A problem awakening from the plenty

Unsurprisingly, CEOs of hospitals had a litany of concerns. They complained about delays in payment in government health schemes like the Central Government Health Scheme (CGHS). But more worrying to them were the rates for treatment quoted under Ayushman Bharat. These were lower than even state health schemes.

Listed Hospital Chains

A senior executive of one of the listed hospital chains puts the rates in perspective. The rates for Ayushman Bharat are 10% lower than what Arogya Karnataka, the Karnataka government’s state health scheme offers. Arogya Karnataka is 10-15% lower than CGHS rates, and CGHS rates are 40-60% lower than our rack rates, he said.

In response to the uniform rates announced under the Ayushman Bharat, Vineet Gupta, director of California-based Varian Medical Systems, shared results of FICCI’s study on costing of select medical procedures.

It concluded that the cost varies based on the cost of land, manpower, and utilities. Costs that vary widely across the country. As a result, rates that may be manageable in Tier 2 and 3 cities are not feasible in their Tier 1 counterparts.

As a result, says the consultant quoted earlier, about half of the 14,000 hospitals empanelled under the scheme are government-funded hospitals that are already either free or low-cost to the patient.

In order to get more hospitals to empanel themselves, some states have revised the Centre-approved rates. Chhattisgarh, for instance, maintained the earlier state scheme rates for 804 medical procedures, while using Ayushman Bharat’s rates for the remaining procedures included in the Centre’s scheme (a total of 1,350 procedures).

One month since the launch of the scheme, the state has empanelled 200 private hospitals. Singh hopes that this number will go past the 500 marks, but she refuses to put a timeline on this. Like Chhattisgarh, Maharashtra, Gujarat, and Karnataka have also revised the rates in line with state scheme levels to get hospitals to empanel themselves.

Refusal to the budge

In states that have not revised rates, hospitals have refused to budge. For instance, Max Hospital in Gurugram. The hospital, which has a large super-specialty tertiary care faction, has not empanelled with the Haryana government as the state has maintained the Ayushman Bharat rates.

A senior executive with a Gurugram-based hospital says that the government will not find many takers in the city unless they revise the medical procedure rates upward by 20-30%. For example, under Ayushman Bharat, a C-section delivery is priced at Rs 9,000 ($123). This is completely unworkable, he says, as it is just 10% of the C-section rack rate in a Tier 1 city hospital.

The scheme could work as-is, believes Shuchin Bajaj, Founder Director of Cygnus Medicare chain of hospitals. But, he says, only if the volumes are high enough. However, after impaneling six Cygnus hospitals with the Haryana government’s Ayushman Bharat scheme, he remains disappointed. “The prices for a model like ours is not a problem, our consultants are on a fixed salary.

We have an unwritten rule to not stop patient for any reason. We do not deny treatment. In Ayushman Bharat, we will be getting something instead of getting nothing,” he said. His problem is that in Haryana, only 150 out of 430 packages funded by the government under Ayushman Bharat are open to private hospitals. These are only tertiary care procedures, especially cardiac procedures.

Hoping for the best

The rest are assigned to government hospitals only. “The person still has to queue and it is still free, which was happening anyway. We were hoping the volumes will increase but they are not increasing,” he added.

Further, Bajaj is still unsure whether the payments will come through in a month as promised. After all, in other government schemes like the Employee’s State Insurance scheme which is managed by the Ministry of Labour, payments can take up to two years.

As a result of this uncertainty, hospitals such as Glocal Healthcare Systems, Vaatsalya Hospitals, and Paras Hospitals which run on a lean model are all observing the execution of the scheme before empaneling.


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