Slow But Steady Start

It has now been a year since the ambitious health care scheme known as the Pradhan Mantri Jan Arogya Yojana (PMJAY) was launched. In that period, it has racked up some impressive numbers: Most importantly, there were about 4.5 million cases of hospital treatment under the scheme. This is a large figure until the number of possible cases in the country is considered. Indeed, the relative smallness of this number points to an issue yet to be addressed: Public awareness and access. The PMJAY has spread across practically the entire country, with 33 states and Union territories having some form of the scheme — the only big hold-outs are some Opposition-ruled states including Delhi, West Bengal, and Telangana. But the number of claims is considerably higher in the richer states. Gujarat has by far the highest number of claims, about 650,000, followed by Tamil Nadu with around 400,000. In other words, just these two rich states account for 1 million of that 4.5 million. Another million or so is accounted for by Karnataka, Andhra Pradesh, and Maharashtra. As with many other all-India schemes, states with better resources are managing to implement it better.

While the slow scale-up of the scheme is a problem, it does mean that its fiscal impact has not yet been fully felt. It is possible that the fear of the fiscal impact is why some poorer states have not expanded it as much as they should have. Cost control is going to require more attention. The PMJAY authorities will, first, have to take pro-active measures to reduce costs, such as by collective bargaining with pharmaceutical companies or the makers of medical equipment. What will certainly be the cause of friction in the future are package rates for private providers. The government is optimistic that there will be a sharp expansion in the number of for-profit private hospitals empanelled under the scheme from the current 9,000, which is only a whisker more than the number of public hospitals so registered. But unless there is a clear understanding about package costs, this might not pan out as expected. With the expansion of for-profit hospitals, questions will also begin to be asked about widespread fraud. This is visible even in the first year of the PMJAY, with sharply high rates of hysterectomies — almost certainly unnecessary — in places like Chhattisgarh and Jharkhand. The PMJAY highlights its data-based intervention to identify such possibilities of fraud. But in the end, disputes will have to be settled by old-fashioned human intervention. The fact is that there is simply no capacity yet planned for in the Union government or in the states to manage such disputes.

While the PMJAY has multiple different models in different states, the common requirement for the success of any of these models will be the expansion of state capacity, whether in terms of regulation, dispute settlement, or in the public sector hospitals themselves. It is impossible to build universal health care on the cheap. While the PMJAY has so far not been a fiscal drain, if it is to succeed, it will certainly require more resources — many of which will have to be diverted to support the poorer states. – Business-Standard