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Is there enough incentive for hospitals to sign up for Modicare/AB?

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The fourth edition of Healthcare Sabha, held over October 5-6, in the national capital went way beyond Ayushman Bharat (AB), India’s National Health Protection Scheme (NHPS), with the assembled public health professionals discussing and debating implementation challenges. Speaking at the conference, Dr V K Paul, Member, NITI Aayog said, “Through AB, we are building a holistic health system with a focus on creating a gamut of healthcare services available to all.” Recognising the significance of collaborations with the corporate sector in AB’s success, he invited private entities to explore this opportunity. (Do catch the full coverage of Healthcare Sabha in the November issue of Express Healthcare)

Will the corporate sector bite the bait when it is already faced with stressed balance sheets? Let’s start with the insurance sector. Insurance companies are bidding for various states and their role is crucial considering that AB is an insurance-based scheme. But insurance partners to some of the existing healthcare schemes run by the different states have not had a good experience. Take for instance, Rajasthan’s Bhamashah Swasthya Bima Yojana, which is supposed to be the template consulted by Prime Minister Modi when designing AB. Far from being a positive push, it has given the opposition many opportunities to run down Chief Minister Vasundhara Raje’s governance.

The insurer, New India Assurance Company (NIAC), complained that the implementing arm of the state’s health department, the Rajasthan State Health Assurance Agency (RSHAA), had not paid them their share of the premium, which had accumulated to pending dues of over `100 crores. Worse, when the NIAC de-empanelled hospitals where frauds were discovered, the RSHAA overturned this decision. This unseemly tug-of-war ended with a settlement as state polls are around the corner, with the RSHAA saying that the delay in payment was because they had been trying to identify and stop misuse/abuse of the scheme. These issues will definitely impact Rajasthan’s state elections due in early December. And Rajasthan is not the only state to default on this score. Telangana too has reportedly not reimbursed hospitals participating in its Aarogyasri scheme for a year.

One hopes that lessons have been learnt and frauds in the AB scheme will not derail the scheme. Frauds increase payouts for the insurance player, making it both economically unfeasible as well as taking away scarce resources from the truly deserving cases. With the states refusing to cease their existing health schemes, hospitals could claim reimbursement under both the state as well as central schemes. Is the IT framework capable of catching these frauds?

Moving on to the much maligned hospital sector. Theoretically, the government hopes that unused capacity in terms of beds, diagnostics facilities and services will be used for AB beneficiaries but the reality of frauds point to another story. Once the government cracks down on such practices, will there be enough incentive for hospitals to sign up for AB and stay in the scheme?

Corporate hospitals are facing their own demons as growth remains sluggish quarter to quarter. Consolidation continues, with even global players cutting their losses in certain cities. The recent example is Columbia Asia pulling out of its Ahmedabad facility and selling out to Zydus Hospitals. The lesson seems to be that while technologies and SOPs can be global, running a hospital in a sustainable manner needs attention to and expertise with local issues. India’s attractiveness remains intact, with Columbia Asia now focussing on building its biggest facility in the country in Pune. According to the management, its Bengaluru facility is achieving the fastest growth in the history of Columbia Asia.

Thus, while the government is willing to spend on health, the areas that need it most lack the infrastructure. And private players are in wait and watch mode to see how things pan out.

With the general election looming next year, there is no doubt that this will be an election issue and we’ll continue to track the roll out of AB. Even though US President Trump revoked Obamacare, the Democrats are using it as an example of a well run scheme which benefited common people, rather than Republican tax cuts which benefitted the corporate sector. Thus AB or Modicare, will swing the fortunes of many political parties, both at the state and the all important Centre next year. With this much at stake, politicians realise that they have to get it right. And hopefully, this will be one example of how political one-upmanship actually resulted in some lasting benefits for the citizens of India.

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