Modicare mirage: PMJAY stricken by fraud, red tape, and unmet promises

The Ayushman Bharat-National Health Protection Mission (PMJAY), popularly called Modicare, introduced the universal health insurance scheme in 2018. This initiative represented a paradigm shift in India's pursuit of universal health coverage. The mission, among Prime Minister Narendra Modi's pet projects, pledged to provide millions of vulnerable families with comprehensive health insurance.

Nevertheless, translating policy initiation into execution has revealed an unfavourable truth: a scheme rife with deficiencies in infrastructure, inefficiencies in operations, and widespread fraudulent activities.

The following chart gauges the challenges faced by the PMJAY scheme, based on data sourced from PRS, EPW, IJFMR and Indian Express:

Obamacare example

In 2010, then US President Barack Obama signed the Affordable Care Act, which required all American citizens to have health insurance. Likewise, the 2018 PMJAY initiative was introduced with the aim of providing healthcare to individuals in need.

The World Bank reports that a mere 15 per cent of the Indian populace possesses health insurance, with individuals personally financing 94 per cent of their healthcare expenses.

Additionally, the bed capacity stands at a mere 0.9 per thousand individuals. In addition to utilising their income and reserves, the individuals finance their healthcare expenses through loans or the sale of their assets.

Ayushman's 2 elements

Ayushman Bharat comprises two interconnected elements: (i) Wellness and Health Centres and (ii) The Pradhan Mantri Jan Arogya Yojana

The primary element of Ayushman Bharat was the setting up of health and wellness centres (HWCs) through the transformation of primary health centres/sub-centres to offer comprehensive primary health care, which was the initial element of the scheme. As per its stated goal, 1.5 lakh HWCs were to be set up by December 2022 in order to reduce out-of-pocket expenses and promote universal health coverage. As of November 2022, 1,31,150 HWCs were operational.

The second component of the PMJAY provides health coverage for secondary and tertiary care hospitalisation services of up to Rs 5 lakh per family per year. Beneficiaries of PMJAY are granted seamless and cashless service access at the point of delivery. The financial support for the initiative is provided in a 60:40 ratio by the Centre and the states, with the northeast and hilly states contributing 90:10.

Expansion of scheme

On the basis of the occupational and deprivation criteria of the Socio-Economic Caste Census, 2011 (SECC-2011), the scheme was implemented in urban and rural areas, respectively, for over 10.74 crore families.

Based on data from the National Food Security Act, the government authorised the expansion of the beneficiary base to 12 crore families in January 2022.

According to data from the National Health Authority (NHA), 7.87 crore beneficiary households were officially registered, accounting for 73 per cent of the 10.74 crore targeted households as of November 2022.

Conspicuous irregularities

However, within a few years, numerous obstacles arose for the scheme. In its report presented to the Lok Sabha in August 2023, the Comptroller and Auditor General of India (CAG) identified conspicuous irregularities within the PMJAY health insurance scheme.

The report noted multiple cases of the scheme providing treatment for patients who had already been declared dead, as well as for thousands of people using the same Aadhaar number or invalid mobile phone number.

According to the report, nearly 7.5 lakh beneficiaries were associated with a single cellular number – 9999999999 – in the scheme's Beneficiary Identification System (BIS). "A BIS database analysis unveiled that a significant number of beneficiaries registered using the same or an invalid mobile number."

According to the report, 1119 and 7,49,820 beneficiaries were associated with a single mobile number in the BIS database.

Mobile number duplication

Among the 7,49,820 beneficiaries associated with the phone number 9999999999, a total of 1,39,300 were associated with the number 8888888888, and 96,046 were associated with the number 9000000000. The report also indicates that 10,001 and 50,000 beneficiaries were associated with a minimum of 20 mobile phone numbers. Households that did not meet the eligibility criteria were enrolled as beneficiaries of the PMJAY and received benefits ranging from Rs 0.12 lakh to Rs 22.44 crore.

According to the report, mobile numbers are crucial for accessing records associated with beneficiaries in the database, particularly those who visit the registration desk without identification.

Beneficiary identification may also become challenging in the event that an e-card is lost. This may lead to the refusal of scheme benefits and communication before and after admission, which will cause inconvenience for eligible beneficiaries.

Fee feasibility

According to an article published in the International Journal for Multidisciplinary Research, hospitals with NABH accreditation are eligible for a 15 per cent price benefit under Ayushman Bharat. However, the package rates under this initiative are deemed unfeasible, compelling hospitals to decline patient treatment under the scheme.

Afshana Parveen, an assistant professor in the Department of Economics at Dr BKB College in Puranigudam, Nagaon, Assam, writing for the journal, noted that the National Anti-Fraud Unit of the NHA uncovered multiple instances of fraud.

A solitary physician performing surgical procedures in four districts concurrently, charging patients for costly procedures that were not performed on them, and performing multiple procedures late at night on a single day. As noted by the article's author, invoicing frequently occurred despite the absence of the specific procedure in question.

Private hospitals dominate

According to a report in the Indian Express that utilised data from the Right to Information (RTI) Act, private hospitals nationwide received two-thirds of the annual funds allocated under the scheme. This was contributed by 2.95 crore patients, or 54 per cent of all beneficiaries through December 2023. This means that medical expenses in private hospitals, which are six to eight times greater than in public hospitals, receive a large share of the funds.

Abhay Shukla, convener of the Jan Swasthya Abhiyan and a physician specialising in public health, argued in an article for the Economic & Political Weekly that the PMJAY scheme is founded upon a fundamentally defective framework, wherein for a variety of reasons, rhetoric surpasses reality.

As per his assertion, the programme provides coverage for specific categories of inpatient care but excludes coverage for outpatient and other healthcare expenses, collectively accounting for approximately 70 per cent of personal healthcare costs. This programme emphasises a subset of hospitalisations and operations rather than promoting overall health, increasing the probability that superfluous procedures will be performed.

Poor left alone

An additional examination of the Rashtriya Swasthya Bima Yojana (RSBY) revealed that this substantial health insurance initiative has failed to provide impoverished households with substantial financial security.

Shukla noted that the success of this initiative hinges on patients seeking care at the larger empanelled private hospitals, which are scarce in rural and remote areas and are predominantly located in metropolitan and major cities.

Having a PMJAY card does not guarantee healthcare accessibility for low-income families, as the closest empanelled institution may be several hundred kilometres away, necessitating significant travel expenditures and wage loss.

Higher out-of-pocket-expenses

A research investigation into hospitalisation covered by government health insurance initiatives revealed that a mere 3 per cent of patients receive cashless treatment, while over 70 per cent of beneficiaries incur out-of-pocket expenses exceeding ₹ 1,000.

This was supported by a study conducted by the National Health Authority, as reported by PRS Legislative Research. The study indicated that patients are frequently required to pay out-of-pocket for medical services not covered by PMJAY and that technical difficulties exist with the PMJAY portal (via which the discharge procedure is executed) despite the scheme's intention to provide free treatment for secondary and tertiary care.

Compared to other nations, the proportion of personal expenses (termed out-of-pocket expenditure or OOPE) borne by individuals is comparatively high in India. The absence of public investment in healthcare has resulted in reliance on typically more expensive private healthcare providers.

Although OOPEs in India have decreased from 64.2 per cent of total health expenditures in 2014 to 48.2 per cent in 2019, the percentage remains relatively high. India ranks 176 out of 196 countries according to the Standing Committee on Health and Family Welfare (2022–23), which tracks the percentage of current health expenditures met out of pocket.

Insufficient utilisation of funds

The Standing Committee on Health and Family Welfare identified the insufficient utilisation of PMJAY-designated funds in 2022.

Notwithstanding this, funding for the scheme has been increased, and the Committee advised the Ministry of Health and Family Welfare to implement measures that guarantee the prudent utilisation of funds under the scheme.

A budget increase of 12 per cent, or Rs 7,200, has been designated for PMJAY in 2023–24, compared to the revised estimates for 2022–23. The allocation to PMJAY in 2023–24 is considerably greater than the expenditures incurred in 2020–21 (Rs 2,681 crore) and 2021–22 (Rs 3,116 crore), periods during which COVID-19 caused a substantial surge in hospital admissions, PRS said.