To Fund Ayushman Bharat, Government Plans to Evaluate Cost of Health Services First

The center has decided to evaluate the cost of health services in India to help it undertake strategic planning for its ambitious health insurance program, Ayushman Bharat, which requires a huge amount of funds. The move is aimed at improving overall financing of healthcare services in India. The department of health research (DHR), under the ministry of health and family welfare, will evaluate the escalation in both administrative and infrastructure costs, and also compare it with the private sector. The discussions on the concept and methodology to evaluate the cost of healthcare services in public and private sector are complete and officials are all set to present the proposal to higher authorities for approval. “The world over, countries have a pricing and strategic financing mechanism. With Ayushman Bharat, India, too, will need to develop such a mechanism,” said Arun Gupta, executive director, National Health Authority. “We have involved several government healthcare institutions and private stakeholders in our finance evaluation, including the Postgraduate Institute of Medical Education and Research (PGIMER), Chandigarh, and the Insurance Regulatory and Development Authority (IRDA),” Gupta said. The Indian Medical Association (IMA), the Association of Healthcare Providers, India, (AHPI), the Clothing Manufacturers Association of India, and the Federation of Indian Chambers of Commerce and Industry (FICCI), which have estimated the unit cost of healthcare services, have told the DHR that disparity in data collection and redundancy within the system should also be taken care of in the costing exercise.

“The accreditation of hospitals should also be factored in while conducting the costing study. Multiple hospitals in different tiered cities need to be included in the study. There needs to be more sampling of hospitals from lower sectors,” a senior health ministry official said, requesting anonymity. “The cost of technology, recurrent costs, cost of financing, and cost of inflation should be taken into account while undertaking costing of health services,” the official said. PGI, Chandigarh, has already conducted a study on the cost of delivering secondary-level healthcare services through public sector district hospitals in Punjab and Haryana and has also published the findings in the recent edition of Indian Journal of Medical Research. The researchers carried out a cost and quantity analysis of all resources, including capital and recurrent expenses, used for delivering services and pegged the overall annual cost of delivering secondary-level healthcare services through a public sector district hospital in north India at about₹11.44 crore. Human resources accounted for 53 percent of the overall cost. With the current set of resource allocation, per-capita cost of providing healthcare through district hospitals in north India stood at ₹139.

“We attempted to determine the unit cost of an outpatient consultation, inpatient bed-day of hospitalization, surgical procedure, and overall per-capita cost of providing secondary care through district hospitals. The estimates obtained can be used for fiscal planning of scaling up secondary-level health services,” said Shankar Prinja, additional professor, Community Medicine and School of Public Health, PGIMER, Chandigarh. The Ayushman Bharat—Pradhan Mantri Jan Arogya Yojana (AB- PMJAY), also dubbed Modicare, which is billed as the world’s largest health assurance scheme, aims to provide free health insurance of ₹5 lakh per family to nearly 40 percent of the population—more than 100 million poor and vulnerable families—based on the Socio-Economic Caste Census. The premium payment expenditure will be shared by the central and state governments. The scheme covers most secondary and many tertiary hospitalizations, which poor people usually cannot afford. The government will need a lot of funds to finance the scheme. – Livemint

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