Ayushman Bharat: a health scheme that should not fail

The implementation of Ayushman Bharat requires a strong reform agenda

May 28, 2018 12:02 am | Updated December 04, 2021 11:56 pm IST

The l aunch of Ayushman Bharat, a national health protection scheme (NHPS), in the last stretch of this government’s tenure comes as no surprise. Social policies in the areas of education, health and the welfare of the disadvantaged or farmers almost always get announced before elections. No political party is an exception to this rule since such ‘feel good’ welfare policies are useful in conferring a sense of legitimacy and caring on the government seeking another term.

Despite these political motivations, those working in these neglected sectors welcome such policy announcements as the crisis is acute in these sectors.

Health policies have two objectives: to enhance the health of the population and reduce the financial risk for those accessing treatment. Success in the first is measured by a reduction in the disease burden and subsequent increase in people’s longevity. Reduced spending or getting impoverished when seeking health-care measures the second. Since the health scheme seeks to address both these critical health goals, it is an important step forward.


The scheme has two components: upgrading the 150,000 sub-centres (for a 5,000 population level) into wellness clinics that provide 12 sets of services; and providing health security to 40% of India’s population requiring hospitalisation for up to a sum assured of ₹5 lakh per year per family. If implemented as integral components of a strategy to improve the abysmal status of India’s health-care system, these initiatives can help achieve the goals of equity, efficiency and quality.

Key issues

An evidence-based strategy will need to address and resolve several key issues affecting the sector. The first is the massive shortages in the supply of services (human resources, hospitals and diagnostic centres in the private/public sector), made worse by grossly inequitable availability between and within States. For example, even a well-placed State such as Tamil Nadu has an over 30% shortage of medical and non-medical professionals in government facilities.

A related question that arises is that while the NHPS will empower patients with a ₹5 lakh voucher, where do they encash this? The health budget has neither increased nor is there any policy to strengthen the public/private sector in deficit areas. While the NHPS provides portability, one must not forget that it will take time for hospitals to be established in deficit areas. This in turn could cause patients to gravitate toward the southern States that have a comparatively better health infrastructure than the rest of India.

The issue is about the capacity of this infrastructure to take on the additional load of such insured patients from other States, growing medical tourism (foreign tourists/patients) as a policy being promoted by the government, and also domestic patients, both insured and uninsured. It is still unclear whether the implications of the national policy on the fragile health systems of States have been fully comprehended and how they propose to address them.

The price factor

Second, the strategy for negotiating/containing prices being charged for services needs to be spelt out. An experience in Hyderabad is instructive. A three-day stay in a hospital for a respiratory problem cost me ₹1.8 lakh. In order to understand the extent of overbilling, I checked ‘Rajiv Aarogyasri’, the health insurance programme in Andhra Pradesh. The rates here were not only incomparable but also did not reflect market prices of common procedures or treatment protocols to be followed by hospitals. So a CT scan that costs ₹19,080 in the Hyderabad hospital (it is the same rate across the city) was only ₹500 in government hospitals in Tamil Nadu (₹7,000 in private hospitals in Tamil Nadu and Delhi).

The Aarogyasri scheme has only package rates, a procedure that all States have since followed as a model. Package rates are not a substitute for arriving at actuarial rating. In the absence of market intelligence, arbitrary pricing and unethical methods cannot be ruled out.

More importantly, there is no way the government or the payer has an idea of the shifts in the price of components within the package. This knowledge is essential to regulate/negotiate prices to contain costs. This also explains why there is no dent in the exorbitant health expenditures being faced in India despite government-sponsored schemes.

Finally, the absence of primary care. The wellness clinic component is a step towards bridging that lacuna, but with no funding, the commitment is hollow.

A pilot done in Tamil Nadu showed that within six months of upgrading primary health-care facilities (human resources, drugs and diagnostics), there was a rise in footfall, from 1% to 17%. At the same time, it requires a minimum outlay of ₹1,500-₹2,000 crore to bridge the deficiencies. In the northern States there are hardly any sub-centres and primary health centres are practically non-existent. It is estimated that ₹30,000 crore will have to be spent if this three-tier primary health-care system is to be brought to minimal health standards. The sum would rise further if there are to be mid-level providers (as in wellness clinics).

In an environment of scarce resources, prioritisation of critical initiatives is vital to realising health goals. The implementation of Ayushman Bharat will have to be contextualised and synchronised with a reform agenda that must include improved governance and an enforcement of regulations.

K. Sujatha Rao is former Union Secretary, Ministry of Health and Family Welfare, Government of India


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