Pharma wrap: NHPS package rates spook private healthcare providers

Private hospitals, which are spooked by low package rates offered by the government under National Health Protection Scheme (NHPS) warned that their participation will be sparse in the ambitious scheme.

"It is found that the rates of Ayushman Bharat Scheme are abysmally low across all procedures and that it would be difficult for any private healthcare provider to offer their services or participate in the ambitious scheme," a letter, recently written to the CEO of Ayushman Bharat from the Association of Healthcare Providers India (AHPI), stated.

AHPI is said to represent about 3,000 private healthcare institutions.

It alleged lack of scientific basis for arriving at the rates.

"For some procedures such as myocardial infarction (heart attack), the rate is simply not acceptable, whereas for clubfoot (single cast), it is exorbitantly high. It appears that overall, no scientific basis has been applied to arrive at the rates," AHPI said.

Moneycontrol saw a copy of the letter.

The government, which has issued a 205-page draft Model Tender document, recently priced packages at 15-20 percent lower than packages offered to hospitals under Central Government Health Scheme (CGHS).

The premium is fixed around Rs 1,086 to provide an insurance cover of around Rs 5 lakh to 10 crore families. The document is expected to help states select insurance companies for the scheme.

For instance, for implanting a bare metal cardiac stent, CGHS (non-NABH accredited) is reimbursing Rs 80,540. But NHPS is offering Rs 65,000. It costs private hospitals Rs 85,818 to for the procedure, according to a cost study done by the Karnataka government in collaboration with the Indian Institute of Management, Bangalore.

For total knee replacement, NHPS is offering Rs 80,000 while CGHS was offering Rs 1,49,100. The Karnataka study found that it costs hospitals Rs 2,05,615.

The government defended the package rates, saying NHPS offers economies of scale unlike CGHS that caters to just 2-2.5 million government employees and pensioners.

"Through NHPS, we are targeting 50 crore beneficiaries. There has to be a strategic buying by the government if the volumes are going up on such scale," said Dinesh Arora, deputy chief executive of Ayushman Bharat.

To be sure, the government had allowed states a leeway to increase prices by up to 10 percent on the package rates offered.

It also proposes to give 10 percent more for National Accreditation Board for Hospitals (NABH) hospitals, besides giving 10 percent additional amount for hospitals in remote areas.

The scheme is expected to be launched on August 15 or October 2, even as insurance companies are awaiting clarity on the premium and whether the bidding process would be statewise or district-wise.

In some relief to pharma companies, the government said it doesn't have any plans to make compulsory use of generics in the NHPS scheme.