Comment

Ayushman Bharat

THE National Health Protection Scheme (NHP), also known as, Ayushman Bharat Yojana could accrue three benefits: harvest votes for its promoters, reduce financial risk of sickness to families and improve health of the population. The first benefit of winning votes has succeeded in the past. Bismarck in 1883 in Germany, Obama in 2010 in the USA and Y.S.R. Reddy in 2004 in Andhra Pradesh used the promise of health insurance to influence elections. The second benefit is to reduce financial risk to families. WHO estimates that healthcare expenses push five crore Indians into extreme poverty every year. NHP could ease this burden only if the execution is effective and efficient. The third benefit is to improve population health. This is where health insurance schemes in the world have struggled to succeed. NHP has two choices: succeed slowly over many years by trial and error; or succeed faster by innovating specifically for India and by avoiding missteps of world health systems.

Approximately 40 countries organized health insurance projects many decades ago, which have matured after numerous iterations over years. And many other countries have started such schemes recently. Health insurance plans of the world, both commercial and government, have seen well meaning steps turning sour; their costs have escalated without proportional improvement in population health. Healthcare expenditure has reached to 10% of GDP in many OECD countries; and the USA healthcare spending is close to 18% of its GDP, amounting to 3.3 trillion dollars annually.

This current state has many causes, two of which are due to flaws in basic design. First, insurance schemes of many countries ignored preventive care and made hospital care the cornerstone of their offering only to realize later that cost of hospital care could be controlled by preventive care. Second, the traditional financial structure of health insurance, converted three stakeholders – healthcare providers, consumers and insurance payers – into adversaries who competed for the same pool of money to maximize their own benefits. The healthcare providers (hospitals, doctors, paramedics) were responsible for treatment and not its cost, so they induced demand for services to earn more; consumers demanded more services because they did not feel the pinch of payment as they were insulated by third party payment; and the payers (insurance companies) wanted to maximize their saving or profit, so they denied services to patients and payment to providers.

India could be trapped into a similar curve of painful learning, unless NHP uses world experience to exclude these structural impediments and innovate a model for India. This can happen, if NHP does not become merely a payment tool for episodes of disease but rewards healthcare providers and consumers to improve health of the population, both by prevention and cure, at optimal cost and quality.

India has over 600 districts, which vary significantly in income and disease profiles. In this proposed scenario, a district should be empowered as an independent NHP unit. The nodal district office would work like an insurance company for administration and payments. Medicos in public and private sectors will be the healthcare providers and the people of the district will be the consumers.

The healthcare provider group will comprise of a hospital, doctors and paramedics in the community. Multiple competing provider groups can be formed in a district depending on the total population. The groups could be private or public; a public group would include the district hospital, primary health wellness centres, and field health workers. A healthcare provider group would provide comprehensive care, from prevention to advanced specialized care, to the population pool of two to three lakh consumers under its care. Both private and public groups would compete for the same service contract. The consumers will get to choose their provider group and can switch to a different group once a year.

The district NHP administrator would determine the sickness profile of the district, establish quality standards, and estimate the cost of prevention and care for the sick. The administrator should integrate multiple vertical national health programmes running in the district into one coordinated unit to reduce operating costs. An IT infrastructure would be a non-negotiable minimum essential prerequisite to monitor the system, avoid fraud and ensure quality. The district authority will determine a healthcare budget, integrated for preventive and hospital care. It will pay the provider group to perform three functions for the assigned population: an amount to cover the predetermined cost of treating the sick, an additional payment for prevention of disease, and an incentive for cost reduction, quality improvement and improving population health. Some examples could be: incentives to providers for 100% immunization in the assigned population or reducing severe malnutrition, or incentives to consumers for adopting healthy behaviour like cessation of smoking and alcohol.

Undoubtedly, this innovation will face hurdles, which may vary between districts. A private group could be at a disadvantage due to their capital expenditure or a public group maybe hampered by red tape or a provider group could risk financial viability if its pool of population happens to have higher disease prevalence. Many other unforeseen hurdles could erupt as the programme unfolds. These problems could be mitigated by iterations or through a risk equalization fund to help a group facing higher risk.

This structure would also have many advantages: preventive and pre-emptive care would reduce disease burden; integration of primary and tertiary care will reduce cost; competition among groups would ensure efficiency; and consumer satisfaction would increase when given the right to choose the provider. Payment mechanism would become effective and efficient: effectiveness will improve health outcomes and efficiency will ensure value for money.

India has an advantage due to the absence of an entrenched vested legacy system. NHP should work on the relatively blank slate to steer three stakeholders – healthcare providers, insurance administrators and consumers – to cooperate towards the same goal: improve population health at a lower cost. NHP should do a few innovative pilot projects in some districts to avoid bad consequences of good intentions.

Shiban Ganju