Healthy Push

As India goes to polls, the Modi government's flagship health Insurance scheme can be a game changer in some key states. Will it be able to deliver?

To the casual eye, nothing could be sweeter than Prime Minister Narendra Modi's letter to 75 million households in seven different languages in the last four months. The attempt was to reach out to the underprivileged - some 100 million families or about 500 million Indians who are included in the Socio-economic and Caste Census list of 2011 - and tell them about the Rs 5 lakh worth of medical treatment each of these families is entitled to every year through the Centre's new flagship health insurance scheme: "Prime Minister Jan Arogya Yojana (PM-JAY) - Ayushman Bharat".

The letter also reminded them about other big social welfare measures initiated (or re-branded) by the current government to improve the living conditions of India's poor and how the prime minister, with his personal experience of poverty, could help craft schemes to ensure ease of living for the least privileged.

Modi's letters are driving enrolment to this scheme in many parts of the country. For most North and North Eastern states which have never had similar state-run health insurance schemes (unlike several South Indian states), the scheme is expected to be a game changer. Every day, Indu Bhushan, the head of the National Health Agency (NHA), which implements the PM-JAY, updates the number of enrolments through his tweets - "4.22 lakh beneficiary e-cards generated, bringing the total e-cards to 1.36 crore", he wrote on February 8.

However, the flip side of Modi's outreach and to an extent the design of the PM-JAY is that it enables the Centre to take all the credit for the programme while sharing substantial financial and administrative burden with the states. This is compelling several states (especially non-BJP ruled ones) to disengage with an otherwise ambitious programme. Delhi is yet to join the scheme. Odisha and Telangana are running their own health insurance programmes without linking them with the PM-JAY. West Bengal and Karnataka have decided to pull out from the agreement with the NHA and offer the same facilities through state-specific programmes. Chhattisgarh has expressed a similar desire and Kerala announced a thoroughly modified version of the PM-JAY in the state Budget presented in the first week of February.

Vishal Bali, Executive Chairman, Asia Healthcare Holdings

As politics takes upper hand in an election year, it seems the pan-India implementation of the PM-JAY is likely to turn messy in the short term. "You should not judge a scheme by what has happened in the first four months. You have to see the promise of the scheme, and see what is likely to happen in the next four years. And from that perspective, this will have a huge impact," says Bhushan.

But politics is the least of the scheme's worries. Providing free treatment means more central and state allocations for the scheme and equipping government hospitals with necessary infrastructure and human resources. It also means getting more private healthcare establishments enrolled at package rates that are agreeable to them. Not to forget the most important task of strengthening the primary healthcare system to reduce the load on secondary and tertiary care that the PM-JAY offers. While these have been the focus of governments in varying degrees over the years, will the scheme be able to live up to the hype being generated around it?

The Scheme

The PM-JAY aims to cover expenses for 1,350 medical packages covering surgery, medical and day-care treatments, including medicines, diagnostics and transport, for 500 million poor people. The central government has allocated Rs  2,400 crore for the first six months of the current year, and Rs  6,400 crore for 2019/20, for the scheme. It offers national portability, allowing patients to get treatment from any empanelled hospital in any part of the country. The IT backbone created by the NHA provides seamless identification, verification of beneficiaries, pre-authorisation of treatments and online payments. "The (central) budget provision has gone up to Rs  6,400 crore. Besides the central government's contribution of 60 per cent, if one adds state governments' contribution, this should add up to over Rs  10,000 crore, which is a decent amount to begin with," says Sakthivel Selvaraj, Director, Health Economics, Financing and Policy, Public Health Foundation of India. In addition to administrating the IT infrastructure, the NHA has prepared about 36 guidelines for states to identify beneficiaries, empanel/de-empanel hospitals, train Arogya Mitras (who guide patients), select insurance agencies and set rules for funding of treatment through state-run trusts.

Close to 14,000 hospitals (public and private) have been empanelled. Another 3,000 applications are pending. Even though all government hospitals get empanelled automatically, three-fourth treatments are being offered by private healthcare providers, mostly from the unorganised sector. But why are organised corporate healthcare providers missing in action?

Private Sector

"We have welcomed the scheme and said it is a bold move. We will deal with the process gaps as we go along," says Rajit Mehta, Managing Director and Chief Executive Officer, Max Healthcare. Speaking on behalf of the industry in general, Mehta says private healthcare providers have informed the government that they are willing to offer all their services if there is agreement on a scientific basis for pricing. "The government is considering our suggestions. Meanwhile, if there is any need, we have asked them if they can give some flexibility in choice of procedures or fix a quota, say some beds or something like that, till the pricing is fixed. That dialogue is on."

The organised players are hesitant to embrace the PM-JAY for multiple reasons. First, their experience with existing health insurance schemes in various states and central government schemes like the CGHS (Central Government Health Scheme) has not been positive. Government rates are rock bottom, somewhat compensated by high volumes, but what has been worrying them is the delay in payments. With only 10,000-15,000 hospitalisation cases a day so far, there are no payment issues with the PM-JAY at the moment, but industry fears that as numbers increase, this might become a cause for concern. As Mehta points out, the industry is also looking for differential pricing to match the quality, level of infrastructure and experience of people employed at private hospitals.

The organised sector is in general wary of adopting all the packages, though some are testing the waters by empanelling for some. "With such a significant undertaking (like PM-JAY), there are areas that need work, such as value-based provider payment mechanisms, adequate financing, capacity expansion, innovative skilling, seamless claim management, preventive health, technology standards and sustainable pricing. The industry, with its supporting ecosystem, is working with governments to ensure that the programme scales up and gives long-term value to people across India," says Siddhartha Bhattacharya, Secretary General, Healthcare Federation of India.

States' Worry

In a letter to the Union health ministry in January, Rajiv Sinha, Additional Chief Secretary of the West Bengal government, accused the Centre of issuing entitlement letters (Modi's letter) to beneficiaries in the state without the knowledge of the state government. The letter said the Centre had agreed to run the PM-JAY as a joint scheme by combining it with the existing state-run Swasthya Sathi Scheme and allow beneficiaries to use the Swasthya Sathi family card issued a year ago for the joint scheme. Referring to the PM's letter as a violation of this agreement, West Bengal announced withdrawal from the PM-JAY. In February, West Bengal Finance Minister Amit Mitra said the state government was already providing free treatment, including free drugs and diagnostic services, to all its citizens in government hospitals. He added in addition to this, more than 25 million people had been enrolled under Swasthya Sathi. "Till November 2018, 3,38385 patients had availed of treatment amounting to Rs  333.73 crore", he said.

Kerala has a different problem. It says the financial support from the PM-JAY is too little while the additional burden is much bigger. Presenting the state budget, state Finance Minister Thomas Isaac said when details of the PM-JAY came out, "it was like a mountain giving birth to a mouse". He said the premium agreed by the central government under an earlier scheme which assured just Rs  30,000 was Rs  1,250 per person, while for the PM-JAY, it was just Rs  1,100 per person. "Moreover, the central government will provide only 60 per cent of this. It is estimated that for benefits worth Rs  5 lakh, the premium will be more than Rs  8,000. There are 42 lakh beneficiaries in the existing scheme, whereas under Ayushman Bharat, the central government provides assistance to only 18 lakh families. The total expense for us is Rs  800-1,000 crore whereas the central assistance is below Rs  100 crore. The situation has placed the entire financial burden on the state government but the whole credit (for implementing the PM-JAY) goes to the Centre," he explains. Kerala has announced its own programme, though unlike West Bengal, it is yet to officially pull out of the PM-JAY.

Rajit Mehta, Managing Director and Chief Executive Officer, Max Healthcare

Vishal Bali, Executive Chairman, Asia Healthcare Holdings, says that for a country like India, any move towards universal healthcare is an excellent initiative. "The bigger question is the funding. What one is beginning to see is that one by one the states are refusing to participate. And it is not just for political reasons," he says. Bali says what is required is a clear policy direction.

Big corporate hospitals might be hesitant, non-BJP ruled states might be opting out, but BJP-ruled states are pulling out all stops to run outreach programmes. Modi's letters are being distributed at public functions by local party functionaries. Of 14,000 hospital enrolments, the 23 greenfield states (mostly in North East and North India and ruled by BJP or its allies) account for close to 6,000 empanelled hospitals. Of this, 1,628 hospitals - 966 of which are private - are in UP alone. Enrolment and empanelment of hospitals in such electorally significant states are expected to pay rich dividends to the BJP in the coming general elections. The dependence on states for part funding and implementation thus has merit as well as disadvantages. The fact that the latest social sector initiative of the BJP - the massive income support programme for small and marginal farmers - is completely central funded also talks volumes about the lessons learned from the collaborative PM-JAY exercise.


Indu Bhushan, CEO, National Health Agency (Photograph by Shekhar Ghosh)

"Better quality hospitals should have better rates"

Indu Bhushan, CEO of the National Health Agency, talks on the PM-JAY as the ambitious scheme, launched by the prime minister on September 23, completes four months: Excerpts:

What has been the progress?

We have issued more than 83 lakh beneficiary cards in the last four months. Every day we are issuing close to 3,00,000 cards. There are 10,000-15,000 hospital admissions every day. The authorised amount for treatments has crossed Rs  1,200 crore. We have empanelled close to 14,000 hospitals and are looking at another 3,000 applications.

How many states have enrolled?

We have signed MoUs with 33 states and UTs (out of 36). West Bengal seems to have withdrawn, but we don't know if it has withdrawn completely.

Will NHA empanel the hospitals?

The implementation is entirely by state governments as health is a state subject. We provide resources and guidelines. We also monitor/supervise, provide support, including the IT backbone.

How does portability work?

When a person, let's say, goes from UP to Mumbai, the Mumbai hospital will check if the person is eligible and will ask UP to pre-authorise the treatment.

What if the patient is from a state not part of the programme?

It has to be done by the state, and if it is a critical situation, with special permission from the minister, we can do it. This cannot be the norm.

Hospitals have been cribbing about the pricing?

They are still cribbing and some of their complaints are justified.

You are not averse to revising?

Of course not. We want to bring in some more sophistication, but also gradation, as better quality hospitals should have better rates. Also, we realise that in metros, the rates may be different.

What is the current treatment universe now?

Apart from organ transplant, everything else is included. We have also included a flexible clause called unspecified procedure package. It can be availed up to Rs  1 lakh per family.

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