National Health Protection Scheme and what it means for doctors and hospitals

M3 India Newsdesk Apr 11, 2018

Indian doctors have heartily welcomed The National Health Protection Scheme while politicians have lauded it as the world’s largest government-funded healthcare programme. This merits two questions: What is in store for hospitals? And, is India ready for NHPS?

According to Indian Medical Association, there are approximately 1 lakh mid-size hospitals in India and many hospitals are under-utilised. With this scheme, there is a possibility for them to get patients and vice versa.

Rajiv Nath, forum coordinator, Association of Indian Medical Device Industry, says the scheme offers expansion opportunities to all the healthcare stakeholders, be it hospitals, drugs manufacturers, or medical device manufacturers and insurance companies. He believes states will accept the NHPS only after considering their fiscal position, socio-economic context, while also keeping in mind their existing health insurance schemes, if any. He says, "If a state chooses to go for NHPS, they should be able to meet their 40% premium share."

The NHPS is a centrally sponsored scheme. The Centre will pay 60% of the cost while States will foot 40% of the bill.

Salient feature of NHPS

  • Hospitals empanelled under the NHPS will be graded on the basis of their infrastructure and quality of care provided
  • Except in emergencies, admissions of any NHPS member to a hospital should be considered on referral from the PCP (primary care physicians) or the specialist
  • Hospitalisation costs of its beneficiaries will be taken care by the NHPS through strategic purchasing from public and private hospitals
  • A nominal co-payment can be collected to avoid unnecessary usage, while medicines and diagnostics can be provided at subsidised prices or free to those who cannot afford
  • Uttar Pradesh likely to be the first off the block to roll out NHPS
  • Shortage of doctors, other personnel, non-availability of public or private hospitals need to be looked upon by state governments.
  • Old and new district hospitals should be equipped to be on par with corporate tertiary hospitals, and medical college hospitals need to be on par with corporate super specialty hospitals
  • 24 new medical colleges will be set up by upgrading district hospitals
  • Through NHPS, government aims to extend healthcare insurance to 10 crore families, raising insurance ceiling to Rs. 5 lakh per family

Challenges ahead

Ashwin Naik, co-founder of Vaatsalya Healthcare, Seraniti, DisruptHealth and Operation Resilience, ponders on how to avoid the challenges that had emerged during the Rajiv Arogyasri scheme. He points out that when the Rajiv Arogyasri scheme was introduced, many hospitals went on an over-prescribe, over-diagnose, and over-operate mode that ultimately forced the state of Andhra Pradesh to discontinue the programme for private players.

He says organisations once bitten by the predecessors of NHPS--Rashtriya Swasthya Bima Yojana, Yashaswini, and Rajiv Arogyasri--are reluctant to fall into the trap again. New players are excited but will tread cautiously as the terms of NHPS might be onerous.

How many states are willing to replace their existing schemes?

Kanchana TK, director general, Organisation of Pharmaceutical Producers of India, says, “Andhra Pradesh, Rajasthan, Tamil Nadu and Karnataka could be reluctant to replace their own health schemes as their schemes are cheap and affordable. The NHPS for these states will, therefore, have to be designed keeping in mind the tight fiscal positions of these states, to encourage participation and align with the central government’s scheme.”

Furthermore, Kanchana sets a positive tone on the NHPS. “It is definitely a step in the right direction and as long it is implemented effectively, it is a realistic move that can bring health insurance to about 40% of the population. New India Assurance, United India Insurance, and Oriental Insurance are the three public sectors entities involved that will be merged into one insurance company. I believe the merger of the three public sector insurance companies will facilitate successful implementation of the proposed scheme to make it realistic.”


Elizabeth Mani is a Bangalore-based freelance writer and a member of, a pan-India network of grassroots reporters.


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