The Indian Medical Association on Sunday said government hospitals should be removed from the purview of the central government’s Ayushman Bharat health insurance programme as their services are already free, PTI reported.

The statement came a day ahead of a two-day event to commemorate the anniversary of the Ayushman Bharat Pradhan Mantri Jan Aarogya Yojana, or PMJAY, scheme that covers hospitalisation for up to Rs 5 lakh per year for about 50 crore people.

The association’s National President Shantanu Sen said if the Centre wants to fund government hospitals it should be done directly. “Why should it be done through insurance companies by paying 15% to them?” he asked, adding that that scheme should be limited to the private sector.

The medical association chief said keeping public hospitals in the scheme was not benefitting people. The association alleged that the insurance model of providing healthcare facilities was a failure, and voiced concerns about the existing structure and mode of implementation of Ayushman Bharat.

The group urged the government to switch to universal healthcare funded by tax revenues instead of the insurance-based model. The medical association claimed that the insurance-based model would eventually become too expensive to function efficiently, and would boost profit maximisation of big private hospitals that would end up stifling operations of small and medium hospitals, The Telegraph reported.

Last year, more than 46 lakh people were provided cashless treatments under the scheme, with more than half of the figure coming from private hospitals. These hospitals get reimbursed at specific rates set by the National Health Authority – the government agency that runs the scheme.

The insurance scheme covers nearly 1,550 treatment packages and includes diagnostic costs up to three days prior to hospitalisation and medicines up to 15 days after being hospitalised.

“The package rates set under the scheme are not viable for many 20 or 25-bed small and medium hospitals – these rates encourage hospitals with large-scale, industry-style operations,” said Indian Medical Association Secretary-General RV Asokan, a Kerala-based physician. “We already have this trend – small and medium hospitals are vanishing, giving way to large hospitals.” He claimed that hundreds of small hospitals had gone out of business in Kerala in the last 20 years, and had been replaced by big hospital chains.

The medical association, which is the largest body of doctors in India, also called for increased government spending on healthcare. Shantanu Sen said if the AB-PMJAY was said to better than China’s schemes, there should be similar spending in the sector. “Should we then not compare our 1% [of the Gross Domestic Product] health spending with China’s 5.5%?”

Earlier this year, health economists informed the Centre that with the existing flow of funding, the health insurance scheme would be able to pay for hospitalisation services to nearly 30% of its beneficiaries. In 2011, a high-level expert group had suggested that tax revenues should be used to provide universal healthcare through government and private hospitals. The Centre should strengthen primary health services and purchase tertiary services from private facilities, it added.

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