While advocates of the scheme claim PMJAY has saved 600 million people from becoming impoverished due to medical costs, critics too were equally vocal in highlighting structural problems of the scheme
An interesting debate has been raging in the media between supporters and critics of the Pradhan Mantri Jan Arogya Yojana (PMJAY) scheme.
PMJAY or Ayushman Bharat, popularly known as Modicare, aims to provide Rs 5 lakh coverage to 10 crore poor families or nearly half a billion people. It is considered an important scheme politically for Prime Minister Narendra Modi to showcase to voters as he heads into general elections next year.
While advocates of the scheme claim PMJAY has saved 600 million people from becoming impoverished due to medical costs, critics were equally vocal in highlighting structural problems of the scheme like lack of focus on primary care, raising demand in a supply deficit environment, low package rates, paltry budgetary allocations and lack of evidence of health insurance reducing out-of-pocket expenditure.
Former Health Secretary K Sujatha Rao filed her salvo on PMJAY last week. Writing in The Indian Express, under the title "Insurance, false assurance' - Rao listed out the pitfalls of PMJAY.
"Government-subsidised insurance schemes are closely-linked to the prevailing macroeconomic variables. In environments of low tax-to-GDP ratio or high fiscal deficit, budgets for health often get slashed," Rao said, adding: "In such situations, any contractual obligation requiring timely payments could potentially imply a substitution effect with money being diverted from other heads such as the more desperately needed primary care and infectious disease-control programmes."
She cites Andhra Pradesh as an example, where the combined state neglected primary healthcare for the Aarogyasri Scheme, which is meant for secondary and tertiary care delivered largely through private hospitals.
According to Rao, offering a voucher and raising demand in a supply-deficit environment will not solve the problem, more so in a highly commercialised and corrupt system operating within a weak regulatory framework.
The government responded to these charges. Writing for the same paper, Amitabh Kant, CEO of government policy think-tank NITI Aayog and Indu Bhushan, CEO of National Health Agency (NHA), the implementing agency of PMJAY, have jointly tried to rebuke some of the concerns raised by Rao and other critics. Here are five important takeaways from their response:Primary care
Kant and Bhushan said that while the government is trying to fix primary care, through 1.5 lakh health and wellness centres, it is equally cognizant of the fact that a large number of poor people will need secondary and tertiary care.
"Currently, they don’t have much choice when they fall seriously sick. Without PMJAY, either they would delay or avoid seeking treatment, or sell their assets or borrow heavily to fund such care," Kant and Bhushan said.
"There is no trade-off between investing in primary and preventive health for the general population and supporting curative health for the poor," they argued.Bridging demand-supply
In the short run, Kant and Bhushan said supply will come from spare capacity in the private sector as well as from the more efficient use of existing capacity.
According to them, private hospitals have an occupancy rate of 60-70 percent. In the medium-term, they expect the market to respond through expanded private sector capacity in Tier II and III cities.
"With significantly greater paying power due to PMJAY and government incentives for the private sector and public-private partnership operations, the private sector’s supply of quality services is bound to expand," the stated.
"Over the last decade, approximately 1 lakh hospital beds have been added annually, but this will need to increase by almost 1.8 times if we are to reach the target of 3.6 million beds by 2034. PMJAY will catalyse these changes," they Kant and Bhushan wrote.Package rates
On package rates, Kant and Bhushan said rates under PMJAY have been fixed conservatively with a view to improve the scheme’s sustainability. They also point out to the large volume of business that the scheme will generate, creating economies of scale. The government is open to modifying the rates, when supporting evidence becomes available, they added.Funding the scheme
According to Kant and Bhushan, with a budget of Rs 10,000-12,000 crore per year, it can realistically be expected to have only limited impact on overall out-of-pocket spending on healthcare, which amounts to around Rs 2,40,000 crore. However, PMJAY will significantly reduce the out-of-pocket spending incurred on catastrophic health expenses by the poorest 40 percent of the population.
They believe the newly introduced health cess and other public resources, in addition to government commitment to increase spending on health from the current 1.2 percent of the GDP to around 2.5 percent over the next seven years, will help in funding the scheme.Out-of-pocket expenditure
While Kant and Bhushan admit that there is no national level study to show that government-funded health insurance schemes reduce out-of-pocket expenditure on healthcare, they point to China's experience in reducing out-of-pocket expenses by embarking on a similar universal health coverage in 2007. Out-of-pocket spending in China was around 60 percent of its health expenditure in 2007, which has fallen to 30 percent now.Not a settled debateIt's early days to judge PMJAY. It's commendable that the government expanded access to health services for 40 percent of Indians living below the poverty line. But health activists are deeply concerned about the haste with which the scheme has been conceived and announced.
There are questions on effectiveness of the 'insurance model' that relies heavily on private sector for service delivery, which isn't well regulated.
While the government assures that it has learnt lessons from the failure of Rashtriya Swasthya Bima Yojana and several state-level schemes and built checks and balances into PMJAY, only time will tell us how much have they learnt.But healthy scrutiny of such an important scheme is extremely important.