By admin April 18, 2019 12:02

80% of the healthcare sector in India is dominated by private sector. as per World Health Organization data for the year 2015, more than 65% of the population in India paid for health from their own pockets that pushes people into debt trap. The Modi government has come out with a solution Ayushman Bharat. Will it help to solve the problem? Or is it better to focus on the preventive side of healthcare sector?


How does a healthy person contribute to the economy?

This savings accrued by reduction in his out of pocket expenditure will help him

  • spend more on the betterment of his family.
  • provide better food and nutrition security for his younger generation.
  • spend more on extra-curricular activities held in his/her school and education


Now, since he is healthy, he will more productiveand more creative. Hence, he will make a progress in his career and earn better salary.

  • After using this money for paying taxes and fulfilling his personal expenditures, he will invest the surplus amount in financial and capital markets like corporate shares and bonds, Fixed Deposit/Recurring Deposit account of Banks etc.
  • In summary, money will be more fluidic and will help to create more jobs.
  • This will help to trickle the benefits of growth to the bottom level of the population.


As an employee, he will be able to contribute more to the company or the firm in which he/she is working. The company will grow faster and earn more profits.With these profits, the company will scaleup their investment in the economy.

  • This will help to create more jobs in the economy
  • The company will pay more Corporate tax and CSR.
  • They will also parka certain percentage of their employee’s money in government accounts like provident fund and Public funds.


  • 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. Out of these, $4.58 trillion will be due to NCDs.
  • This impacts India’ commitment to achieving the targets mentioned under SDG (2030) and commitments at international levels to control Drug Resistance.



  • PMJAY 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



  1. 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.
  2. 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.
  3. In partnership with NITI Aayog, a robust, modular, scalable and interoperable IT platform will be made operational which will entail a paperless, cashless transaction.



  1. The insurance cost is shared by the center and the state mostly in the ratio of 60:40.
  2. To ensure that the funds reach SHA on time, the transfer of funds will be done through an escrow account directly.
  3. Empanelled hospitals agree to the packaged rates under PMJAY.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.



  1. 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.
  2. 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
  1. 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.
  2. 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.
  3. Ayushman Bharat does not incentivize hospitals or healthcare centers to get any accreditation that can represent their quality standards.
Macro-level Infra
  1. Ayushman Bharat, at present, has about 8,500 hospitals empaneled (includes both Pvt. and public).
  2. People who may be the biggest beneficiaries cannot travel to other places due to financial compulsions. This number should rise to atleast 30,000-40,000 to make it successful. (RSBY failed because of lack of such infra)
Individual hospital infra
  1. 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.
  2. 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.
  1. As of March 2017, there are ~1,56,000 health sub-centres and ~25,650 primary health centers and ~5,600 community health centers.
  2. 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
  1. 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.
  2. 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
  1. 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.
  2. 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
  1. No actuarial database is available to yield a probability distribution of the expected number of different health episodes requiring different treatments at varying costs.
  2. 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
  1. PMJAY 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.
  2. SECC excludes the 500 million people or so of the middle segment dependent on the unorganized sector.



Improve supervision on the movement of finances
  1. 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.
  2. 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
  1. 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.
  2. This will help to push for product innovation by health insurers and improve efficiency in the system.
Develop infrastructure
  1. 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
  2. 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 Thailand model with excellent SHI coverage and OOP spending down to 18% is increasingly seen as global best practice


By admin April 18, 2019 12:02