Ayushman Bharat- Our journey towards a healthy, caring and structured healthcare system
ET Healthworld.com , Oct 22, 2019
As Ayushman Bharat completes one year of implementation, we must celebrate India’s leap closer to its intended targets of Universal Health Coverage and SDG3 goal. With more than 18,000 hospitals empaneled, over 10.9 crore E-cards issued and over 54 lakh pre-authorised hospitalisations, the scheme has already benefitted numerous underprivileged families across the country. It is indeed a commendable achievement in a short span and we, as Indians, are proud of this.
As we traverse to Ayushman Bharat 2.0, it is important to consolidate and act upon learnings from the first phase. While the idea of Ayushman Bharat is well intended and supported by all stakeholders, implementation calls for improvement. The government has fast-tracked some initiatives aimed at achieving key tenets of UHC i.e, strengthening healthcare infrastructure, capacity building, enhanced use of technologies, as well as access to free medicines and screening; however, achieving the desired results seem improbable in the current landscape. The mammoth scheme, intending to cover about 40% of our population, has many barriers to be resolved. Although many states have joined the scheme, the central and the state schemes are not completely aligned with each other, bringing in anomalies in implementation.
Successful execution of Ayushman Bharat would first require a change in the government mindset to bring about massive structural modifications, substantial financial investment along with concerted effort to work with the industry in an atmosphere of faith and trust. Although, the government recognises the significance of private sector participation in the scheme, appropriate incentives for private healthcare providers have not been planned well.
Private healthcare sector- that has served as the bedrock of capacity and capability in the last few decades, accounting for nearly 60% of all inpatient care, and being responsible for radically enhancing the quality of care- is currently beset with multi-faceted challenges. These include low profitability, highly competitive markets, decreased investor interest, unviable price caps, unpredictable regulatory environment, rising costs of human resources and many others. Additionally, rising trust deficit of people and the government on the private providers, along with increasing cases of violence against doctors are making the sector unattractive for top talent in the country.
The FICCI-EY 2019 report on ‘Re-engineering of Healthcare 2.0’ has observed that while major hospital chains witnessed a surge in bed capacity addition between 2014 to 2016 (at 14%), capacity addition has been significantly decreased between 2016 to 2019 (at 8%). Despite being preferred over government hospitals, the private healthcare sector is currently witnessing declining performance both for profitability and Return on Capital Employed (ROCE). It is expected that with allocation of only 25% of capacity to AB-PMJAY patients, multi-specialty NABH accredited hospitals are likely to witness upto 25% decline in ARPOBs (Average revenue per occupied bed day), upto 50% decline in EBITDA and upto 60% decline in ROCE. The recent corporate tax reduction to 22% is expected to benefit some hospitals, although full recovery from the slowdown will take time.
In case of GST, while the government has granted exemption to healthcare services, cost of care to the patients has increased owing to an increased cost incurred by providers on inputs and services consumed to deliver care in absence of provision of input tax credit. The government needs to immediately consider zero-rating of healthcare services, which will ensure that the credit chain is intact, and the input taxes are not loaded into the cost of services but are available as refund to healthcare providers.
(Hony) Brig. Dr Arvind Lal is the Chair at FICCI Heath Services Committee and CMD at Dr Lal PathLabs