While govt has a laudable vision and objectives, some insurance players have viability concerns. The task for the government is to make sure it can deliver what it has promised.
The National Health Protection Mission (NHPM) is the government’s initiative to provide healthcare access to the economically-backward and weaker sections of the society, and represents a quantum leap towards India achieving universal healthcare. Also called the Pradhan Mantri Jan Arogya Yojana (PMJAY), NHPM is a critical component of the Ayushman Bharat initiative designed to provide secondary and tertiary hospitalisation cover to the covered citizens.
Given the scale of PMJAY, success will depend on the quality of execution. The plan is to integrate and merge PMJAY with existing schemes such as Rashtriya Swasthya Bima Yojana (RSBY) and state-level health insurance schemes. Ensuring this is done smoothly, without negative impact, is important. As on date, 30 states, including UTs, have agreed to be part of the scheme and will start implementation from September 25. The scheme is targeted towards the poorest 40% of population, which includes BPL families, deprived rural households and certain urban worker families. There is a heavy focus on rural areas with 8.3 crore families participating, and remaining 2.33 crore families are urban. Some states that were providing insurance through RSBY or own schemes had wider coverage than provisioned in PMJAY. Combining these with PMJAY could widen the total insurance coverage to reach around 60-65% of the population.
While the basic contours of the existing schemes and PMJAY are similar, there is one aspect that makes PMJAY fundamentally different. RSBY and other state insurance schemes are all enrolment-based schemes, whereas PMJAY is an entitlement scheme. Hence, if you fall under the beneficiary list, then you are automatically covered under PMJAY.
The PMJAY implementation strategy proposes two models: trust model and insurance-based model. Currently, majority of states have opted for the trust model for a variety of reasons, like package rates, existing contracts, etc. Officials from various authorities will jointly form the Ayushman Bharat-National Health Protection Mission Governing Board (AB-NHPMGB), which will be responsible for governance. The National Health Agency (NHA) has been formed to provide vision and stewardship for design, roll-out, implementation and management.
Some other vital attributes that will be critical for the success of the scheme in both the models are empanelled hospitals, funding and package rates.
Another critical success factor will be empanelment of hospitals to provide hospitalisation services. Of the 15,000 hospital empanelment applications received across the country, 7,500 are private establishments. With more private and NABH-accredited hospitals getting empanelled, the quality of care provided to the beneficiaries will improve going forward, paving the way for standardisation of care across the country. Currently, there is criticism that the package rates proposed are inadequate. The willingness of the authorities to review this, as needed, will be important.
Funding for PMJAY is an attribute that will determine its success. The initial grants from the central government will be used to pay premiums in states that are implementing the scheme through the insurance model. The plan is for the central government to bear 60% of the cost, and states are to bear 40%. While there is concern that the current budgetary provision is inadequate, the central government has reiterated on several occasions that funds will be provided as needed. The government is also open to extending funding sources and seeking new sourcing avenues in the future.
NHPM has the potential to be a game-changer. While the government has laudable vision and objectives, some insurance players have viability concerns. The government is signalling it will be cognisant of ground realities—portability across states, relaxing package rate norms in states already having contracts with insurance providers, etc. The task for the government is to make sure it can deliver what it has promised. As with all schemes of this scale, the effectiveness will depend on a collaborative effort by all the stakeholders working towards a common goal, viz. making India healthy.
By- Ravi Menon. Senior Business Adviser, SKP Business Consulting LLP. (Views are personal)