Rising out-of-pocket expenditure (OOPE) of the citizens is a key concern in the healthcare sector.
Among different sources of healthcare financing, 67% of the total health expenditure comes from households’ pockets.
Health expenses push about 7% of the population below the poverty threshold every year.
In this backdrop, the government launched the Ayushman Bharat-National Health Protection Mission (AB-NHPM) to reduce OOPE.
Is it a workable measure?
The AB-NHPM shares its objectives with the Rashtriya Swasthya Bima Yojana (RSBY) scheme.
RSBY sanctioned Rs 30,000 health insurance coverage per family per year for secondary and tertiary hospitalisation.
In the nearly 9 years of RSBY’s existence, the scheme objectives are yet to be met.
The quality of healthcare provisioned under the RSBY was compromised because of insufficient coverage.
In this respect, the Ayushman Bharat scheme is a positive step up, with an increased coverage limit of Rs 5 lakh.
However, some less-desired aspects of the RSBY are reflecting in the AB-NHPM scheme as well.
The capacity of increased coverage to reduce the actual OOPE is limited in the current form of this scheme.
What are the continuing concerns?
Coverage - Despite the increase in coverage amount, the AB-NHPM is limited to only inpatient care.
The Rs 5 lakh cover is intended for secondary and tertiary care ‘hospitalisation’ only.
The outpatient expenditure, which forms a major part of OOPE, has been left out of the ambit of the AB-NHPM.
Poorer people, functioning on daily income, tend to avoid hospitalisation due to the associated loss in working income.
Therefore, outpatient care inclusive of diagnostics and medicines needs to be insured for them.
Private players - Private sector participation in healthcare services has been increasing at a quick rate in urban areas, while remaining more or less constant in rural areas.
In 2014-15, over 68% of hospitalised cases in urban areas, and 42% in rural areas, got recorded in private hospitals.
Even in top-performing states with the highest government health expenditure, the spending in private sector in OOPE form is quite high.
But the scheme, in its current form, may not be able to account for this rising private players' participation.
The increase in compensation under AB-NHPM holds value only when it is able to induce insurance coverage for healthcare services provided by the private sector.
The list of hospitals empanelled under the scheme does contain many private hospitals.
But under the single rate card provision of the scheme, the private sector’s willing participation seems unlikely.
This is because the prices proposed under the rate card fall much below the expectations of private sector healthcare providers.
Medical packageslist - Preparing the entire medical procedure list at the central level is a potentially suboptimal move.
This is a challenge given the heterogeneity in healthcare needs and disease prevalence across the country.
A study under the India State-Level Disease Burden Initiative highlights the need for state-specific health interventions.
There are comprehensive inequalities in disease burden and its causes across states.
So there is a deep-rooted need for disease-specific interventions, with specialised attention to associated risk factors.
What is to be done?
Cooperative federalism can go a long way in addressing the above challenges.
States’ role needs to be enhanced at planning stages, a shift from their current role as implementers.
E.g. states could be given the responsibility of preparing the medical package list
This will encourage cost-effective accounting for inter-state variation.
Also, if poorer states could set up lucrative prices for healthcare packages, it could augment private investment in these states.
So, while the objective of the scheme is welcome, the implementation challenges deserve some serious thought.
Increased states’ participation and inflation-adjusted rates for procedures could help India progress towards its universal healthcare goal.
