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Modicare will ensure a shift towards use of generics from costly branded drugs, says NITI Aayog vice-chairman Rajiv Kumar. Photo: HT
Modicare will ensure a shift towards use of generics from costly branded drugs, says NITI Aayog vice-chairman Rajiv Kumar. Photo: HT

Modicare will expand private healthcare market: NITI Aayog VC

The Modicare health insurance scheme will lure more investments into private healthcare sector and drive down cost of treatment at private hospitals in near future, estimates NITI Aayog

New Delhi: Hundred million families coming under the National Health Protection Mission (NHPM) could lure more investments into private healthcare market and drive down cost of treatment at private hospitals in near future.

NHPM, often called Modicare, is set to significantly lower the cost of healthcare at private hospitals by scaling up the healthcare market, estimate NITI Aayog, country’s apex policy think tank and industry bodies.

“NHPM will bring a huge supply side response. The fact that the scheme will be available across the country will bring private sector healthcare providers to Tier-3 and Tier- 4 towns and expand operations there. The healthcare market will expand hugely and it will have the potential to bring prices down because of its scale," said Rajiv Kumar, vice-chairman, NITI Aayog in an interview.

“Also, the protocols that will be signed between health insurance companies and healthcare providers will become benchmarks for other private providers. That will also help in bringing prices down. One will also see a shift towards use of generics from costly branded drugs. The whole healthcare paradigm will radically transform," he said.

The NHPM, labelled the world’s largest health assurance cover, aims to provide health insurance to nearly 40% of the population—i.e. more than 100 million poor and vulnerable families—with the premium paid by the government. The finance ministry in February had initially announced an outlay of Rs2,000 crore. The Union health ministry last week announced an allocation of Rs10,000 crore to Modicare for next two years with Union health minister J.P. Nadda saying more funds will be provided accordingly.

“With NHPM, it is very likely that investment in mid-size hospitals with more than 50 beds and more will increase. This may cut the costs of the health services considerably," said Arup Mitra, professor, Health Policy Research Unit (HPRU) at the Institute of Economic Growth, New Delhi.

NHPM will be an entitlement-based scheme based on data from the deprivation criteria in the Socio-Economic Caste Census (SECC). Beneficiaries under NHPM can avail of benefits in both public and empanelled private facilities. Health policy experts claim that the scheme will prove to be a game changer with poor families benefiting the most.

“Poor people will not fall back into utter poverty due to a health emergency and they can be assured that the scheme will take care of their health needs. The scheme is a game changer in the health sector and it should be rolled out in a manner that ensures the best possible coverage," said Kumar.

Private health and insurance industry experts also expect new jobs to be created. “The scheme will also create lakhs new jobs in the country as new healthcare facilities will come up in smaller districts and villages," said Antony Jacob, CEO, Apollo Munich Health Insurance.

The government also has a provision of extending free treatment to the poor by reserving some beds in private hospitals. However, most private hospitals claim they don’t get enough poor and underprivileged patients for free beds.

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