For the past 15 months, we've been driven by a singular mission: making quality healthcare accessible and affordable for 1.2 billion Indians. Our ground-level experience has convinced us that, thanks to technological advancements like LLM-based AI and India's Health Stack (ABDM), the time is right to tackle this challenge and improve the lives of billions of Indians and stakeholders alike.
One aspect of India’s social scheme and Digital Public Infrastructure (DPI) that has deeply impressed us is its sheer scale and audacity. PMJAY, for example, stands as the world's largest state-sponsored health insurance program, both in terms of beneficiaries and claim amounts. Here are some key differences between PMJAY and other available health insurance options:
Complete cashless insurance: PMJAY offers cashless treatment, removing the financial burden from beneficiaries.
Family coverage: A family's combined claim amount reaches a significant INR 500,000.
Extensive reach: Over 70 Crore Indians, including 50 Crore women and 20 Crore children, are covered under PMJAY, encompassing over 12 Crore families.
Wide network of empanelled hospitals: PMJAY boasts a network of private hospitals comparable to private health insurance providers. Importantly, these hospitals cater to the specific needs of beneficiaries. For instance, in my district of Samastipur, PMJAY beneficiaries have access to empanelled hospitals around 35km away, with additional options in Baheri, just 6km from my village. In comparison, other private insurance plans often require beneficiaries to travel up to 85km to Patna for cashless treatment.
Coverage for pre-existing conditions: PMJAY covers pre-existing medical conditions without any waiting period.
While the budget allocation and money spent on treatment highlight the scheme's impact, there is room for improvement in maximizing its effectiveness. Let's analyze the past five years:
Note: According to the PMJAY’s dashboard tracker, it claims to be 72256.96 Cr (I don’t have much clarity on that)
NHA Annual Budget
PMJAY’s Website
Budget Announcement PDF
The number of beneficiaries availing claims has increased by 5 million in the past three years, yet the expenses remain relatively unchanged. This coincides with rising healthcare inflation, raising questions about the cost-benefit ratio.
The scenario suggests two possibilities:
A decline in treatment quality.
PMJAY's efficient claim processing system has minimized fraudulent activity. (IRDAI reports indicate 15% of all health insurance claims are fraudulent.)
Regardless of the reason, it's difficult to fully assess the scheme's impact and whether it has lived up to its potential. However, one undeniable success is the increased number of providers under the insurance umbrella and the growing awareness among Indians regarding the importance of health insurance. Notably, 100% of PMJAY beneficiaries are first-time health insurance users. We must also acknowledge the social impact of the scheme, saving lives and preventing millions from falling into poverty due to unaffordable healthcare costs. PMJAY holds the true potential to make healthcare universal in India.
PMJAY has played a crucial role in NHA's development of inclusive DPIs like ABDM and NHCI. The learnings from operating PMJAY at scale enabled the creation of the National Health Claim Exchange (NHCI). This interoperable platform uses health records as a "Source of Truth," significantly reducing claim processing costs. This is particularly significant considering the upcoming inclusion of OPD (outpatient department) coverage in health insurance, which typically involves lower claim amounts.
To be frank, many things are missing from India’s Health Insurance hence it must be looked at as the outcome improvement (Jobs to be done) in patients rather than just financial protection.
As I discussed in my previous essay, the current perception of health insurance in India primarily focuses on financial protection. This mindset needs to shift towards viewing health insurance as a tool for improving patient outcomes. This shift is impossible if NHA continues to approach PMJAY from a traditional health insurance perspective. PMJAY must be redesigned and implemented through the lens of "Managed Care-based Health Insurance with Care Delivery System," often referred to as "SuperMed." This model perfectly aligns with the "Jobs to be done" framework in healthcare.
Regulators like NHA, ABDM, and others have demonstrated a positive and proactive approach to building a robust and inclusive healthcare infrastructure for billions of Indians, paving the way for universal healthcare. This commitment deserves praise, as they have effectively tackled the foundational challenges. Ultimately, NHA and other regulators strive to improve patient outcomes and ensure the good health of all citizens. If a public-private partnership can achieve these goals, NHA should actively explore this possibility.
This public-private partnership approach is not without precedent. In 1997, the AARP (American Association of Retired Persons) partnered with UnitedHealth Group's Managed Care-based Health Insurance to provide coverage for its members. This decision proved pivotal, and today, every US citizen enjoys access to "Managed Care-based Health Insurance with Care Delivery System" rather than mere financial protection through general health insurance. This success story demonstrates the potential for universal healthcare through such collaborations.
While the US model achieved remarkable results, it lacked a crucial element: a robust data-sharing platform. This absence contributed to rising healthcare costs per capita, as stakeholders functioned as closed systems, hoarding patient data. Fortunately, India has already established an interoperable healthcare protocol, allowing seamless data exchange across stakeholders. This advantage positions India for even greater success than the US model, potentially achieving Universal Healthcare at a much lower Healthcare per capita.
PMJAY's unique "ecosystem approach" offers an ideal platform for piloting the proposed "SuperMed" model. The program's 12 Crore families are grouped under various sub-schemes, making it feasible to select one specific group for a pilot implementation before scaling it up nationwide.
NHA can replicate the AARP approach by starting with a smaller scheme, such as the Central Armed Police Force (CAPF), which comprises approximately 55 lakh beneficiaries. This pilot program would emphasize "Managed Care-based Health Insurance with Care Delivery" instead of the traditional model focused solely on financial protection.
I come from a School of thought that believes the healthcare challenge cannot be tackled by the public sector alone; a collaborative approach involving both public and private entities is essential. Private players require predictable revenue streams to justify investments. Schemes like PMJAY, with their fixed and transparent revenue pools, offer attractive opportunities for private participation, incentivizing investment and accelerating progress towards universal healthcare.
The past five years of experience with PMJAY, ABDM, NHCI, and other initiatives have laid a solid foundation for NHA to design and manage programs like "SuperMed" under private management. This approach will attract new players, fostering competition and driving innovation, ultimately paving the way for universal healthcare in India.
Attracting venture capital investment is crucial for the success of "SuperMed." Given the 10 to 12-year lifecycle of such funds, building a compelling investment case is vital. Demonstrating the long-term value proposition of "SuperMed" through pilot programs and data-driven projections will be instrumental in attracting venture capital and propelling the initiative forward.
Every stakeholder in the healthcare ecosystem, including NHA, must adopt a "Jobs to be done" approach to understand the true needs of patients. Unlike transactional services where goals are immediate, healthcare's "Jobs to be done" are long-term and impact all stakeholders. Public funding will be essential in laying the foundation for "SuperMed," hence NHA should allow Private Players to manage some components of PMJAY to validate “SuperMed”. So, a suitable “SuperMed” service could be built for every Indian because it holds the potential to achieve universal healthcare in India, a shared aspiration for all!
Thanks for reading, if you know someone from the regulator or Government who might benefit from this essay, please share.
I will see you all the next week :)