Health secretary Preeti Sudan. Photo: Pradeep Gaur/Mint
Health secretary Preeti Sudan. Photo: Pradeep Gaur/Mint

‘Govt is committed to take public expenditure on healthcare up to 2.5% of GDP’

'Modicare', labelled the world's largest health assurance scheme, aims to offer a health cover of Rs5 lakh per family per year, targeting over 100 million poor and vulnerable families

New Delhi: The Union cabinet in March approved the centrally sponsored Ayushman Bharat-National Health Protection Mission (AB-NHPM), which will be implemented by the health ministry. The scheme known as “Modicare" and labelled the world’s largest health assurance scheme, aims to offer a health cover of Rs5 lakh per family per year, targeting more than 100 million families belonging to poor and vulnerable population based on Socio Economic Caste Census database.

Preeti Sudan, secretary, ministry of health and family welfare, spoke in an interview about the scheme, implementation procedures and its long-term implications on healthcare in India. Edited excerpts:

What timeline has the Union health ministry decided for implementation of the AB-NHPM?  

Implementation will depend on the preparedness of the states as they will need to carry out various preparatory activities. It is primarily upon the states to inform their readiness to roll out the scheme. 

Previously, health insurance schemes such as Rashtriya Swasthya Bima Yojana (RSBY) and similar state health insurance schemes have not been quite successful in India. How do you think AB-NHPM will work out?

Various studies have shown that access to healthcare for benefits covered under RSBY and state schemes has improved. In terms of out-of-pocket expenditure (OOPE) reduction, evidence has been mixed. However, RSBY was limited in cover as it provided cover of only Rs30,000 and therefore, for conditions which cost more than the cover or when insufficient cover is left for treatment, families may need to make OOPE. Since NHPM has a much higher cover (more than 16 times higher) there will not be many situations where beneficiary will need to pay from out of pocket and therefore, OOPE will be reduced. Experience from implementation from successful countries, RSBY and states’ schemes have been incorporated into NHPM design. A strong technical design coupled with a stronger commitment from central and state governments may be the key to success of this scheme. 

India is one of the economies in the world that spend least on healthcare i.e. below 2% of GDP. AB-NHPM is going to require huge costs for paying premiums. How will government manage the costing of the ambitious programme? 

Increased spending on healthcare is one of the priorities of the government. We have committed to take the government expenditure on healthcare up to 2.5% of the GDP. In the cabinet approval, more than 10,000 crore has been allocated for the scheme, which is a very small percentage of the total health budget of the country. In addition, new cess has been introduced that will also provide funds for the scheme. Therefore, the costs involved for the scheme will be met by the government without any issue. NHPM shall pay hospitals on carefully decided package rates. It shall also involve clinical protocols and audit mechanisms to curb malpractice among the providers. Thus, over long term, the cost can be effectively monitored. 

The scheme is entitlement based, wherein the poor and vulnerable people can get treatment in central, state government hospitals and selected empanelled private hospitals. How will you select private hospitals? 

All public hospitals will be deemed to be empanelled under the scheme while private hospitals will be empanelled based on specific criteria. A committee under chairmanship of director general of health services has been constituted by MoHFW that is in the process of finalizing the empanelment criteria for private hospitals.

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