Government’s flagship National Health Protection Scheme (NHPS)also known as Ayushman Bharat Program and here after referred to as Modicare is all set to be rolled out on September 25. The scheme was launched in the Union Budget 2018 and will provide coverage of up to `5 lakh per family per year for secondary and tertiary care.
The Indian healthcare delivery system is categorised into two major components - public and private. The public healthcare system comprises limited secondary and tertiary care institutions in key cities and focuses on providing basic healthcare facilities in the form of Primary Health Centre (PHCs) in rural areas. The private hospitals provide majority of primary secondary and tertiary, care institutions with a major concentration in metros, tier I and tier II cities.
The scheme is set to cover 10 crore families, i.e almost 50 crore people (assuming five members per family). Apart from hospitalisation charges, the benefit will also include pre and post-hospitalisation expenses. Perks of the scheme are portable across the country and the beneficiary will be allowed to take cashless at the empanelled public and private hospitals, as noted in the release by government of India (GoI).
On March 2018, the Union Cabinet approved the continuation of National Health Mission with a budget of Rs 85,217 crore (US$ 13.16 billion) from April 1 2017 to March 31 2020. The government aims to increase the total health expenditure to 2.5 per cent of Gross Domestic Product (GDP) by 2025 from the current 1.15 per cent.
The beneficiaries will be based on deprivation criteria in the socio-economic caste census (SECC) database and the scheme will subsume existing central government sponsored schemes like Rashtriya Swasthya Bima Yojana and the Senior Citizen Health Insurance Scheme.
Populism or requirement
One thing to note is that this was the last full budget before the 2019 Lok Sabha elections. The last year of any government is earmarked by populist measures. Such measures have an impact on the fiscal health of the country.
However, the healthcare in India is in a dilapidated state. The government spending on health care in India is only 1.3 percent of the GDP, which is one of the lowest in the world. The cost of medical treatment has become unbearable and according to the National Sample Survey Office (NSSO-2015) hospitalisation expense has increased by nearly 300 per cent.
The NSSO- 2015 data also reveals that out of pocket expenditure in India is over 60 per cent, which leads to nearly 60 lakh families getting into poverty due to catastrophic health expenditures. The National Family Health Survey data shows that only 28.7 per cent households in India have at least one member with a health insurance cover. It means that over 70 per cent of India is not protected under medical cover. This is in spite of plethora central and state sponsored health schemes available in the public domain.
The minister of State for Family Welfare Ashwini Kumar Choubey answered in Lok Sabha members that, the salient features of the scheme are:
(i) Ayushman Bharat- National Health Protection Mission is an entitlement based scheme. Families figuring in the specified deprivation criteria of SECC database (both rural and urban) are entitled to claim benefits under the scheme.
(ii) There is no cap on family size.
(iii) Cashless and paperless access to services for the beneficiaries at the point of service (both public and private) empanelled hospitals.
(iv) All India portability.
(v) Using a robust IT backbone.
(vi)To be implemented by States either on Trust Mode or Insurance Mode or both; under Trust mode, States set up State Health Agency and under Insurance Mode Insurance Providers are selected through open bidding process.
As on July 7, 2018, 26 states and Union Territories (UT) have signed memorandum of understanding for implementing Ayushman Bharat – National Health Protection Mission (AB-NHPM).These states and UTs are namely Andaman and Nicobar Island, Chandigarh, Dadar and Nagar Havelli, Daman and Diu, Lakshadweep, Andhra Pradesh, Arunachal Pradesh, Bihar, Chhattisgarh, Gujarat, Himachal Pradesh, Jammu and Kashmir, Jharkhand, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, Tripura, Uttarakhand, Uttar Pradesh, and West Bengal. Consultations with rest of the states regarding joining the AB-NHPM are underway.
Thus there is a dire need of improving the healthcare in the country and the Modicare scheme can be a welcome step, if implemented in the right way. But do we have the apparatus for this? Are insurance companies prepared?
Outlook Money spoke to few leaders in the insurance industry. According to one, who did not wish to be named, it is a tricky thing as to how the (insurance) industry looks at the risk and pricing model it. “Government has included a threshold where you cannot make more than 10-15 per cent, forget profits. In such situation, the insurance companies have to set a minimum limit beyond which it cannot bid”, he says. At the end of the day, insurances companies have to run their businesses, he adds.
Stressing the mission Choubey said the empanelment of the hospitals with AB-NHPM is to be done by the respective States. State Nodal Agencies have started the process of empanelment. Under the Mission all public hospitals are deemed to be empanelled. For empanelment of private hospitals, defined criteria and hospital empanelment guidelines have been issued to all the states.
Another leader told Outlook Money that insurers in past have actually participated in many of the government scheme, at break-even prices just to build their brand. But for any scheme of this magnitude, data and Information Technology (IT) support is crucial for identifying frauds. Without proper data support, rolling out the scheme at this level will be a gigantic task for insurance companies. Having said this, both the leaders agreed that they were happy to see insurance getting prime importance in Budget 2018. Choubey responded that a robust IT system is being developed by the National Health Agency intended to provide seamless portability to beneficiaries from one state to another across the country.
Hitesh Asrani, Founder,CRP Risk Management says that health insurance companies are bleeding despite pricing their own products. “Now in Modicare, when the insurance companies are not even in control of price due to bidding process, they will have financial concerns attached”, he says.
On fraud claims, Asrani opines that insurance companies need to have strong analytics capabilities to identify which of the claims need to be investigated. He believes that with a huge quantum of claims, accessing each one is not possible. “There needs to be integration between a strong medical audit framework backed by a deeply penetrated team of experts”, he says.
Gopal V Kumar, economist and consulting actuary at Radgo and Company is of the opinion that the adequacy of premium, based on sound actuarial principles is important for making Modicare viable in long run.
He adds that healthcare is a state subject but the centre plays an important role through centrally-sponsored schemes. “We need to have robust and effective coordination between them to have effective planning, implementation and monitoring of (such) schemes” he says.
A National Health Agency has been established to act as the implementing body for Modicare and co-ordinating with the states. The states and UTs have been directed to create similar bodies. The states have been given flexibility in deciding the mode of implementation of the scheme through insurance or trust or mixed mode.
However, Asrani believes that lack of apparatus can be a hindrance in the successful implementation of the scheme. “Our country is not ready for this, nor are the insurance companies truly prepared”, he says.
On August 4, Prime Minister, Narendra Modi, reviewed the progress of preparations towards the launch of the Health Assurance Programme under Ayushman Bharat.
Top officials of the Ministry of Health and Family Welfare, briefed the former on various aspects, including the preparations in states, and development of the technological infrastructure associated with the scheme.
suyash@outlookindia.com nirmala@outlookindia.com With inputs from M Rajendran