The Pradhan Mantri Jan Arogya Yojana (PMJAY, also called Ayushman Bharat or Modicare)) that offers Rs 5 lakh health insurance scheme may need to be in operation for at least 10 years for its real benefits to reach the masses.
A team from the University of Chicago is working with the National Health Authority (NHA) to offer strategies to improve coverage and awareness under the scheme.
Until now, 27 million people have been enrolled under the scheme and the target is to enrol 500 million people classified under the socio-economic caste census (SECC). NHA is the umbrella body to implement the scheme.
Research has shown an estimated 7 percent of India’s population is pushed into poverty each year due to medical expenses. In an interaction with Moneycontrol, Anup Malani, Professor at the University of Chicago said they are looking to improve efficiencies under the programme.
“You need to give it time. About 10 years later, this scheme could make a meaningful impact as a public health insurance scheme in India,” he added.
The Tata Centre for Development, in collaboration with the University of Chicago and the government of Karnataka, had conducted a randomised control trial that examined the impact of India’s previous government-run program-RSBY-on the health and financial security of roughly 50,000 people in Karnataka.
Malani said the study has direct relevance for PMJAY, also known as Modicare. This programme covers up to 500 million poor and near-poor Indians for up to Rs 5 lakh ($7,000) in hospital expenses. Important lessons for PMJAY emerged from the study.
RSBY and lessons learnt
Malani said they looked at what happens to RSBY when it is expanded to the above poverty line families as well. They had started the project in 2013 and followed the individuals for four years since then.
The idea was to look into the individuals covered and how people utilise the benefits. Further, the team also wanted to look into how the scheme improved the financial status of households.
“People in India are pushed into poverty due to high medical expenses. We wanted to take an overview from the see what the financial benefits were,” he added.
Compared to RSBY where a health cover of Rs 30,000 was given, Modicare offers Rs 5 lakh cover. This includes tertiary care as well.
Giving the example of the RSBY programme, Malani said the scheme moved quickly to 120 million enrollments between 2008 and 2012.
“Modicare will also see similar increases in enrollments. But the country needs to set up an infrastructure that is able to meet the rising demand. Like the United States, it will take time,” he added.
With respect to the RSBY scheme, Malani said, on the one hand, while there were concerns about fraud, on the other the premiums quoted also fell. With the trust model, Malani said some of these issues could be addressed.
“The success of such an ambitious health insurance programme hinges on three primary factors, whether people sign up for the service, whether they use it, and whether hospitals participate. Participation of private hospitals is key,” he added.
This comes at a time when the majority of private hospitals are reluctant to join Modicare given the low rates for the different procedures proposed by the NHA.
Another area of work is awareness. Under RSBY, Malani said many enrolled did not know how to use the cards for availing medical facilities.
The research has recommended putting more effort into information and education campaigns. Besides reducing paperwork and hassle costs for beneficiaries—PMJAY—according to the research findings, must ensure that hospitals have functioning payment systems and do not turn away patients.
Besides addressing demand and supply issues, sound financing and a strong data infrastructure are also important. According to the research team, for a financing scheme like PMJAY, it is important to get the data backbone right, without which claims can’t be tracked and paid, and without which the plan runs the risk of failing.
Obamacare vs Modicare: What can India learn?
Malani said while Obamacare and Modicare are similar in spirit, there are technical differences.
Obamacare covered medicine and physician care and it also provided a subsidy for those not rich enough to buy their own health insurance plan. Modicare, on the other hand, is only for those below a certain economic class.
“India has had a public health insurance system only for 10 years. US introduced a programme like RSBY called Medicaid as early as 1965. But even in the US, the first decade of the programme was very challenging. They had to find enough hospitals, physicians to provide services,” he added.
Considering the vast population of India, Malani said it would be advisable to not expect a quick turnaround time for the programme.
“In 2014, Obamacare launched its Medicaid expansion and premium subsidy to get 24 million people enrolled. It took more than a year to get 10 million enrollees and even now they only have 16 million enrollments,” he added.
How to improve access to private hospitals
Malani said private hospital participation will depend on their individual locations. Similar to the RSBY scheme, where private hospitals were keener to participate, Malani said rural areas will see more success in Modicare than urban areas.
However, he also said since the scheme does not make financial sense to the private hospitals in larger cities, some tweaks could be considered.
“NHA is also open to tweaks in the rates that have been uniformly set for hospitalisation procedures across the country. In countries like the US, there is a cost factor adjustment based on the procedure and the location and it shouldn’t be difficult to implement in India,” he explained.
Apart from this, he said that the rise in demand would require more private hospitals to help meet the gap. Going forward, Malani said Modicare could also improve a rise in private facilities provided they have adequate financial incentives/subsidies.
Future expansion under Modicare
The first step, said Malani would be to have selective targeting through viral marketing campaigns. Further, Malani said that the claims data can be looked at to see what are the exact medical needs of policyholders as well as if there is any fraud by hospitals over the billing.
“Since the states under the trust model have the power to settle the claims, they also can take over the information campaign. How successful the programme will depend on how many relevant people we are able to target,” he added.Modicare is the world’s largest health insurance scheme and was launched in September 2018. A total of 1.6 million beneficiaries have taken the hospitalisation benefit under the scheme among the 14,912 network hospitals