With an objective to shift the focus of measuring performance of hospitals from volume of services provided to the value of healthcare services, National Health Authority (NHA) is introducing a new system to measure and grade hospital performance under the flagship scheme Ayushman Bharat Pradhan Mantri Jan Arogya Yojana (AB PM-JAY).

Traditionally, from the payer’s perspective, the healthcare model has been focussed on the quantity of services delivered, where case-based bundled payment is made on the basis of the number of services provided. The new initiative will introduce the concept of ‘value- based care’, where payment will be outcome based and providers will be rewarded according to the quality of the treatment delivered. Under the new model, the providers will be rewarded for helping the patients improve their health, which consequently will reduce the effects of disease in the population in the long term.

The step promises significant increase in the overall health gains and is expected to be a win-win for all concerned stakeholders from patients to healthcare providers, payers and suppliers. While the patients will get better health outcomes and higher satisfaction out of the services they receive, providers stand to get better care efficiencies. Similarly, payers will be able to maximize the health benefits generated out of the spending incurred.

Speaking on the initiative Dr. R.S. Sharma, CEO, National Health Authority said, “To ensure PM-JAY beneficiaries receive both cashless healthcare benefits and high-quality care at every empanelled hospital, NHA has implemented various measures. These measures include standardizing the cost of treatment under the scheme and adding new and advanced treatment procedures. Additionally, NHA has made a provision to incentivize best performing hospitals that provide quality care to patients.”

In a value-based healthcare system, the payers can also exercise strong cost controls. A healthier population with fewer claims translates into less drain on payers’ premium pools and investments. Suppliers would benefit from being able to align their products and services with positive patient outcomes and reduced cost. Altogether, value-based care promises to significantly improve healthcare landscape in India by incentivizing and encouraging healthcare providers to focus more on delivering patient centric services.

Under value-based care, the performance of AB PM-JAY empanelled hospitals will be measured based on five performance indicators such as: 1. Beneficiary Satisfaction; 2. Hospital Readmission Rate; 3. The extent of Out-of-Pocket Expenditure; 4. Confirmed Grievances and 5. Improvement in-patient’s Health-Related Quality of Life.

The performance of the hospitals based on the above indicators shall also be made available on a public dashboard that will help the beneficiaries to make an informed decision. In this way, the hospital performance shall not only determine the financial incentive of the hospital but also create a demand for quality treatment of beneficiaries under PMJAY.

Collectively these interventions of performance assessment and value-based incentives, use of health technology assessment, and use of digital tools to monitor the quality of care will transform AB PM-JAY and the Indian health system from a volume-based to a value-based health care delivery system.