What does Ayushman Bharat need for Successful Implementation?

Ayushman Bharat.jpg

Ayushman Bharat is the most in-depth health policy India has seen since the National (Rural) Health Mission was passed in 2005. Under this plan, some of the nation’s most vulnerable people will receive health care coverage of up to Rs. 5 Lakh per family, per year. The only problem is, the scheme might be too complex to implement into a health system that’s fragmented at best. This is what the experts think is necessary to get Ayushman Bharat running smoothly.



A significant concern about the National Health Protection Scheme (NHPS) is the financial kitty which will be raised to fund the scheme. The governance of the project, and transparency and accountability measures, are of equal concern. Setting program standards, ensuring the clarity of patient data, and ease of program use is crucial for smooth implementation.

If the ‘assurance’ scheme is to be truly successful, it must develop into a health access platform which provides such high quality, evidence-based care that if it were to be opened up to even those who are not eligible, they would be willing to pay an ‘insurance’ premium to ensure their families are covered. This is where it is paramount that the scheme administrators learn from best practices, as well as failures encountered by state-level schemes, and from those being run in other Low and Middle Income Countries (LMIC)s. We need to ensure that the government, beyond the rhetoric, shows intent and implementation mechanisms to make Ayushman Bharat work— even in our complex health system that includes private and public care.


The last decade has seen its share of health schemes – some rolled out by the centre and others by the state. There is evidence to show that the Rashtriya Swasthya Bima Yojana’ (RSBY) was ineffective in reducing the burden of out-of-pocket spending for poor households. The critical reason is most of the health services we seek (and consequently the expense) is in the outpatient department, while RSBY covered inpatient hospitalisation costs only. There is a parallel body of evidence that shows the use of unnecessary diagnostics, procedures and surgeries in the private sector – another expense for patients. Any insurance scheme which does not cover preventive and outpatient care and include regulatory standards will be unable to change the standard of our health care system. Public money should not be used for non-evidence based programs.


Health insurance straddles a fine line between consumer choice and cherry picking by the insurers. By that I mean if you have too many insurance products, ostensibly to help consumers, that could allow insurers to pick and choose the healthiest patients and turn away sick patients. The ideal insurance would be uniform and comprehensive. There is no point having insurance which has a clause ‘we don’t cover for cancer and related illnesses.’ Insurers should reimburse physicians at the market rate; otherwise, physicians might not accept insurance. The paperwork required for physicians to be reimbursed should be minimal. Finally, hospitals should not bill patients, particularly poor patients, what they cannot recover from insurers— otherwise, that defeats the whole purpose of financially protecting the poor.


Biometric identification such as Aadhar could solve double counting and the same kind of confusion that Rajiv Gandhi Jeevandayee Arogya Yojana and Brihanmumbai Municipal Corporation schemes. Multiple insurance companies, rather than a single one, will bring the efficiency and speed that Ayushman Bharat needs. In recent health insurance schemes, the amount of paperwork necessary resulted in delayed claims processing. Some critical diseases, such as pediatric cardiology, were not included in coverage. On top of that, some small hospitals and nursing homes are alleged to have indulged in nefarious activities such as admitting patients and submitting bills without actually carrying out the documented procedures. These issues must all be addressed, and punitive action for non-compliance added to ensure success in any future health coverage plans.

TRANSACTION COSTS SHOULDN'T BE AFFORDABLE. Transaction costs shouldn’t be unaffordable.

For an insurance scheme to succeed, the beneficiary pool size should be large and diverse. If the beneficiary pool size is too small, prices must be much higher to compensate. The transaction costs of previous schemes were very high. In effect, for every 100 Rs spent on RSBY, only Rs 70 were spent on healthcare. Many thought that the demand for healthcare would lead to the creation of more hospitals in rural areas. Unfortunately, this did not happen and the treatment availed in RSBY after ten years of operation was mainly at district level hospitals. No additional or higher-capacity hospital beds have been procured in rural areas.


Though public health is a state subject under the Seventh Schedule of the Constitution of India, the Government of India has always played a vital role in this sphere. This role is set to expand further with the launch of the central government’s flagship National Health Protection Scheme. This raises multiple questions regarding the part of the central and state government in administering such an ambitious scheme.

One of the fundamental questions to consider is whether NHPS is an over-prescriptive programme that imposes the central government’s mandate on the states. Many states in India have their own successful health insurance schemes. A national programme like NHPS should ensure that it does not, in any way, stifle the state government in carrying out its health programmes. If the central government is to remain faithful to its stated vision of “cooperative federalism,” it should ensure that the states also have a crucial role in shaping the NHPS programme and not just in implementing an existing plan. It is time to explore new institutional mechanisms equivalent to the Goods and Services Tax Council for drawing up national-level programmes on states’ subjects. If the centre and state can act together as partners where both contribute in policy-making as well as in implementation, central programmes like NHPS can succeed.