Daily Answer Writing
12 May 2021

Q) Critically analyze the success of Pradhan Mantri Jan Arogya Yojana in handling the COVID-19 related case load. What reforms are needed to further the aim of reducing out-of-pocket health expenditure in this regard? (250 Words)

Source <https://indianexpress.com/article/opinion/columns/welfare-schemes-covid-crisis-modi-7311361/>

GS 3: Indian Economy, GS 2: Welfare schemes

Approach Answer:

Introduction: According to the World Bank, the Out-of-pocket expenditure as a proportion of the current health expenditure was 65.06% in 2015. The  Pradhan Mantri Jan Arogya Yojana (PM-JAY) seeks to contribute to improvement in many health outcomes in States that implemented the ambitious programme to provide healthcare access to most vulnerable sections by reducing out of pocket expeniture.


Success of PM JAY

              a. Enhance health insurance coverage: thereby improving the health benefits and early detection of diseases.

              b. States with PMJAY are better: The  Economic Survey of 2020-21 PMJAY states have experienced greater penetration of health insurance, reduction in infant and child mortality rates, realised improved access and utilisation of family planning services and greater awareness of HIV/AIDS.

              c. Benefits empanelled hospitals: It brings business to 24,215 hospitals were empanelled, extended treatments worth ?7,490 crore (with 1.55 crore hospital admissions).

              d. Incentivises private sector investment into rural health: The rural empanelled hospitals see a greater influx of patients with PMJAY health card. This incentivises them to open hospitals in rural areas.

              e. Enhances Savings rate: Savings rate is one of the most important parameters in the sustainable growth of a country. This scheme channelizes a portion of wealth into savings.


Limitations in the Implementation of the scheme:

              1. Not enough hospitals to be empanelled: The COVID-19 situation has shown than there is a huge infrastructure deficit in India. The JAY-card cannot by itself promise healthcare if there are very few hospitals.

              2. Not all citizens covered: Since there is no universal coverage, there can be risks of exclusion errors. Further, COVID does not discriminate amonst patients.

              3. Smaller Geographical reach: Over 72% of private empanelled hospitals are located in just seven States: Uttar Pradesh, Rajasthan, Tamil Nadu, Gujarat, Maharashtra, Punjab and Karnataka.

              4. Medical Frauds: often Private sector hospital increase the value of the bill as the patient do not question the importance of the procedures. Private hospitals account for 63% of all PM-JAY claims and 75% of the total claim value. They are more likely to discharge patients early post-surgery to cut costs

              5. Unnecessary Procedures: The top PM-JAY packages by value — including knee replacement, cataracts, haemodialysis and cardiovascular surgeries — are overwhelmingly provided by private hospitals.

              6. Sub-optimal facilities: a National Health agency's report states that there is a better infrastructure for clinical and support services than their government counterparts.

              7. It curtail states' autonomy in designing their own policies in the sector. Several state governments have implemented or supplemented health protection schemes that provide varying coverage. Telangana, Odisha and Delhi have not signed MoU with the newly created National health agency(NHA) to implement the scheme.


Steps required to reduce out of pocket expenditure

              1. Increasing Public spending:  It is suggested by the economic survey that an increase in public spending from 1% to 2.5-3% of GDP — as envisaged in the National Health Policy 2017 — can decrease the OOPE from 65% to 30% of overall healthcare spend.

              2. Construction of new Medical colleges: The government has in 2018 budget announced to open one medical college for every three parliamentary constituencies.

              3. Incentives for the Private Players: PMJAY itself acts as an incentive for the private players to set-up hospitals.

              4. Universal coverage under PMJAY: The whole of the Population could be covered under PMJAY. It would reduce the exclusion errors as well as would act as a great incentive for the health system.

              5. Digitalization of health Records: For not only the continuity of the treatment, but also for enhanced access to the system.

              6. Ensuring accountability: of the empaneled hospitals under PMJAY.  National Health agency must rely on frequent Medical audits in order to ensure that the private sector are not unnecessarily escalating the medical costs.


Conclusion: Since relying on Private sector is no excuse to ignore public spending, greater public expenditure is the key to reduce out of pocket expenditure. They ensure the basic minimum level of care in the society. The NK Singh Panel has recommended a 2.5% of public expenditure on health, this is more required now than ever.

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