Offer An Article

Pandemic Latest News

Ayushman Bharat forcing hospitals to cut costs?

Ayushman Bharat is nothing if not ambitious. As the world’s largest healthcare scheme it aims to provide health insurance coverage to around 500 million Indians — a number larger than the population of all countries besides India and China. However, the limit of reimbursement amounts from the insurance cover have even India’s cheapest hospital worried.

Copyright: waelkhalil / 123RF Stock PhotoDr. Devi Shetty, founder and chairman of Narayana Healthcare, has expressed concern that even at his hospitals, the amount offered under reimbursement costs may not cover the full amount for the procedure.

Narayana Healthcare operates a chain of 23 hospitals. These hospitals specialise in providing cheap procedures, even by Indian standards. A pulmonary thromboendarterectomy, for example can cost more than US$200,000 in the US. Shetty performs the surgery for about US$10,000 and still turns a profit.

Surgery for head and neck cancers starts at US$700. An endoscopy is US$14; for a lung transplant, US$7,000. Even incredibly complex procedures such as a heart transplant will only cost around US$11,000. Investment bank Jefferies estimates that the hospital chain can profitably offer some major surgeries for as little as half what domestic rivals charge.

Despite being one of the cheapest options for private hospitals in India, if reimbursement does not fully cover the procedure, the remainder of the cost is likely to be passed on to the consumer. This could limit the impact of Ayushman Bharat when it comes to reducing out-of-pocket expenditures.

Ayushman Bharat aims to grant each family enrolled in the scheme Rs 5 lakh each year to cover health expenses. To put this in perspective, a heart transplant at one of the Narayana hospitals costs upwards of Rs 7.6 lakh.

With this in mind, a single serious surgery may put a family in excess of the reimbursement amount, leaving them both in debt for the remainder and unable to use the health insurance scheme for any other medical costs for the rest of the year.

On the other hand, the scheme still reduces the cost to the patient by a significant margin that they would otherwise be required to pay out of pocket. In this sense the scheme does offer some relief to the patient, though some may still be unable to afford the excess. This often removes the possibility of opting for private healthcare for many individuals, forcing them to seek treatment at the often underequipped public hospitals which are cheaper, though do not provide some treatments.

Dr Shetty believes he can further trim the costs of procedures to ensure individuals can afford treatment under the Ayushman Bharat scheme. However, inevitably there comes a point where cutting costs becomes cutting corners, a fact that could endanger lives if applied to surgical procedures.

This is not the first time concerns have been raised about the amount earmarked under the Centre’s budget for Ayushman Bharat. A number of experts and doctors have said costs of the scheme could potentially balloon due to concerns that the current allocation for Ayushman Bharat may not be able to satiate demand. While the scheme is certainly not lacking in ambition, there are a number of practical considerations experts have raised. These fears are not likely to go away soon.

Leave a Comment

Your email address will not be published. Required fields are marked *

%d bloggers like this: