NHA Initiative to Grade Hospitals

January 10, 2023

The National Health Authority (NHA) in India is introducing a new system to measure and grade hospital performance under the Ayushman Bharat Pradhan Mantri Jan Arogya Yojana (AB PM-JAY) scheme, with the goal of shifting the focus of hospital performance measurement from the volume of services provided to the value of healthcare services. The new initiative will introduce the concept of “value-based care,” where payment will be outcome-based and providers will be rewarded based on the quality of treatment they deliver.

Shift from Quantity to Quality

Traditionally, the healthcare model has been focused on the quantity of services delivered, with case-based bundled payments made on the basis of the number of services provided. Under the new value-based care model, providers will be rewarded for helping patients improve their health, which will ultimately reduce the effects of disease in the population in the long term. This shift promises significant increases in overall health gains and is expected to benefit all stakeholders, from patients to healthcare providers, payers, and suppliers.

Measures Taken by NHA to Ensure Quality Care

To ensure that PM-JAY beneficiaries receive both cashless healthcare benefits and high-quality care at every empaneled hospital, the NHA has implemented various measures. These measures include standardizing the cost of treatment under the scheme and adding new and advanced treatment procedures. Additionally, the NHA has made provisions to incentivize the best performing hospitals that provide quality care to patients.

Performance Indicators and Public Dashboard

Under the value-based care system, the performance of AB PM-JAY empaneled hospitals will be measured based on five performance indicators:

Beneficiary Satisfaction;
Hospital Readmission Rate;
Out-of-Pocket Expenditure;
Confirmed Grievances; and
Improvement in Patient’s Health-Related Quality of Life.

The performance of hospitals based on these indicators will also be made available on a public dashboard, allowing beneficiaries to make informed decisions about their healthcare. This will not only determine the financial incentives of hospitals, but also create a demand for quality treatment among PMJAY beneficiaries.

Benefits of Value-Based Care

The implementation of value-based care promises to significantly improve the healthcare landscape in India by incentivizing and encouraging healthcare providers to focus more on delivering patient-centric services. Patients will receive better health outcomes and higher satisfaction from the services they receive, while providers will benefit from improved care efficiencies. Payers will be able to maximize the health benefits generated from their spending, and suppliers will be able to align their products and services with positive patient outcomes and reduced costs. Additionally, payers will have the opportunity to exercise strong cost controls in a value-based healthcare system, as a healthier population with fewer claims translates into less strain on premium pools and investments.

Overall, the introduction of value-based care by the National Health Authority under the AB PM-JAY scheme represents a significant shift in the focus of hospital performance measurement in India, from quantity to quality of care. The use of performance assessment and value-based incentives, health technology assessment, and digital tools to monitor the quality of care will help to transform the AB PM-JAY program and the Indian healthcare system as a whole from a volume-based to a value-based healthcare delivery system.

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