Not quite healthy
It’s five years since GOI launched PMJAY, the state-funded health insurance scheme meant to cover the poorest 40% of the population. An important goal of PMJAY is to reduce out-of-pocket expenditure in healthcare. CAG this week unveiled a performance audit of the scheme. It covers the period between 2018 and 2021. Since then, PMJAY has expanded coverage. Juxtaposing CAG’s report with other data presented by GOI in Parliament provides a sense of the scheme’s performance.
States are the pioneers in government-funded health insurance coverage. Hence, PMJAY had to be grafted on to existing insurance plans in many states. A consequence is that State Health Authorities (SHAs) directly administer the working of the scheme for more than half the beneficiaries under PMJAY. It’s also led to health coverage of about 15.5 crore families, a level that’s above GOI’s target as many states foot the bill to ensure families in their original schemes are covered. Given this background, the CAG report and other data point to some structural weaknesses.
Tight control over data and processes is critical to the smooth functioning of health insurance. CAG’s report showed that PMJAY has a problem. PMJAY Id, a 9-digit unique alphanumeric code shouldn’t be duplicated. That’s, however, not the case. In addition, there are other problems with names and even age – some beneficiaries are apparently born in the 19th century. Database issues mean that dubious healthcare providers can game the system and also exploit the information asymmetry that characterises the relationship between doctors and patients. Here, one data point is a puzzle. GOI said that the average cost per episode of hospitalisation in 2022-23 was ₹13,703, which is not even 3% of the overall cover of ₹5 lakh/family. It’s out of sync with general inflation in medical costs. What impact could it have on OOP?
Health insurance needs enough empanelled hospitals. Hospitals are unevenly spread, which means poorer states are inadequately covered. For example, Bihar has a population that exceeds TN by almost 50 million but has less than half the latter’s empanelled hospitals. Therefore, adding beneficiaries in absence of healthcare infrastructure is meaningless. Media reports show that even in public hospitals patients are being defrauded and denied benefits under PMJAY. SHAs, the dominant administrators, need to up their game. The fifth anniversary is a good time to iron out PMJAY’s design flaws. GOI also needs to do an independent audit of PMJAY’s impact on OOP.