ET Bureau|Jul 17, 2019, 11.00 AM IST

NEW DELHI: The National Health Authority (NHA) managing the Ayushman Bharat insurance scheme is considering introducing a ‘collective bargaining’ policy for medical devices, seeking to answer criticism that the programme lacks sufficient viability at the specified procedure rates. 

The idea behind this policy is to lower purchase costs for hospitals, helping make the procedure rates sustainable that would allow the scheme to expand to more number of beneficiaries, said top officials associated with the scheme.

Indu Bhushan, CEO of NHA, told ET that as is seen globally, countries moving towards universal health coverage are in a better place to collectively bargain with pharmaceutical companies and medical device manufacturers as they negotiate the prices on a country level, rather than a state/province or the hospital level. 

With the launch of PMJAY (Pradhan Mantri Jan Arogya Yojana), covering more about 10.74 crore families, National Health Authority (NHA) is in that unique position to explore collective bargaining with these providers. However, NHA will be exploring this in coordination with National Pharmaceutical Pricing Authority (NPPA), which is the nodal authority in the country for this purpose. NHA will also be conducting industry-wide consultations to rationalise and rework the prices of drugs, implants and devices, Bhushan added. 

In the last two years the NPPA has pushed medical device makers to cut prices of high value devices like stents and knee implants, which has led to a diplomatic tussle between India and United States. 

Ayushman Bharat provides insurance cover of up to ?5 lakh to a low income family of five, and covers 1,350 medical procedures. Since its launch a year ago, about 6 million people have been beneficiaries of the scheme, according to the NHA. By reducing device procurement costs, which form a a big proportion of the overall package expenses, NHA is seeking to make the rates workable. 

The proposal suggests hospitals make their purchases for patients covered under this scheme through the government e-market place (GEM) where the tender procurement guidelines will look at the best available quotations of price and quality standards. The department of health research has been asked to prepare a list of devices most commonly procured by hospitals. 

A concept note prepared by Ai-MeD (Association of Indian Manufacturers of Medical Devices) on this policy says that despite the government offering a 15% price benefit to hospitals that are NABH accredited, the package rates under Ayushman Bharat is not viable, forcing hospitals to opt out of treating patients under the scheme. 

The procurement policy, if it were to work out, will help meet the objectives of reducing costs, maintaining device quality, and giving incentives to the Make in India programme. Under Ayushman Bharat scheme, a hospital cannot charge more than Rs 1-1.5 lakh for a cardiac surgery.