While the Pradhan Mantri Jan Arogya Yojana (
PMJAY
) was launched to bring down out-of-pocket expenditure (OOPE) on health, especially due to hospitalisation, a study of patients who used the scheme in Chhattisgarh showed that it involved significant out-of-pocket expenditure especially in
private hospitals
. The study identified the widespread practice of
dual billing
as the main reason for this.
PMJAY or Ayushman Bharat prohibits empanelled hospitals from charging patients, but the study found that private hospitals took significant charges from patients and claimed reimbursement from the government for the same episode, leading to dual billing, a fraudulent practice. The study was conducted in 2022 by researchers of the State Health Resource Centre in Chhattisgarh, a government entity, by interviewing 768 individuals who had used PMJAY for hospitalisation in the month preceding the interview. PMJAY has empanelled 1,006 public and 546 private hospitals in the state.
According to the study published in the latest issue of the Economic and Political Weekly, the mean
medical OOPE
per episode in private hospitals was 43 times higher than in
public hospitals
. “While a greater share of the more severely ill were treated in private hospitals, the multivariate analysis controlling for this factor showed that the medical OOPE was very high in private hospitals irrespective of illness severity. A more likely explanation of high medical OOPE in the private sector seems to be high-profit expectations,” stated the study.
Though there are different kinds of out-of-pocket expenditure while accessing healthcare such as the money spent on transport and stay, the study looked at only medical OOPE defined as the amount of money directly paid by a patient to the hospital, drugstore, and diagnostic centre during hospitalisation.
Among the disease categories, the study found that utilisation for maternal care and communicable diseases was concentrated in public hospitals. For non-communicable diseases (NCDs) and injuries, public and private hospitals had nearly equal shares. Among those perceiving their illness as serious, a bigger share utilised private hospitals. Of the longer-duration hospitalisations, a bigger proportion took place in private hospitals.
However, utilising private hospitals was found to be the main determinant of catastrophic expenditure under PMJAY. Nearly one-third of the hospitalisations in private hospitals resulted in catastrophic health expenditure or CHE10, defined as expenditure more than 10% of the total annual non-medical consumption expenditure of a household. Over a sixth of hospitalisations in the private sector resulted in CHE40, that is where the expenditure exceeded 40% of the household’s annual non-food consumption expenditure. Poorer patients were more likely to suffer catastrophic health expenditure. But the authors noted that if the level of education was used as a proxy for awareness, it did not seem to have any effect on the amount of medical OOPE.
The study found that vulnerable sections such as the scheduled tribes and women were largely dependent upon the public sector, even though PMJAY offered the promise of affordable access to the private sector, a pattern reported from other studies of the scheme. It noted that utilising public hospitals saved people from incurring large medical OOPE, and that public sector services were substantially cheaper for patients than using the private sector, irrespective of the publicly financed insurance schemes.
While it is believed that competition among providers would improve services and bring down prices, the study found that even districts with a very high density of private hospitals, and thus a good likelihood of competition, did not show lower medical OOPE than those with lower hospital density.
“In India, the price and quality regulation of private healthcare providers is poor. This, combined with the profit incentive encourages private hospitals to adopt the practice of dual billing,” noted the study adding that the government had failed to enforce an “all-important condition” in its contract with hospitals — not charging extra from patients.
Mean Medical OOPE under PMJAY in 2022 (Rs)
Per capita household expenditure quintile | Public Hospitals | Private Hospitals |
Poorest | 407 | 20,727 |
Poor | 554 | 13,878 |
Middle | 297 | 9,800 |
Rich | 438 | 8,499 |
Richest | 488 | 35,230 |
Caste | ||
ST | 750 | 20,174 |
SC | 249 | 9,712 |
OBC | 376 | 16,350 |
Others | 305 | 11,346 |
Mean Medical OOPE and Incidence of CHE on Hospitalisation under PMJAY in 2022
Types of hospital | Mean medical OOPE | CHE10(%) | CHE40(%) |
Public hospitals | 426 | 0.5 | 1.7 |
Private hospitals | 18,382 | 29.6 | 16.6 |
Source: Authors’ estimates