NITI Aayog’s National Health Stack: Who Benefits From It

The National Health Stack is just another gold rush and if the patients aren’t the winners, we must ask – who benefits?

A monitor shows the results of a dynamic pressure measurement for a patient’s feet at a mobile clinic in Pancharala, on the outskirts of Bengaluru, India. (Photographer: Dhiraj Singh/Bloomberg)
A monitor shows the results of a dynamic pressure measurement for a patient’s feet at a mobile clinic in Pancharala, on the outskirts of Bengaluru, India. (Photographer: Dhiraj Singh/Bloomberg)

The NITI Aayog announced an ambitious National Health Stack project in June this year and before we had the details, there was an announcement that pilots had begun in some states to implement the project under the Pradhan Mantri Jan Aarogya Yojana. In previous articles we have highlighted several issues that make this a very expensive information technology project that is not just violative of the fundamental right to health but also the fundamental right to privacy. We also expect that this will have very little impact on access to healthcare for those who most need it.

If all the experts know of the previous disasters in the United Kingdom, a small country with an advanced free universal healthcare system, where the best technical experts spent an excess of £12 billion before the project was scrapped, why is NITI Aayog sponsoring this in India? The Harvard study that sets out the foundation and architecture for the NHS makes no mention of the UK’s disastrous ‘IT for Health’ project. The answer lies perhaps in trying to figure out who benefits from this project.

The first and perhaps the biggest beneficiary of this project will be a large IT company, probably an Indian IT company.

Building The Framework

In recent years, the biggest Indian IT companies have not grown at the same rate as in the previous few decades, especially in mature overseas markets. When asked about growth in employment, the response from these companies has been that the future is bleak since their clients are expecting automation and reduced costs for the services they are consuming. This project will be a windfall just like the Goods and Services Tax, Aadhaar and other digitisation projects of the Income Tax Department and the Ministry of Corporate Affairs.

Unlike the income tax project or the MCA project for filing under the Companies Act, this project will require several apps that patients, hospitals, doctors, government and other stakeholders will need to make full use of this unprecedentedly huge database, which will need thousands of people to keep it working and be valuable to service providers.

This project will require a deep understanding of the healthcare business and processes – an opportunity to partner with international technology consultants, perhaps a U.S.-based expert like Cerner or Accenture (both worked on the UK project). Given the scale and complexity, how they will price their services will be very interesting.

Servicing The Network

The second beneficiary will be the software provider – the platform on which this whole system will work across all stakeholders. There are a few software providers to various U.S. hospital chains but none of them would have had to deal with the size of this project – the vast geography, the number of patients, doctors, hospitals and other service providers. Layered on this is the challenge of paper medical records and the untrained staff to record medical data on a new and unfamiliar system.

All the primary healthcare centres, hospitals, and doctors across the country need to be connected to a national data backbone so that they can access central databases and all the apps can work seamlessly with each other. How many telecom providers can claim to be ready for this level of reach and connectivity – both optic fibre and wireless? Do we really expect MTNL and BSNL to be providing this service? A telcom company—that also has large server farms—to be able to host one of the largest databases ever built is best placed to win the right to participate in this project.

The project will need thousands of individuals to input medical data that is being generated about patients. Even before patients’ data is entered into a mega-database, millions of patients will need to be enrolled and given a unique ‘functional health ID’. Companies which participated in the Aadhaar project have had to wind down the mass operation since 90 percent of the Indian population has already been enrolled in Aadhaar. These entities, although much maligned for the manner in which they performed on the Aadhaar project, are best placed to participate in a virtual unending project of enrolling patients, digitising medical records and updating these records continuously in every primary health care centre, clinic, laboratory, hospital and service provider all over the country.

Data For Insurers, ‘Occupancy’ For Hospitals

Health insurance companies, with the abysmal risk coverage they provide, have complained that they have had limited success in the Indian market. Although they are unclear about the real reason, perhaps they should look at the risk coverage that health insurance provides – when they realise that motor vehicle insurance provides better coverage, you know the reason for poor penetration is staring you in the face.

The reason given most often for poor penetration of health insurance is that there isn’t enough data to price the risk and there isn’t the healthcare infrastructure in India to provide for all the needs of the people.

The NITI Aayog acknowledges this as one of the key objectives of the NHS project. Although state governments are free to use either the trust model (i.e., self-insure) or purchase insurance to cover the claims of patients, it seems like health insurers have not participated in these projects. Perhaps they are waiting for a few years until they have the claims data so that they can price the risk premia more accurately than they can now. One expects that in a few years, many insurance companies will participate in this project and get access to subscribers who they would otherwise have found it difficult to reach.

Those of you who have been following the recent fortunes of private hospital chains will no doubt have seen the parallels with the hotel and airline industry. In some strange way, these sectors require a high level of ‘occupancy’ to survive and airlines, hospital chains, and hotel chains have been recording lower than expected occupancy, and declining revenue per occupancy.

With the government now funding healthcare costs, patients should be able to access private hospitals and this project may just revive the fortunes of private hospitals. We have some early indications of this trend. Should the government be building hospitals and primary healthcare centres instead of paying private hospitals? That is a question no one has yet asked.

Since hospitals will receive government benefits, the NITI Aayog expects that an army of people, assisted by artificial intelligence will be employed to detect frauds.

As with the Aadhaar project, the NHS-powered PMJAY has all the makings of exclusion rather than empowerment.

We know that in Maharashtra, for example, the total number of farmers, women and underprivileged constitute only 5 percent of the beneficiaries. The Aadhaar project has shown that exclusion can happen at every stage of the NHS project – enrollment, authentication, access, and quality of treatment and reimbursement of claims. The NITI Aayog paper hasn’t listed the key risks and challenges at the patient level that this project is likely to throw up and how the NHS proposes to tackle them.

If it seems to you by now that all this is a great project for the Indian economy with so many winners but nothing has been mentioned about how patients benefit, that is perhaps because no mention is made by the NITI Aayog about any improvement in the actual infrastructure to treat patients – on better primary healthcare centres, more doctors, more dispensaries or free medicines. As with the gold rush, it wasn’t the miners who struck gold and became rich, it was the saloons, brothel keepers, hardware merchants and others who supported the gold miners who made their fortunes. Perhaps this is it – the NHS is just another gold rush and if the patients aren’t the winners, we must ask – who benefits? Is it worth it? Shouldn’t we expect something better?

Murali Neelakantan is an expert in healthcare laws.

The views expressed here are those of the authors’ and do not necessarily represent the views of Bloomberg Quint or its editorial team.