PM-JAY: Can it rise to the challenge?

Draw clear boundaries between political interests and professional conduct.

Pradhan Mantri Jan Arogya Yojana (PMJAY)—the programme that aims to provide financial protection to 100 million poor households against hospitalisation expenses.

What if you try making a bullet train operational in India within a year? The project will fail miserably as you need to allow enough time for design and implementation. Using the same logic, if a road needs repairing, it needs to be fixed immediately, instead of wasting time in endless deliberations. It applies both ways.

Adopting a short-term approach to dealing with longer-term projects is just as wrong as adopting a longer-term approach to solving problems requiring immediate response. Yet these approaches are adopted for strategic reasons.

Roll it out thoughtfully

Take the case of the Pradhan Mantri Jan Arogya Yojana (PMJAY)—the programme that aims to provide financial protection to 100 million poor households against hospitalisation expenses—that Narendra Modi launched in September this year. Even though the NDA government had announced its intent almost two years ago, the launch of the PMJAY was timed closer to the forthcoming general elections. As a result, the programme is now being rolled out hurriedly, even before the necessary systems and processes have been developed fully and tested for their robustness. The government wants to show some quick results before the elections. So, the programme is chasing, tracking and reporting the number of people who benefited from it. Its design and implementation are happening almost side by side!

Just because one is open to iterative or adaptive learning doesn’t mean a design is a good starting point. One needs to aim to minimise iterations/adaptations. Which means that one needs to start with as good a design as possible. Too many iterations too often can make the stakeholders lose confidence in the programme. Clearly, the design of systems and processes under the PMJAY should have started earlier on.

Good solutions that are designed hurriedly and implemented imperfectly can make them look bad. Continuing with the PMJAY example, providing financial protection against hospitalisation expenses is a good solution to reducing household spend on hospital care. Yet the imperatives of rolling out could potentially bring a bad name to the programme and its key stakeholders, as well as discredit the solution. The package rates being given to the empanelled hospitals remains a vexed area. A clear vision and understanding on the package rates are yet to evolve, not to mention a binding commitment to uphold sound principles in rate revision.

Although the National Health Agency has done a splendid job in putting several guidelines in place to enable states to roll out the programme, some key questions remain unanswered: How does the programme propose to level the playing field between the public and private hospitals, as public hospitals would continue receiving budgetary support? Whether the programme will be extended to the above-poverty-line (APL) population in the unorganised sector? Will additional incentives be given to the private players for setting up hospitals in the underserved areas in due course? And these questions are not independent; they are interconnected.

Covering the APL?

Even with the PMJAY at scale, a sizeable part would remain uninsured—mostly lower-middle class and middle-class households whose income-earning members work in the unorganised sector. Of course, these households have an option to buy health insurance product from one of the insurance companies. But the product would typically be priced several multiples of the price these households could be covered for under the PMJAY. Additionally, health insurance products would likely have several exclusions.

Bringing this section of population also under the fold of the PMJAY upon payment of premium will bring significant value. It has other important advantages for the programme. For example, the budgetary support to public hospitals could be reduced, thereby levelling the playing field with the empanelled private hospitals.

Further, it would give correct signals to the private players who want to invest in hospitals in the underserved areas. The APL population need not be included immediately but, say, in a couple of years. What is needed at this stage is only a binding policy commitment so as to reduce policy uncertainty and enable investments in hospital infrastructure. In other words, a longer-term outlook is needed, and based on this, certain commitments are warranted now.

Will not bringing of the APL under the PMJAY reduce the potential market for insurance companies? Yes, it would, but only for the basic minimum health insurance cover. For supplementary or add-on health insurance cover, people will have to turn to insurance companies. In a growing economy, the rising economic prosperity of its people will boost demand for supplementary health insurance cover. Insurance companies will still have expanding health insurance business; only that the type of products will be different.

To sum up, it is important to make longer-term commitments and resolve programme uncertainties, especially with regard to the inclusion of the APL, for which there is a strong case. Let such commitment and clarity not be guided by political interests alone. Drawing a clear boundary between political interests and professional conduct is in the best interest of the programme.

(The author is a development economist, formerly with the Bill & Melinda Gates Foundation and the World Bank)

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