Modicare: A Gamechanger For India’s Healthcare?

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In September 2018, 4 million Indians received a two-page customised letter from PM Modi which explained the importance and benefits of the  ‘world’s largest government-funded scheme’ – Ayushman Bharat a.k.a. Modicare. While the scheme was first unveiled on our 72nd Independence, it was officially launched by PM Modi on September 23rd, 2018.

Here’s why it can be a game changer for India’s healthcare.

It’ll drastically reduce out-of-pocket expenditure

Once rolled out, almost half of the Indian population – 40% – will be insured immediately. The 500 million beneficiaries covered under the scheme include the poorest of the poor who are often the ones who cannot afford quality health care, are jobless and often own lesser assets. They can walk into any public and participating private hospital and get access to free treatment, which means they do not have to spend a penny on getting access to healthcare. The cashless scheme includes 2 major initiatives – establishing 1.5 lakh health and wellness centres to strengthen the healthcare and a medical insurance worth Rs. 5 lakh covering hospitalisation expenses of all secondary and tertiary treatments. The primary health care is the first level of contact with patients with the health system through a general practitioner or family physician. While the secondary and tertiary healthcare includes specialised care like psychiatrists, physiotherapists, respiratory therapists, speech therapists, like cancer management, neurosurgery, cardiac surgery. The treatment of the latter is pretty expensive. Take the treatment of cancer for example – which has literally wiped out life savings of the patients and also compelled many to sell off their houses. Although relatively cheaper than in the West, it’s still unaffordable for poor and middle-class Indians, who often do not have health insurance. The expense could range from Rs. 2 lakhs to as much as Rs. 20 lakhs. In fact, each chemotherapy sitting costs the patient Rs. 90,000.

Incurring such heavy expenses pushes millions of Indians into poverty every year. Till date in India, at least 62% of patients spend money on healthcare from their own pockets (income, savings, loans, borrowings) without any third party like an insurance company or government being involved. Now, with the government covering the expenditure worth Rs. 5 lakh per family, it relieves the poor and the lower middle class from the burden of catastrophic health expenditure.

While currently, the benefits are only for the 40% of the Indian population, eventually it will cover a full 100%. Thus, it’s an important vehicle for universal health coverage – one of our Sustainable Development Goals (SDG). The initial blueprint submitted by the NITI Aayog proposed 100% coverage. However, owing to lack of funds this proposal was scrapped off and the neediest were chosen to be the beneficiaries of the scheme.

It’ll revamp healthcare in rural India

Today, India is equipped with world class private healthcare which matches the standards of the UK and the US. But, these are mainly concentrated in the urban areas. In fact, 80% of the doctors and 60% of hospitals are located in the urban areas. The reason why they are not set up in the rural and the district villages is that the population there simply cannot afford the high-cost bills. And private hospitals run on the sole purpose of profit making. However, with the new central scheme launched, experts feel it will drive private players to open hospitals in rural areas because (a) the government will be paying for all the costs, so there’s no loss for them (b) the private players would not want to miss out on the business opportunity of serving 40% of the country’s population. So, rolling out of Modicare would mean people in the rural areas getting access to this world-class facilities without having to travel to the urban cities.

To meet the growing demand of patients getting treated in the rural areas and overcome the lack of doctors, 24 new government medical colleges and hospitals will be set up in the rural areas. The government also plans on incentivising doctors who will render services in the rural areas. For example, in Bhopal, the state government has asked the doctors in government medical colleges to choose between private practices or work in government hospitals to get additional monetary benefits under the scheme.

It’ll include a wider range of ailments

The Ayushman Bharat scheme or the ‘Modicare’ focuses on a wider band of services. Non-communicable diseases (NCD) are the ones which are not caused by any infectious agents and last for longer period of time. In India, at least 61% of deaths (ie 5.8 million deaths) are caused by non-communicable diseases like heart stroke, hypertension, cancer, diabetes, respiratory diseases etc. Of these – cancer, diabetes and heart diseases.

However, almost all the past centrally sponsored schemes like Rashtriya Swasthya Bima Yojana (RSBY) and the Senior Citizen Health Insurance Scheme (SCHIS) ignored these diseases and prioritised only communicable disease or the infectious ones (like malaria, HIV, influenza and TB), maternal health, newborn and child health – which catered to only 15% of the patient’s needs. The Ayushman Bharat scheme or the ‘Modicare’ focuses on a wider band of services. It will be inclusive of not just communicable but also non-communicable diseases. Experts state that this would the most needed social safety net for healthcare has treatment of non-communicable diseases is long-term and expensive. Including non-communicable diseases will help in an early detection of diseases and will reduce not only the number of deaths but will also reduce the burden on our economy. As per a report by the World Economic Forum and Harvard School of Public Health, India is expected to lose $4.58 trillion before 2030 due to NCD and mental health conditions.

It’ll be a guaranteed success

(considering it’s based on other successful models)

Modicare is formulated after analysing health schemes and successful health models from different countries and has been further tailored to meet India’s needs. The mainframer and the CEO of the scheme – Indu Bhushan – has been actively involved in formulating health policies for several countries like Vietnam, Cambodia, Thailand, China, and Mongolia, to name a few. After understanding India’s healthcare sector, Bhusan decided to amalgamate China’s IT infrastructure, Thailand’s fraud prevention and detection mechanism and South Korea’s use of AI in healthcare. All of these models have proved to be successful and most importantly address the healthcare issues faced in India. For example, one of the focus areas of the Modicare is prevention of fraud and corruption – which has been plaguing the entire government funded scheme. That’s where we took cues from Thailand – which is known to have best healthcare scheme in terms of a watertight fraud-proof system. While announcing the anti-fraud guidelines for the states, the government stated that the scheme will have zero tolerance for fraud. As health insurance schemes are prone to fraud, abuse and leakages – the government has called on companies to build an IT framework that can identify and trigger alerts for ‘suspicious’ transactions. While the project is yet in a developmental stage, at least 14 companies including Wipro, IBM, L&T etc have shown interest in designing the IT framework. Further with the power of data analytics and artificial intelligence (AI), the government will be able to generate a large volume of data, better target healthcare initiatives, detect and monitor fraud and optimise costs.

Like any other government scheme, this one too comes with its own set of challenges. But if implemented effectively, this scheme will have far-reaching consequences on the entire healthcare landscape.

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