The post announcement analysis of National Health Protection Scheme (NHPS) or Ayushman Bharat has been dominated by the enormity of the challenges of financial viability and the extremely complex modalities of coordination and implementation of a Centre driven scheme for a state subject. As more details flow in, there is reason to be more optimistic. A well designed and implemented Ayushman Bharat can transform India’s healthcare scenario characterised today by extreme paucity of infrastructure, funds and human resources. Let’s delve deeper to understand the potential impacts of NHPS over the medium to long term:

Size And Scale Of The Opportunity

Even after considering that Ayushman shall merge existing government sponsored insurance schemes- Rasthriya Swasthya Bima Yojana (RSBY) and Senior Citizen Health Insurance Scheme (SCHIS), the quantum of coverage shall increase around three times from about 6 crore families to about 10 crore families. This would extend cover to around 40 crore population where the need for healthcare provision is the maximum but the ability to seek care is negligible. Moreover, the coverage for hospitalisation is more than 15 times the existing coverage under RSBY. The healthcare seeking behaviour of the bottom of the pyramid is set to change dramatically with this cover available. The data points of about 60 million people falling below poverty line due to health related catastrophic expenditure is expected to fall drastically leading to improved quality of life for the masses.

Healthcare Infrastructure

A lot of affordable care rural focused hospital chains can be expected as the scheme is implemented. Private facilities were observed as the preferred ones by the beneficiaries of both RSBY and state level health insurance schemes. Findings from the states of Gujarat, Uttar Pradesh and Haryana showed private facilities to be most commonly utilised (73 per cent, 87 per cent and 67 per cent respectively) under RSBY. Three-quarters of all claims under RSBY in India were reported to have utilised care in private facilities, with Bihar, Madhya Pradesh and Rajasthan reporting 100 per cent of claims from private facilities.

This trend is expected to continue under Ayushman Bharat as well. With the coverage being 10 times more than RSBY, we are looking at a quantum increase in healthcare infrastructure, significant part of which is expected to be captured by the private sector. This shall also enable bridging the gap in availability of beds per 1000 population as prescribed by WHO standards and global averages (India currently has 1.3 beds per thousand population against the WHO standard of 3.5). Coverage of Rs 5 lakh shall ensure that a lot of accredited small and medium hospitals would be eligible for empanelment with the scheme. Around 10,000 hospitals are expected to be empanelled when the scheme would be rolled out fully.

Promoting Quality

Ayushman can be a significant driver in upgrading quality of healthcare in general. As empanelled hospitals would be expected to have NABH or equivalent quality and accreditation, we can reasonably expect a big movement towards improving standards and healthy competition among providers to carve greater share of the purchasing power available with the public. It shall also be a lever to improve the quality of the public healthcare system if they have to compete with nimble footed private providers. This demand driven improvement in quality of care shall ideally have a better impact than regulatory or government driven prescriptions.

GDP Driver

Healthcare could emerge as a key driver of GDP and employment in the country. It is the fifth largest employer among all sectors, both in terms of direct and indirect employment. There is a huge scope for enhancing employment, productivity and entrepreneurship if an enabling ecosystem is constructed. The positive externalities of this healthcare boom should spill over to medical devices and pharmaceuticals. The price control plaguing the industry actions shall be ameliorated as more purchasing power comes to people.

A Flexible Implementation Model

While there are obvious advantages of an insurance led model of coverage to reduce out-of-pocket (OOP), there are potential pitfalls of over utilisation and moral hazard. To guard against these challenges, the government has provided flexibility to states to implement the scheme through an insurance company or directly through trust/society or a mixed model. Secondly, payments for treatment will be done on package rates instead of actual as is the practice today. It is important that these package rates are derived through a scientific process of costing of procedures where a comprehensive view of the private and public sector enterprises is taken on board.

Funding

Experts have provided varied assumptions for the cost of the scheme which range between 10,000 and 20,000 crore. With India’s healthcare spend languishing at about 1.2 per cent of gross domestic product (GDP), the additional spend should enable us to move towards the targeted 2.5 per cent of GDP over the next three to four years. However, we would most certainly require innovative financing models for extending the scheme to people above the poverty line including instruments like the medical savings account. The funds earmarked for HSA can only be allowed use for qualified medical payments, or as a voluntary contribution receiving deferred tax breaks if used for medical purposes. Deposits into these accounts can be structured like a provident fund that is a defined contribution receiving tax breaks. A HSA offers an alternative health related savings avenue compared to the prospect of sunk costs incurred in a traditional medi-claim policy.

A Robust Referral System: the final aspect of Ayushman is the provision of 1.5 Lakh wellness centres across the country which is expected to strengthen primary and preventive care so that the trend of over utilization of tertiary care facilities can be reversed. This aspect is most relevant for ensuring ‘The ease of living’ aim of the government. Timely screening and diagnosis of NCDs and containing infectious diseases in addition to its usual role in maternal and child care shall be the key responsibilities of these wellness centres. A robust referral system is of utmost importance for the success of Ayushman Bharat.

In conclusion, while a lot of teething challenges needs to be overcome in the areas of funding, human resources and implementation for a successful roll-out of Ayushman, it has the potential to completely transform the healthcare scene in the country. A well designed and public private partnership (PPP) driven competitive model built on a strong interoperable IT infrastructure should be able to contain healthcare costs to the extent possible while leading to improving standards of care. A significant change in health seeking behaviour and rapid improvement in availability of tertiary care beyond the top tier cities is on the cards in the medium term.

# Preeti Sinha is Global Convenor, YES Global Institute; Sidharth Sonawat is Fellow, YES Global Institute

(Views of authors are their own and may not represent those of the Institute)

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