Ayushman Bharat: A Game-Changer Initiative for the Marginalised

Ayushman Bharat or Pradhan Mantri Jan Arogya Yojana (PMJAY) completed one year on 23 September 2019. A game-changer initiative with technology at the core has led to medical services accessible to poor of India at the same time augmenting healthcare facilities and capacities and giving rise to an ecosystem around emerging business opportunities particularly in the HealthTech sector. A first of its kind national scheme, which is end-to-end technology enabled has brought all stakeholders onto a single platform. How the learning can be replicated in other government schemes? What makes the scheme to deliver? What are the ensuing business opportunities being created?

25 September, 2019 Health, Research Reports
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Progress in healthcare sector in India has not kept pace with economic growth in the recent decades. However, Ayushman Bharat scheme, introduced in September 2018, has brought transformative changes in the health space. The scheme, targeted at providing free and quality healthcare services to the deprived section of the society, has brought revolutionary changes in the way health services are financed and delivered. Health insurance coverage, which was just around 20 per cent before the launch of the scheme has jumped to more than 60 per cent now. Around 50 crore, or 40 per cent of the population, is insured with `5 lakh annual coverage at one go. This is the world’s largest healthcare intervention so far as the number of targeted people is concerned.

Ayushman Bharat—world’s largest health intervention—introduced in September 2018, has brought transformative changes in the health sector and has set an example of how other schemes and India should run.

It is a remarkable achievement that more than 40 lakh people have availed the insurance benefits in less than a year. They have availed the benefits without doing any paperwork or paying a penny. An end-to-end technology led system has been put in place in such a way that no eligible person can be denied the treatment. There is no intermediary involved. This is the only health insurance scheme in India, which is 100 per cent paperless and cashless.

Ayushman Bharat scheme has substantially reduced the cost of treatments and procedures on the back of better regulation and economy of scale. A whole lot of new business opportunities are being created in health technologies and related sector. Today, Ayushman Bharat is amongst the most successful government interventions. Within one year it has been implemented almost across the country, except a few states who have opted out mostly due to political reasons. 

[tie_index]SKOCH Study[/tie_index]

An end-to-end technology-led system has been put in place in such a way that no eligible person can be denied the treatment. Use of technology has done away with the intermediary. So much so that even email as a means of communication has been removed from the system. Increase in healthcare capacities; creation of a technology core to which all other allied businesses are getting integrated and plugged in; creation of new business processes; seamless connectivity amongst the National Health Authority and states; and, between the beneficiary database, hospitals, insurance and TPA, are what make this scheme unique.

Paperless and cashless, Ayushman Bharat has substantially reduced the cost of treatments and procedures on the back of better regulation and economy of scale. Prime Minister’s Modi’s Swastha Bharat campaign is ready for a quantum leap. Health insurance coverage, which was just around 20 per cent before the launch of the scheme has jumped to more than 60 per cent.


SKOCH Group conducted field studies and survey to gauge the grassroots level impact of the scheme. SKOCH teams comprising of domain experts visited empanelled private and government hospitals. Our findings are based on interactions and feedback from beneficiaries and their family members across a number of states including the North East. Teams have also interacted with hospital staffs to know their concerns and challenges. Some impactful interventions have been featured as case studies in this edition.

Our study shows that there is a huge transformation in the functioning of the public hospitals. Public and private hospitals are paid the same amount for a particular treatment or procedures under the Ayushman Bharat scheme. This has brought parity not just in terms of the quality of service but also generating good revenue for public hospitals. It has proved very helpful in upgradation of infrastructure in cash-starved state government-run hospitals.

A whole lot of new business opportunities are being created in health technologies and related sectors. A number of Startups have come up in the area of Medical Technology. The sector is estimated to grow to $25 billion in the next five years from the current around $10 billion. New business opportunities are being created in almost all aspects of healthcare care from diagnosis to monitoring to treatment to life support. It has also given a boost to Indian the pharmaceutical sector. 

[tie_index]Boon for the Poor[/tie_index]

Boon for the Poor

Raj Kumar used to work as a cleaner at different offices in Gurugram. One day, around four-five months back, while at his work, suddenly he had a severe stomach-ache. He visited one doctor in Gurugram who advised him to take some medicine. His condition improved. But that improvement did not last long. He felt the similar problem again. As a result he had to leave his work. He became unemployed and could not afford expensive ultrasound and other procedures advised by the doctor he had consulted. Anyhow he managed to get the diagnosis done and it was discovered that there is stone in his kidney. It needs to be removed through surgery that in a typical private hospital in Gurugram would cost over `50,000. This medical problem would have certainly pushed him in a debt trap and as a result vicious cycle of poverty.

[tie_index]Salient Features of Ayushman Bharat scheme:[/tie_index]

Salient Features of Ayushman Bharat scheme:

  1. Health insurance cover of up to ?500,000 per family per year on a family floater basis
  2. More than 10.74 crore poor and vulnerable families (approximately 50 crore beneficiaries) covered across the country
  3. All families listed in the SECC database as per defined criteria will be covered
  4. No cap on family size and age of members
  5. The scheme covers secondary and tertiary care hospitalisation in empanelled public and private hospitals
  6. Wide coverage: 1,393 medical packages covering surgery, medical and day care treatments, cost of medicines and diagnostics
  7. All pre-existing diseases covered
  8. Cashless and paperless access to quality health care services
  9. The benefits include pre-and post-hospitalisation expenses
  10. National portability: eligible beneficiaries can avail services across the country
  11. Rashtriya Swasthya Bima Yojana (RSBY), launched in 2008, is subsumed in Ayushman Bharat scheme.
  12. Expenses incurred on the scheme is shared between Centre and States in 60:40 ratio
  13. Ayushman Bharat takes care of secondary care and tertiary care procedures only

Although in pain due to the undergoing treatment at Alfaa Hospital in Gurugram, Raj Kumar looked hopeful. Thanks to Ayushman Bharat scheme he is not forced to borrow the money to pay the exorbitant hospital bills. “I am without a job for four months now. I don’t have money. If this scheme was not there it would not have been possible for me to get the treatment,” Raj Kumar said in Hindi. But the bigger worry for him was that had he taken the loan it would have taken years to repay.

Launched on 23 September 2018 Ayushman Bharat – Pradhan Mantri Jan Arogya Yojana (PMJAY) has saved millions of vulnerable people like Raj Kumar from falling in the debt trap and vicious cycle of poverty. Nearly 41 lakh people have benefited from the scheme as on August-end 2019. This flagship healthcare scheme of Prime Minister Narendra Modi government seeks to provide a cover of up to Rs. 5 lakh per family per year for secondary and tertiary care hospitalisation.

Under this scheme the services are provided cashless and paperless. SKOCH Group conducted a nationwide survey study of the scheme touted as the “world’s largest government funded healthcare programme.” The ground level study shows that Ayushman Bharat – Pradhan Mantri Jan Arogya Yojana also termed by some as “Modicare” is among the best performing social welfare schemes in the country.

While most of the schemes look good on paper and promise transformation, the most striking feature of the Ayushman Bharat project is its delivery on the ground. Nearly 41 lakh people have benefited from the project in less than one year time. None of these people have been subjected to make any payment. Had this scheme not been there majority of these people would have fallen in the trap of vicious cycle of poverty. Although, there is no data on how many of the beneficiaries were already below poverty line, a large number of them who had come out of poverty might have fallen back.

Ayushman Bharat has proved to be the most effective tool to save people from falling in the poverty trap. “Whenever we look at the health sector of our country, it has been observed that if `100 is spent on an individual for treatment, of that the burden of more than `60 is borne by the family or that individual. The entire savings is spent on medical expenses. As most part of their income is spent on medical expenses, every year lakhs of families that are on the verge of coming out of poverty are again pushed back into poverty due to some or the other disease. We have thus, taken this responsibility of changing this scenario,” Prime Minister Narendra Modi had said after launching the scheme on 23 September 2018 at a function in Ranchi.

“People are naming it in different ways but for me it is a great opportunity to serve the poor people of our country. I believe that there cannot be a greater scheme or a campaign than this one to serve the poor,” the Prime Minister had said.

A large number of the people from the deprived section used to avoid hospital treatment due to the fear of unbearable burden. Despite some teething problems today bottom 40 per cent population is assured of free treatment at hospitals.

[tie_index]What makes the scheme successful[/tie_index]

What makes the scheme successful

Ayushman Bharat is among the most inclusive schemes. It covers nearly half of the country’s population who are vulnerable and marginalised. Even the vulnerable and marginalised poor can now get the same treatment at public and empanelled private hospitals as given to the well-off. Here are some important factors that make Ayushman Bharat a successful scheme.

[tie_index]Robust IT Framework[/tie_index]

Robust IT Framework

Ayushman Bharat scheme rides on a robust IT infrastructure. It is cashless and paperless. There is no cash transaction. No eligible patient is required to pay any cash at hospital. The government does not pay any money to any beneficiary or person. The transaction is done from institution to institution. It has helped eliminate leakages and corruption. No beneficiary is required to fill in any form or submit any documentary proof at the hospital or any other government offices. The proof of treatments are submitted by hospitals electronically. Invoice is generated and the payments are made electronically.

Explaining the IT framework, Indu Bhushan, Chief Executive Officer (CEO) of Ayushman Bharat – Pradhan Mantri Jan Arogya Yojana and the National Health Authority (NHA), said: “The IT platform defines beneficiaries who go to the hospital. Through this IT platform, we identify or recognise whether the person is a beneficiary or not. And with Aadhaar we reconfirm that the person is the same or not.”

He further said, “The IT platform records the entire stay of the person right from the admission to discharge and after discharge when the claim is raised. Claim is raised through this IT platform and the payment is also made through the IT platform.”



Ayushman Bharat – Pradhan Mantri Jan Arogya Yojana is the only insurance based health scheme in the country, which is truly paperless. Even email interaction is not required in this scheme. Apart from the Ayushman Bharat, all the health insurance schemes offered by private firms or the government-run entities require some sort of paper work. It is a big achievement that Ayushman Bharat scheme is being offered through IT infrastructure end-to-end. It has enabled states also to upgrade its infrastructure and integrate them with the central database. The IT framework includes:

  1. Hospital Empanelment System (HEM)
  2. Beneficiary Identification System (BIS)
  3. Transaction Management System (TMS)
  4. Other supporting applications / components – data warehouse, MIS & analytics, fraud etc.

Artificial Intelligence (AI) is being used in fraud detection system. A robust IT infrastructure has made the system efficient and substantially eliminated the scope of corruption. However, there is huge scope of upgradation. The government has already invited RFP for upgradation of IT infrastructure. The new architecture would be called ‘PMJAY IT 2.0 solution’.

Inviting the bid for the new architecture the National Health Authority said: “The current system is operated and maintained by eco-system of service providers. However, it is agreed that in today’s dynamically changing scenarios every system needs upgradation to adjust to the demanding situations and greater expectations from all stakeholders.

“With new challenges coming up the demand for new technologies & re-engineering of the processes have emerged and thus a need to enhance the current IT eco-system, which is expected to enable NHA to provide world class services to its growing base of beneficiaries is a need of present and future. This is to ensure complete transparency, efficiency, effectiveness and accountability in the implementation of the scheme,” it added.

[tie_index]Administrative Structure[/tie_index]

Administrative Structure

The biggest hurdle in the success of most of the government schemes in India has been multiple control and command system. Usually different departments and authorities get involved in implementation of a particular project. It hinders efficiency. A seamless administrative structure is among the major reasons for the success of the Ayushman Bharat scheme. PM-JAY National Health Agency was set up in the form of Society registered under the Societies Registration Act, 1860. It was later re-structured as National Health Authority (NHA). National Health Authority is now an attached office to Ministry of Health and Family Welfare.

The NHA is responsible for all operational matter of PMJAY. Although the NHA functions as an attached office to the Ministry of Health and Family Welfare the working style and environment resembles with that of any big multinational corporation.

[tie_index]Public-Private Partnership[/tie_index]

Public-Private Partnership

There is huge infrastructure gap in India’s healthcare sector. The condition of public hospitals remains miserable, to say the least. Private sector plays an important role in bridging the infrastructure gap. Nearly three-fourth of outpatient and 60 per cent of inpatient care services are provided by private sector in India. The Ayushman Bharat scheme effectively taps the private infrastructure. Nearly 16,000 hospitals have been empanelled to provide the services under the Ayushman Bharat scheme. Majority of these hospitals are in the private sector. The government has also taken measures to support and facilitate private investments in hospitals, with a view to bridge the infrastructure gap. Incentives are being provided in the form of allotment of land, speeding up clearances and funding, especially in the Tier 2 and Tier 3 cities. The government has also proposed to provide Viability Gap Funding (VGF) for improving the financial viability and bankability of the hospital projects.

All the above mentioned households, except D6 category, are eligible for the benefits of the Ayushman Bharat scheme. There is no enrolment process in the Ayushman Bharat scheme. The beneficiaries are pre-determined. However, some states like Uttarakhand and Karnataka have broadened the scope of the scheme by providing the services to even those households who are not in the deprivation category. Expense incurred on such inclusion of beneficiaries is borne fully by the state.

The Ministry of Health and Family Welfare early this year issued broad guidelines to facilitate private investments in setting up hospitals in Tier 2 and Tier 3 cities. Elaborating the roles and responsibilities of different stakeholders it said the private sector would be required to “build, design, finance, manage operate and maintain with quality standards. Take market risk and provide services at PMJAY rates.”

On the other hand the government would be responsible to “earmark and provide sufficient unencumbered land on lease or through bidding, facilitate various permissions and clearances through special window with timelines, compulsory empanelment of the hospitals for PMJAY and other government scheme, ensure timely payments for services, VGF up to 40 per cent of the total cost of the project, provide gap funding up to 50 per cent of tax on capital cost, restoration of status of hospital as industry for getting benefit of VGF, etc.”

[tie_index]Industry Status[/tie_index]

Industry Status

For getting benefits of VGF hospitals have been given the status of “industry”. This is a very important step in facilitating private investments in hospitals in a transparent manner. Private hospitals and medical colleges in India largely run on “trust model”. In this model trust is set up to own hospitals. Companies and individuals control hospitals via trust. Hospitals set up under trust model face various restrictions and find it very difficult to raise money. This virtually throttles their expansion.



The approach of Ayushman Bharat scheme is principle based rather than rule based. It means there is a lot of scope of modification in the scheme. States have got enough flexibility in terms of packages, procedures, scheme design, entitlements as well as other guidelines. Under PMJAY, the States are free to choose the modalities for implementation. They can implement the scheme through insurance company or directly through the Trust/ Society or mixed model.

[tie_index]National Portability[/tie_index]

National Portability

Artificial Intelligence (AI) is being used in fraud detection system. A robust IT infrastructure has made the system efficient and substantially eliminated the scope of corruption. However, there is huge scope of upgradation. The government has already invited RFP for upgradation of IT infrastructure. The new architecture would be called ‘PMJAY IT 2.0 solution’.

 The scheme ensures nationwide portability. It allows the beneficiaries to avail cashless benefits at any empanelled hospital across the country. Beneficiaries are drawn from the 2011 Socio-Economic and Caste Census. Poor people move from one place to another in search of jobs and livelihood. The scheme allows such poor labourer to avail the benefits wherever they are. This also helps in ensuring equal access to the infrastructure. There is huge disparity in healthcare infrastructure in the country. Condition of healthcare infrastructure in the states like Bihar and Uttar Pradesh is very when compared with the states like Gujarat, Maharashtra, Tamil Nadu etc. Also there is huge rural-urban gap. The national portability empowers beneficiaries to avail the best possible services.



The process of the Ayushman Bharat scheme is clearly laid. Although there is room for flexibility at the policy level there is no scope for intermediary. Beneficiaries are identified from the SECC data. It can’t be modified unless there is another Census. All the empanelled hospitals are required to set up a dedicated counter to facilitate the Ayushman Bharat beneficiaries. This helps in saving them from falling into the trap of any middleman. There is no cash transaction, since money is not paid to the beneficiaries. There is institution to institution transfer. This substantially reduces the scope of corruption.

[tie_index]Curbing Fraud[/tie_index]

Curbing Fraud

The government and insurance regulators have taken pro-active steps to curb frauds. While there is hardly any scope of fraud at beneficiary or intermediary level, there have been reports of irregularities by hospitals. The NHA and the Insurance Regulatory and Development Authority of India (IRDAI) have formed a working group to detect and deter fraud. 

[tie_index]World’s largest healthcare scheme[/tie_index]

World’s largest healthcare scheme

The total number of individuals covered under the scheme is nearly 50 crore. This is nearly 40 per cent of India’s population. However, let’s put it in global context. The number of beneficiaries of this scheme is higher than the population of the United States, Canada and Mexico put together. It is also roughly equal to the population of the European Union that includes 28 countries.

While the public healthcare system in most of the advanced countries are far better than India, the number of individuals covered in the Ayushman Bharat scheme is unparalleled.

The most talked about public funded health insurance scheme globally is United State’s Patient Protection and Affordable Care Act introduced by the then US President Barack Obama. The scheme nicknamed as “Obamacare” has provided insurance protection to 2.4 crore people. Obama had announced in 2010 that the scheme would cost $940 billion to the US exchequer over the next 10 years. However, two years later the US Congressional Budget Office came out with an estimated cost of $1.76 trillion, which was higher than India’s GDP in 2012-13. 

[tie_index]How are the beneficiaries identified[/tie_index]

How are the beneficiaries identified

Ayushman Bharat is an entitlement-based scheme. Beneficiaries are identified by the government on the basis of deprivation and occupational criteria using the Socio-Economic and Caste Census (SECC) 2011 database. As per the eligibility criteria decided by the government, 10.74 crore families are entitled for the benefits under the scheme. This includes more than 8 crore families from the rural India. There is no cap on the minimum or maximum number of members in a family. Also there is no cap on age.

The Socio-Economic and Caste Census categories households based on various aspects of their socio-economic status – housing, land-holding/landlessness, educational status, status of women, the differently able, occupation, possession of assets, SC/ST households, incomes, etc. As per the SECC 2011 there are 24.39 crore households in the country. Out of this 17.91 crore are rural households.

The SECC provides deprivation data. It has identified 14 parameters on the basis of which household is considered deprived. The SECC 2011 classifies deprivation in seven categories: 

D1 Households with only one room, kuccha walls and kuccha roof 2.37 crore 13.25%
D2 No adult member in household between age 18 and 59 65.15  lakh 3.64%
D3 Female headed household with no adult male member between 16 and 59 68.96 lakh 3.85%
D4 Households with differently able member with no other able bodied adult member 7.16 lakh 0.40%
D5 SC/ST Households 3.86 crore 21.53%
D6 Households with no literate adult above age 25 years 4.21 crore 23.52%
D7 Landless households deriving a major part of their income from manual labour 5.37 crore 29.97%
Deprivation Data

[tie_index]Ayushman Mitra[/tie_index]

Ayushman Mitra

Each hospital empanelled under Ayushman Bharat scheme is required to have an ‘Ayushman Mitra’. His/her role is to assist patients and coordinate with the hospital and the NHA. A dedicated help desk has been set up at each hospital. Feedback from beneficiaries collected by SKOCH during the study of the scheme shows that the help desks have proved very useful in successful implementation of the scheme. It has eliminated the scope of any intermediary. Help desks especially in the government hospitals give a refreshing view. Patients usu

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