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‘Ultimately, goal is universal health coverage… where rich subsidise poor, healthy the ailing’: Indu Bhushan

CEO of Ayushman Bharat Indu Bhushan, says, "We have benefited from the previous Rashtriya Swasthya Bima Yojana. Almost all states had RSBY experience. That helped understand demand-side financing”

'Ultimately, goal is universal health coverage... where rich subsidise poor, healthy the ailing': Indu Bhushan Ayushman Bharat CEO Indu Bhushan with Senior Assistant Editor Abantika Ghosh in The Indian Express newsroom. (Express photo by Abhinav Saha)

CEO of Ayushman Bharat Indu Bhushan says it is wrong to say the scheme will give funds to private sector unconditionally, says to not have Delhi on board was a “letdown”, assures the scheme has a strong IT backbone and won’t compromise on data privacy, and dismisses some calculations of the scheme’s expenditure

Why Indu Bhushan?

Launched on September 23, Ayushman Bharat-Pradhan Mantri Jan Arogya Yojana, the largest government health insurance initiative in the world, entitles 10.74 crore families to an annual health cover of Rs 5 lakh. A former Rajasthan-cadre IAS officer, Bhushan was appointed the CEO of PMJAY and the National Health Agency in March this year and has been at the centre of the implementation of the ambitious project since. Before this, Bhushan, who holds a Master’s in Health Sciences from Johns Hopkins University, has worked with Asian Development Bank and World Bank in his 35-year-long career

RAVISH TIWARI: Ayushman Bharat is an intervention based on demand and can also be read as a price assurance scheme for hospitals. Isn’t that counterproductive? Instead of investing money in enhancing healthcare facilities, you are subsidising private players.

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ABANTIKA GHOSH: Also, the Jan Swasthya Abhiyan (a federation of civil society groups working on public health) recently said that the scheme is based on the discredited Rashtriya Swasthya Bima Yojana (RSBY) model.

Well, what is wrong in providing resources to the private sector to ensure services for the poor? Either there is a model where we can ensure services to the poor through the public sector… it is being tried for the past 70 years. Now, even the poor will have the option of going to private healthcare providers. They can also access public healthcare facilities. People are going to private providers anyway and we are only providing these hospitals money if they cater to these people. We are not giving this money to the private sector unconditionally. The condition is that they serve the poor.

This scheme will also change the incentive structure. Right now the structure is such that services are provided to those who can afford it. That will change. More than 50 per cent of our private sector facilities are concentrated in the top 20 cities because that is where people have the paying capacity. It is not so in tier-2 and tier-3 cities; they do not have paying capacity. This scheme is trying to break that vicious circle by providing incentives to the private sector to expand their services to these areas which was not being done earlier because of the lack of business opportunities.

Even for the public sector it changes the incentive structure. For public sector facilities, (patients covered under the Ayushman Bharat scheme) will be VIPs. They will bring money with them, which in turn can be used as incentives for doctors and other para-medical workers. It will also provide resources for upgrading infrastructure of public sector hospitals.


COOMI KAPOOR: There seems to be a contradiction in the whole scheme because your target group are dispossessed people in rural areas. The healthcare in these parts is very poor. So then, shouldn’t the priority be to set up healthcare centres in rural areas before launching this scheme?

This scheme is not taking away from anything that the government has done in the past 70 years, and the work it is doing right now. If you look at the distribution of public health services, it’s skewed in favour of rural areas. But the issue has been that these public services have not benefited the poor people because of the extreme inequities in terms of access to facilities. This scheme provides that access.

You are right, we need to strengthen public services outside of big cities such as Delhi and Mumbai. But, how do you do that? You can either do that by following the previous approach, where we provide services with the assumption that they will reach the people… which will not happen. Now, with this scheme, we are providing incentive and a huge market for the private sector.


ABANTIKA GHOSH: There are not enough private hospitals even in big cities outside of Delhi. Delhi is not part of your scheme and for thousands of people, Delhi is still the place to come to for healthcare.

To not have Delhi as part of the scheme has been a bit of a letdown. Lots of people who come to Delhi for health services live in areas around Delhi and they are a part of our scheme. For them not to have empanelled hospitals in Delhi will be a problem. To address that we have empanelled three major hospitals — AIIMS, Ram Manohar Lohia Hospital and Safdarjung Hospital. We are also looking at the possibility of empanelling other hospitals. There are more than 500 hospitals from Delhi that have shown a keen interest in the scheme. We are looking at various options to bring these hospitals on board. I am still hoping for Delhi to join the scheme.

One problem with Delhi has been the lack of communication with the political leadership. We have not been able to communicate with them directly. At the bureaucratic level, whenever we have spoken to the chief secretary or the health secretary, they have shown a willingness to join. They send an offer, we make changes and it goes back, but then it never comes back. We don’t know why that is the case.

'Ultimately, goal is universal health coverage... where rich subsidise poor, healthy the ailing': Indu Bhushan Indu Bhushan said, “We are connecting the whole country through our IT backbone. It will help us identify disease patterns. It can also have a good impact on public policy.”

ABANTIKA GHOSH: Government hospitals give services for free. There is a registration fee of Rs 5 or 10; that’s all. What are they being paid under the scheme?

At most places government services are free, but not all services are free. In many cases you still have to pay for implants and things that have to be bought from outside. This scheme will ensure a few things in the public sector. One is that it will be completely free. So excuses such as we have run out of medicines or implants or other things that have to be bought from outside, will cease to exist. That is because it is all paid for under the scheme. Secondly, public hospitals usually do not have facilities such as diagnostics, MRI etc. The Ayushman Bharat scheme allows them to have public-private partnership and they can use the money they are receiving from us to get some of these facilities on contract.


RAVISH TIWARI: A lot of consumers of this service are people using insurance for the first time. Even people in urban areas struggle with it. You need a huge IT backbone to ensure that things run smoothly. How are you dealing with it in remote areas where Internet connectivity is poor and hospitals do not have good IT infrastructure?

We are facilitating this through a strong IT backbone. All the empanelled hospitals are connected to this IT backbone. It came as a pleasant surprise to me that most of the district and private hospitals didn’t have any connectivity issue. I think this is part of the change that has happened in India in the past few years.


There are some districts in the Northeast that have a connectivity problem. We have offline modules for them. But 99 per cent of the hospitals, or even more, do not have a connectivity problem. The IT system is working very well even in remote areas of Chhattisgarh.

Also, fortunately, only few states have opted for the insurance model — where an insurance company has to come in and provide cover. In most states, especially in bigger and poorer states, we are following the ‘trust model’, where the government is paying for the claims, and so far there have been no problems.


We have actually benefited from the previous Rashtriya Swasthya Bima Yojana (RSBY, launched in 2008), which was piloted in many states… Almost all states had some experience with the RSBY. That has helped in terms of improving understanding of how demand-side financing works.

ABANTIKA GHOSH: In the first few meetings with you, insurance companies had said that the premium amount was too low. So then why are so many states opting for the trust model? Is it because insurance companies are unwilling to come on board?

Not at all. Actually, insurance companies were never willing or unwilling to come on board. We had not specified any insurance premium. We had said that the premium will be discovered through market forces and through open bidding. And we had seen a huge variance in terms of premium quoted. For example, Nagaland said Rs 444 per family whereas some states quoted Rs 1,600.

ABANTIKA GHOSH: J&K and Puducherry have opted for the insurance model. What is the premium there?

J&K has Rs 775 per family and Puducherry, I think, has not opened the bid yet. We had not even specified Rs 775, it was decided through open bidding.

ABANTIKA GHOSH: Now that the scheme has been rolled out, do we have a realistic estimate of the cost? What about claims by development economist Jean Drèze, who has pegged the annual cost of the scheme at Rs 50,000 crore?

He (Drèze) based his calculation on the assumption that every family uses 1 per cent of their Rs 5 lakh quota in a year. That is when the annual expenditure will come to Rs 50,000 crore. Now, this 1 per cent is just a number that he assumed; if it’s 2 per cent, then the cost will probably be Rs 1,00,000 crore.

A better way of looking at it would be through a study of the healthcare-seeking behaviour at the moment or what has been the premium discovered through the market. If you look at the healthcare- seeking behaviour right now, you will see that in the bottom 20 per cent, the hospitalisation rate is 2 per cent… and so about one crore people are hospitalised every year. The expense of one hospitalisation is anywhere between Rs 8,000-Rs 10,000. So then, the annual expenditure would be about Rs 10,000 crore.

But, of course, as the scheme becomes more mainstream, we expect the 2 per cent to increase to 3-4 per cent. It will take some time. When it increases to 4 per cent, the expenditure too will increase to Rs 20,000 crore. So our initial estimate is about Rs 10,000 crore (annually) or slightly more than that.

PRASANTA SAHU: Chhattisgarh has opted for the ‘hybrid’ model, where payments till Rs 50,000 per annum will be made through insurance companies, and higher payments up to Rs 5 lakh will be administered by the government-run trust.

Chhattisgarh has a very good scheme running right now. It has been going on for a long time and that is what we expect with Ayushman Bharat as well. (In the future) the hospitalisation rate will go up and people instead of coming later, will come to hospitals earlier. Right now, a large proportion of our hospitalisation comes from states. In Chhattisgarh, people know about the scheme and come in large numbers for hospitalisation. That is not the case in UP, Bihar or Madhya Pradesh. In these states, such a scheme is being implemented for the first time.

ABANTIKA GHOSH: Of the 31 states and Union territories under the scheme, how many have opted for the trust model, hybrid model and insurance model?

Eighteen have opted for the trust model, seven for insurance model and the remaining for the hybrid model.

RAVISH TIWARI: Have you figured out why a majority of the states have opted for the trust model, because in the long term, it will have a fiscal bearing on states?

In terms of the fiscal impact and outflow of funds, it does not really matter whether you are doing it through trust mode or insurance mode, because you will also pay for the administrative costs. The insurance company will bring in efficiency and that will reduce some of the expenses. If you look around the world, everywhere, with the exception of countries such as Columbia or Mexico, most insurance is implemented through trust.

So why have states opted for the trust model? It was a surprise for me as well. Initially, when we were holding discussions with states, most of them had schemes running on the insurance model. But, there were also states such as Andhra Pradesh and Telangana which had the trust model and were doing pretty well. These states realised that trust provides more flexibility. In the insurance model, once you have decided on a package, you get into a contract with the company and that cannot be changed. That in turn has implications on cost.

ANOOP PHILIP: The success of any scheme depends on data. There is gross under-reporting of illness in the country. Does the government expect an explosion in demand in the future?

I am 100 per cent sure that there will be an explosion in demand. If you see the data, you will find an ironic inverse correlation between health and the proportion of people who are ailing. The ‘healthy’ states where the Infant Mortality Rate (IMR) is low and other health indicators are good, the proportion of people who tend to fall sick is high. It is not that these states have a higher proportion of people who are sick, but I think they are more aware. They are reporting it better. In states with high IMR you will find that reported sickness is very low. With this scheme we hope to see a reversal of this trend.

We are connecting the whole country through our IT backbone. It will help us identify disease patterns. It can also have a good impact on public policy. For example, if we find that anaemia is prevalent in a certain belt, we can make a public policy intervention there.

KAUNAIN SHERIFF M: Comparing the Capital’s healthcare scheme to Ayushman Bharat, Chief Minister Arvind Kejriwal said that not more than six lakh families, out of the 50 lakh in the city, will benefit if the Ayushman Bharat scheme is implemented in Delhi. He also said that Ayushman Bharat is ‘not at all a universal scheme’.

There are many states that have their own schemes and we have found a way to converge with them. In Jharkhand, for example, we are supporting around 27 lakh families, whereas the total number of families covered is more than 50 lakh. This doesn’t mean that we are not adding value.

A lot of people come to Delhi for healthcare services. Hospitals make profits by cheating people who come from outside. This scheme will be of help to them. Right now, the scheme in Delhi will not help people who are coming from outside. Also, people from Delhi go outside. These people won’t have access to services if Delhi is not part of our scheme. So, there is the portability advantage.

Six lakh may be a small number, but it will ensure that these people have access to resources. Yesterday, I read that Delhi is foregoing around Rs 15 crore every year by not joining the scheme. In addition, the hospitals in Delhi are giving up a lot of income that they would have generated by treating patients from outside Delhi.

Of course, universal healthcare coverage is the goal and everyone should be covered. This is just the beginning. Ultimately, we have to have a universal coverage where we can ensure that rich people subsidise poor people, healthy people subsidise unhealthy people, and young people subsidise the elderly. That kind of a social compact will only come when we have universal health coverage. And this scheme is a huge leap towards that goal.

KAUNAIN SHERIFF M: People have to get hospitalised to access the Ayushman Bharat scheme. And the model is such that doctors will now urge patients to get hospitalised, even for small treatments. In top government hospitals, the IPD (In Patient Department) occupancy rates stand at 150 per cent. So how do you plan to handle that?

While hospitalisation is needed for seeking benefits, there are also certain packages where daycare is available. But yes, there might be perverse incentive here — pushing people to get hospitalised — and we would count that to be borderline fraud. If not fraud, then abuse for sure.

RAVISH TIWARI: You said that the scheme will also help detect emerging public health situations in the country. But for that you need to have more data, which means that the system will be capturing more data. You will be recording the patient’s transaction, services provided to her and the ailment she is seeking treatment for. Isn’t that a breach of privacy?

We are dealing with very sensitive information — health records, Aadhaar data etc. We have to be extremely careful and follow the highest standards of maintaining privacy and security. We are the first programme under the Ministry of Health which has its own policy for privacy and security and we follow the best international practices. We will ensure that all the data is received in a transparent manner and is then stored and used carefully. We will also ensure that the data we don’t need is destroyed or not stored and that no one gets access to it without the consent of the patient.

Also, we will not be sharing this data with anyone outside the country without a specific reason.

PRASANTA SAHU: Why is it taking so much time to identify the beneficiaries of the scheme?

I don’t think it has taken very long. We have identified more than 10 crore families. Since the launch, our website has had over 12 lakh hits each day.

ABANTIKA GHOSH: For over two decades, there has been talk about increasing the country’s health spend to 2.5 per cent of the GDP. When do you think that will happen?

I hope it happens by 2025. The challenge has been that (our GDP) has been growing by 6-8 per cent. So even if we increase the health budget by say 6-8 per cent, it will still remain the same because we are growing. So, to go from 1.2 to 2.5 per cent, the budget of our health sector needs to grow by 20 per cent.

Also, more than the health budget, it’s about ‘absorptive capacity’. It is not just about a large budget but whether we can absorb it. That probably has been one of our challenges.

First published on: 07-10-2018 at 12:30:21 am
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