So Prime Minister Narendra Modi on September 23 officially launched the BJP-led National Democratic Alliance government’s much-vaunted health insurance scheme — the Ayushman Bharat–Pradhan Mantri Jan Aarogya Yojana (AB-PMJAY).
Calling it a “game changer”, Modi said it was “an opportunity to serve the poor” and to “empower the poor”.
But experts, evidence, and past experience with insurance schemes in the country tell a different story.
The Ayushman Bharat insurance scheme aims to provide an annual coverage of up to Rs. 5 lakh per family for 10 crore poor households (around 50 crore estimated beneficiaries) for secondary and tertiary care hospitalisation.
Meanwhile, five states — Telangana, Odisha, Delhi, Kerala and Punjab — have refused to implement the scheme — on the grounds that they (except for Delhi and Punjab) already have health insurance schemes. While Delhi does not have an existing insurance scheme, it was unhappy with AB-PMJAY’s “proposed target of six lakh families — which is just 3% of its two crore population. Punjab also held similar reservations,” according to NDTV.
Also read: Ayushman Bharat Health Scheme will not give Indians Freedom from Ill Health
As Newsclick has elaborated again and again, Ayushman Bharat is not the panacea for the ills of the poor — especially in a country where 50.6 million people were pushed below the poverty line between 2004 and 2014 due to catastrophic out-of-pocket spending on healthcare.
There are a number of reasons why — besides the fact that the budgetary allocation for the scheme is not enough.
Dubbed ‘Modicare’ by the media, the scheme was initially allocated a paltry Rs. 2,000 crore, which has since been increased to Rs. 10,000 crore for two years (2018-19 and 2019-20).
Besides paying for the premiums (to be shared 60:40 between Centre and states, except for the Northeastern states and the three Himalayan states of Jammu & Kashmir, Himachal and Uttarakhand), this allocation will be used to cover the costs for setting up the technology to go with it — the National Health Stack, a complicated digital infrastructure to subsume all medical and healthcare activities in the country, with the primary aim of enabling private players to harvest the health data of citizens. After all, the healthcare market in India was valued at $ 100 billion in 2016, and is expected to grow to $ 280 billion by 2020.
And as Newsclick has pointed out before, the Stack has inbuilt mechanisms — for “fraud detection” and such — that is bound to lead to the exclusion of beneficiaries.
But there are structural problems with the insurance model itself — which will ensure that it is not the answer to India’s health needs.
Also read: National Health Protection Scheme: Difference Between Coverage and Care
Health insurance schemes — to promote the goal of what is called Universal Health Coverage (UHC) in official parlance — has been aggressively pushed by the international financial institutions like the World Bank.
Now, the World Bank and its ilk are directly responsible for destroying the public provisioning of services in the developing world, or the ‘Global South’.
So, the idea behind state-funded health insurance schemes is to provide financial protection to people — given that the majority of the population in developing countries is poor and only getting poorer, while healthcare costs escalate with profit-oriented private companies providing services.
Thus, insurance schemes will ensure that people do not become impoverished and die while trying to access health services due to the catastrophic rise in out-of-pocket expenditure — while simultaneously ensuring a steady and wide clientele for the private service-providers.
In India, the privatisation of the health ecosystem is going on at an unprecedented pace and scale, so much that the profiteering has already begun to hurt even the middle classes.
Coming to Ayushman Bharat, first let us look at the provisions under it — a health cover of Rs. 5 lakh per year per family for 10 crore households, but only for secondary and tertiary care hospitalisation.
However, as health experts have pointed out — the majority of the health expenditure that people incur on an average is on preventive care, or outpatient care.
As health economist Indranil Mukherjee had earlier told Newsclick, “Out of Rs. 100 spent from people’s pockets on healthcare services, say, 60% is on outpatient and preventive care, while only around 40% is on inpatient care or hospitalisation.”
Indeed, “health for all” — as Modi claims of AB-PMJAY — cannot become a reality by leaving out healthcare needs at the primary and preventive levels.
As Dr. Amit Sengupta of the Jan Swasthya Abhiyan (People’s Health Complement) writes:
“In theory, good health systems are like pyramids: the largest numbers can be treated at the primary level where people live and work, some would need to be referred to a secondary level such as a community health centre, and few would require specialised care in tertiary hospitals. Better primary and secondary level care ensures that fewer patients end up in more expensive speciality hospitals to undergo major procedures. Health insurance schemes invert this pyramid and starve primary care facilities.”
There are already existing state-funded health insurance schemes, both at the national and state levels (as some of the states that have rejected AB-PMJAY have highlighted).
The Rashtriya Swasthya Bima Yojana (RSBY) — which shall now be subsumed under the AB-PMJAY — is a similar nationwide health insurance scheme launched in 2009, although with a lower coverage ceiling.
However, the RSBY had been a massive failure — leading to an increase in out-of-pocket expenditure by the beneficiaries while excluding the poorest, as assessments have shown.
Then there is the example of Andhra Pradesh’s Rajiv Arogyasri scheme that, as studies have shown, draws 25% of the state’s health budget while covering just 2% of the disease burden in the state.
As Dr. Sengupta has pointed out, insurance schemes currently cover a third of the country’s population, but NSSO data (2014) showed that only 12-13% of the potential beneficiaries are actually covered.
What’s more, even a report by the Parliamentary Standing Committee on Health and Family Welfare said that the Ayushman Bharat was not a “step forward” from the existing insurance schemes. The same report pointed out that the central government had released less than half of the original budget allocation for the existing RSBY in 2017-18.
Even worse is the fact that state-funded health insurance schemes in the past have reportedly resulted in horrifying malpractices by private hospitals that try to extract the maximum money through the schemes by prescribing and conducting unnecessary, even dangerous procedures on unsuspecting poor patients.
The reports of unnecessary hysterectomies performed on poor women can be taken as one example.
Even as the government pays the premium for the insurance cover, it would only funnel money into private hands — not just the private hospitals, but also private insurance companies, whose entry the AB-PMJAY scheme facilitates in a big way.
As K. Sujatha Rao, former Union secretary in the Ministry of Health and Family Welfare, has written: the Ayushman Bharat insurance scheme aims to create “an effective demand to trigger private investments in supply deficit areas.”
Given the severe paucity of an adequate number of public-funded hospitals with the requisite facilities — as public hospitals are starved of funds while private players are given incentives to set up shop — the insured patients will largely go to private hospitals only.
For example, under Andhra Pradesh’s Rajiv Arogyasri scheme, the total payments made to accredited healthcare facilities in the state from 2007 to 2013 amounted to Rs. 47.23 billion. Of this, Rs. 10.71 billion went to public healthcare facilities while Rs. 36.52 billion went to private facilities.
As Dr. Sengupta writes, “Insurance schemes channel public money into private facilities. Public facilities are further weakened in a situation where private providers are already dominant. On the other hand, private providers are assured of a steady clientele. The dominance of the private sector is particularly worrying in a situation where neither quality of care nor its costs are regulated.”
There were some news reports that the government was beginning the insurance scheme in its pilot phase (launched in August in some districts in a few states including Haryana, Uttarakhand and Chhattisgarh) with only some public hospitals on board — but that is only until the initial creases are ironed out. The same reports have said that the government has been in the process of identifying and empanelling a large number of private hospitals.
So, once the corporates are assured that the AB-PMJAY is safe for entry and for milking profits, there is obviously going to be an explosion of private players treating patients under ‘Modicare’.
What the people need is a robust and effective public healthcare system. And that can only be achieved through government expenditure for an adequate network of primary healthcare centres, affordable and high-quality public hospitals, dispensaries, training for health staff, investment in technology, etc. India is among the lowest spenders on public health worldwide, spending just around 1.4 per cent of the GDP on health. This is far below the global average of 6%, while even the World Health Organisation (WHO) recommends public health spending of at least 5%.
The AB-PMJAY might indeed be a “game changer”, but only for the worse, as far as the poor are concerned. The scheme shall only ensure the transfer of public money into private hands. Therefore, it is not “an opportunity to serve the poor” — but rather an unprecedented opportunity to serve the private coffers of the rich, especially the corporates, who would be milking the poor, aided by Ayushman Bharat.