Separate medical device cost and package rates under Ayushman Bharat: MTaI

New Delhi: Medical Technology Association of India (MTaI), which represents leading research-based medical technology companies with significant manufacturing investments in India, said Ayushman Bharat should be developed as a value-based healthcare programme giving priority to quality of treatment while keeping the cost component within the defined limit.

The government announced its plan to launch Ayushman Bharat or National Health Protection Scheme (NHPS) in February 2018 to bring over 10 crore poor and vulnerable families under cashless health insurance cover of upto 5 lakh rupees per family per year for secondary and tertiary care hospitalization. The government is currently in the process of drawing up package rates for treatments under the programme.

“Ayushman Bharat has the potential to be the most comprehensive health financing and reimbursement initiative, the success of which is very important to Indian people. It can metamorphose Indian healthcare ecosystem depending on the approach we take. The government is working out package rates to contain cost of treatment. These package rates are expected to subsume the cost of medical devices. Among all the good things, this is one element of the programme which can have a vitiating impact on the entire initiative in the medium to long-term.

“Subsuming cost of implants, prosthesis, hardware and high-risk consumables without any quality benchmarking or outcome measurement will make way for the cheapest products which may lead to sub-optimal therapies,” MTaI Director Mr. Kaustav Banerjee said.

“While episodic cost may be lower, the total cost of disease management will increase. Manufacturers will have no incentive to improve device longevity. Instead, the focus will be to reduce cost by significantly sacrificing outcome. The increase in redo, revision, repeat procedures due to increased adoption of cheaper products will have a direct impact on the payer and the patient both,” he added.

Giving an example of how cost-based treatments are affecting the quality of healthcare delivery, Mr. Banerjee said, “In heart valve replacement surgery, bi-leaflet valve has a higher longevity but in most reimbursement programmes currently operational in India mono-leaflet valve is being used as it is cheaper. Mono-leaflet valves have fallen away globally due to various clinical reasons such as sheer mechanical stress on mono-leaflet valve could be a predisposition to thrombosis, and requirement of elevated anti-coagulant regime that potentially affect the valve longevity. Similar issues exist for every high-risk medical devices and implants.”

“In order to address these concerns, it may be an ideal solution to migrate to a value based healthcare system in the long run which will focus on health outcome for every rupee spent. At the same time, it may be worth considering a short to medium term solution given the magnitude of NHPS and the time constraint in implementation. This can be done by separating the prices of medical devices from package rates and rationalising trade margins of devices to mitigate compliance risk,” he added.