Hurdles in Ayushman Bharat

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Hurdles in Ayushman Bharat

Thursday, 24 October 2019 | Rajeev Ahuja

There are questions that don’t have to be answered now in detail but clarifying a vision is important to stakeholders who are going to make investments

Former Niti Aayog Vice-Chairman Arvind Panagariya considers Ayushman Bharat (AB) to be one of the major successes of the Narendra Modi Government. Obviously, he has in mind only one of the AB pillars, that is the Pradhan Mantri Jan Arogya Yojana (PMJAY) which entitles free hospitalisation benefits of up to Rs 5 lakh every year to nearly 11 crore vulnerable households. PMJAY has been able to treat nearly 50 lakh people at an average cost of Rs 17,000 per treatment in its first year. The other pillar of AB relates to Health and Wellness Centres (HWCs) aimed at providing comprehensive primary care and serving as a platform for integrated delivery of various services. The Government plans to develop 150,000 HWCs across the country by 2023. This pillar hasn’t met with the similar success as the PMJAY. Till now, the Government has been able to develop 20,000 HWCs and aims to have at least 40,000 HWCs functional by the end of this fiscal year. However, not much is known or discussed about their performance.

Both the components of the AB are at an early stage of implementation but the PMJAY is moving faster and has greater political traction. But it’s the HWCs that are considered a high priority by some experts, so much so that they call them the foundation on which the PMJAY stands. Regardless of how AB is conceptualised, both the pillars need a few years before one can start talking about their “success” as it not only depends on numbers but also sustainability. Both are still evolving and will undergo significant technical refinements over the years. With the PMJAY, it is easy to show “quick wins” as the Government is giving free entitlements to the needy and offering a scope for additional revenue to hospitals. But the real success of the programme lies in getting it stabilised. A year of implementation has given rise to various distortions which need to be addressed as the programme advances. Following are the four key distortions:

First, higher income States like Gujarat, Tamil Nadu, Kerala and Karnataka have benefited disproportionately more than the poorer States of Bihar, Madhya Pradesh and Uttar Pradesh. The reasons for this distortion are not difficult to understand as the poorer States have lower levels of awareness and they also have fewer hospital beds in Tier-2 and Tier-3 cities. As per a National Health Authority (NHA) survey, only 10-15 per cent of the population is aware of the programme in Bihar while in Tamil Nadu awareness is as high as 80 per cent. Getting the message out to beneficiaries is easy but increasing the number of hospital beds is hard. The Government is yet to announce an incentive package for private hospitals to boost availability of beds in Tier-2 and Tier-3 cities.

Most big corporate hospitals have been empanelled under PMJAY. This is surprising, given that these hospitals are designed to serve the creamy layers of society and high-paying international medical tourists. They are not suited for providing “affordable” care which is the focus of PMJAY as these rates wouldn’t be profitable even if they are assured of a higher number of patients. PMJAY rates are appropriate for hospitals with low-cost structures. It’s no wonder that big hospitals have been complaining about the reimbursement rates. Given that more than 50 per cent of PMJAY empanelled hospitals are private, they have a strong bargaining power and sooner or later they will assert it. They will either ask for a hike in reimbursement rates or opt out or abuse the system, all of which would be detrimental.

Third, instances of fraud and corruption are a distortion too. Despite heavy reliance on technology in controlling them, such instances have surfaced in the first year itself. The NHA has confirmed over 1,200 cases of fraud that forced it to take action against 340 hospitals. Any scheme that suffers from leakages loses credibility and eventually loses Government support, too. Although, the NHA’s graded response includes levying penalty, de-empanelling hospitals, naming and shaming the fraudsters, it needs to prevent it through better use of technology as well as higher deterrence by hiking penalties.

Last but not the least, an overarching vision and goal of the programme is yet to be defined. Further, from a policy perspective a few important questions remain unanswered. For example, will the informal economy (non-poor) households be brought under the fold of PMJAY? Will it be integrated with other public health insurance programmes in the spirit of one country, one programme? Just like the Goods and Services Tax (GST) Council, will there be a governance structure comprising the Centre and States, that will oversee this programme? These and related questions don’t have to be answered now in detail but clarifying a vision is important to stakeholders who are going to make investments. Both pillars of AB have their respective trajectories, are in their infancy and will take a few years to mature. How well this journey is negotiated by the decision-makers and those implementing it on the ground will define their success.                            

(The writer is a development economist)

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