Does Ayushman Bharat tackle the problems of healthcare supply in Bihar?

A yr in the past, as a part of the Union Price range 2018-19 speech, the federal government introduced a brand new Nationwide Well being Safety Scheme referred to as Ayushman Bharat. In a panel dialogue held at Patna, Bihar in December 2018, Sanjay Kumar (Principal Secretary, Well being Division, Authorities of Bihar), Sisir Debnath & Tarun Jain (Indian College of Enterprise, Hyderabad), Anup Malani & Kiran Pandey (College of Chicago), Chandrakant Lahariya (public well being specialist), and D. Narayana (Gulati Institute of Public Finance), deliberated on key points round Ayushman Bharat within the context of healthcare supply in Bihar.


The India Programme of the Worldwide Progress Centre (IGC), in collaboration with the Division of Finance, Authorities of Bihar, and the Centre for Financial Coverage and Public Finance (CEPPF) on the Asian Growth Analysis Institute (ADRI), organised a panel dialogue on “Does Ayushman Bharat Yojana1 (ABY) tackle the problems of healthcare supply in Bihar?” in Patna in December 2018.


The session chair, Sanjay Kumar (Principal Secretary, Division of Well being, Authorities of Bihar) set the stage by giving an outline of healthcare spending and protection in Bihar. Whereas the federal government tends to largely give attention to main and secondary healthcare reasonably than tertiary companies, non-communicable ailments (NCDs) at the moment are accounting for over 50% of deaths in Bihar. It’s difficult to design a healthcare system in a state like Bihar the place 88% of the inhabitants is in rural areas with solely 2% of medical doctors. There’s a enormous human sources constraint on the event of tertiary companies. Though Bihar’s per capita well being spending is one-third of the nationwide common, life expectancy is just like that of the remainder of the nation – making the case for rising spending. It’s hoped that ABY, beneath which 10.8 million households are eligible for cashless hospital-based remedy, will essentially change the state of affairs of tertiary care companies within the state. 

Sisir Debnath (India College of Enterprise), the moderator of the dialogue, remarked that economist Kenneth Arrow had stated within the Nineteen Sixties that healthcare is just not like different markets and desires particular remedy. This is the reason we see plenty of coverage interventions within the sector, however a standard drawback is the poor implementation of well-designed programmes. 

Andhra’s Aarogyasri: What can we study from it? 


Tarun Jain (Indian College of Enterprise) shared insights from his intensive research of the medical health insurance programme of Andhra Pradesh referred to as Aarogyasri2, which was began in 2007 and covers over 80% of the state’s inhabitants. It’s a profitable scheme with excessive participation charges: by 2015, 663 authorities and personal hospitals have been empanelled, and three.3 million procedures had been carried out. The designers of AYB have explicitly referenced Aarogyasri and its successes in arising with the salient points of AYB. 

Within the context of Aarogyasri, he defined that there are three key actors – sufferers, hospitals, and authorities. Sufferers have a alternative of hospitals beneath medical health insurance schemes; they’re conscious of high quality of care, and are prepared to journey. Regardless of authorities reimbursing hospitals for procedures, they incur prices associated to accessing care similar to journey and keep. Hospitals have to determine whether or not or to not take part within the scheme, holding profitability in thoughts, and conditional on profitability, they should determine what high quality of care to offer. If there are extra rivals in a market, hospitals have a tendency to offer increased high quality of care. Lastly, the federal government must determine reimbursement charges for procedures. 

The important thing classes that may be drawn from Aarogyasri are: (i) High quality of care and distance to well being facility matter to sufferers; uninformed sufferers are prepared to commerce off high quality for comfort however not knowledgeable ones. (ii) The price of care is way increased for city hospitals vis-à-vis rural ones, implying that single reimbursement charges should not environment friendly. 

Lastly, he made the case for enhancing monetary outlays and making medical health insurance schemes common by highlighting that the per process value labored out to be solely Rs. 20,000 for Aarogyasri. This would cut back identification errors in deciding who’s eligible, and create a bigger marketplace for the non-public gamers to enter. Moreover, an inclusive scheme has extra implicit monitoring inbuilt because the non-poor, extra empowered beneficiaries are prone to make a noise when one thing is flawed with the operations. 

Rastriya Swasthya Bima Yojana vs. Ayushman Bharat Yojana 


Primarily based on his analysis on Rastriya Swasthya Bima Yojana3 (RSBY) – the most important public medical health insurance scheme that India has had since 2013 – Prof. Anup Malani mentioned the variations between RSBY and AYB and the way relevant the teachings from RSBY are to AYB. 

He highlighted a number of the findings from the analysis of RSBY in Karnataka which was executed to know the short- and long-term results of the medical health insurance programme on uptake and utilisation charges, influence on households’ well being, and influence on their funds.  

The research, a big scale randomised managed trial (RCT) involving about 55,000 households, was performed in two districts of Karnataka – Mysore and Gulbarga. Households have been randomised in three totally different ‘remedy’ teams: one group had entry to free insurance coverage, the second group was given the suitable to purchase RSBY insurance coverage by paying the identical premium that the federal government does, and the third group was given the suitable to purchase the RSBY insurance coverage together with an unconditional money switch equal to the premium. A ‘management group’ was additionally used for comparability. There was a exceptional uptake even when RSBY was supplied for buy. Nevertheless, it’s seen that the utilisation price was low throughout all three remedy teams. One purpose behind low utilisation charges is that it’s not as if people don’t have entry to secondary care within the absence of RSBY – they do have entry to public hospitals which can be an ample security web. Additionally, even with out insurance coverage they do have a way to finance healthcare as there are casual insurance coverage markets and casual credit score markets in villages so folks can get entry to healthcare. Thus, there was no vital enhance in profitable use of RSBY card amongst Above Poverty Line (APL) populations. The one group that confirmed an enchancment in utilisation was really the group that was requested to pay for RSBY, which reveals individuals are extra prone to worth merchandise that they buy.

Clearly, if there is no such thing as a massive utilisation impact there is not going to be a giant well being impact too and this was one other discovering – no vital enchancment was seen in well being outcomes after 12-18 months. One other attention-grabbing discovering was that folks modified their asset allocations from liquid to illiquid belongings that provide a better return, in response to having medical health insurance. So, the findings may not present vital enchancment in utilisation and well being outcomes, however the programme has had a monetary influence. 

Common well being protection and Ayushman Bharat Yojana

Chandrakant Lahariya described the idea of common well being protection (UHC), which India has dedicated to by way of its Nationwide Well being Coverage. UHC signifies that all folks – people and communities – should have entry to good high quality well being companies that are additionally reasonably priced to them. He defined how ABY gives a paradigm shift whereby suppliers are separated from payers. Nevertheless, he additionally famous that ABY is a Rs. 100 billion scheme and OOP expenditure on well being in India is Rs. 3,000 billion (2013-14). 

There are two elements of ABY. The primary, Pradhan Mantri Jan Arogya Yojana goals to cut back the monetary burden on poor and weak teams arising out of catastrophic hospitalisation episodes. The second part of Well being and Wellness Centres (HWCs) goals to strengthen main healthcare to deal with 80-90% of the full well being wants of the inhabitants and practically two-thirds of whole OOP expenditure on well being. But, this latter part is getting much less precedence and a spotlight. He cautioned that demonstrating protection is all the time essential however not sufficient. He cited the instance of China that has 90% protection however catastrophic spending4 of 18%, whereas India has low protection of 20-22% protection and nonetheless has much less catastrophic spending (17%) than China. 

Within the context of Bihar, he emphasised the ‘political financial system perspective’. He acknowledged that any new initiatives in Bihar ought to cater not solely to present but additionally to future well being wants. Primarily based on previous learnings, he remarked that when the state took management in 2005-06 for Muskaan Abhiyan in Bihar, full immunisation elevated and the beneficial properties have been sustained over time. Entry to high quality main healthcare is important, and HWCs present a basis for influence and success of ABY. States have to take initiative together with encouraging innovation and group engagement, and empowering native establishments. 

Is supply-side healthcare able to tackle the problem?

D. Narayana introduced the supply-side challenges for entry to high quality care beneath ABY. He confirmed that many of the hospitals which can be empanelled beneath the scheme in Bihar are public hospitals. There are hardly any non-public hospitals, besides in Patna and Muzaffarpur, which suggests there’s little hospital alternative accessible to sufferers as of now.

He additionally confirmed that whereas the Toddler Mortality Price (IMR) of Bihar has declined from 58% (2007) to 38% (2016), the Neonatal Mortality Price (NMR) as a % of IMR has elevated from 53.9% (2007) to 71% (2016). This reveals that there are issues with the standard of care that’s offered. He additional argued that increasing healthcare protection doesn’t essentially lead to higher well being outcomes. Utilizing the Nationwide Rural Well being Mission (NHRM) for example, D. Narayana acknowledged that there was no enchancment in inhabitants protection in Bihar throughout 2004-2014. Bihar has one sub-centre for a inhabitants of 10,000, whereas the norm is one sub-centre per inhabitants of 5,000. Referring to the rise in institutional care because of Janani Suraksha Yojana5 he quoted a latest Lancet article: “Most of the births within the programme occurred in main care facilities that didn’t have sufficiently expert employees to deal with maternal and new-born issues.” (Kruk et al. 2018). Therefore, the protection didn’t lead to improved maternal well being or new child survival. 

Moreover, the package deal charges beneath the ABY scheme don’t give sufficient flexibility to states to vary these charges. Just lately, non-public healthcare suppliers in Kerala held a press convention and acknowledged that with these charges, they will be unable to take part on this scheme. Given this, the scenario in Bihar is just not going to be any totally different, and there’s no assure that the charges are going to be periodically elevated. Beneath these constraints, there is no such thing as a various however to enhance the standard of the general public well being system. Due to this fact, extra money must be spent on HWCs. 

Offering healthcare companies successfully: Classes from different nations 

Kiran Raj Pandey defined that healthcare supply in any a part of the world is a two-part drawback: financing, and repair supply. He acknowledged that community-centred, public-owned main healthcare services in Sri Lanka led them to attain well being outcomes which can be on the high of middle-income nations. Thailand, which spends solely 4% of its GDP (gross home product) on well being, has well being outcomes pretty much as good as another middle-income nation. In Thailand, 86% of well being expenditure is borne by the federal government and 14% by the non-public sector. Nevertheless, it took the nation 30 years to construct main healthcare programs. 

Costa Rica began UHC in 1961 even earlier than UHC grew to become trendy. Their main focus was on constructing community-centred healthcare programs, and one in all their coverage improvements was decoupling their well being system from the Ministry of Well being and integrating it into their social safety scheme. This ensured that the funding cycle was predictable because the funds that got here within the type of social safety have been all the time there even at midnight days of the Nineteen Eighties, when neo-liberalism and the contraction of the State was going down throughout Latin America. 

He contended that drawing classes from different medical health insurance programmes from different nations will assist the Authorities of Bihar in implementing ABY successfully and decreasing wasteful spending. 

Concluding remarks 

A key takeaway famous by Sisir Debnath from the dialogue was that well being and healthcare are two various things – healthcare is simply an enter into the manufacturing that goes to create well being. There are a lot of different inputs as properly which embrace sanitation, wellness and health and so forth, and that requires a holistic method. Mr Sanjay Kumar stated that on condition that there are lower than 600 empanelled hospitals beneath ABY in Bihar, of which about 540 are public well being services, this will probably be a chance for strengthening infrastructure and creating totally different incentives for workers in public hospitals. The Authorities of Bihar has taken a call that 70% of funds will go in the direction of strengthening facility infrastructure and the remaining for incentivising staff in public hospitals. The rise in NMR factors in the direction of the pressing want for having a facility-based system within the state. He additionally highlighted that the sustainability of any programme creates totally different questions at totally different instances and making choices on an ad-hoc foundation doesn’t work properly within the case of well being programs. 

The occasion commemorated 10 years of the Centre for Financial Coverage and Public Finance (CEPPF).


    1. Authorities of India launched the Ayushman Bharat Yojana (Nationwide Well being Safety Mission) in 2018 – a collaboration between the central and state governments designed to pay for tertiary healthcare for practically 100 million households throughout the nation.
    2. Aarogyasri is a cashless medical health insurance programme for BPL households in Andhra Pradesh (and Telangana for the reason that state’s formation in 2014). The programme covers medical payments as much as Rs. 200,000 for the remedy of significant illnesses similar to most cancers, kidney failure, coronary heart and neurosurgical illness that require hospitalisation.
    3. Rashtriya Swasthya Bima Yojana was launched in 2008 by the Authorities of India to offer medical health insurance protection for Under Poverty Line (BPL) households. The target was to offer safety to BPL households from monetary liabilities arising out of well being shocks that contain hospitalisation. It offered whole cowl of Rs. 30,000 per household (5 members) yearly for tertiary care bills. The programme was administered by states although 75% of the funding got here from the central authorities.
    4. Catastrophic spending means spending of 10% or extra of family expenditure on well being.
    5. Janani Suraksha Yojana (JSY) is a protected motherhood intervention launched in 2005 beneath the Nationwide Rural Well being Mission (NHM) which is being applied with the target of decreasing maternal and toddler mortality by selling institutional supply amongst pregnant girls.

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