Plugging the leaks in health schemes

The Union Budget 2024-25 turned out to be a damp squib for the healthcare sector. Barring the cut of customs duties on three cancer medications (experts argued that even with these cuts these medications would still be very expensive) and a reduction of Basic Customs Duty (BCD) on specific X-ray-related products, experts were disappointed that there was no concerted impetus for healthcare infrastructure or the manufacturing of medical devices. 

The Union Health Ministry’s allocation of Rs 90,658.63 crore in the interim Budget for 2024-2025, does represent a 12.59 per cent increase from the revised estimate of Rs 80,517.62 crore in the 2023-2024 Budget. The lower than expected allocation is most probably due to the under-utilisation of previously allocated funds. For instance, the ministry had been allocated Rs 6500 crores last year (Budget Estimates 2023-2024) but could utilise only Rs 1519.87 crore (Revised Estimates 2023-2024). Thus BE 2024-2025 are considerably low at Rs 1274.79 crore. 

However, this is not the case with the flagship Ayushman Bharat – Pradhan Mantri Jan Arogya Yojana (PMJAY). BE 2023-2024 were Rs 7200.00 crore, RE 2023-2024 was lower at Rs 6800 crore indicating some shortfall in utilisation. However BE 2024-2025 is Rs 7300 crore, perhaps indicating a commitment to this cause. But PMJAY performance audits point to a sad reality.

Industry experts point to a lot of leakages flagged by the Comptroller and Auditor General of India (CAG) in a report on the PMJAY, tabled in Parliament last August. The report highlighted discrepancies under five major heads: Beneficiary Identification and Registration, Hospital Empanelment and Management, Claims Management, Financial Management, and lastly Monitoring and Grievance Redressal. 

The CAG report points out that in the absence of adequate validation controls, errors were noticed in the beneficiary database i.e. invalid names, unrealistic date of birth, duplicate PMJAY IDs, unrealistic size of family members in a household etc. Ineligible households were found registered as PMJAY beneficiaries and had availed the benefits ranging between Rs 0.12 lakh to Rs 22.44 crore under the Scheme. 

The CAG recommendations ranged from the Ministry and States/UTs putting a suitable mechanism for identifying state-wise beneficiaries under the scheme and to weed out ineligible beneficiaries in a time-bound manner. The registration process needs to be strengthened to avoid delays in registration beyond the prescribed time. Validation checks should be in place so as to avoid invalid entries and increase the accuracy and reliability of the data.

The CAG report also highlighted that some of the empanelled health care providers (EHCPs) neither fulfilled the minimum criteria of support system and infrastructure nor conformed to the quality standards and criteria prescribed under the Scheme guidelines. Beneficiaries in some states were charged for their treatment in empanelled EHCPs resulting in an increase in out-of-pocket expenditure of beneficiaries. 

On this, the CAG emphasised the strong need to invest in public hospitals to improve and upgrade the quality of the existing health facilities. More private hospitals could be encouraged to join under the Scheme in all the Districts in order to build an effective and accountable network of health service providers as per quality standards.

Importantly, the CAG stressed the monitoring of EHCPs through physical inspections and necessary audits so that malpractices may get detected and action may be initiated against the errant EHCPs. The National Health Authority (NHA) and State Health Authorities (SHAs) should also have a mechanism to monitor and curb instances involving out-of-pocket expenditure by the beneficiaries. 

While urging that processing and payment of the claims must be done on time after ensuring necessary scrutiny by SHAs, the CAG pointed out that they must ensure that claim amount is utilised by Public/Government Hospitals for improving the overall infrastructure, functioning of the hospital, quality of services and delivery of services and for incentives to staff.

Under the Financial Management head, the CAG recommended that the NHA should exercise due diligence while releasing the grant to SHAs to ensure fulfilment of corresponding State commitments, actual expenditure against past releases and also avoid idling of funds. Diversion of grant from one head to another should be discouraged and NHA/SHA should ensure that grant is utilised for the purpose it was released. The CAG also urged that the amount due from insurance companies and interest from SHAs may be recovered at the earliest. NHA must put in a mechanism to map and identify PMJAY beneficiaries so that there is no overlap of PMJAY and state-specific schemes. In terms of monitoring and grievance redressal, the CAG report recommended that anti-fraud activities must be taken up on urgent basis and defaulters should be penalised in a timely manner. 

A more recent Public Accounts Committee (PAC) PMJAY performance audit, also followed up on the recommendations of the CAG 2023 report. While speedier registrations was one, the PAC also recommended the formation of an independent body to oversee the updating of PMJAY coverage, and validation of the database. The hope is these leaks are soon plugged so that the increased allocation will be more effectively used and reach the most deserving beneficiaries.

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