The Ayushman Bharat, a national health protection scheme, has proposed to cover over 10 crore (100 million) poor and vulnerable families  to start with, and slowly increase this number so that every Indian can get the benefit of this scheme.

The scheme seeks to provide a coverage of Rs 5 lakh  (Rs 500,000 or approximately US$7,300) per family per annum for hospitalization requiring secondary and tertiary care. The scheme is intended to subsume the pre-existing centrally sponsored health schemes such as Rashtriya Swasthya Bima Yojna (RSBY) and the other state-sponsored health schemes.

The Association of Healthcare Providers India (AHPI) has recently written to the government stating their hesitation to participate in the Ayushman Bharat scheme. Their unwillingness seems to stem from the emerging clarity regarding the non-viability of the scheme. The AHPI is of the opinion that the Ayushman Bharat’s proposed rates of reimbursement are neither sufficient nor scientific, and are also arbitrary.

Representing over 3,000 private healthcare providers, the AHPI in a letter addressed to the CEO of Ayushman Bharat Scheme, Indu Bhushan, stated: “It appears that overall, no scientific basis has been applied to arrive at the rates”. The letter further reads that if the participation of healthcare institutions in the scheme turns out to be sparse, the scheme would be ineffective and as a result will most likely fail.

Following a fierce criticism, the government brought about changes in the initial reimbursement package rates. However, the private sector continues to be dissatisfied with the revised rates, citing the reason that they do not match the actual costs.

Some time ago, the Karnataka state government collaborated with the Indian Institute of Management-Bangalore (IIM-B), to comparatively analyse the costs of procedures done by private medical institutions against the reimbursement packages offered by the government health schemes. The analysis indicated that the reimbursement rates were lower by a big margin than the actual costs claimed to be borne by private hospitals.

Government reimbursement rates vis-a-vis costs of medical procedures

Not so long ago, the Karnataka state government along with experts from the National Accreditation Board for Hospitals and Healthcare Providers (NABH) as well as IIM-B, in their analysis, compared costs incurred by empanelled private hospitals with the reimbursement packages offered by the government under the Central Government Health Scheme. The AHPI has used this analysis to compare the rates offered by the Ayushman Bharat health scheme.

It has been found that even after the rates were revised by the government, the private health sector’s expectations are still not being met. For instance, the Karnataka government’s study estimates that the cost of implanting a cardiac stent would amount to about Rs 85,818. While the Central Government Health Scheme is reimbursing an amount worth Rs 80,540, under the Ayushman Bharat scheme, the reimbursement package offered for the same implant is only Rs 65,000, which is more than Rs 20,000 below the actual costs incurred during each implant.

The Karnataka government’s analysis points out further disparities regarding other medical procedures as well. For example, while a knee replacement is estimated to cost about Rs 1,98,207, the reimbursement offered under the new scheme is Rs 80,000, which is less than half of the cost of the procedure as claimed by private hospitals.

Similarly, a procedure for the amputation of a limb, more specifically a leg just above the knee, is estimated to cost Rs 94,0003. The Ayushman Bharat scheme proposes a package of Rs 18,000 for this procedure, which is completely disparate.

Yet another disparity is seen in case  of hysterectomy undergone by patients suffering from cancer. While the cost estimated by the analysis is Rs 1,45,143, the reimbursement offered under the scheme is only Rs 50,000.

The AHPI has concluded that the Ayushman Bharat scheme is only reimbursing about 12% to 58% of the actual costs of medical procedures conducted by private hospitals. They have said that such low and unrealistic rates are untenable.

Data analytics in healthcare: The way forward

Big data analytics can help clear the current roadblocks that the healthcare system faces in India today. It can not only improve the quality of care, but also help drive clarity of data in terms of actual costs of treatment, which in turn will have a huge positive impact on the health insurance industry. A lack of clarity in data can mean that health insurance providers are vulnerable to fraud, poor decision-making capacity, a lack of optimisation in processing health insurance claims and sub-optimal underwriting.

The healthcare system is rich in data. All that is needed is the right infrastructure in order to collect the data, clean, normalise and analyse it in order to exploit this rich data-mine for the improvement of the health insurance industry.

The Ayushman Bharat scheme and it’s reimbursement package rates for medical procedures provide a pertinent example of how lack of clarity in health data can threaten a important national goal, that has been dubbed to be the world’s largest health scheme.

All the above studies mentioned, which are showing the rate comparison with Ayushman Bharat, are not providing the following important facts:

  • What is the cost of such procedure in a specific room category type?
  • What is the type of implant being used in surgeries like joint replacement and stents?
  • Which category of hospitals were used for arriving at that averages?

The health scheme by the government, which is otherwise well intended and ambitious, can still benefit from a fresh perspective that big data analytics can provide.

In order to improve the situation, a more structured approach backed by a willingness to technologically evolve is required to shift the status-quo and lift the healthcare system and the health insurance industry out of its current stalemate.

Big data and data analytics can provide speed, accuracy, volume and veracity of data which the government and the private sector can use to provide better healthcare and insurance. Ultimately, good quality data will bring about a win-win situation for all parties involved, namely, the government, private players and patients.

Since it’s in the nascent stage, if efforts are made to capture the important data, right from the beginning, the data analytics can not only help in smooth functioning of the scheme in terms of processing and pay-outs, but also will help dealing with the important problem of fraud, waste and abuse (FWA).

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  1. Hi Abhijeet,

    Article hits the nail in right area “pricing”. There is one area that government can work on, procuring the implants from the direct manufacturer, and the same to be supplied to all NWH who are serving under this scheme.
    Another area can be standardizing the rates for generic medicines to be used under this scheme.

    Hospitals have always been crying on the fact that rates provided in government schemes are on the lower side, and that the same results in grievances.

  2. The best thing is for the government to develop government hospitals on a large scale like in the UK.
    All doctors can be absorbed for services in government hospital.
    As it is, there is a huge shortage of good specialists in government hospitals.
    The population will learn the discipline of proper preventive health check ups, and this will prevent the enormous number of sudden deaths due to heart attacks. Heart disease is the number one killer disease that suddenly kills people without giving an opportunity to go to hospital, in 40% of heart attacks.

  3. In case the patient wants to avail better services, the hospital should be allowed to charge extra from the patient, with the consent of the patient. Since the government has limited resources, the people who can afford, and can pay for better services, should be allowed.

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