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NHPS package rates too low: IMA

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Prabha Raghavan    18 June 2018

Even as India prepares to roll out what is described as the “largest” health protection scheme in the world, a lobby group of over 200,000 doctors has expressed doubts over its success. The Indian Medical Association (IMA) has criticised the scheme for reimbursement rates set for treatments covered in the scheme, popularly known as Modicare, being too low.

“The highly optic National Health Protection Scheme (NHPS) fails to create any new national asset,” said Ravi Wankhendkar, national president and RN Tandon, honorary secretary general, IMA. “Rates quoted by the government are abysmal and impracticable.”

According to IMA, most package rates set by the government do not cover even 30% of the cost of the procedure and “no hospital” can work on these rates without “seriously compromising patient safety.” It said the scheme would be a “non-starter” owing to this.

However, Indu Bhushan, CEO of the Ayushman Bharat National Health Protection Mission (ABNHPM), said the government has done a “rigorous” job in setting the package rates based on available data and current benchmarks. “We believe marginal costs of hospitals can be more than covered through these rates,” Bhushan told ET. At the same time, the government is planning to conduct a costing study to correct the rates for any packages that may warrant an adjustment, he said.

Niti Aayog and the Indian Council of Medical Research (ICMR) are “most likely” to help conduct this study over the next few months as the scheme is rolled out.

IMA has demanded costing be transparent and in public domain. “We don’t want to set the package rates too high that they are not viable (for the coverage proposed) or too low that they are unsustainable,” said Bhushan. “We are open to learning. We are going to do a costing study… to be able to define the package rates going forward.”

States are allowed to revise package rates to match the reimbursements provided in their own schemes if they are higher or lower, said Bhushan. NABH-accredited hospitals are also allowed to increase package prices by 10-15%, depending on whether they have basic or advanced accreditation, he said.

ET reported on June 1 that five of Indias largest private hospitals have asked the government to reconsider the treatment package rates, saying it would be unviable to provide quality care to patients at the current rates. At the same time, several smaller private hospital and hospital chains have communicated their willingness to participate in AB-NHPM at these rates, according to Bhushan.

IMA has raised issue with states having the option to implement the scheme through insurance modes, saying it would not encourage the creation of new public sector hospitals. “The insurance driven healthcare is a failed experiment,” said Wankhedkar, alleging that the scheme would “lose” Rs. 400 crore to the private health insurance companies for managing it. The money allotted for the scheme would be better put to use if Rs. 2 crore was invested to strengthen infrastructure of every government district hospital, according to the body.

However, Bhushan said that ABNHPM will “significantly” strengthen government hospitals.

“I do not necessarily agree that support for the private sector is ‘losing’ money. We need to strengthen both public as well as private sector provision of health services,” Bhushan said, adding that the public sector on its own will never be able to meet the demand for health services. “Several treatment packages are reserved for public sector. Large proportion of NHPM payment will go to public hospitals and they will retain these revenues for strengthening their infrastructure and providing salary top-up to their staff,” he told ET.

Such support to government hospitals is more effective and efficient as it is directly linked to their providing services to the poor, he added.

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