PMJAY (Pradhan Mantri Jan Aarogya Yojana)

(General Studies II – Health – Issues relating to the development and management of Social Sector/Services relating to Health, Education, and Human Resources)

• Ayushman Bharat is the government’s flagship programme to achieve universal health coverage (UHC).
• The scheme has two inter-related components: health and wellness centres and the Pradhan Mantri Jan Arogya Yojana (PMJAY) that aims to provide a health cover of ₹5 lakh per family per year for secondary and tertiary care hospitalisation to over 12 crore families that form the bottom 40% of the population.

Implementation Challenges –

• Dues and Delays:  Hospitals report substantial unpaid dues and delays in receiving payments from some states despite the guidelines being clear about turnaround time.
• Hospital Turnaways: Some hospitals are turning away or limiting the intake of PMJAY patients due to the risk of claim rejection, which means the insurance company may reject a claim because of documentation errors or a technicality even after surgery or treatment.
• Cap on Charges: The union government has put a cap on the amount Hospitals can charge for different treatments. That doesn’t always work well for private providers.
• Inefficiency in Resource Allocation: The union government is meant to allocate 60% of PMJAY funds, but the amount it is spending is less than this. High out-of-pocket expenditures indicate inefficiencies and misallocation, particularly in the public sector.
• Coverage Limitation: PMJAY covers less than 2.5% of total health expenditure, not sufficient for comprehensive health coverage.
• Capacity Issues: In many states, the number of people per empanelled healthcare provider (EHCP) is high. In Bihar, it was over 10,000 families per EHCP.
• Service Disparity: Private hospitals are perceived to provide better care, leading to preferential use over available public hospitals.
• Inactive Facilities: Not only do hospitals not exist in many parts, but even empanelled hospitals haven’t been active. For example, in Uttar Pradesh, 39% of empanelled hospitals have been inactive since their enrollment.
• Claim Processing: Governance processes make a big difference. Delays exceeding 45 days in some states contrast with faster processing in others.
• Coverage Gaps: The focus on inpatient care excludes significant areas like outpatient care, diagnostics, and drugs.

Recommendations for Improvement –

• Public Sector Performance: There is a need of a stronger role for public insurance to enhance healthcare quality and efficiency.
• Public Service: The private sector is unlikely to go to remote places and build a hospital. It would have to be led by the public sector for the foreseeable future.
• Integration of Healthcare expenditure: The largest component of healthcare expenditures are government expenditures through the State and Centre and they are multiples higher than what these two schemes are doing. Therefore, there is a need to have an integration of public sector health expenditure and PMJAY.
• Network Adequacy: There is a need to have an obligation for the insurer to have network adequacy meaning you can’t offer an insurance scheme unless you have hospitals nearby.
• Enhanced Coverage: Expansion of PMJAY to include outpatient care, diagnostics, and drugs to provide comprehensive health coverage as the bulk of the expenditure is on drugs and OP care.
• Efficiency Improvements: Need to address inefficiencies and resource misallocation to reduce dependency on the overstretched private sector.

Way Forward –

• Countries like Thailand, Turkey, Vietnam, and Uruguay have successfully implemented Universal Health Care using an insurance model. This approach addresses the issue of misallocation of government resources often exacerbated by schemes focused solely on hospital-centric designs.
• A recent study on health insurance in low- and middle-income countries highlighted that the challenge extends beyond the method of channelling government subsidies—whether through health insurance or direct public facility subsidies. The focus should be on establishing specific payment structures and non-price mechanisms that effectively alter both provider behaviour and patient choices.