M5L2: India’ Modicare

CURRENT STATUS OF HEALTH INSURANCE IN INDIA

·         As per WHO, India will lose $6.2 trillion under the human and economic costs between 2012 and 2030 due to the existing burden of diseases

·         According to the National Sample Survey Office, out-of-pocket health expenditure approached 70% as of 2014. 80% of those facing catastrophic health shocks in India lack insurance coverage.

·         Patients are faced with ill-equipped primary health centers (PHCs), run by poorly trained staff, a broken referral system and crowded hospitals.

·         Overburdened and disgruntled medical staff, long treatment queues, touts and supposedly free but missing drugs have increasingly pushed patients towards private providers, who now account for over 70% of healthcare provision.

FEATURES OF THE AYUSHMAN BHARAT SCHEME

·         PM JAY beneficiary can avail treatment in any state/s that has implemented the scheme.

·         There is no restriction on family size, age or gender

·         All pre-existing conditions including pre-& post hospitalization are covered

No premium needs to be paid by the family to avail the benefits of this scheme

GOVERNANCE STRUCTURE in AYUSHMAN BHARAT SCHEME

a)    For a focused approach and effective implementation of PM-JAY, an autonomous entity, the Ayushman Bharat National Health Protection Mission Agency (AB-NHPMA) is constituted. It will play a critical role in fostering linkages with health programs of the Central and State Governments.

b)    States would need to have State Health Agency (SHA) that can either use an existing Trust/ Society/ Not for Profit Company/ insurance company / State Nodal Agency (SNA) or set up a new entity to implement the scheme.

c)    In partnership with NITI Aayog, a robust, modular, scalable and interoperable IT platform will be made operational which will entail a paperless, cashless transaction.

IMPLEMENTATION STRATEGY

a)    The insurance cost is shared by the center and the state mostly in the ratio of 60:40.

b)    To ensure that the funds reach SHA on time, the transfer of funds will be done through an escrow account directly.

c)    Empanelled hospitals agree to the packaged rates under PM JAY. These packaged rates also mention the number of average days of hospitalization for a medical procedure and supporting documents that are needed. These rates are flexible, but once fixed the hospitals can’t change it and under no circumstances can they charge the beneficiary.

DIFFERENCES BETWEEN AYUSHMAN BHARAT AND RSBY

	Rashtriya Swasthya Bima Yojana	Ayushman Bharat
Coverage	Rs. 30,000	Rs. 5 lakh
Services covered	Limited	Will cover high-end procedures
Premium	Rs. 300-400	Not applicable
Population covered	18 crore	50 crore
Criteria for identification of beneficiaries	BPL data from censuses conducted by state governments.	Socio Economic Caste census conducted under the 2011 Census

a)    Under the RSBY, Below Poverty Line or BPL households are entitled to hospitalization coverage through a network of about 8,700 hospitals and 14 insurance companies from both the public and private sectors.

b)    However, after more than eight years’ expenditure of about Rs 5,000 crore, the programme has failed to protect poor households from financial risks due to healthcare.

WHY RSBY FAILED?

Inadequate outreach	a)    To identify households eligible for the scheme, the health ministry used BPL data b)    This BPL list is already polluted with many ghost beneficiaries while eligible people were left out. c)    Hence, the money allocated for actual beneficiaries never reached to the intended people
Inadequate benefits	a)    In India, the average expenditure in 2014 for a single hospitalization at a private hospital was about Rs 26,000, according to data from the National Sample Survey Organisation. b)    This implies that even if one member of a beneficiary family gets hospitalized, the family exhausts its RSBY coverage for the year
Outpatient services not covered	The RSBY does not provide coverage for outpatient care that accounts for 70% of the healthcare cost in India.
Lack of information	people enrolled under the RSBY have a poor understanding of how it works and the process of availing of healthcare services through it
Lack of regulatory framework	Under RSBY, it was found that hospitals often over-prescribed the treatment and tried to inflate the bills beyond the Rs 30,000 limit and ask the RSBY patient to pay the balance.
Shortage of infrastructure	The government facilities suffer/ed from an acute shortage of human resources. The patients, therefore, had to approach private hospitals for treatment.

In 2014, WHO reported that Out of Pocket expenditure as a percentage of total expenditure on health in India is 62%. In this context, India ranks 182 out of 192 countries. In the same year, NSSO launched a 71st round. In its ‘Social Consumption on Health’ it reported that only 14.1% population in rural areas and 18.1% in urban areas are covered under any health insurance scheme. In the same year, IRDAI too reported only 24% of India’s total population is covered under Pvt./public health insurance policies including RSBY. In 2017, it reported that the total population covered under health insurance till 2017 is appx. 36%.

CHALLENGES FOR AYUSHMAN BHARAT SCHEME

Feasibility	a)    Ayushman Bharat has fixed package rates (one size fits all) for various procedures based upon its past survey. This cost may not bode well at all the places. b)    For e.g., a Caesarean operation at ₹9,500 may be feasible in a smaller hospital in a small town but it may not be feasible in a super specialty hospital
The absence of healthcare regulations and quality standards	a)    According to a 2017 report of the task force on primary healthcare in India by MoHFW, only 11% of sub-centers and 16% each of primary and community centers meet the Centre’s Indian Public Health Standards. b)    Currently, India has only 538 NABH (National Accreditation Board for Hospitals & Healthcare Providers) and 34 Joint Commission International (JCI) hospitals which are around 1-3% of all hospitals. c)    Ayushman Bharat does not incentivize hospitals or healthcare centers to get any accreditation that can represent their quality standards.
Macro-level Infra	a)    Ayushman Bharat, at present, has about 8,500 hospitals empaneled (includes both Pvt. and public). b)    People who may be the biggest beneficiaries cannot travel to other places due to financial compulsions. This number should rise to at least 30,000-40,000 to make it successful. (RSBY failed because of lack of such infra)
Individual hospital infra	a)    At least 33% of the people covered by this scheme have no previous health insurance coverage. It is expected that this scheme will increase the hospital admission rate by 6% with an average three-day stay. b)    Currently, there are about 1.5 million hospital beds in the country. These cannot support the 500 million people who will have insurance. As hospitals see an increasing patient inflow, they will have to build capacity
Secondary infra.	a)    As of March 2017, there are ~1,56,000 health sub-centres and ~25,650 primary health centers and ~5,600 community health centers. b)    AB aims to upgrade 150,000 sub-centers (out of existing ~1,56,000) to health and wellness centers (above ~25,650 existing). This will not be an easy task given the existing  equipment and manpower shortages
Payment and reimbursements	a)    Under the scheme, the majority of the states are opting for the trust model instead of the insurance mechanism. This means that every state will have its own customized model. b)    A ‘trust model’ does not have an immediate pressure to reimburse the claims for payment. Hence, if hospitals are not being reimbursed for their claims on a timely basis, this will impact the overall efficiency in the delivery of services under the scheme
Lack of quality data	a)    The government believes that the insurance companies are getting a large pool of people that will eventually lower the individual costs under market pricing mechanisms. b)    However, there is no well-refined data (even by NSSO) that shows the disease burden in a district that will give an idea of a number of patients that will undergo treatment at that place.
Fiscal limits	a)    No actuarial database is available to yield a probability distribution of the expected number of different health episodes requiring different treatments at varying costs. b)    Depending on the nature of the contract between governments and insurance agencies, the actual cost of the programme may leave a deep hole in the finances of the insurance agencies or the central and state governments.
Minimalist approach	a)    PM JAY will protect the poorest 40% that are determined through SECC. It may happen that among those, whosoever is working in an organized sector, government or corporate, also have access to insurance. b)    SECC excludes the 500 million people or so of the middle segment dependent on the unorganized sector.

WAY FORWARD

Improve supervision on the movement of finances	a)    Strict control processes are required to deliver the results under tight fiscal limits using claim analytics, de-duplication of customers to remove ghost beneficiaries etc. b)    In order to maintain a sufficient pool of money to cover as many people as possible, the amount remaining in unclaimed insurance should be redirected to trust funds.
Adopt a decentralised approach	a)    Since Ayushman Bharat will generate data in huge magnitude, it can be published on a quarterly or half-yearly basis to improve the picture of people who have benefitted and where they are more clustered. b)    This will help to push for product innovation by health insurers and improve efficiency in the system.
Develop infrastructure	a)    The success of the accredited social health activists—Asha workers—instituted as part of the 2005 National Rural Health Mission shows it is possible to scale up with community health workers b)    Such success model can be emulated to increase the overall capacity of AarogyaMitras. That is not to say that they will replace doctors and nurses.
International Experiences	India can learn from the experiences of others. The Thai model with excellent SHI coverage and OOP spending down to 18% is increasingly seen as global best practice

CONCLUSION: While the intentions behind this programme are novel and providing health insurance is essential at this stage but at the same time, it should be noted that accessibility and quality of health care precede affordability. the scheme focuses on affordability without much focusing on the first two and hence it will be a challenge for the health sector to ensure them for greater success of the scheme.