AB PM-JAY Hospital Grading System

The National Health Authority (NHA) in India 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) with the goal of shifting the focus from the volume of services provided to the value of healthcare services.

  • This new initiative promises to bring significant increase in overall health gains and is expected to be a win-win for all stakeholders involved, from patients to healthcare providers, payers, and suppliers.

The Shift from Volume-Based to Value-Based Care

  • Traditionally, from the payer’s perspective, the healthcare model has been focused 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, providers will be rewarded for helping patients improve their health, which will reduce the effects of disease in the population in the long term.
  • Value-based care aims to incentivize and encourage healthcare providers to focus more on delivering patient-centric services.
  • The performance of AB PM-JAY empaneled 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 the patient’s Health-Related Quality of Life.
  • The performance of the hospitals based on these indicators will also be made available on a public dashboard that will help beneficiaries make an informed decision. In this way, the hospital’s performance will not only determine the financial incentive of the hospital but also create a demand for quality treatment of beneficiaries under PMJAY.

Benefits for All Stakeholders

  • Value-based care promises to significantly improve the healthcare landscape in India. Patients will receive better health outcomes and higher satisfaction from the services they receive.
  • Providers will benefit from better care efficiencies and increased revenue for providing high-quality care. Payers will be able to maximize the health benefits generated from the spending incurred, and suppliers will benefit from aligning their products and services with positive patient outcomes and reduced costs.
  • In a value-based healthcare system, payers can also exercise strong cost controls. A healthier population with fewer claims translates into less drain on payers’ premium pools and investments.
  • Additionally, by using health technology assessment and digital tools to monitor the quality of care, the NHA will be able to transform AB PM-JAY and the Indian health system from a volume-based to a value-based healthcare delivery system.

The introduction of value-based care by NHA under the AB PM-JAY scheme is an important step towards improving the quality of healthcare services in India. It aims to make healthcare providers accountable for the outcomes of their services and to improve the overall health of the population in the long term.


Written by IAS POINT

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