Human Development

National Health Stack: A job half well-done

  • Blog Post Date 10 September, 2018
  • Perspectives
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To support the implementation of the recently launched National Health Protection Scheme, NITI Aayog has proposed the creation of digital infrastructure called National Health Stack. In this post, Smriti Sharma discusses the thinking behind National Health Stack, and whether it can help overcome the challenges faced by existing government-sponsored public health schemes. She contends that laying a technology framework on top of a flawed system will not resolve underlying issues.


NITI Aayog (National Institution for Transforming India) recently published a strategy and approach paper to create National Health Stack (NHS) (henceforth referred to as the NHS paper) to support the implementation of the recently launched Ayushman Bharat Yojana (ABY) across the country. NHS is envisaged to be a digital platform that will help implement ABY at scale across the country. Government-sponsored health schemes prior to ABY have had huge implementation challenges. In this post, I argue that while NHS is a good initiative for creating a master repository of health data of the country, it cannot overcome implementation challenges unless the underlying public health issues are addressed. 

Ayushman Bharat Yojana: Lessons from predecessors

ABY was announced earlier this year by Finance Minister Arun Jaitley in his budget speech of 2018-19. ABY is meant to combine the best of what different health policies aim to achieve, that is, improving the health of the population, and reducing the risk of financial burden while seeking treatment.

ABY has a two-pronged approach:

  1. Improving access to primary healthcare by creating 150,000 health and wellness centres;
  2. Improving access to secondary and tertiary healthcare for over 100 million vulnerable families, by providing insurance cover of up to Rs. 500,000 per family per year – under the Pradhan Mantri – Rashtriya Swasthya Suraksha Mission (PM–RSSM).

The announcement of ABY has evoked both awe and incredulity. While some call it a game changer, others rightly worry about the funding, design, and viability of the scheme. While most health experts agree that ABY sounded like a great plan, they concur that the devil lies in implementation. The scepticism comes from past failures of similar schemes. After all, there have been several government-sponsored health insurance schemes prior to ABY both at the Centre and state levels. Rajiv Aarogyasri Health Insurance Scheme in Andhra Pradesh, Mahatma Jyotiba Phule Jan Arogya Yojana (MPJAY) in Maharashtra, and Rashtriya Bima Suraksha Yojana (RSBY) at the central level are some of the schemes that entitle poor and other vulnerable households to access cashless healthcare from a pool of empanelled private or public providers.

Various studies have shown that these schemes have not achieved their objectives. Karan et al. (2017) conducted an impact evaluation of RSBY and concluded that the scheme did not have any significant impact on out-of-pocket (OOP) expenditure and the probability of incurring outpatient expenditure. In fact, the likelihood of incurring any OOP spending (both inpatient and outpatient) increased by 30% due to RSBY. Prinja et al. (2017) reported that while government-sponsored health schemes improved utilisation of healthcare among those enrolled there was no clear evidence to suggest that these have resulted in reduced OOP expenditures or greater protection from financial risk.

There are several reasons why government-sponsored health schemes have not achieved desired outcomes:

  1. Lack of implementation capacity among states: The government’s health spending as a percentage of GDP (gross domestic product) was a mere 1.02% in 2015-16. It has largely remained unchanged in the last several years. Also, health is a state subject under the Constitution of India. In the last couple of years, the share of the Centre in total public health expenditure has been steadily declining. The Centre:states share in the total public expenditure on health was 31:69 in 2015-16. The quality of governance plays a vital role in the efficacy of public spending. The implementation of publicly funded health schemes depends on smooth coordination among the state government, district administration, insurance company, and the hospitals. Unless states have the capability to coordinate with multiple stakeholders and administer large-scale programmes, they cannot successfully implement government-sponsored health schemes.
  2. Participation of the private sector: Public health infrastructure in India is weak. According to the National Health Profile 2018, India has only 23,582 government hospitals with 710,761 beds. Out of the total government hospitals, 19,810 are in rural areas. There is a lack of medical staff too. For a population of 1.3 billion people, India has one million allopathic doctors only, out of which a mere 110,000 serve the public health sector. Private hospitals are important for filling the gap that public health infrastructure leaves. More than 70% (72% in rural and 79% in urban) ailments are treated in the private sector.1 In the past, the experience of engaging with the private sector in healthcare has been fraught with complications. On the one hand, the private sector sees little incentive in government-sponsored health schemes as the rate card for many medical procedures is low, and payments are delayed. On the other hand, private hospitals have also been known to misuse these schemes by performing unnecessary procedures and making fake insurance claims. In turn, insurance companies complain about government delaying payments, hospitals making fake claims, as well as low premium-to-claims ratio.
  3. Flawed design of public health schemes: The design of government-sponsored health schemes has traditionally been focused on hospitalisation and reducing inpatient expenditure. The reason why drugs and outpatient care are not covered in insurance schemes is because stakeholders in the entire chain can perversely affect outcomes. Doctors would like to increase the number of visits by patients; pharmacists would be encouraged to prescribe unnecessary and expensive medicines. Insurers on their part could discourage outpatient visits by increasing the co-payment amount that patients need to pay. This means patients would have to incur higher OOP before insurance company starts paying. Meanwhile, the schemes focused on tertiary cares led to many unintended consequences like beneficiaries not seeking care till hospitalisation became necessary. Hospitals encouraged poor and unaware patients to undertake unnecessary treatments and surgeries. The other issue is cost of drugs. According to the 71st Round of the NSS (National Sample Survey), out of the total medical expenditure around 72% in rural and 68% in urban areas is incurred for purchasing medicine for non-hospitalised treatment.2
  4. Lack of good data: The data – both in terms of quantity and quality – for the health sector is lacking. A study of the Health Management Information System (HMIS) in Haryana demonstrated that a lot of the health data generated at the sub-centre (SC) and primary health centre (PHC) level is of poor quality. Lack of trained human resource, computers, or network connectivity at the SC level necessitated manual data entry by Auxiliary Nurse and Midwives (ANMs) into physical registers. There were several errors, as well as over- and under-reporting of health indicators. This flawed and inadequate data was then fed into the computers at the district level and used for drawing up programme implementation plans by the state government. Another issue with data is duplication of efforts and involvement of multiple agencies. For example, Ministry of Health and Family Welfare (MoHFW) generates a ‘National Identification Number’ (NIN) for all health facilities in the country. In parallel, Insurance Information Bureau of India maintains a ‘Registry of Hospitals in Network of Insurance’ (ROHINI). This duplication and involvement of multiple agencies in an IT system can lead to coordination problems as well as data conflicts. 

Understanding the National Health Stack

When ABY was approved by the Cabinet, NITI Aayog was given the responsibility to create a robust, scalable, and interoperable IT platform to enable paperless and cashless transactions under the scheme. The platform was also required to prevent/detect any potential misuse/fraud/abuse cases. It was in this context that the idea of NHS came into being. While the NHS paper does not explicitly state its objectives, some of the statements reveal what NHS seeks to achieve:

" help achieve continuum of care across primary, secondary and tertiary care.”

"...will be built in the context of RSSM, it will be designed for beyond RSSM to support existing and future health initiatives both public and private.”

" will eliminate any repetitive efforts, yet retain autonomy for the states…"

"...paving way for rapid rollout of various health initiatives, achieve convergence and accelerate the momentum to achieve the goal of Universal Health Coverage well ahead of time.”

"...designed to provide the foundational components that will be required across Ayushman Bharat and other health programs in India."

Therefore, it means that the NHS will help in delivering services across all levels including primary, secondary, and tertiary healthcare. It will involve both the public and the private sector. NHS will help states converge their efforts and avoid duplication. Finally, the NHS is currently being built to implement the PM–RSSM but its scope will go beyond implementing the insurance arm of the ABY.

At a high level, the components of NHS are organised in two layers:

  1. Electronic registries: The national health registries form the base of NHS. The ‘Provider Registry’ will contain master data for all healthcare providers and the ‘Beneficiary Registry’ will contain details of the beneficiaries. 
  2. Software services and platforms: Above the health registries, there is a layer of software services and platforms including a ‘Coverage and Claims Platform’ that would enable public and private actors to implement insurance schemes in an automated, data-driven manner. The ‘Claims Engine’ would send out payment triggers and notifications to designated entities. A ‘Fraud Management Service’ would make use of big data analytics and artificial intelligence to ensure that the number of fraudulent claims settled by coverage and claims platform is minimised. For example, hospitals would not be able to charge for undue procedures without coming into notice. Similarly, insurance companies too would not be able to refute claims if the data trail is available. NHS will facilitate creation of ‘Personal Health Records’ (PHR), which will allow for an integrated view of all data related to an individual across various health providers. A ‘National Health Analytics Platform’ will create anonymised and aggregated datasets that would assist in creation of dashboards, reports, and other types of statistics and help improve predictive analytics.

Experiences of previous public health insurance schemes suggest that NHS alone cannot solve the great public health challenge. The government needs to address the weak public health system before galvanising it with a digital infrastructure. It needs to be appreciated that laying a technology framework on top of a flawed system cannot resolve underlying issues. 

Way forward

The public health system aims to improve the quality of life of the population through prevention and treatment of disease. This means government should prioritise funding those areas where there is a pressing need to intervene. Unless issues of transparency and accountability are addressed, the fate of ABY will be the same as that of its predecessors. The government should focus on setting and enforcing standards for medical facilities. There is a need to regulate both public and private hospitals for the quality of care they provide. Doctors need to be held responsible for malpractice and negligence. The government should create a system for disease surveillance, and work towards prevention of communicable diseases. All this information should flow into the NHS.

NHS must truly become the master repository of health data. Therefore, it needs to triangulate data from disparate sources like NIN and ROHINI and subsume their databases. NHS can play an important role in paring the information asymmetry in the healthcare market. Medical facilities should be listed on NHS; their adherence to health standards or any penalties and measures imposed on them should be publicly available and visible to patients. This would create an equal pressure for compliance and performance on the service providers and the State.

While the NHS paper assures that the PHRs will be maintained in a secure and private environment, there may be some concerns with regard to data privacy and choice of beneficiaries with regard to sharing of their medical data. For example, the NHS paper indicates that health data fiduciaries will facilitate consent-driven interaction between entities that generate the health data and entities that want to use the PHR. It is unclear who these health data fiduciaries are, and how they will be regulated. In line with the ongoing data privacy debate, NHS must allow patients to opt out. For example, in Australia, patients can access their health information using a ‘My Health Record’ but the government allows for an opt-out. 

Concluding thoughts

In conclusion it may be said that NHS is a great move towards monitoring and evaluation of the implementation of ABY. However, technology can at best streamline processes and help create a digital backbone for execution of public health programmes; it alone cannot solve the greater public health challenges. This endeavour needs to be complemented by strengthening the implementation capacity of states. The real need of the hour is to fix accountability of the medical professionals, improve standards of care, ensure transparency, and procure high-quality data without compromising privacy and choice of beneficiaries.


  1. Refer to Statement 3.9 of NSS (National Sample Survey) 71st Round.
  2. Refer to Statement 3.21 of NSS 71st Round.
  3. HMIS captures data on various health indicators like antenatal coverage, immunisation coverage, delivery services, family planning coverage, etc.

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