To improve quality of service delivery and patient satisfaction, the National Health Authority (NHA) is working on a mechanism to link payments to hospitals based on value-based care and the severity of diseases to bring efficiency in spending and patient care in the flagship Pradhan Mantri Jan Arogya Yojana (PMJAY), NHA chairman R S Sharma told FE.

PMJAY offers Rs 5,00,000-a-year free health cover to 107 million poor households in the country, roughly covering the bottom 40% population of the country. After the scheme was launched on September 23, 2018, 42.1 million beneficiaries across the country have availed of free hospitalisation benefits worth about Rs 50,000 crore so far.

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“We are now going to introduce two new concepts. One is called DRG (diagnosis-related group) or payment to hospitals based on the severity of diseases and value-based care,” Sharma said.

Currently, package rates are fixed for various diseases irrespective of the severity of the illness. DRG system will further fine tunes the packages in a way that the rates will be lower if the severity is less and vice versa. NHA is doing a pilot on this to assess the efficacy of this new mechanism.

Under PMJAY, a total of 1,949 procedures are available for beneficiaries to get cashless treatment which includes all the costs related to treatment, medicines, supplies, diagnostic services, physician’s fees, room charges, surgeon charges, OT & ICU charges, etc.

Secondly, going beyond the cost of the packages for various procedures, NHA will introduce value-based care with a focus on patient satisfaction with the hospital service delivery and accordingly hospitals would be reimbursed. “Values-based care would factor in the quality of care, behaviour of the service provider, empathy to the patient, etc. So, it’ll be a more holistic assessment of the care or the treatment which the hospital has provided to the patient.”

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To give relief to patients who spend from their own pocket for diagnostic tests not available in the hospital they are taking treatment, NHA will soon expand the coverage of e-rupee or e-voucher that will be transferred to the mobile of patients to neutralize those costs. Currently, this facility is available in Chandigarh and Madhya Pradesh.

According to a GIZ India report, about 62% of health care costs were out of pocket and this medical expenditure pushed as many as 63 million Indians into poverty every year. PMJAY has reduced the out-of-pocket expenditure of the people substantially, Sharma said.

Under PMJAY, about 28,000 hospitals are empanelled, half of which are in the private sector. . Assessing the performance of the qualitative performance of the hospital is also in the process.

With more than four years of demonstrative experience of beneficiaries who availed the free healthcare facility, the scheme is getting traction among the population. “Average hospitalisation under the scheme has increased from about 0.8 million a month a year-and-half ago to 1.2 million now,” Sharma said. “For the first time after the scheme was rolled out, we will be fully spending our annual budget in the current financial year.”

Out of the Central budget allocation of Rs 6,412 crore for FY23, Rs 4,500 crore has already been spent in April-December, he said. In earlier years, the annual central spending ranged between Rs 2,500 crore to about Rs 3,000 crore.

Out of the two models adopted for the scheme, 27 states operate under the trust model while six states operate under an insurance model. Of the 27 states, four follow a hybrid model of trust and insurance. West Bengal, Odisha and Delhi have not joined the scheme. The cost of PMJAY is shared between the Centre and states in a 6:4 ratio subject to an overall ceiling of Rs 1,500 per family/annum.

The Centre may widen the coverage of PMJAY to middle-class families to protect them from rising health-related expenditure shocks.

Sharma said the government has to decide whether PMJAY can be extended to middle-class families.

“If PMJAY is extended, we will be able to take care of it. We are improving our platform. The second version of the platform will be out soon,” he said. NHA is building a health claims exchange for processing claims, which is a digital public good and can be used by even the private sector free of cost.