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Ayushman Bharat-PMJAY CEO Indu Bhushan. Photo: HT
Ayushman Bharat-PMJAY CEO Indu Bhushan. Photo: HT

Confident of getting more funds for Ayushman Bharat: CEO Indu Bhushan

Ayushman Bharat CEO Indu Bhushan on the challenges before the health insurance scheme and how it can be a disrupter in the healthcare space

New Delhi: Indu Bhushan, chief executive officer of Ayushman Bharat-PMJAY, talks about the challenges before the scheme and how it can be a disrupter in the healthcare space. Excerpts:

One consistent feedback is that the packaged rates of medical procedures are too low…

One of our biggest challenges was the packaged rates. Many professional associations and hospital lobbies have been trying to convince us to increase rates, and to convince them that it’s a new scheme capable of achieving economies of scale was certainly challenging. On packaged rates being too low, I want to understand how much of this is bargaining and how much of this is real. Of course we will also look at data and if the evidence suggests rates need alteration, we will be open to it.

PMJAY will increase the demand manifold; supply, of course, will follow with a huge time lag. How do you plan to cope with this?

Yes, it will be a constraint in the beginning. We are hoping that the supply will come from better management of services. Some of it will come from spare capacity of private hospitals because even the private hospitals are not running to full capacity. Over time, of course, some of the supply will come through expansion but that will take time as establishing hospitals and human resources is a long drawn process.

For FY19, the government has allocated 2,000 crore for PMJAY. Is that enough? Some estimates say you need 50,000 crore…

We have asked for more funds and are very confident of getting it. Public expenditure on healthcare needs to go up. To achieve this, we need to increase the health budget by 20% every year, assuming that our GDP will grow by 6-8% every year. Our own estimates of financing needs are close to 10,000 crore. The estimate depends on assumptions on health care seeking behavior and hospitalization expenditure. This estimate of 50,000 crore sounds high to me at least in the initial phase of the scheme.

There is a view that public health needs to be addressed first. Also that the scheme doesn’t pay for out-patient care, which constitutes the bulk of expenses.

I find this view completely misplaced and short-sighted. Of course we have to strengthen public health system, but that will not address the curative needs for the poor. If they get hospitalized, they need to pay for it—the scheme does that for them. The scheme focuses on catastrophic expenses that pushes many into deeper poverty.

The health and wellness centres being built by the government will hopefully address the out-patient department (OPD) needs at nominal rates, but for us it’s about paying the big ticket expenses. Another reason that we have not included opd in the scheme is that we want to start with health conditions which are easier to monitor, especially from the fraud and abuse perspective.

What are the immediate challenges for you to deal with?

Right now the main challenge is to have sufficient number of quality hospitals to provide the required service and to design the scheme in a way to check frauds and abuse. We want to ensure that we can minimise the incidence of fraud and abuse because it’s like cancer, once it starts it continues to grow and that can be the bane of the scheme leading to loss of reputation and resources. Second is to ensure that the IT system remains stable and robust. We are also working on standard treatment protocols. Some states that run their own health insurance schemes like Maharashtra and Andhra Pradesh already have these protocols but enforcement has been an issue. So, ensuring quality is an ongoing challenge, as is the challenge to increase capacity.

Many view PMJAY as the disrupter in the healthcare sector. Your views?

For the last 70 years the government has primarily focussed on its role as a service provider in the healthcare sector. The assumption has been that once you build it they will come. But this assumption has not been correct, especially for the bottom 40% of the population. Public services are not strong enough and nearly 70% of health care is provided by private sector. The use of private sector healthcare by the bottom 40% of the population is very low, much lower than their use in the government sector. Further, if you look at the distribution of health care services it’s highly skewed. About 70% of healthcare infrastructure is located in top 20 cities in the country and that’s not where most of the poor people live. This is because paying capacity is concentrated in these areas.

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PM-JAY will change the incentive structure, because instead of financing the services we are financing the use of these services by bottom 40% of the population. This is going to increase the use of services including private services, which will eventually expand in tier 2 and tier 3 cities and rural areas. PM-JAY promises economies of scale, so I think everyone in the private sector will come on board because they can’t have a business model where they ignore 40% of the population. The close involvement of the private sector in the scheme also provides a leverage to the government to improve the quality of their services and more effectively enforce regulations.

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