Ayushman Bharat- Quality healthcare to all

September 12, 2018 0 By CH Unnikrishnan

Muralidharan Nair

The much awaited and much debated Ayushman Bharat scheme of the incumbent central government is soon going to be a reality. The scheme aims to provide comprehensive primary healthcare to all through 1.5 lakh Health and Wellness Centres (HCW) and the National Health Protection Scheme (NHPS) that offers cashless, free and entitlement-based health insurance cover of Rs. 5 lakhs per annum per family for most of the secondary and tertiary inpatient care needs of poor and economically deprived sections. It plans to cover 10.5 cr families initially, with rural beneficiaries comprising more than 80 percent of the total. The debates around the scheme have covered a wide range of issues, including the financial prudence involved in launching such a scheme, the adequacy of the allocated budget, the time of launch, preparedness for a smooth and efficient execution, the adequacy of reimbursement tariffs and finally, the quality of care.

As we witness the start of the scheme and await the full launch next month, here are some of the things that need to be kept in mind:

Estimated budget for NHP

Immediately after the announcement of the scheme in February, the CEO of Niti Ayog mentioned a number of Rs 10,000 cr to Rs 11,000 cr as the estimated cost of servicing NHP, while the CEO of Ayushman Bharat indicated an amount of Rs 20,000 cr to Rs 30,000 cr. An ex-finance minister from the opposition benches mentioned a number of “not less than Rs 1.5 lakh crore” in Parliament. Niti Ayog’s estimate is possible only if 85 percent of the NHPS provision happen through public facilities (essentially valued at the marginal cost of serving patients, with the fixed cost of infrastructure, manpower, etc. to be covered as part of the regular health budget of the relevant departments). The Ayog’s estimate also involves some assumptions which are just not practical in the short-to-medium term. The estimate of Rs 1.5 lakh crore is also way off the mark. As per an Ernst & Young estimate, making provisions for possible efficiencies of scale and a reasonable mix of public-private consumption (50-50) and plausible hospitalization rate increase for the target segment, it is possible to contain expenditure between Rs 30,000 to Rs 35,000 crore.

Financial prudence

In a country where both the politicians and the public have put up with less than 25 percent of the budgets for government schemes ultimately reaching the intended beneficiary and lakhs of crores being scammed or siphoned off, I can either ignore or view with sympathy –for the demonstrated lack of compassion and the state of schizophrenia — anyone who questions the financial prudence of such a programme. The scheme meets a serious need of the poor and underprivileged, whose alternatives are either to agonisingly suffer the pain and agony of their self/ kins without treatment or avail such services with a consequence of devastating financial implications, often leading to lifelong poverty.

Timing of launch

I have little doubt that the time of the launch is predominantly guided by political exigencies. I am sure the planning and preparation will be better if the implementation team gets another year for a full-scale launch. But still, it will not be perfect. In a country like ours, with its accompanying complexities of execution, the cost of certitude beyond a certain point becomes prohibitive when you consider that tens of millions of people are pushed below the poverty line every year owing to healthcare costs. For the sheer tangible benefit to those millions, it will be prudent to launch with reasonable preparedness, and correct/optimize the systems as needed along the way.


It is critical that the planners have chosen a top-down approach in designing the programme with respect to governance standards/processes and a bottoms-up approach for coming up with state-specific implementation plans. While a central template must be enforced for governance purposes, the operational success of the programme will be contingent upon customising the programme to address the  ground conditions, which vary significantly from state to state and even within the state. This includes the availability of relevant human resource, the maturity of private providers, public health capability, morbidity profile and the cost of care. I am certain, the learned managers of this programme are fully seized of this matter, but I have a few other concerns:

HWC: What is of concern to me is that there has been very little discussion around the HWCs, perhaps because it offers less glamour, politically speaking. But they are the very foundation for achieving the vision that drives the AB programme, as 80 percent of the intended beneficiaries are in rural areas while 80 percent of the primary care providers in rural India have no medical qualification (World Bank-CPR Report, 2003, J.Das, et al.) Unless HWCs provide the much-needed filter — as gatekeepers and referral centers — via effective intervention at a preventive and primary level, the programme will not achieve its intended vision. This is a very daunting task, but also a crucial one, and I would expect the  government to set monthly targets for launching fully operational HCWs and report on its progress publicly.

Technology: It is imperative that a complex programme like this depend heavily on technology support for effective execution, be it for process efficiency, process integrity, fraud prevention, optimization strategies or customer feedback. It is unlikely that the technology capabilities will be fully deployed before a while, and importantly, given the rural reach that is planned. Therefore, it is crucial that there is a robust plan for the interim and a sustainable operational ecosystem for carrying out technology operations in the future.

Communication: My discussions with the sections of the targeted population reveal they have little understanding of the programme, but I am certain, in an election year, the establishment will not miss out on outreach.

Patient safety and dignity

What I am most concerned about is this: Given the state of public healthcare, the extent of geographical coverage needed in higher-tier towns, the paucity of accredited hospital capacity, the stretched reimbursement tariffs underpinned by the general psychology of low quality-consciousness for a “free” service, ensuring minimum standards of care and human dignity to the beneficiaries will be most challenging. There should be a carrot and stick approach to tackle this, with incentives for performance (like better tariffs, easier cash-flow etc.) and a serious penalty for critical non-performance. Importantly, patient feedback should be an important tool for assessing the performance of the providers, in addition to formal medical audits, and such feedback should be sought independently (not by the provider) after discharge and outside the environs of the provider. It should also be available to the general public through a portal, akin to a TripAdvisor.

Reimbursement tariff

Private sector players have expressed their distress at the inadequacy of the proposed tariff under this scheme. It is understandable, as the estimates are significantly lower than prevailing market rates. But their reactions are also based on an evaluation that compares the viability of the proposed tariffs within their prevalent business model which is not designed for this kind of mass service. I am certain that private providers are innovative enough to realign their model, and will demonstrate a sense of social solidarity to respond effectively to this noble challenge. But what the government must ensure, and will be of great value to the providers, is strict discipline in receivables settlement. I would even suggest that 80 percent of the bill should be immediately cleared upon presentation (can be linked to performance as well) and the remaining within 21 days with automatic interest eligibility for any delay.

Adoption by states

This issue is pretty much settled, with most states, even the ones from opposing political dispensations, having already adopted the scheme. This was inevitable as it is politically disadvantageous to oppose the scheme for its currency with the public and is economically advantageous to the states with their own health schemes.

The author has long-standing association with EY India but the views are strictly personal.