Translating Research to Policy: Setting Provider Payment Rates for Strategic Purchasing under India's National Publicly Financed Health Insurance Scheme

AbstractBackgroundIn 2018, the Government of India launchedAyushman Bharat Pradhan Mantri-Jan Aarogya Yojana (AB PM-JAY), a large tax-funded health insurance scheme. In this paper, we present findings of the Costing of Health Services in India (CHSI) study, describe the process of use of cost evidence for price-setting under AB PM-JAY, and estimate its fiscal impact.MethodsReference costs were generated from the first phase of CHSI study, which sampled 11 tertiary public hospitals from 11 Indian states. Cost for Health Benefit Packages (HBPs) was estimated using mixed (top-down and bottom-up) micro-costing methods. The process adopted for price-setting under AB PM-JAY was observed. The cost of each HBP was compared with AB PM-JAY prices before and after the revision, and the budgetary impact of this revision in prices was estimated.FindingsFollowing the CHSI study evidence and price consultations, 61% of AB PM-JAY HBP prices were increased while 18% saw a decline in the prices. In absolute terms, the mean increase in HBP price was ₹14,000 (₹450–₹1,65,000) and a mean decline of ₹6,356 (₹200–₹74,500) was observed. Nearly 42% of the total HBPs, in 2018, had a price that was less than 50% of the true cost, which declined to 20% in 2019. The evidence-informed revision of HBP prices is estimated to have a minimal fi scal impact (0.7%) on the AB PM-JAY claims pay-out.InterpretationEvidence-informed price-setting helped to reduce wide disparities in cost and price, as...
Source: Applied Health Economics and Health Policy - Category: Health Management Source Type: research