Key Takeaways From Yeddyurappa’s Vajpayee Arogyashree Scheme For A Comprehensive Modicare

The Vajpayee Arogyashree Scheme – Karnataka’s own healthcare scheme – was launched in February 2010 by then chief minister B S Yeddyurappa.

The Scheme

If keywords were to be used to broadly define the Vajpayee Arogyashree Scheme (VAS) in Karnataka, they would be listed as: “families below poverty line”, “improving accessibility”, “catastrophic illness”, “financial barriers”, “surgeries and tertiary care” and “specialist doctors”. Like most other poor people, families below poverty line in Karnataka, with conditions requiring tertiary care had to make a difficult choice: either go in for sub-optimal government care, or take crushing debt to pay for treatment at private hospitals – or forego treatment and face consequences.

The scheme, meant for below poverty line (BPL) families in Karnataka, was initially launched in Gulbarga and Belgaum divisions, covering 14.39 lakh and 16.91 lakh families. Later, it was extended to Bangalore and Mysore in 2012, covering the entire state. It sought to provide high-quality care, otherwise unaffordable to the masses, in the empanelled super-specialty hospitals.

The VAS is implemented through SAST – Suvarna Arogya Suraksha Trust – a registered body under the Indian Trusts Act. An implementation support agency manages day-to-day functioning and has hired staff to organise camps, processing pre-authorisation for procedures, screening, settling claims of the empanelled hospitals, etc.

Eligible members get free care for a targeted range of tertiary care services, mostly cardiac, oncologic (surgery, chemotherapy and radiotherapy), neurologic, burn and trauma care, and the entire treatment is borne by the government. The expenses covered are related to investigations, procedures, transport, food and medicines; follow-up treatment is also provided in 60 procedures. An important highlight is that pre-existing disease is not a bar and patients are not to be rejected on those grounds. Another highlight is that it incentivises providers to seek patients with cardiac and oncologic conditions requiring specialised care.

The BPL families are enrolled and identified by a BPL ration card issued by the Food, Civil Supplies and Consumer Affairs Department of the Karnataka government. The scheme covers five members of a family as listed and photographed on the BPL card. Like in the case of the Andhra Aarogyasri, the sum assured is Rs 1.5 lakh, with a buffer of Rs 50 lakh. All transactions are cashless for the beneficiaries, requiring no user fees or payment of premium; the entire sum is paid by the government, financed out of tax revenue.

As of June 2013, the scheme empanelled about 150 hospitals capable of providing tertiary care. The trust signs memorandums of understanding with all hospitals. Hospitals received a fixed bundled payment based on a reimbursement schedule for more than 400 tertiary care service packages. As most hospitals are in urban centres and beneficiaries are located in remote villages, hospitals organise health camps in rural areas to screen patients and then transport eligible patients for treatment; they receive a fixed payment per health camp conducted. The claims are settled within 21 days of receiving them from network hospitals.

State-level coordination is made easier by the existence of a call centre with a toll-free helpline. The scheme used the services of Arogyamitras to guide the network hospital and the beneficiary. And there is a proper management information system for collection, real-time reporting and updating of data collected from Arogyamitras, regional consultants, district coordinators, for claim settlements and for maintaining records and generating reports.

Evaluation As Per Research Studies

Given that the scheme covered tertiary services – those covering treatment and surgeries for serious illnesses – immediate health benefits were assured. Research was carried out to find the strengths and see if it was possible and desirable to replicate it in other places.

Design features were such that diseases and beneficiaries were easily identified and targeted.

A study titled: “Government health insurance for people below poverty line in India: quasi-experimental evaluation of insurance and health outcomes” led by Neeraj Sood, associate professor at Center for Health Policy and Economics, University of California, evaluated the effects of the scheme on parameters like mortality, hospital use and out-of-pocket expenditures.

This study contrasted the effects in villages, where the scheme was implemented with where it was not; this was possible because the scheme was staggered in implementation, and the researchers compared outcomes in neighbouring villages on either side of the boundary drawn between the communities chosen for early versus late implementation. Data was collected by surveying households as well as interviewing one ASHA worker (community health worker) every village. They concluded that implementation of a healthcare insurance programme in the Northern districts of Karnataka led to important health benefits among people below the poverty line, as there were significant reductions in a) out-of-pocket expenditures and b) a 64 per cent reduction in mortality owing to the scheme’s coverage of health conditions.

According to this study, some reasons why the success of the scheme was a foregone conclusion are: One, the fact that the northern portion of Karnataka was selected for coverage because the state government thought this region was in greater need of tertiary healthcare. Two, the requirement of outreach camps to be held by empanelled hospitals promoted the services to individuals living in regions, where tertiary care was often foregone. Three, the automatic enrollment of all BPL cardholders with no premiums, user fees or co-payments removed an important barrier in the use of health services. Four, the focus was on illnesses with a rising share of disease burden in India and whose management is otherwise inaccessible for the poor. The authors of this study felt that these design features behind the scheme could be used by extension to other regions.

Government as purchaser of healthcare with fixed package rates to private hospitals lends the scheme open to exploitation.

Another study that recorded people’s experiences found serious questionable practices in the implementation of the scheme. A paper titled “Design Implementation, and Patient Experiences of the Rashtriya Swasthya Bima Yojana and Vajpayee Arogyashree Scheme: A qualitative Study from Bangalore District, Karnataka” was published by authors Akhila Vasan, Sylvia Karpagam and Vijaykumar Seethappa in Social Development Report, Oxford University Press. Domestic workers, autorickshaw drivers, construction workers, low-income communities and patients’ families were interviewed and district-level camps were reviewed.

These authors strongly criticised the very foundation of the scheme, which they felt was to ensure that the private players did not incur losses. They accuse the entire discourse of the scheme to be underpinned by costs and package rates; since the SAST was a purchaser of health services, its primary concern was to negotiate rates. Therefore, the VAS by design allowed the hospitals to pursue numbers and volumes to stay viable – this reportedly was confirmed by an officer in SAST. In cardiac care, it was easy to follow assembly-line kind of fixed processes – which begin with tests and end with surgical intervention.

Since other specialty interventions were less simplistic and followed different regimens, private players began “combing” district camps to bring in as many cardiac patients as possible, to keep up the “volumes”. The scheme was thus skewed in favour of hospitals providing cardiac care compared to those providing cancer and neurosurgery care, and several private hospitals complained that the scheme had been hijacked by heart-care hospitals. These other hospitals were upset with “unviable” package rates, and said they had no incentive to hold camps and recruit patients. Further, there were allegations that through camps, the marketing teams of hospitals would pick patients with clear indication of surgery and who would get highest returns for the hospitals.

This particular study, based as it was on interviews with people, threw up many more experiences of serious concern, bringing out violation of several guidelines – regarding non-discrimination among patients, in the quality of care, in signing consent forms, in charging patients for diagnostics, in not allowing them to take second opinions, and so forth. Follow-up procedures and care related to complications were also doubtful. And further, there were allegations even in the composition of the board of the trust and criteria for its selection, and lack of transparency in its functioning.

Thus, two separate research studies were laudatory and denigratory respectively.

The unregulated ways of the private hospitals and their open dissent

This subject was also mentioned in a write-up by N Devadasan and P Bore Gowda, the former a member of the Empanelment and Disciplinary Committee of VAS, and the latter, executive director of the Suvarna Arogya Suraksha Trust. In 2014, when the government of Karnataka decided to expand the coverage of free care and claim reimbursement under VAS to all citizens in the state with a tertiary condition (447 in number), private hospitals agitated. The authors then wrote a clarification titled: “Private Healthcare providers threatened by the Vajpayee Arogyashree Scheme”.

They sought to clarify certain contentions that included: one, that it should not matter to hospitals if there were false claimants under BPL category so long as the government was paying for their treatment; two, that contrary to the hospitals’ complaints, SAST database showed timely reimbursement (within seven days); three, packages were priced after extensive consultations with specialists, so there was no reason for them to be low.

The authors were clear that the crux of the objection raised by private hospitals was that they would not be able to charge affluent patients high rates if all patients came under VAS. Also, that they were unhappy that the SAST’s conditions regarding adherence to quality, infrastructure, treatment protocol and control of prices, which interfered with their unregulated ways of performing unnecessary procedures and charging exorbitant rates, especially once VAS became universal. “The private sector will have to change its current working style to fit this new environment” was the conclusion of these high-level functionaries. Package rates have consistently been an issue, and as recently as last year, several private hospitals had been suspended for stopping services under the scheme. Later, following the agitation by private hospitals, the SAST was forced to empanel 24 of the 46 government medical colleges.

Key Learnings

• Healthcare should mainly be the responsibility of the government, and there can be no substitute for an efficacious and well-equipped government healthcare system, beginning with primary healthcare centres and going up to district hospitals. Later, this scheme was forced to look at the option of upgrading and empanelling district hospitals.
• Any public private partnership model, though relying on the private sector as an important service-provider, must guard against becoming too “understanding” of the private sector’s ‘viability’ and ‘happiness’.
• An Insurance company’s services are not essential for smooth provision of healthcare.
• The trust set up for implementation of the healthcare scheme must be a strong regulatory body; its constitution must be well thought-out and must have adequate representation of all stakeholders in public health, including rural healthcare non-governmental organisations.
• Very low package rates run the risk of making hospitals obsessively pursuing other compensatory mechanisms for making money.
• Arogyamitras, who act as patient counsellors must come from outside the system – rather than be appointed by private hospitals – so that patient interest and patient satisfaction are maximised.
• IT systems must be in place, and possibly even be outsourced – for complete backing of income criteria for eligibility, for the purpose of monitoring, for the purpose of transparency and timelines of procedures as well as payments.
• Ration cards must be in place and authenticated, for the identification of BPL beneficiaries. In VAS, there were instances reported where BPL cards were held by government officials as well as many well-to-do citizens. There were also cases where the BPL card process was hastily administered for ‘promising’ patients. In all, there were less-than-transparent processes regarding procurement of ration cards.
• Monitoring diseases from time to time by the state’s health department would indicate the extent to which the healthcare programme is succeeding and whether it is skewed – for whatever reason – in favour of any particular disease.
• It is important to have a proper grievance redressal mechanism by which the concerns of patients are addressed effectively.

Read the first part in this series: Lessons For Modicare From YSR’s Aarogyasri Project In Andhra Pradesh