AP govt’s new health scheme a windfall for pvt hospitals
Private hospitals in Andhra Pradesh are raking in some brisk business—all thanks to the government’s innovative community health insurance scheme called Rajiv Aarogyasri. CNBC-TV18 Vishwanath Pilla reports.
It’s a health insurance scheme targeting the poor that has private hospitals excited. YSR Reddy’s pet project, called Aarogysri, allows families below poverty line to undergo up to 942 medical procedures even in private hospitals. These even include complex open-heart surgery and kidney transplantations, costing up to Rs 2 lakh.
With this increased demand, private hospitals, which used to run at 60% occupancy, are seeing brisk business. They are running at full capacity, and in some cases, are finding they cannot meet demand.
Says A Babu, CEO, Aarogyasri Health Care Trust, “Prior to the scheme, we had around 30–40 vacancy and capacity utilization was not there. We have given customer base of 90% to the hospitals.”
To meet this rising demand, private hospitals have started expanding. Apollo Hospitals, for one, has even opened district hospitals. While these do not have Apollo-like five-star facilities, they are equipped to deal with most medical procedures.
Says Hari Prasad, CEO, Apollo Health City, “Hospitals, which focus on certain elements and cut down on overhead costs and other infrastructure, have a business model for Aarogyasri. For instance, our hospitals in peripheral areas like Karimnagar and Kakinada in Andhra Pradesh, we have cut down on lot infrastructure to make it viable.”
Even smaller hospitals are increasing their bed capacity to meet the 50-bed requirement, so that they can participate in the scheme. With nearly 15,000 beds across 345 hospitals in the state being occupied, hospitals are also finding that cost efficiencies have improved.
“After the scheme has started we have got around 13 high-end radio-therapy cancer machines valued between Rs 1–3 crore coming into the state which is one of the highest in the country. This way the medical infrastructure in the state is growing,” Babu says.
What hospitals find most attractive about the scheme is the short claim settlement period. The government is making sure that claims are settled within seven days of being filed. Private hospitals have received a major portion of the Rs 900 crore spent by the government on the scheme, and have the state’s healthcare industry growing at a healthy 20%.