India’s Healthcare Sector

- Challenges and Way

Ahead

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Table of Contents
Executive Summary.......................................................................................................................2
Current Status of Healthcare in India.........................................................................................3
Major Problem and Challenges....................................................................................................7
Ayushman Bharat..........................................................................................................................9
Field Visit to Baby Memorial Hospital......................................................................................14
Challenges Faced by Private Hospitals under Ayushman Bharat and How Can They Come
on Board?.....................................................................................................................................17
Is NHPS a Feasible Solution?.....................................................................................................20
Way Ahead: Disruptive Technologies in Healthcare...............................................................22
References:...................................................................................................................................23

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Executive Summary
The healthcare sector in India has been one of the most talked about issues in the recent past.
Healthcare delivery in India is classified under three categories – primary, secondary and tertiary
care. In India, it is the responsibility of the States to deliver quality healthcare services and
facilities.
India ranks way below in various health indicators. It ranks 130 out of 189 countries in the
Human Development Index.
The healthcare spending in India is much lower than other middle income countries such as
Brazil, South Africa and much lower than China and Russia.
There are various challenges and problems that this sector has been facing which primarily
revolves around the four A’s – availability, accessibility, affordability and acceptability.
India’s major issues lies around:
 Low healthcare spending
 Maternal and infant mortality rates
 Low Life Expectancy
 Maternal Health
 Scarcity of Beds
 Human Resource Shortage
Government of India has taken various initiatives in the recent past to take care of the dismal
state of the Indian healthcare industry. Some of them are:
 Mantri Jan Arogya Yojana (PMJAY).
 Ayushman Bharat-National Health Protection Mission
 Mission Indradhanush
As a part of the field visit for the EE project, “India’s Healthcare Sector: Challenges and Way
Ahead”, we also visited Baby Memorial Hospital to gain the insights from and have a discussion
on our topic with an expert in the health care domain, Mr. Saji Mathew, the Chief Operating
Officer of Baby Memorial Hospital, one of Kozhikode’s largest private hospitals. His thoughts
have been further mentioned in the report.
Further, as part of way ahead, we identified that technology can play a critical role in delivery of
critical healthcare facilities to the remotest corners of the country. It is the best way to build a
connected healthcare ecosystem. Some of the examples of different technologies that are
transforming the healthcare ecosystem are mobile care applications, wearables and sensors.
These devices enable automation of logging-on mechanism, real time updates of patient’s vitals
and provides insights into detection of disease at an early stage.

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Current Status of Healthcare in India
As per the the Indian Constitution, the provision of healthcare in India is the responsibility of the
state governments, rather than the central government. States are responsible for to raise the level
of nutrition and the standard of living of its citizens. They are also responsible for the
improvement of public health.
The Parliament of India had introduced the National Health Policy in 1983. It was updated in
2002, and then again in 2017. The four major updates of 2017 includes:
 Growing burden of non-communicable diseases
 The emergence of the robust healthcare industry
 Growing incidences of unsustainable expenditure due to health care costs
 Increasing economic growth leading to enhanced fiscal capacity
However, in practice the private healthcare sector is majorly responsible for healthcare in India.
Most healthcare expenses are paid out of pocket, rather than through health insurance.
Government health policy encouraged private sector expansion along with well-designed but
limited public health programmes.
A health insurance project was launched in 2018 by the Government of India, called Ayushman
Bharat.
As per the World Bank reports, the total expenditure on health care as a percentage of GDP in
2015 was 3.89 percent. Out of this, the governmental health expenditure as a percentage of GDP
is just 1%. The out-of-pocket expenditure as a percentage of the current health expenditure was
65.06 in 2015.

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Low Healthcare Spending: The U.S.’s health expenditure is 18% of GDP, while India’s is still
under 1.5%. India also spends less on healthcare than other middle income countries such as
Brazil, South Africa and much lower than China and Russia.

Low Life Expectancy: Life expectancy is a statistical measure of the average time a person is
expected to live. It is based on the year of its birth, current age and other demographic factors
including gender. The most widely used measure is life expectancy at birth. Although, there has
been improvement, life expectancy at birth in India is still low.
Infant Mortality Rates Still Among the Highest Amongst Peers: This is mainly due to pre-
term birth complications, lower respiratory infections and diarrheal diseases.
Maternal Health: India’s maternal mortality rate reduced to 167 deaths in 2013 from 212 deaths
per 100,000 live births in 2007. This is mainly due to various government interventions such as
the Janani Shishu Suraksha Karyakaram (JSSK) scheme which includes various free maternity
services for women and children, increase in nationwide emergency referral systems and
maternal death audits. It also includes improvements in the governance and management of
health services at all levels.
Scarcity of Beds Remains a Challenge: The World Health Statistics say that India ranks among
the lowest in this regard globally, with 0.9 beds per 1,000 population - far below the global
average of 2.9 beds.
Human Resource Shortage: India is one of many countries facing severe shortage of trained
medical professionals—including nurses, dentists, and administrators—but especially doctors.
The United States has 2.67 doctors per 1,000 people, and 3.1 hospital beds per 1,000 people.
India, on the other hand, has a mere 0.59 doctors and 0.9 hospital beds per 1,000 people.

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Affordability Issues:
Indian needs to address the issues around availability, affordability, accessibility and
acceptability of healthcare factors to provide access to larger population.

Healthcare Delivery:
The healthcare delivery system in India is mainly divided into three categories – primary,
secondary and tertiary care.
At the primary level of health care, community health centers (CHCs), Primary health centers
(PHCs), and subcenters (SCs) are included. The sub-district hospitals comes under the category
of secondary health care. The tertiary level of health care includes the district hospitals and
medical colleges.
The major problem lies in the delivery of primary healthcare in India

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Government Initiatives:
The various initiatives taken by the Government of India to promote Indian healthcare industry
are as follows:
 On 23rd September 2018, Government of India had launched Pradhan Mantri Jan Arogya
Yojana (PMJAY). The aim of this scheme was to provide health insurance worth Rs 500,000
to over 100 million families every year.
 The Government of India approved Ayushman Bharat-National Health Protection Mission in
August 2018. It is a centrally Sponsored Scheme contributed by both center and state
government at a ratio of 60:40 for all States, 90:10 for hilly North Eastern States and 60:40
for Union Territories with legislature. The center contributed 100 per cent for Union
Territories without legislature.
 Mission Indradhanush was also launched by the Government of India with the aim of
improving immunization coverage in the country. Its aim was to cover at least 90 percent of
the children by December 2018 which will cover unvaccinated and partially vaccinated
children in rural and urban areas of India.

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Major Problem and Challenges
Problems:
Despite the overwhelming levels of inequality and poverty in the country, estimates show that up
to 85% of consultations in India are with private sector healthcare providers, which is an
indicator that the government run healthcare system is severely lacking in many aspects. This
occurs even among the people of lower income groups, and the socially disadvantaged, despite
the greater hit to their disposable income.
1. For a country that is still largely rural, with more than 65% of its population residing in
villages, India’s public healthcare system has several shortcomings in the rural sectors. These
include a lack of infrastructure, especially in terms of access to water and uninterrupted
electricity supply.
Rural PHCs are staffed with nurses and/or paramedics, with doctors often being absent from
the facility. Further, the doctors assigned to these facilities are generalists, with specialists
being overrepresented in the urban areas, avoiding postings in rural healthcare facilities due
to poorer infrastructure, such as water, and erratic electricity supply, shortage of basic drugs,
poorer lifestyle and income, etc.

2. While the quality of public healthcare in India is poor overall, the extent varies throughout
the country, with states like Uttar Pradesh, Bihar, Assam, Jharkhand ranking poorly in
several metrics, while the states of Kerala and Tamil Nadu approach first world countries in
terms of the quality of public healthcare available. Barring the existence of a few centrally
operated hospitals such as the All India Institutes of Medical Sciences (AIIMS), the public
healthcare system in a district is the responsibility of the district administration, which comes
under the purview of the respective state governments.
A good indicator of the quality of healthcare in an area is the infant mortality rate (IMR),
which varies from as low as 11 in the state of Kerala, to 82 in Madhya Pradesh. In terms of
the quality of public healthcare available, the states of Kerala and Tamil Nadu rank the best,
while the states of Bihar and Jharkhand rank the lowest. This stark difference in the quality
of public healthcare available in different states is due to the difference in the respective
policies of state governments over the past decades.
The state of Tamil Nadu had, and continues to allocate significant funds (up to 45% of
healthcare funds) for primary healthcare facilities all over the state, including the rural areas.
The primary health centers have more autonomy and flexibility to use their funds for
preventive care (such as immunization drives and awareness campaigns), allowing more
targeted solutions for local problems

3. Absenteeism is a major issue in the government healthcare facilities of India; the states of
Assam and Bihar have had absenteeism rates of up to 60% in the past, most of the
absenteeism being due to official leave, which is far more than the legally sanctioned amount
of leave permissible to employees. The rates of absenteeism are highest in the smaller rural
health centers, and lowest in district hospitals or larger installations.

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 Another issue related to absenteeism is availability of medical care personnel at the right
time; poor patients can’t afford to skip work/take leave days except in the most severe of
cases, and thus seek medical attention after working hours, when medical staff tends to be
unavailable or severely understaffed.

4. Distance is a major challenge in the Indian healthcare setup, especially in the case of
accidents/unplanned incidents. Physical reach is defined as the presence of a primary medical
facility which can provide routine medical care, such as dressings, maternity wards,
immunization, injuries, etc.
A 2012 study found that only 37% of the rural populace could gain access to inpatient care
within 5 km of their residence, although the percentage for outpatient care was better, at 68%
of the rural population. Further, lack of accessibility due to floods, mountain roads, etc., are
another factor for lack of accessibility of medical care.

5. Lack of/poor distribution of requisite trained manpower. The number of trained allopathic
doctors (i.e., those trained under the MBBS program as their minimal qualification) number
around 800,000 as of 2018, making for a distribution of 6.2 doctors per 10,000 persons. This
distribution is skewed in the favour of the more developed South as compared to the North.).
In the case of female practitioners, there exist about 7 female healthcare workers per 10,000
population, but as the majority (around 70%) of nurses and auxiliary care providers are
women, the proportion of female doctors is around 2 doctors per 10,000 population.
Further, there exists a shortage of health workers such as nurses in several states, such as
Bihar and Jharkhand, with the number of nurses numbering as low as 10 per 10,000
population. On the other hand, states such as Punjab, Kerala, Goa, Tamil Nadu, etc, have
more than 37 nurses per 10,000 population.
While the above is the overall trend, the split of doctors and nurses across the private and
public sectors is more worrying for the masses. Up to 80% of doctors work for the private
sector in India, whereas the case of nurses is more even; about half work for the public
sector. This distribution is even across rural and urban areas. This is due to the
socioeconomic backgrounds of nursing staff, and the lower pay differential for nurses
between the public and private sectors.
The above problems have major repercussions when it comes to healthcare for the masses in the
country, with people often unable to access the simplest of treatments due to the distance from
trained staff and equipped facilities, poor maintenance of said facilities, and a lack of knowledge
at the ground level of the population. This sometimes leads to seeking treatment from dubious
sources and unproven/untested folk remedies, and more often, a fear of seeking medical attention
due to the high costs involved for the treatment (especially in the private sector), travel, and loss
of income due to absenteeism from work.

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Ayushman Bharat
Introduction:
The vision of the National Health Policy 2017 is to achieve Universal Health Coverage (UHC).
Ayushman Bharat, also known as Pradhan Mantri Jan Arogya Yojna (PM-JAY), is the flagship
scheme launched by Government of India to achieve this vision. The Ayushman Bharat Scheme
was launched on 23rd September, 2018 by prime minister Narendra Modi.
Ayushman Bharat Scheme is governed by National Health Authority, which is an apex body that
is responsible for handling this scheme. Dr. Indu Bhushan is the Chief Executive Officer of both
the Ayushman Bharat scheme and the National Health Authority.
PM-JAY scheme is considered to be a modification of the already existing Rastriya Swasthya
Bima Yojana (RSBY). It is aimed at addressing the problems that were not addressed properly
by the Rastriya Swasthya Bima Yojna.
Ayushman Bharat scheme is a venture to move from segmented and also sectoral method of
delivery of health service to a need-based comprehensive health care service. It targets to takeup
path-breaking interventions to address health holistically, at all the levels – primary, secondary
and tertiary.
There are two components of this scheme:
 Health and Wellness Centres (HWCs)
 Pradhan Mantri Jan Arogya Yojana (PM-JAY)
HWCs are the provisions for taking care of of the primary healthcare of the people, while PM-
JAY is the initiative to take care of the secondary and tertiary healthcare of the people.
Health and Wellness Centres (HWCs)
The government of India announced the setup of 1,50,000 Health and Wellness Centres (HWCs)
in February, 2018. These centres are to be created by transforming the existing Primary Health
Centres and Sub Centres. The main aim of these centres is to bring healthcare closer to people’s
homes by delivering Comprehensive Primary Health Care (CPHC) to the people. It covers both-
the maternal and child health services, and also some non-communicable diseases, that include
essential drugs for free and diagnostic services.
These Centres are expected to provide a wide span of services that will take care of the primary
health care of the whole population in their area. They will expend the universality, access and
equity near to the community. They will stress on promotion and prevention of health by
bringing focus to keeping people healthy. The method of doing this will be to engage and
empower people and communities encouraging them to take up healthy behaviours and make
changes that can reduce the risk of catching any chronic diseases and morbidities.

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Pradhan Mantri Jan Arogya Yojana (PM-JAY)
PM-JAY is a component of Ayushman Bharat that takes care of the secondary and tertiary
healthcare. It does it by providing Rs. 5 lakh health insurance cover per family per year that
covers secondary and tertiary care hospitalization to the bottom 40% of poor population. One of
the major points here is that there isn’t any cap on the family size. Earlier known as National
Health Protection Scheme (NHPS), this scheme was renamed to PM-JAY. PM-JAY covers the
families that were covered under Rashtriya Swasthya Bima Yojana (RSBY) as it subsumed the
then existing sheme. The fund for this scheme is provided by the Government, and the
implementation cost is shared between State Governments and the Central Government.
PM-JAY milestones
 1st February, 2018 – Union Budget Announcement
 21st March, 2018 – Cabinet Approval of the scheme
 27th March, 2018 – Indu Bhushan was appointed as the CEO
 11th May, 2018 – National Health Authority incorporated (initially known as National
Health Agency)
 14th June, 2018 – Ministries’ Conclave conducted
 15th August, 2018 – PM announces the launch of PM-JAY
 23rd September, 2018 – Ayushman Bharat PM-JAY scheme is launched
 11th December, 2018 – 5 lakh beneficiaries availed treatments
 24th January, 2019 – MoU signed with Ministry of Railway & 91 railway hospitals got
empanelled
 11th April, 2019 – 20 lakh beneficiaries availed treatments
 24th June, 2019 – 30 lakh beneficiaries availed treatments
 25th November, 2019 – E-cards issued: 11.4Cr, number of hospitals admissions: 62.57 lakh,
amount of hospital admissions: Rs. 9,205 Cr, hospital empanelled: 20,908
Eligibility Criteria
 Pradhan Mantri Jan Arogya Yojana is an entitlement-based scheme. These entitlements are
decided based on deprivation criteria in the SECC database.
 The different categories that can avail this scheme include:
 Families that have only one room with kucha walls and kucha roof
 Families that don’t have any adult member between age 16 to 59
 Female headed households that don’t have any adult male member between age of 16 to 59
 Disabled member and no able-bodied adult member in the family
 SC/ST households
 Landless households deriving major part of their income from manual casual labour,
 Rural area families that have any one of the following: households without shelter, living on
alms, manual scavenger families, legally released bonded labour, primitive tribal groups
 For urban areas, 11 categories are entitled to receive the benefits
 Households that have motor vehicles, mechanized agricultural equipment, Kisan Credit card
with credit limit above Rs. 50,000, non - agricultural enterprises registered with government,
a member earning more than Rs. 10,000 per month, that pay income taxes, a member having
government job, that pay professional tax, three or more rooms with pucca wall and roof,

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 refrigerator, landline phone, 2.5 acres of irrigated land with 1 irrigation equipment, 5 acres or
more of irrigated land for two or more crop season, at least 7.5 acres of land or more with a t
least one irrigation equipment – any of the above point; they are automatically excluded from
availing the benefits of the scheme.

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Key Features of PM-JAY
 PM-JAY is the largest health insurance scheme in the world that is fully financed by the
government.
 Provides cover of Rs. 5 lakhs per year per family, for the secondary and tertiary care
hospitalization across public and private empanelled hospitals in India.
 Number of eligible families is over 10.74 crore which are poor and vulnerable.
 Cashless health care services provided to the beneficiary at the hospital.
 It will help to depreciate catastrophic healthcare expenses for the poor
 There are no restrictions on gender, or age, or family size.
 It covers 3 days of pre-hospitalization and 15 days post-hospitalization expenditures
 Benefits are portable across the country i.e. benefits can be availed from any empanelled
public or private hospital for cashless treatment.
 Services include around 1,393 procedures, and covers all the costs related to treatment,
including, but not limited to, drugs, diagnostic services, supplies, physician's fees, room
charges, surgeon charges, OT and ICU charges etc.
 Public hospitals and private hospitals are reimbursed at same rate
Things like medicine, intensive care units, food services, hospital accommodation are all covered
under the PM-JAY scheme.
Pros
 Priority is given to the women, girl child, and senior citizens.
 Treatment available for free at every public hospital and also empanelled private hospitals.
 All pre-existing diseases covered. Hospitals cannot deny treatment.
 Cashless and paperless access to quality health care services.
 Eligible beneficiaries are liable to avail services throughout the country, offering advantage
of national portability. To reach out for any information, complaint, information and
grievances to a helpline number which is available 24x7 – 14555
 It will help in progressively achieving Sustainable Development Goals (SDG) and Universal
Health Coverage (UHC).
 Avail enhanced access of quality secondary and tertiary care services at affordable price
through a mixture of public hospitals and private care providers, (especially the not-for profit
providers).
 Align the private sector growth with public health goals.
 Cost control for enhanced outcomes of health.
 Mandatory cover for young and healthy population will support in lowering Claim Ratio.
This lower insurance premium will be advantageous for all. Also, as there is available an
alternate mechanism for payment that will help in diverting significant patient flow to private
health care facilities, the increased volumes will reduce the processes for services.
 Economies of scale due to higher patient turnaround for hospitals which will further leading
to reduction in costs and making the treatments more affordable.
 Enable creation of a new health infrastructure in the rural, remote area which is under-served.
 Increase the health expenditure done by Government as percentage of GDP.

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Cons
 Outpatient expenditure, which is a major part of out-of-pocket expenditure, has been left out
in this scheme as well, just like Rashtriya Swasthya Bima Yojana.
 Relying on one single rate card for an entire country has led to limited private sector
participation.
 Preparing an entire medical procedure list which is at the central level is a probably a
suboptimal move, especially when there is heterogeneity in healthcare needs across the
country.
Challenges
 Inability to easily identify beneficiary: The beneficiary criteria for the scheme is a subset of
SECC 2011. Also, RSBY card-holders can avail the services. The problem is to spread
awareness for the families that are eligible for the scheme and also to identify the family of a
patient if any he comes to a hospital for treatment.
 Controlling fraud and abuse (FA): After one year of the implementation of the scheme, fraud
at 341 hospitals was detected as per the official data. Also, National Ani-Fraud Unit found
many ineligible people that claimed fake medical cover by faking the relations with parent-
beneficiary.
 Unviable rates- The rated for different surgeries and treatments are considered too low for
private hospitals.
 Redundancy due to overlapping with the other national health Programmes: For example,
Cataract and Dialysis are covered in both the AB PM -JAY and national health programmes.
 Cost reduction for services at the point of care: High costs of devices, services, and lack of
cost standardization across different service providers is a big challenge for the success of
this scheme.
 Improve quality of care: With the increase in the number of patients, the problems such as
lack of quality standards and also, any standard treatment protocols that is necessary for
serious illnesses are needed to be addressed.
 Maximizing the beneficiary awareness: Lack of awareness in the people that live in rural
areas and small towns; information asymmetry about health, treatment and diseases can be
problem in increasing demand for healthcare. They can create resistance to change in
behaviour of healthcare-seeking amongst the poor and vulnerable citizens.
 Enhancement of the quality and the security of data: Creating a personal health records
architecture that can help in making better treatment decisions by the doctor and improved
efficiency in care, especially at the times of emergency. Another challenge is to ensure data
security and privacy of the patients’ data.
 Build capacities of health workforce: The health workforce expansion is one of the most
critical parameters to achieve universal health coverage. India’s healthcare system is not
adequate to service additional people that Ayushman Bharat PM-JAY covers. A demand of
1.3 crore additional bed days, around 43,000 new hospital beds, 5,000+ additional doctors
and greater than 20,000 additional nurses is needed to bemet for successful implementation
of the PM-JAY.

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Field Visit to Baby Memorial Hospital
As a part of the field visit for the EE project, “India’s Healthcare Sector: Challenges and Way
Ahead”, we visited Baby Memorial Hospital to gain the insights from and have a discussion on
our topic with an expert in the health care domain, Mr. Saji Mathew, the Chief Operating Officer
of Baby Memorial Hospital, one of Kozhikode’s largest private hospitals. We have summarized
important learnings and opinions given by Mr. Mathews in the following text.
What is the current healthcare scenario in India?
Mr. Mathew was of the opinion that in the last 2-3 decades, India has improved a lot. “Benefit of
economic growth is seen in healthcare industry- Kerala, Southern Indian states and even
Maharashtra. Some of the facilities exist only in Tier-1 and Tier-2 cities. Post-independence,
more than 6 crore families who live below poverty level are not able to meet the healthcare
expenditure. Access to quality infrastructure is missing. 70% of Indians rely on private
healthcare providers. There is an acute shortage of qualified professionals” explained Mr.
Mathew. He further stated that India is now trying to create bridging courses to fill that gap.
Government spending is only close to 1.4% of GDP, while total spending is close to 4%.
Evidence on India’s underwhelming performance
“On one side we have one of the latest technologies in healthcare at reasonable costs and even
attract foreigners to come here to seek treatment, on the other hand a vast majority of rural
Indians don’t have access to quality healthcare” remarked Mr. Mathew. He was of the opinion
that developed economies like the USA spend close to 16-18% of the GDP, European countries
spend around 10-12%, countries like Russia also spend 5%. Even Sri Lanka and Bangladesh are
more effective in terms of their spending. NHP 2017 has now envisaged to provide Universal
Healthcare to Indians. Government is targeting a population of 50 crore people below the
poverty line. 17% of the world population lies in India but 20% of all disease cases lie in India,
especially diabetes, hypertension and cancer. Then we look into nutrition, well-being and other
things. HDI and similar parameters are also very low. States like Kerala are still comparable to
the Western World.
Speaking on Problem of Funding and Political Priorities
On these issues, Mr, Mathew remarked “Apart from the lack of political will. Money is another
an issue. A budget allocation of mere 2000 crore is never going to be enough to serve 50 crore
families. The focus has historically been on Roti, Kapda and Makaan. Recently only health
became an important issue. Then came other priorities. Now that we have achieved a certain
level of stability in those areas, we have health schemes. Now, states like Kerala can even afford
to focus on life-style diseases moving on from the communicable and non-communicable
diseases”. He further observed that the Western world is now focusing on wellness. In India,
health care was never on wellness. Indians have traditionally not even bothered to do any
preventive health check-ups either. “We are focusing on sickness care. Policymakers have
realized that government spending can never be as efficient as private spending. Per bed
spending in government hospitals is almost same as private hospitals but it is taxpayers money
and isn’t accounted for properly. Do proper costing and then say that there will be 100%

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discount to the patient to bring about proper accountability. I was in Singapore for 13 years and
there the model is different. There they don’t support the hospital, they support the patient after
assessing eligibility”. Hence, he pointed out that government hospitals are actually competing
with private facilities for treatment. In India, there is no equitable distribution of healthcare
facilities. Ayushman Bharat is now moving towards that direction but funding is a big issue and
the scheme is underfunded in a lot of ways. A budget allocation of mere 2000 crore is never
going to be enough to serve 50 crore families. Execution also matters a lot, in Kerala only 7% of
the population is below the poverty line where as in states like Bihar and Orissa, close to 40% of
the population is below the poverty line. Southern States also do better as far as the rankings are
concerned?
How has the execution of the scheme been so far? What are some of the inefficiencies?
In India, because of Federal structure, Central Government Schemes may launch an initiative
wherein the States only have an option to adopt the same since health care is a state subject. The
states may come up with their own schemes as many of the Southern States already have. Mr.
Shaji opined, “Telangana and Andhra Pradesh have their own schemes which are better than
the central scheme and have continued with them. For the Central Scheme, the Central
Government has decided that it will contribute 40% of the fund allocation while 60% needs to be
contributed by the State Governments”.
On being asked about other inefficiencies, Mr. Mathew pointed out that other major execution
challenges include fraudulent claims. The Central Government has looked at two models for this:
1. Creation of trust from where money can be disbursed and;
2. Relying on private insurers like Reliance to disburse the funds to the hospitals.
However, issues which have hindered process include inability of government to make timely
payments to the insurers. And when revenue collections fail to meet expectations, the
government is further stretched while making payments.
About Technology
“In the forefront are Ayush workers (paramedics). They can be trained to assist in decisions. The
doctors can be from the Tier-1 or Tier-2 cities through internet can be connected to the rural
hospitals. Expertise shall be available through virtual presence. Screening such as cancer
screening or deafness screening can be performed using screening equipment (which uses AI
algorithms) and only people who are identify for further treatment can be treated. Aravind Eye
Hospital is running retinopathy wherein they’re able to do entire screening using equipment. In
terms of capacity, you cannot build the capacity overnight. Technology is the only way of
reaching every Indian with regard to health care”.
Mr, Mathew briefly talked about the Government of India’s National Digital Health Programme,
through which it aims to create a digital healthcare ecosystem. The government envisions a
system where each citizen shall have a health record having a medical history right from the day
he/she is born, which can be authenticated using an identity such as the Aadhaar. With consent,
such data can be used effectively for targeted and effective treatment and channelization of
expenditure. Existing expenditure of Central Government is allocated based on surveys which
may or may not reflect underlying circumstances. Nomenclature, treatment mechanisms for

15
every disease can be standardized. Access shall be given through a health portal. “A lot of magic
can be done with such large amounts of data. Whatever you are spending needs to reach the
ultimate beneficiary. So if you want to come for consultation from an IIM to BMH, all your
essentials are already being monitored through smart equipment” concluded Mr. Mathew.

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Challenges Faced by Private Hospitals under Ayushman
Bharat and How Can They Come on Board?
Under Ayushman Bharat, all public hospitals, in the states implementing PMJAY, are deemed
impanelled. For other healthcare providers, an elaborate empanelment criterion has been issued
by the Ministry of Health and Family Welfare. Base rates have been set for the 1350 procedures
that the government plans to cover under PMJAY.

According to the centre, the prices of each procedure has been arrived at after much research;
still, private hospitals are not finding Ayushman Bharat a viable option for them. Hence, there is
a considerable reluctance from private players to join the scheme.

Upon asking the reason for the reluctance, Mr. Saji Mathew replied, "We do a Caesarean here
for 40,000. Under Ayushman Bharat, we will be getting only 9,000. It is a huge loss for us. We
are a private entity and do not have a moral obligation to do it. Some of the Delhi hospitals
which were given the land (for hospital) on a lease on a minimal amount have a regulatory or
legal obligation to provide 20% of the services on a subsidized rate. If that sort of agreement
comes, we are also willing to join. However, in the absence of that, especially for private
hospitals, this is an impractical option. The only private entities who have joined till now are
medical colleges." 

The Indian Medical Association (IMA) has also criticized the reimbursement rates set by the
government. According to IMA, most package rates set by the government do not cover even
30% of the cost of the procedure, and "no hospital" can work on these rates without "seriously
compromising patient safety." (Times)

Private hospitals are highly capital intensive and cannot run at all if the costs are not matched by
revenues.
Private hospitals would join PMJAY provided,

1. They will be offered concessions or grants.

2. They will be provided with tax concessions or rebates.
3. They are allowed to provide the services under PMJAY when they have spare capacity.
4. They simulate the model of Mission hospitals where they make money from private patients
and use the money earned to cross-subsidize the services for the poor. 

For all of these models to be successful, the government would have to increase the fund
allocated under the healthcare sector.

Challenges facing the Public healthcare system in India

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Mr. Saji talked about the AAAQ framework, which governs the public healthcare system
worldwide. Availability, Affordability, Accessibility, and Quality and how Ayushman Bharat
seeks to make healthcare affordable for the underprivileged but availability and accessibility is
still a challenge. In around five states in the country, public healthcare infrastructure is not
adequate to provide even quality secondary care, let alone tertiary care.

 "In a lot of states, the required number of professionals are not available; beds are not there. In
some of the places, even the state of affairs is very sad. People have to travel 200- 300 km to
reach a decent facility where they can be treated. The government setup is also very corrupt at
places. 40% vacancies are not filled. Positions are created but you do not have people. And even
if the doctor is there, he might not be present half the times. This reduces the probability of
consultation for a person who is traveling 100 km to just around 20%."- Replied Saji Mathew
when asked about the challenges faced by the Indian public healthcare system. 

After the discussion, we came to an understanding that the inaccessibility of healthcare often
deters people from getting the treatment. Towards the end of the state, when people seek
treatment, it is often too late, and then they end up spending even more. In terms of quality, only
a few government hospitals provide quality healthcare services. Rest others are plagued by
inefficiencies. 

What about health inequality in India?

During our discussion, inequality in Indian healthcare also came to light. Mr. Saji told us about
how, health being the state subject, healthcare infrastructure differs across different states.
Whereas on the one hand Bihar and Chhattisgarh lack on public healthcare infrastructure, Kerala,
on the other hand, has world-class public healthcare facilities. 

On 6th October 2018, 13 government hospitals won the National Quality Assurance Standards
certificate. Out of these, 12 hospitals belong to Kerala. On further probing as to why certain
government hospitals are performing way better than others, we realized that there are many
factors that come into play. 

The major factor was literacy rate. Other factors are awareness and dedication among the people
to serve the needy. Mr Saji reasoned that if similar dedication is shown by other states as well
then Ayushman Bharat can really be a nation-wide success. He said “Government hospitals are
run by government, an additional 10,000 received via Ayushman Bharat would definitely make a
big difference”

He also showed his concern for the states which are not ready to implement Ayushman Bharat as
this can really be a step in the right direction. He opined that political rivalry should never come
in the middle of these policies as someone’s health is way more important than any other
political agenda.

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Concept of Wellness in India 

“Wellness is a state of complete physical, mental, and social  well-being, and not merely the
absence of disease or infirmity.” – The World Health Organization.

India’s focus has always been on curative care. Fairly recently we have started focusing on
preventive, palliative and rehabilitative care. There is very less awareness among Indians, Mr
Saji opined. “Government of Singapore has acquired Fitbit for all of its population, whereas in
India it is still a luxury, something that is not worth spending on”, Mr Saji told. It is very sad to
see that health is only seen in terms of physical illnesses. What about mental health or social
health? But times are changing. Because of the spread of internet in the remotest areas, people
are now becoming more aware than ever.

Wellness industry in India is expected to grow at a compounded annual growth rate of 12% for
the next 5 years. More and more start-ups are coming in the wellness sector. This is a positive
sign.

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Is NHPS a Feasible Solution?
Wellness Clinics
An attempt to create health and wellness clinics can be seen as a move towards strengthening of
public health system in India. The move to turn health sub-centres into wellness centres will help
in detection of disease at an early stage thus reducing both mortality and morbidity. It will also
help in shifting focus to proactive prevention from treatment.
Health insurance schemes have not been an absolute success
For a developing country like India we cannot consider an insurance-based model like
Ayushman Bharat as the best long-term solution. If we go by international data and experience
on results of insurance-based healthcare policies, the results have been a mixed bag. Although
the expenditure of US on healthcare accounts to 17.2 percent of its GDP and is higher than
almost any other European countries, the quality of healthcare facilities as well as outcomes lag
when compared to European counterparts. This lag has been attributed mainly to the insurance
lane adopted by US. A substantial amount is spent on lawyers by insurance companies in US.
Evaluation of RSBY (Rashtriya Swasthya Bima Yojna) shows that despite of decades of
implementation of the same only 3.6 crore out of the 5.6 crore families have been covered. There
existed no uniform premia and varied from district to district. The scheme had an average claim
ratio of 33% and is reported to have no effect on reducing out of pocket expenses. Lack of access
to quality care is considered to be a major reason behind it.
Need of effective regulation capability to make sure effectiveness of NHPS
It has been noticed in past that in absence of any regulatory oversight there has been numerous
instances of hospitals playing with the system by overcharging services, reducing quality of care
and making fraudulent claims. So, the real gainers of government expenditure had been
Hospitals and insurance companies. It is necessary to establish a regulatory body like National
Health Assurance Authority to look after implementation aspects for reduction of unnecessary
hospitalization, check on fake claims, standard setting, monitoring of quality etc.
Accessibility: Social Inequality
There exist major inequalities in seeking healthcare in India. Health is not a result of just
efficient medical services but is mainly determined by social, economic conditions and ability to
earn, eat and afford access to healthcare when there is a need. An insurance-based model like
Ayushman Bharat can be considered to be a distillate of this process. Only an insurance-based
model is not sufficient to meet the real goal to achieve UHC (universal healthcare coverage).

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Infrastructure and Quality of care
The assumption that only creation of demand will lead to sufficient investment flow seems
misplaced. Non-availability of public or private hospitals providing wide array of services
included in secondary and tertiary care, shortage of Doctors and other health care professionals
are some of the major barriers. This scheme could not be expected to substitute government
investment. The government doesn’t have any option other than establishing hospitals in the 200
backward districts or incentivise the private sector to do so. Expansion of the supply side is
needed to keep pace with the escalation of demand in order to ensure equitable access to the
scheme.

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Way Ahead: Disruptive Technologies in Healthcare
Technology can play a critical role in delivery of critical healthcare facilities to the remotest
corners of the country. It is the best way to build a connected healthcare ecosystem. Some of the
examples of different technologies that are transforming the healthcare ecosystem are mobile
care applications, wearables and sensors. These devices enable automation of logging-on
mechanism, real time updates of patient’s vitals and provides insights into detection of disease at
an early stage.
Emerging technologies can be used to tackle specific challenges faced in healthcare in
India:
 It provides real time information of the patient and diagnosis based on symptoms saves time
for Doctors thereby enabling them to consult more patients
 Enables consultation and conduction of surgeries remotely thereby bringing healthcare
facilities to remotest areas without any access to basic facilities
 Analysis of vitals captured remotely by wearable devices enables both patients and
healthcare professionals to take proactive measures on the basis of analysis
 Blockchain technology can be used to decentralise health records of patients into a single
source whose access can be controlled by patients
 Providing critical home care with remote monitoring of patient’s vitals
Some of the emerging technologies in Indian Healthcare facilities are:
Artificial Intelligence
 It is the ability of devices to learn without any explicit program and then act on the same
cognitively.
 Helps in identifying the patients who are at risk of developing condition deteriorating
because of lifestyle, environmental or any other factors, using pattern recognition. Machine
learning algorithms can be used to represent physiology digitally thus enabling prediction of
chronic diseases in future on the basis of choices made today.
 It helps in disease management by providing application based better coordinated care plans
and better management of treatment programmes for the patients.
IoMT
The worldwide network that consists of interconnected medical devices and their applications is
known as Internet of Medical Things (IoMT). It has application in both clinical and non-clinical
scenarios. Clinical uses include raising alarms by monitoring vitals of patient like temperature,
blood pressure, respiration, ECG etc.

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References:
 https://pmjay.gov.in/about-pmjay
 https://timesofindia.indiatimes.com/india/ayushman-bharat-scheme-a-modification-of-
rashtriya-swasthya-bima-yojana-parliament-panel/articleshow/67292718.cms
 https://www.financialexpress.com/opinion/rashtriya-swasthya-bima-yojana-rsby-lessons-
for-ayushman-bharat/1426918/
 https://ab-hwc.nhp.gov.in/home/aboutus
 https://www.youtube.com/watch?v=H-tFgA6_PJ0
 https://economictimes.indiatimes.com/news/politics-and-nation/what-the-doctor-orders-
ground-report-on-ayushman-bharat-from-uttar-pradesh-and-
bihar/articleshow/66062524.cms?from=mdr
 https://www.downtoearth.org.in/news/health/a-year-of-ayushman-bharat-46-5-lakh-
treated-action-against-341-hospitals-for-frauds-67019
 https://www.thehindubusinessline.com/economy/a-year-on-ayushman-bharat-faces-
multiple-challenges-ahead/article29497106.ece
 https://www.financialexpress.com/health-3/ayushman-bharat-report-card-total-
beneficiaries/1694781/
 https://www.startupindia.gov.in/content/sih/en/ams-application/challenge.html?
applicationId=5d6fa0f4e4b0fad8ed6ba26c
 https://www.sbigeneral.in/SBIG/blog/ayushman-bharat-–-noble-challenging-initiative
 https://ahpi.in/pages/infrastructureissues.html
 https://data.worldbank.org/indicator/SH.XPD.CHEX.GD.ZS
 https://thewire.in/health/the-governments-previous-health-insurance-schemes-have-
failed-why-should-the-new-one-work
 https://www.pwc.in/assets/pdfs/publications/2018/reimagining-the-possible-in-the-
indian-healthcare-ecosystem-with-emerging-technologies.pdf

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