMJAY; in general they describe the essentials for a good healthcare scheme –

A functioning health insurance system therefore must ensure three different purposes: Patients are not under-treated, patients are not over-treated with unnecessary procedures and patients are not over-charged”.

One of the main problems of any healthcare scheme is pricing as stated above by the CEO of this scheme. There should be an equilibrium set so as to ensure that prices are not too low for hospitals that they may choose not to take part in the scheme and not too high. As the authors of the piece point out, pricing is the central problem in any healthcare scheme in any country.

…one thing that countries implementing large-scale programs have in common is a large analytical and data center. Prices have to be frequently negotiated and updated based on the data, and this is a job for specialized teams of hundreds in each state”.

Another important tenant for this healthcare scheme is improving government hospitals. If one wants to avoid the scenario of predatory pricing practices or denial of service, an efficiently running government hospital system will be essential in the long run. In districts where there isn’t much competition, public hospitals can play a role in limiting the monopoly power of private players. The authors present a sound summary of what is needed for a scheme like PMJAY-Ayushman Bharat to succeed in India –

…with a scheme like Ayushman Bharat, our state capacity now needs to go far beyond the health sector to complex regulation, industry practices, the police and the courts. And it is the metric against which the Ayushman Bharat should be monitored and what the government should be held accountable for”.