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“Modicare”: India’s Path to Universal Healthcare Coverage

March 28, 2019

This is Part 2 of a two article series on healthcare reform in India. Part 1 explored the unique factors that drive healthcare policies in India. This piece analyzes India’s flagship healthcare reform, Ayushman Bharat, which is also known as “Modicare.”

India has the world’s largest rural population, and around 300 million citizens live in poverty. As such, comprehensive healthcare reform in India must address these demographic challenges.[1] Previous national healthcare initiatives in India, however, were unsuccessful in combating the impact of high out-of-pocket (OOP) costs and the rural-urban divide in access to care.[2] On September 23, 2018, India’s Prime Minister Narendra Modi launched a nationwide health reform called Ayushman Bharat (which means “bless India with long and healthy life”). Commonly dubbed “Modicare,” Ayushman Bharat has two pillars: a health insurance program for the poor known as Pradhan Mantri Jan Arogya Yojana (PMJAY) and the establishment of a national network of Health and Wellness Centers. The Health and Wellness Centers focus on primary care (routine care delivered by one’s primary physician), whereas PMJAY focuses on the coverage of secondary and tertiary care (increasing levels of specialized care beyond that offered by one’s primary physician).[3] Though Ayushman Bharat expands access to healthcare for nearly half of the population, India may not achieve comprehensive healthcare due to limited financing and an underemphasis on primary care.

Image: &quot;Modicare&quot; has two main componentsImage: "Modicare" has two main components

Ayushman Bharat: An Overview

PMJAY is a government-sponsored health insurance scheme that provides “poor and vulnerable” families with financial coverage for hospital expenses for secondary and tertiary care.[4][5] Families in the poorest 40% of India’s population – an estimated 110 million families or equivalently 500 million individuals – will be automatically enrolled in this program.[6] The program will cover up to 500,000 rupees in hospital expenses without any OOP costs for beneficiaries.[7][8] Beneficiaries can receive care at any private or public hospital that has joined the scheme.[9] PMJAY will cost the central government and state governments approximately $1.54 billion annually.[10] Moreover, PMJAY builds upon the government’s previous national insurance program, Rashtriya Swasthya Bima Yojana (RSBY), which provided up to 30,000 rupees in financial coverage for inpatient expenses to families below the poverty line.[11] PMJAY fully replaced RSBY, increasing RSBY’s coverage amount six-fold and covering the poorest 500 million people, as opposed to just the 300 million who live below the poverty line.[12]

In addition to PMJAY, Ayushman Bharat will establish 150,000 Health and Wellness Centers by December 2022 in order to increase access to primary care in rural and urban areas.[13][14] Initially proposed in the 2017 National Health Policy, these Health and Wellness Centers will provide free medicines, diagnostic services, maternal and child health services, and treatment for non-communicable diseases.[15][16] To launch this program, existing sub-centers, local hospitals in rural areas that serve three to five thousand people each, will be converted to Health and Wellness Centers, increasing access to primary healthcare for rural populations.[17]

The Challenges Ahead

Ayushman Bharat focuses on the specific demographic challenges that India’s healthcare system faces – namely, the nation’s large impoverished and rural populations.[18] Previous reform efforts like RSBY did not reduce the chance of inpatient OOP expenses, which are largely unaffordable for poor families.[19] PMJAY eliminates these OOP costs associated with hospitalizations by providing eligible families with 500,000 rupees of coverage. Moreover, Health and Wellness Centers serve as Ayushman Bharat’s predominant means of delivering primary care to rural areas.

Although Ayushman Bharat addresses the rural-urban divide and access to healthcare for impoverished families, its emphasis on secondary and tertiary care as well as limited funding prevent this policy from achieving comprehensive health coverage. According to the World Health Organization, the key to attaining universal healthcare is access to primary healthcare.[20] In fact, the greatest health returns come from comprehensive access to primary healthcare – not secondary or tertiary care.[21] In addition, it is through primary care that India will tackle its main health concerns and priorities such as infectious diseases and immunizations.[22] Ayushman Bharat boosts primary care access through the Health and Wellness Centers; PMJAY, however, covers the costs of treatment and hospitalization exclusively for secondary and tertiary care. In addition, the insurance provided by PMJAY may increase demand for expensive inpatient secondary care, which could disincentivize the use of more cost-effective primary care.[23] As the Government of India aims to spend two-thirds of national public healthcare spending on primary care, Ayushman Bharat risks disincentivizing and underemphasizing the role of primary care.[24] Another barrier to achieving universal healthcare coverage in India is the limited funding allocated towards the implementation of PMJAY. The Government of India has currently budgeted $300M to subsidize care for impoverished families through PMJAY for its first year.[25] The coverage provided by PMJAY, however, may lead to insurance-induced demand and overutilization of secondary and tertiary services.[26] The $300M budget may not be sufficient for this increase in demand. In fact, if only one in ten families eligible for this health insurance scheme were to utilize the entire 500,000 rupees of coverage, the Indian government would owe hospitals approximately $25B – more than 80 times the amount allocated for the first year.[27]

Ayushman Bharat has made great strides to address the specific demographic challenges that afflict India’s health system and influence access to healthcare. Through the two pillars of the scheme, PMJAY and the Health and Wellness Centers, Ayushman Bharat provides better access to care for the impoverished as well as rural populations in India. The program, however, has an overemphasis on secondary and tertiary care and limited funding, which stifles India’s progress toward universal healthcare.

Conclusion

PMJAY is the boldest national health insurance plan in India’s history, providing more people with greater coverage than any previous program. Ayushman Bharat, as a whole, however, underemphasizes primary care services provided by the Health and Wellness Centers. Instead, Ayushman Bharat promotes PMJAY, which only covers secondary and tertiary care, as the main aspect of the reform. As primary care is a more cost-effective means to address the most pressing health concerns of developing countries, future efforts at healthcare reform in India must place greater focus on access to primary care.

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  • The views expressed on the Student Blog are the author’s opinions and don’t necessarily represent the Wharton Public Policy Initiative’s strategies, recommendations, or opinions.

References

   [1]https://publicpolicy.wharton.upenn.edu/live/news/2907-healthcare-in-india-the-challenge-of-demography

   [2]https://publicpolicy.wharton.upenn.edu/live/news/2907-healthcare-in-india-the-challenge-of-demography

   [3]http://pib.nic.in/newsite/PrintRelease.aspx?relid=183624

   [4]https://www.hopkinsmedicine.org/patient_care/billing-insurance/insurance_footnotes.html

   [5]https://www.economist.com/asia/2018/09/27/indias-government-launches-a-vast-health-insurance-scheme

   [6]http://pib.nic.in/newsite/PrintRelease.aspx?relid=183624

   [7]http://pib.nic.in/newsite/PrintRelease.aspx?relid=183624

   [8]https://www.economist.com/asia/2018/09/27/indias-government-launches-a-vast-health-insurance-scheme

   [9]https://www.economist.com/asia/2018/09/27/indias-government-launches-a-vast-health-insurance-scheme

   [10]https://www.theguardian.com/world/2018/sep/24/modicare-indias-pm-promises-free-health-care-for-half-a-billion-people

   [11]https://publicpolicy.wharton.upenn.edu/live/news/2907-healthcare-in-india-the-challenge-of-demography

   [12]https://publicpolicy.wharton.upenn.edu/live/news/2907-healthcare-in-india-the-challenge-of-demography

   [13]http://pib.nic.in/newsite/PrintRelease.aspx?relid=183624

   [14]https://link.springer.com/article/10.1007%2Fs13312-018-1341-1

   [15]https://www.sciencedirect.com/science/article/pii/S0140673618323870

   [16]https://www.sciencedirect.com/science/article/pii/S0140673618322840

   [17]https://ab-hwc.nhp.gov.in/home/aboutus

   [18]https://publicpolicy.wharton.upenn.edu/live/news/2907-healthcare-in-india-the-challenge-of-demography

   [19]https://www.ncbi.nlm.nih.gov/pmc/articles/PMC5408909/

   [20]https://publichealthinafrica.org/index.php/jphia/article/view/jphia.2013.e17

   [21]https://www.sciencedirect.com/science/article/pii/S0140673618323870

   [22]https://www.sciencedirect.com/science/article/pii/S0140673618323870

   [23]https://www.sciencedirect.com/science/article/pii/S0140673618323870

   [24]http://cdsco.nic.in/writereaddata/National-Health-Policy.pdf, pp.18

   [25]https://www.economist.com/asia/2018/09/27/indias-government-launches-a-vast-health-insurance-scheme

   [26]https://www.economist.com/asia/2018/09/27/indias-government-launches-a-vast-health-insurance-scheme

   [27]https://www.economist.com/asia/2018/09/27/indias-government-launches-a-vast-health-insurance-scheme

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RESOURCE SPOTLIGHT:

  • <h3>The World Bank Data (U.S.)</h3><p><img width="130" height="118" alt="" src="/live/image/gid/4/width/130/height/118/484_world-bank-logo.rev.1407788945.jpg" class="lw_image lw_image484 lw_align_left" srcset="/live/image/scale/2x/gid/4/width/130/height/118/484_world-bank-logo.rev.1407788945.jpg 2x, /live/image/scale/3x/gid/4/width/130/height/118/484_world-bank-logo.rev.1407788945.jpg 3x" data-max-w="1406" data-max-h="1275"/>The <strong>World Bank</strong> provides World Development Indicators, Surveys, and data on Finances and Climate Change.</p><p> Quick link: <a href="http://data.worldbank.org/country/united-states" target="_blank">http://data.worldbank.org/country/united-states</a></p><p>See all <a href="/data-resources/">data and resources</a> »</p>
  • <h3>Federal Reserve Economic Data (FRED®)</h3><p><strong><img width="180" height="79" alt="" src="/live/image/gid/4/width/180/height/79/481_fred-logo.rev.1407788243.jpg" class="lw_image lw_image481 lw_align_right" data-max-w="222" data-max-h="97"/>An online database consisting of more than 72,000 economic data time series from 54 national, international, public, and private sources.</strong> FRED®, created and maintained by Research Department at the Federal Reserve Bank of St. Louis, goes far beyond simply providing data: It combines data with a powerful mix of tools that help the user understand, interact with, display, and disseminate the data.</p><p> Quick link to data page: <a href="http://research.stlouisfed.org/fred2/tags/series" target="_blank">http://research.stlouisfed.org/fred2/tags/series</a></p><p>See all <a href="/data-resources/">data and resources</a> »</p>
  • <h3>NOAA National Climatic Data Center</h3><p><img width="200" height="198" alt="" src="/live/image/gid/4/width/200/height/198/483_noaa_logo.rev.1407788692.jpg" class="lw_image lw_image483 lw_align_left" srcset="/live/image/scale/2x/gid/4/width/200/height/198/483_noaa_logo.rev.1407788692.jpg 2x, /live/image/scale/3x/gid/4/width/200/height/198/483_noaa_logo.rev.1407788692.jpg 3x" data-max-w="954" data-max-h="945"/>NOAA’s National Climatic Data Center (NCDC) is responsible for preserving, monitoring, assessing, and providing public access to the Nation’s treasure of <strong>climate and historical weather data and information</strong>.</p><p> Quick link to home page: <a href="http://www.ncdc.noaa.gov/" target="_blank">http://www.ncdc.noaa.gov/</a></p><p> Quick link to NCDC’s climate and weather datasets, products, and various web pages and resources: <a href="http://www.ncdc.noaa.gov/data-access/quick-links" target="_blank">http://www.ncdc.noaa.gov/data-access/quick-links</a></p><p> Quick link to Text & Map Search: <a href="http://www.ncdc.noaa.gov/cdo-web/" target="_blank">http://www.ncdc.noaa.gov/cdo-web/</a></p><p>See all <a href="/data-resources/">data and resources</a> »</p>
  • <h3>National Center for Education Statistics</h3><p><strong><img width="400" height="80" alt="" src="/live/image/gid/4/width/400/height/80/479_nces.rev.1407787656.jpg" class="lw_image lw_image479 lw_align_right" data-max-w="400" data-max-h="80"/>The National Center for Education Statistics (NCES) is the primary federal entity for collecting and analyzing data related to education in the U.S. and other nations.</strong> NCES is located within the U.S. Department of Education and the Institute of Education Sciences. NCES has an extensive Statistical Standards Program that consults and advises on methodological and statistical aspects involved in the design, collection, and analysis of data collections in the Center. To learn more about the NCES, <a href="http://nces.ed.gov/about/" target="_blank">click here</a>.</p><p> Quick link to NCES Data Tools: <a href="http://nces.ed.gov/datatools/index.asp?DataToolSectionID=4" target="_blank">http://nces.ed.gov/datatools/index.asp?DataToolSectionID=4</a></p><p> Quick link to Quick Tables and Figures: <a href="http://nces.ed.gov/quicktables/" target="_blank">http://nces.ed.gov/quicktables/</a></p><p> Quick link to NCES Fast Facts (Note: The primary purpose of the Fast Facts website is to provide users with concise information on a range of educational issues, from early childhood to adult learning.): <a href="http://nces.ed.gov/fastfacts/" target="_blank">http://nces.ed.gov/fastfacts/#</a></p><p>See all <a href="/data-resources/">data and resources</a> »</p>
  • <h3>HUD State of the Cities Data Systems</h3><p><strong><img width="200" height="200" alt="" src="/live/image/gid/4/width/200/height/200/482_hud_logo.rev.1407788472.jpg" class="lw_image lw_image482 lw_align_left" srcset="/live/image/scale/2x/gid/4/width/200/height/200/482_hud_logo.rev.1407788472.jpg 2x, /live/image/scale/3x/gid/4/width/200/height/200/482_hud_logo.rev.1407788472.jpg 3x" data-max-w="612" data-max-h="613"/>The SOCDS provides data for individual Metropolitan Areas, Central Cities, and Suburbs.</strong> It is a portal for non-national data made available through a number of outside institutions (e.g. Census, BLS, FBI and others).</p><p> Quick link: <a href="http://www.huduser.org/portal/datasets/socds.html" target="_blank">http://www.huduser.org/portal/datasets/socds.html</a></p><p>See all <a href="/data-resources/">data and resources</a> »</p>
  • <h3>MapStats</h3><p> A feature of FedStats, MapStats allows users to search for <strong>state, county, city, congressional district, or Federal judicial district data</strong> (demographic, economic, and geographic).</p><p> Quick link: <a href="http://www.fedstats.gov/mapstats/" target="_blank">http://www.fedstats.gov/mapstats/</a></p><p>See all <a href="/data-resources/">data and resources</a> »</p>
  • <h3>Congressional Budget Office</h3><p><img width="180" height="180" alt="" src="/live/image/gid/4/width/180/height/180/380_cbo-logo.rev.1406822035.jpg" class="lw_image lw_image380 lw_align_right" data-max-w="180" data-max-h="180"/>Since its founding in 1974, the Congressional Budget Office (CBO) has produced independent analyses of budgetary and economic issues to support the Congressional budget process.</p><p> The agency is strictly nonpartisan and conducts objective, impartial analysis, which is evident in each of the dozens of reports and hundreds of cost estimates that its economists and policy analysts produce each year. CBO does not make policy recommendations, and each report and cost estimate discloses the agency’s assumptions and methodologies. <strong>CBO provides budgetary and economic information in a variety of ways and at various points in the legislative process.</strong> Products include baseline budget projections and economic forecasts, analysis of the President’s budget, cost estimates, analysis of federal mandates, working papers, and more.</p><p> Quick link to Products page: <a href="http://www.cbo.gov/about/our-products" target="_blank">http://www.cbo.gov/about/our-products</a></p><p> Quick link to Topics: <a href="http://www.cbo.gov/topics" target="_blank">http://www.cbo.gov/topics</a></p><p>See all <a href="/data-resources/">data and resources</a> »</p>
  • <h3>National Bureau of Economic Research (Public Use Data Archive)</h3><p><img width="180" height="43" alt="" src="/live/image/gid/4/width/180/height/43/478_nber.rev.1407530465.jpg" class="lw_image lw_image478 lw_align_right" data-max-w="329" data-max-h="79"/>Founded in 1920, the <strong>National Bureau of Economic Research</strong> is a private, nonprofit, nonpartisan research organization dedicated to promoting a greater understanding of how the economy works. The NBER is committed to undertaking and disseminating unbiased economic research among public policymakers, business professionals, and the academic community.</p><p> Quick Link to <strong>Public Use Data Archive</strong>: <a href="http://www.nber.org/data/" target="_blank">http://www.nber.org/data/</a></p><p>See all <a href="/data-resources/">data and resources</a> »</p>
  • <h3>The Penn World Table</h3><p> The Penn World Table provides purchasing power parity and national income accounts converted to international prices for 189 countries/territories for some or all of the years 1950-2010.</p><p><a href="https://pwt.sas.upenn.edu/php_site/pwt71/pwt71_form.php" target="_blank">Quick link.</a> </p><p>See all <a href="/data-resources/">data and resources</a> »</p>
  • <h3>Internal Revenue Service: Tax Statistics</h3><p><img width="155" height="200" alt="" src="/live/image/gid/4/width/155/height/200/486_irs_logo.rev.1407789424.jpg" class="lw_image lw_image486 lw_align_left" srcset="/live/image/scale/2x/gid/4/width/155/height/200/486_irs_logo.rev.1407789424.jpg 2x" data-max-w="463" data-max-h="596"/>Find statistics on business tax, individual tax, charitable and exempt organizations, IRS operations and budget, and income (SOI), as well as statistics by form, products, publications, papers, and other IRS data.</p><p> Quick link to <strong>Tax Statistics, where you will find a wide range of tables, articles, and data</strong> that describe and measure elements of the U.S. tax system: <a href="http://www.irs.gov/uac/Tax-Stats-2" target="_blank">http://www.irs.gov/uac/Tax-Stats-2</a></p><p>See all <a href="/data-resources/">data and resources</a> »</p>
  • <h3>Federal Aviation Administration: Accident & Incident Data</h3><p><img width="100" height="100" alt="" src="/live/image/gid/4/width/100/height/100/80_faa-logo.rev.1402681347.jpg" class="lw_image lw_image80 lw_align_left" srcset="/live/image/scale/2x/gid/4/width/100/height/100/80_faa-logo.rev.1402681347.jpg 2x, /live/image/scale/3x/gid/4/width/100/height/100/80_faa-logo.rev.1402681347.jpg 3x" data-max-w="550" data-max-h="550"/>The NTSB issues an accident report following each investigation. These reports are available online for reports issued since 1996, with older reports coming online soon. The reports listing is sortable by the event date, report date, city, and state.</p><p> Quick link: <a href="http://www.faa.gov/data_research/accident_incident/" target="_blank">http://www.faa.gov/data_research/accident_incident/</a></p><p>See all <a href="/data-resources/">data and resources</a> »</p>
  • <h3>USDA Nutrition Assistance Data</h3><p><img width="180" height="124" alt="" src="/live/image/gid/4/width/180/height/124/485_usda_logo.rev.1407789238.jpg" class="lw_image lw_image485 lw_align_right" srcset="/live/image/scale/2x/gid/4/width/180/height/124/485_usda_logo.rev.1407789238.jpg 2x, /live/image/scale/3x/gid/4/width/180/height/124/485_usda_logo.rev.1407789238.jpg 3x" data-max-w="1233" data-max-h="850"/>Data and research regarding the following <strong>USDA Nutrition Assistance</strong> programs are available through this site:</p><ul><li>Supplemental Nutrition Assistance Program (SNAP) </li><li>Food Distribution Programs </li><li>School Meals </li><li>Women, Infants and Children </li></ul><p> Quick link: <a href="http://www.fns.usda.gov/data-and-statistics" target="_blank">http://www.fns.usda.gov/data-and-statistics</a></p><p>See all <a href="/data-resources/">data and resources</a> »</p>