If effectively rolled out, the NHPS is likely to transform the Indian healthcare narrative over the next decade
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The National Health Protection Scheme (NHPS), launched by the central Government, is being referred to as the world’s largest health insurance plan. The plan envisages covering 10 crore poor and vulnerable families which amounts to approximately 50 crore beneficiaries. The coverage amount has been set at Rs 5 lakh per family per year for secondary and tertiary care hospitalisation. This amount is significantly higher than the cover provided by other central or state Government schemes. Over a period, the scheme is expected to subsume the existing central scheme, Rashtriya Swasthya Bima Yojana (RSBY), as well as many state insurance schemes.
The implications of NHPS for the Indian healthcare sector must be understood in terms of its potential impact on patients, providers and payors, which in this case is the Government.
Let us first understand the outlook related to patients. The NHPS is likely to spawn greater patient demand for healthcare services. This demand will be driven by increased population coverage, enhanced cover amount per family and procedural ease. The RSBY, the predecessor of NHPS, is estimated to have been rolled out to approximately 36 million families over a 10-year time-period against a targeted coverage of 60 million families.
The NHPS, on the other hand, is targeting coverage for 100 million families. In a conservative scenario, if the NHPS achieves ~60% of this declared target over the next 5-6 years, even then an incremental ~24 million families are likely to be covered under this scheme. That translates into an additional 105-110 million lives getting covered. The NHPS is also expected to address the lopsided demand-supply gap across specific geographies like the Northern and Southern states in India as well as the gap between metros and non-metros.
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