Doctors talk to patients as they look at their medical records at the Acharya Tulsi Regional Cancer Treatment & Research Institute in Bikaner, Rajasthan, India (Photographer: Prashanth Vishwanathan/Bloomberg)

Specialised Medical Care Most In Demand Under Modi’s Health Insurance Scheme

More than three-fourths of claims under Prime Minister’s free health insurance scheme came from costlier speciality care, including cancer and heart treatment, adding to the concerns of private hospitals that are lobbying for an increase in rates.

Medical and radiation oncology accounted for 22 percent and 7 percent, respectively, of the total packages used by patients since the launch of the scheme, according to data provided by National Health Authority—the implementing body for Pradhan Mantri Jan Arogya Yojana—that aims to cover more than half-a-billion Indians. While cardiology treatments were the second-most utilised packages at 13 percent, orthopedic stood at 11 percent as of Feb. 8, 2019. Urology treatments, especially dialysis, accounted for 9 percent of the total claims under the scheme, popularly known as Ayushman Bharat.

Private hospitals earlier had threatened to stay away from the scheme, citing unviable and unscientific pricing. The prices calculated by the Indian Medical Association, a doctors’ lobby, were up to 84 percent higher than what the government fixed.

In its interim budget 2019, the government decided to increase its allocation for the scheme to Rs 6,400 crore for financial year 2019-20 from Rs 2,000 crore in the previous fiscal. To be sure, the fixed package rates for the 1,354 medical packages offered remained unchanged.

So far, there are about 17,800 empanelled hospitals, of which 56 percent are private and 69 percent multi-specialty hospitals. About 65 percent of the treatments given under the scheme were through private hospitals, according to National Health Authority.

But that will not continue for too long as the package rates offered under the scheme are 30-40 percent lower than what were provided under the central government health scheme for government employees, said Girdhar Gyani, director general at Association of Healthcare Providers (India)—that represents 40,700 large and about 8,000 small and medium hospitals. “Some private hospitals may even start opting out of the scheme, if rates are not rationalised within a year,” he said.

While there’s still no clarity on when the rates would be revised, the National Health Authority said that package rates for the tertiary care facilities—the costliest procedures due to high level of specialisation such as heart surgery, neurosurgery, chemotherapy, dialysis and knee replacement—will be revised earlier than the secondary hospitalisation packages.

“An internal discussion on revision of rates is on, but we are yet to form a technical advisory committee to analyse the current prices,” Malti Jaiswal, project director at National Health Authority, told BloombergQuint over the phone. “We still do not have enough data as it has been just four months since the scheme launched,” she said. “But we are in the process of revising rates.”

Participation of private hospitals is vital for the health insurance scheme as half the households in the country, according to the National Family Health Survey published in July 2017, don’t use state-run facilities because of poor access and quality.

“If a scientific study on costing is taking longer, the National Health Authority could at least provide the highest package rates offered in each state to make the scheme viable for private hospitals,” Gyani said. “But even that’s not being done.”

If This Usage Pattern Continues

This makes the problem of lack of highly specialised medical care facilities and skilled doctors in rural areas even more acute.

This shortage will result in a widening treatment gap, said Selvaraj Sakthivel, director of health economics, financing and policy at the Public Health Foundation of India, a research institution.

“Most of the private tertiary hospitals in the country are limited to metro cities and small towns, and different states have different levels of health infrastructure,” Selvaraj said. While the uptake of the scheme may be more in the southern states, it will be much lower in Uttar Pradesh, Bihar and Jharkhand where there is a clear shortage of public and private hospitals, he said.

To put that in perspective, India has one government doctor for every 11,082 people, according to the National Health Profile. That compares with the World Health Organization’s suggested ratio of 1:1,000.

A paper published in the Indian Journal of Community Medicine in April 2018 said the shortfall in rural public health infrastructure “rise with increase in level of care” and is “compounded by the shocking shortage for specialist doctors”.

The shortfall in specialist doctors for secondary and tertiary care was around 80 percent, according to the paper. That would result in “crowding of sick persons at urban facilities (mostly private sector)”, thereby increasing their out-of-pocket expenditure, which is not covered under the scheme.

Indians pay more than three-fourths of all healthcare costs out of their pocket, according to a study by the Public Health Foundation of India published in May last year. Nearly 5.5 crore people were pushed below the poverty line because of healthcare expenses, of which 3.8 crore became poor only because they had to bear medicine costs, it said.

“It will eventually increase the burden on smaller single specialty hospitals and the limited number of private multi-specialty hospitals in the urban areas, and their quality of care would suffer,” Gyani said. The data of the scheme, he said, is limited and linked to large state-run health insurance schemes as many of their beneficiaries coincide. “But as the volumes go up, the scheme is bound to face a shortage of specialist doctors and hospitals.”

(Updates an earlier version to correct that tertiary treatment contributes three-fourths of claims under Ayushman Bharat.)