Policy Brief on Ayushman Bharat

2033417 Divyae Rastogi, 2033457 Aradhana Modi, 2033446 Sujal Tak, 2033435 Rahul Raj

Department of Economics, Christ (Deemed to be University)

BECH341A: Health Economics; Theory and Application

Dr. Aneesh K A

Oct. 14, 2021

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Executive Summary

Ayushman Bharat is a National Health Protection Scheme that would provide coverage

up to 5 lakh rupees per household per year for secondary and tertiary care hospitalization to over

ten crore poor and vulnerable families. The ongoing centrally sponsored programs - Rashtriya

Swasthya Bima Yojana and the Senior Citizen Health Insurance Scheme - will be absorbed into

Ayushman Bharat - National Health Protection Mission. The Pradhan Mantri Jan Arogya

Yojana, often known as the Ayushman Bharat Yojana, is a plan that aims to assist economically

underprivileged Indians who require healthcare. The National Health Protection Scheme,

Ayushman Bharat Yojana, has been renamed Pradhan Mantri Jan Arogya Yojana. Beneficiaries

of the PM Jan Arogya Yojana receive an e-card that may be used to access services at any

empanelled hospital in the country, whether public or private. Unlike most other insurance

policies, the PMJAY covers pre-existing conditions and requires treatment in all public hospitals.

However, like any other to prevent corruption and service delays, a policy criticized and debated

by the opposing party and the various other organizations, Ayushman Bharat Policy was also

charged based on its promises and overall requirement and effectiveness. Firstly, it has been

observed that the financial backing of the Ayushman Bharat Policy has been reducing the

reserves and resources available to the National Health Mission in undertaking other previous

schemes such as the National Rural Health Mission. Secondly, poor health personnel are not

available to properly implement such a large-scale insurance policy. On further analysis of the

Registry of Hospitals in Network of Insurance data, only 3% of private hospitals are qualified for

the Ayushman Bharat Policy. The cover issued by the policy covers less than 30% of the hospital
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and healthcare charges. All the above recommendations will ensure that there would be more

stability concerning access to the Ayushman Bharat Scheme for poor and sick people.

Statement of the Issue/Problem

Ayushman Bharat is a National Health Protection Scheme that would provide coverage

up to 5 lakh rupees per household per year for secondary and tertiary care hospitalization to over

ten crore poor and vulnerable families (about 50 crore beneficiaries). The ongoing centrally

sponsored programs - Rashtriya Swasthya Bima Yojana (RSBY) and the Senior Citizen Health

Insurance Scheme - will be absorbed into Ayushman Bharat - National Health Protection

Mission (SCHIS).

Background

The Pradhan Mantri Jan Arogya Yojana (PMJAY), often known as the Ayushman Bharat

Yojana, is a plan that aims to assist economically underprivileged Indians who require

healthcare. This health insurance system, launched by the Prime Minister on September 23,

2018, covers around 50 crore Indian individuals and has several success stories to its credit. As

of September 2019, the initiative had empanelled over 18.059 hospitals, admitted over 4,406,461

beneficiaries, and distributed over 10 crore e-cards. The National Health Protection Scheme,

Ayushman Bharat Yojana, has been renamed Pradhan Mantri Jan Arogya Yojana. This initiative

aims to make secondary and tertiary healthcare entirely cashless for the poorest members of

society. Beneficiaries of the PM Jan Arogya Yojana receive an e-card that may be used to access

services at any empanelled hospital in the country, whether public or private. It allows you to

stroll into a hospital and receive treatment without having to pay any money.
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Implementation Strategy

An Ayushman Bharat National Health Protection Mission Agency (AB-NHPMA) would be

established at the national level to handle the program. A specialized institution named the State

Health Agency would advise states/UTs on implementing the system (SHA). They can either

utilize an existing Trust, Society, Not-for-Profit Corporation, or State Nodal Agency (SNA) to

implement the program or create a new entity. States/UTs can choose to execute the program

through an insurance business, the Trust/ Society directly, or an integrated approach.

Significance

It assists families by providing access to healthcare services and day-care treatments, particularly

those involving pre-existing conditions. The plan covers nearly 1,350 medical packages available

at both public and private network hospitals across India. The program allows persons in need to

receive supplementary healthcare from experts such as cardiologists and urologists. Advanced

medical therapy, such as cancer treatment, heart surgery, and other procedures, is also covered.

Unlike most other insurance policies, the PMJAY covers pre-existing conditions and requires

treatment in all public hospitals. This implies that no one will be turned away if they need

medical attention—this program aids in reducing out-of-pocket costs. PMJAY intends to make

the whole healthcare payment process cashless. PMJAY beneficiaries can also get treatment

anywhere in India. To prevent corruption and service delays, all public and empanelled private

hospitals have been instructed not to charge additional medical care fees to PMJAY recipients.

The system will purchase services from private healthcare providers because it covers such a

significant population. This program is also anticipated to foster the development of more cost-

effective medical equipment and pharmaceuticals.

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Information Pertinent to the Issue

India being a democratic republic, several policies for delivering healthcare service have

been presented and executed throughout the country. Furthermore, every citizen of India has the

fundamental right to obtain safe and high-quality health care. The Sustainable Development Goal

by the United Nations to ensure universal health coverage is a priority, and as such, India must

try to reach this goal by the year 2030.

However, like any other policy criticized and debated by the opposing party and the

various other organizations, Ayushman Bharat Policy was also charged based on its promises

and overall requirement and effectiveness.

There are numerous opposing views against the policy implemented by Narendra Modi.

Firstly, it has been observed that the financial backing of the Ayushman Bharat Policy has been

reducing the reserves and resources available to the National Health Mission in undertaking

other previous schemes such as the National Rural Health Mission (India, 2020). Secondly, poor

health personnel are not available to properly implement such a large-scale insurance policy.

Such a scheme requires vast infrastructure and administrative support. The policy relies on the

private health care sector for service delivery. On further analysis of the Registry of Hospitals in

Network of Insurance (ROHINI) data, only 3% of private hospitals are qualified for the

Ayushman Bharat Policy. On average, 1.28 empanelled hospitals per one lakh population can

deliver healthcare under the policy. These hospitals lack the necessary infrastructure and are

concentrated in the country's more significant and more prosperous states. (Ayushman Bharat

and the false promise of Universal Healthcare 2021) There is also the lack of a regulatory

mechanism to ensure good quality of the healthcare provided, whether the patient was made to
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pay more, and the ethical necessity (NewIndianXpress, 2018). Thirdly, the poor communication

of the benefits and the means to avail them negatively impacts the underprivileged and illiterate

people. Many disapprove of the additionally, equity access to the benefits is also a problem.

Despite having valid documentation, chronically ill patients are denied treatments as their

illnesses are not listed in the 1350 Ayushman Bharat medical packages. During the first year of

its implementations, 1,200 corruption cases were reported, all related to the beneficiaries.

(Ayushman Bharat and the false promise of Universal Healthcare 2021)

Lastly, the scheme has failed to meet its most important and necessary objective, i.e.,

providing cashless and paperless healthcare. The cover issued by the policy covers less than 30%

of the hospital and healthcare charges. Out-of-pocket expenditure is not covered under the

policy; as a result, this further impacts the underprivileged and illiterate people and excludes

them from the insurance scheme. Furthermore, it does not provide outpatient consultation and is

underfunded to support the beneficiaries. It has failed to plug in the shortcomings of the

previously introduced healthcare insurance plans, and its importance and effectiveness are

debated. (What the numbers say about the performance of Ayushman Bharat 2021)
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Figure 1.

Data on the reach of the Ayushman Bharat Policy

Source: PM-JAY Annual Report, 2020

The above figure displays the numbers of the hospitals empanelled and cards issued etc.,

for the Ayushman Bharat Policy. Taking Chhattisgarh in specific, we can see the average out-of-

Pocket expenditures for insured and uninsured beneficiaries. (What the numbers say about the

performance of Ayushman Bharat 2021)

The need for such a large-scale scheme is disapproved by many due to the challenges it

faces and the existence of several other schemes that aim to achieve the same, two of them being

Rashtriya Swasthya Bima Yojana (RSBY) and Senior Citizen Health Insurance Scheme

(SCHIS). (What the numbers say about the performance of Ayushman Bharat 2021) Many

believe that this flagship scheme was introduced as a vote catcher. It is used as a marketing

strategy and helps display a strong populist front to the public. The ongoing debates and
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criticisms of the Ayushman Bharat aren't to say that individuals will not benefit from it. But it is

certainly not worth the costs and the damage it will have on the overall public health

infrastructure. (NewIndianXpress, 2018)

Responses and Policy options

The lifestyle and the environment people are living in; health insurance is a must for

them. Yet, according to a survey conducted, only one-fifth of the total population of India is

insured under health insurance. The rest, 80 %, are still unaware of the idea. This has specific

reasons, and one of them is the extreme poverty that a huge section of Indian society faces. The

lack of a certain income and hence saving has led to a low proportion of people opting for health

insurance (Goel, 2020).

To address this issue, several organizations have made attempts. Some have failed

miserably, while some have brought some positive news but not enough for it to be

revolutionary. Let us see a few schemes that the government has launched to solve the issue.

Rashtriya Swasthya Bima Yojana. The scheme was launched by the Ministry of Labour

and Employment, Government of India. It provides health insurance coverage for people

belonging to the Below Poverty Line (BPL) family. It includes hospitalization coverage of up to

Rs. 30000 for most diseases.

Aam Aadmi Bima Yojana. The scheme was launched in 2007 on the birth anniversary of

Mahatma Gandhi. It is meant for rural landless households to provide them with social security

in terms of the death or disability of the insured. A per annum sum of Rs. 200 each by state and
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the central government was pooled for the insured and further used per the Terms and

Conditions.

Universal Health Insurance Scheme. It aims at improving access to health care by low-

income families. It provides for reimbursement of medical expenses, death cover due to an

accident, compensation due to loss in earnings. It has different premium amounts for different

family capacities. A premium for an individual is Rs 200 while it is Rs 300 for a family of five

and Rs. 400 for a family of seven.

There have been NGOs working towards the solution of the issue. One scheme developed

by an NGO is the Sampoorna Suraksha Programme implemented by the NGO called Shri

Kshetra Dharamshala Rural Development Project in Karnataka. In the days when poor people

face severe health issues, the program aims at giving financial assistance. The program collects

an annual subscription from people interested in contributing; the fund is then used to help the

needy poor in different parts of Karnataka. The program has received well-narrated responses,

and different state governments and central governments might look upon similar strategies.

Though these programs seem well written down, the problem in their implementation is

the correct identification of the needy ones. Proper appropriation of funds determines the success

of any program, and most schemes in India have failed on this front. The time has come where

the focus has shifted, was pooled, and I think we will see a change for the better.
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Recommendations

Ayushman Bharat Policy (PM-JAY), launched in 2018, has completed three years, but

still, the desired results have not been observed yet. PM-JAY has a big task and faces many

challenges ahead of it. Drawbacks are part of every scheme, and PM-JAY is not an exception.

This section will discuss the various scope of improvement in the policy.

1. Cost-revisions – The government of India needs to revise the costs of various treatments

regularly to incorporate more and more hospitals into the program. Also, states like

Maharashtra, Kerala, where state-government-led insurance programs already exist,

protested this scheme claiming that the costs under the scheme are not practically viable.

As a result, the center allowed them to stick to their old rates, making policy rules a mere

guideline. Therefore, it should be ensured that policy guidelines should be followed and

revised costs remain affordable.

2. Fixing infrastructural flaws- Government should work towards resolving the

infrastructural flaws at the grassroots level. Setting up costs for different treatments alone

will not make the scheme a success. It should be ensured that treatments given to the

public are reliable, of good quality, and follow hygiene. A trained and specialized

workforce should be recruited more. This is a significant problem in rural areas where

highly specialized medical workers are unwilling to do service because of lack of

infrastructure like lack of facilities, outdated or old medical equipment, frequent power

cuts, lack of awareness amongst the general public. Many hospitals still do not have a

good number of beds. This situation came to notice during the COVID-19 pandemic,

which brought about flaws in the Indian healthcare system. Many experts believe that
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hospitals have a smaller number of beds mainly because of less-trained workers.

Therefore, seat numbers and medical colleges should be increased.

3. Seamless connectivity- Swift and effortless connectivity of all people across India with

the policy is still a distant dream. The government should connect people of remote areas

and regions of turmoil like Kashmir, northeast states to the PM-JAY. Hospitals should

also be empanelled in the remote regions of the northeast and Leh region. Also, measures

should be taken to ensure that political instability has a minimal impact on the scheme's

functioning, as we have seen in the case of Kashmir, where abrogation of section 370 and

shutdown of the internet hampered the functioning of the scheme for almost two months.

4. Strict monitoring- EThevernment launches many schemes every year, but the

development rate remains relatively low. The problem generally not only lies within the

policy but also in the way it is implemented. Government should improve monitoring at

every level to avoid fraud, fake transactions. Reports claim that over ten crores e-cards

are created, but there is no mechanism to check if there is any fraudulent or ghost

admission in it. Medical workers often tend to admit ineligible beneficiaries to earn the

cost of treatment covered under schemes. Health experts believe that the higher the cover,

the more prominent the opportunity for fraud people. Therefore, a more robust artificial

intelligence system is needed to prevent such fraud and ghost admissions cases.

5. Advanced technology- In today's era, everyone and everything is going digitally. The

medical industry is not an exception. For PM-JAY to succeed, it is essential to have

robust information technology as it provides a rock-solid backbone to implementing this

yojana. From creating E-cards to promoting online registration, this scheme has depended

heavily on technology for smooth functioning. To ensure an effortless and seamless

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implementation of this scheme, we must ensure that everyone has good access to internet

facilities and is also aware of various digital procedures like online transactions.

Advanced technology can help keep an eye on fake transactions and ghost beneficiaries.

Strict actions could then be taken against those who fail to comply with the policy

guidelines.

6. Collaborations on a sectoral level and political dedication to improve and strengthen the

entire healthcare system are the need of the hour for India to achieve sustainable

development goals.

All the above recommendations will ensure that there would be more stability concerning

access to the Ayushman Bharat Scheme for poor and sick people.
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