Odisha government recently announced its aspirational health scheme Biju Swasthya Kalyan Yojana (BSKY) in order to provide financial assurance up to `5 lakh per household to around 70 lakh households for secondary and tertiary care hospitalisation. The state has expressed its reluctance to participate in the Ayushman Bharat National Health Protection Mission (ABNHPM). Three important aspects — how the Odisha scheme is different, whether this will provide financial risk protection and what are the operational issues for smooth rolling out of the scheme — are discussed here.
States participating in the ABNHPM have options to choose one among the three possibilities — Third Party Administration (TPA), Trust model and the Trust-TPA combo model to run the scheme.
Odisha purposes to form a Trust to implement the scheme, which will reimburse the hospitalisation cost and will not pay premiums to insurance companies. To that extent, Odisha may save some resources as the difference between the claims settled and premium paid goes to the insurance firms. The other advantage is that the Trust will incur less administrative expenditure compared to TPAs.
Though the Trust model saves money, the major constraints are weak in-house capacity, poor governance structure and susceptibility to outside interference. For effective implementation of the scheme, the state needs to design the Trust structure by hiring experts to suggest packages, costs and criteria for empanelment of private hospitals. Another uphill task for the Trust is to improve the governance structure. Riddled with weak IT system and poor administration, the uptake of the ongoing health insurance programmes is far from satisfactory.
There are large inter-district variations in the RSBY utilisation and the uptake is low for BKKY. Moreover, the Odisha State Treatment Fund has several procedural challenges, which, increases the predicament of patients. The same issues will have a major bearing on the BKSY implementation, unless the Trust carefully introduces measures to lessen these problems. One of the strategies that can ease the administrative bottlenecks is to develop a well enabled digital platform. Odisha can learn from Andhra Pradesh’s and Karnataka’s experience of Trust model.
Besides these, the financial implication of such a humongous scheme needs deliberation. The current resource absorption for RSBY, BKKY and OSTF is not hefty. The claims ratio for RSBY is 65-68 per cent. This is unlikely to rise significantly, unless architectural correction is made. Therefore, renouncing the Central scheme may not have huge financial burden. Rather, it may usher large political benefits.
The most important question is: Can BSKY improve the persistent health financing problem? Currently, Odisha spends around 4.5% GDP on healthcare, of which only 1.05% is by the government.
Out of pocket (OOP) expenditure constitutes 76% of total health expenditure, which is unexpectedly high. On the contrary, the utilisation from the public healthcare facilities is quite high, the proportion being 72.55% for outpatient visits. Furthermore, a significant proportion of OOP is due to outpatient care, mainly due to drugs and diagnostics services (58% and 12%, respectively). Dubbed as a step towards achieving Universal Health Coverage (UHC), BSKY may provide breathing space to millions of households burdened by costly health care. However, a large part of OOP, which occurs due to outpatient visits (71%), will not be alleviated by any insurance mechanism, as it is meant only for hospitalisation.
Another major strand of BSKY which can lessen the OOP is to provide free primary and secondary care to all. This is a step towards achieving UHC. However, the health system constraints need to be alleviated urgently. Stepping up investment, especially building primary care, is an option Odisha should pursue aggressively.
A comprehensive primary care will substantially reduce the cost at the secondary and tertiary care leading to positive externality and efficiency in resource spending. Strategic purchasing, which, for instance, is used in the UK’s NHS and other countries should be explored further to guide decisions for improving health system performance. Other specific steps to improve the debilitating public health system could be the optimal use of existing resources through improved governance, deploying additional human resources and strengthening crucial schemes — NIRAMAY and NIDAN.
(Dr Rout works as an associate professor in Indian Institute of Public Health, Bhubaneswar, PHFI)