Ayushman Bharat Scheme for Spine Surgeons: Every Path has its Puddle!!

INTRODUCTION Understanding the true and fair cost of hospital care is pertinent for ensuring financial sustainability and transparency in India’s health system. Despite significant expenditures on manpower, consumables, infrastructure, and capital assets, actual per-bed-per-day costs are often not visible to patients or policymakers. Synthesizing data from multisite costing analyses across public and private hospitals, the study found substantial variation in costs. Per-bed-day expenses ranged from ₹345 in private teaching hospitals to ₹6996 in private multispecialty facilities. Government tertiary hospitals averaged ₹600–₹1200 per day. Intensive care costs were significantly higher, ranging between ₹6000 and ₹11,241 daily, depending on hospital type. Human resources were the largest cost component in government hospitals, accounting for over 50% of expenses, whereas capital costs were dominant in private hospitals. Consumables contributed 20%–40% of total costs, depending on the treatment and facility type. Patient charges in public hospitals are far below actual costs, especially in critical care, where beds are subsidized at <5% of real expenses. The study calls for establishing meaningful cost benchmarks ₹5000 for medical wards and ₹10000–₹12000 for surgical and intensive care unit care to ensure quality and financial viability. It also recommends policy reforms in Ayushman Bharat Pradhan Mantri Jan Arogya Yojana, especially revisiting the health benefit package 2.0. This includes more precise cost bifurcation for procedures such as cervical and lumbar spine surgeries and setting realistic implant prices based on current market rates, calculated per implant or per cage. These reforms are vital for sustainable and efficient hospital service delivery. Should I operate four level or three level? I learnt minimally invasive spine surgery, Is this patient a good selection for MIS-TLIF? Such questions require answers that go beyond mere guidelines as socioeconomic factors critically influence the outcome. The practical problem being faced by numerous spine surgeons across the country is the dilemma between their moral responsibility and clinical versus economic status of patients. The Ayushman Bharat Pradhan Mantri Jan Arogya Yojana (AB-PMJAY) is a significant publicly funded health insurance program; however, a critical analysis of the scheme reveals certain gaps as given in Table 1. This paper highlights the critical analysis and issues being faced by the spine surgeons. The systemic deficiencies under the scheme are significant impediments for achieving optimal surgical results, negatively affecting both “surgeon performance and patient recovery.” A review of various studies identified several key themes for criticism: like out-of-pocket health expenditure (OOPHE), up-coding and provision of unnecessary medical care, a shifting focus away from primary care, issues with coverage, and unequal access.Table 1: Financial assistance wise distribution of various codes and packages related to spine surgeryThe government has been requested to plan impact evaluation studies in each state to get high-quality feedback. Absence of such studies or feedback indicates that there is hardly any evidence to evaluate the scheme’s effectiveness and economic benefits. A study on the revision of the health benefit package (HBP) within the PM-JAY in Punjab revealed that the revisions under the package had a positive impact on service utilization, particularly for services that were originally under-priced. However, ongoing recalibration and corrections based on high-quality feedback are necessary for the scheme to reduce catastrophic OOPHE effectively. Private hospitals, in particular, argue that the package rates for many high-cost surgeries are not financially viable. The packages are intended to cover only pre- and posthospitalization expenses, consultations, diagnostics, and medicines; however, as per these hospitals, the reimbursement package is insufficient to cover the total costs of the treatment and thereby sustaining their operations becomes critical. The situation is no different in the public hospital where high-risk cases are admitted in larger proportion. Hospitals, especially small and mid-sized, report significant delays in reimbursement from the scheme, with some reporting pendency beyond a year. This disrupts their cash flow and daily operations, making them reluctant to treat Ayushman Bharat beneficiaries. It has been learned that claims are often rejected or partially paid due to clerical errors and minor documentation issues. Lack of an effective appeals mechanism for hospitals to contest these deductions further erodes trust and discourages participation. The present package system under PM-JAY needs a strategic shift to improve the effectiveness and relevance of the scheme. The major issues which need to be addressed are discussed in the succeeding paragraphs: FINANCIAL VIABILITY AND PAYMENT DELAYS A significant issue under this scheme is the financial viability of private hospitals, which are a major part of this network. Private hospitals make up a large portion of all empaneled hospitals and account for a majority of hospitalizations under the scheme. However, they frequently protest against what they call “systemic exploitation” due to low package rates and significant payment delays from the government. In some States, such as Haryana, this has led to large-scale protests and suspension of services by the Indian Medical Association, citing hundreds of crores as pending claims. The low package rates, which have not been revised since 2018, are often considered unsustainable for private hospitals to provide quality patient care services and maintain their operations. This results into breakdown of services and creates untrust between the government and healthcare providers. A key constraint to the viable operation of hospitals participating in the scheme is the “insufficient package prices.” Private hospitals make up 46% of all empaneled hospitals and account for 54% of hospitalizations under the scheme. INFRASTRUCTURE GAPS AND REGIONAL DISPARITIES There is a notable gap in healthcare infrastructure, which hinders the scheme’s effectiveness, particularly in northern States like Uttar Pradesh and Bihar, which have the highest number of Ayushman cardholders but low utilization rates. These states have a limited number of empaneled hospitals, especially in rural areas, and many of the empaneled facilities are small with limited capacity. This contrasts sharply with southern states like Tamil Nadu and Kerala, which have stronger public health infrastructure and see higher rates of utilization. The scheme’s focus on secondary and tertiary care without a corresponding investment in strengthening foundational primary care facilities further exacerbates these regional imbalances. LIMITED COVERAGE AND DAY CARE SURGERIES LIKE MINIMALLY INVASIVE SURGERY OR PAIN BLOCKS While the scheme aims to provide comprehensive coverage, critical gaps exist. The scheme primarily covers inpatient services, leaving out a large number of patients who require long-term outpatient care, such as those with chronic illnesses or cancer who need frequent follow-up and medication. Furthermore, low awareness remains a major barrier to the scheme’s utilization, especially in rural communities. Studies have shown a significant disparity in awareness across states, for example, awareness in Tamil Nadu is much higher than in Bihar and Haryana. This lack of awareness means many eligible beneficiaries are unable to access the benefits they are entitled to, reducing the scheme’s overall impact on reducing OOPHE. GRIEVANCES An analysis of grievances of the beneficiaries (October 2018 and March 2022) highlighted common issues related to eligibility and registration. A study found that the grievance rate significantly increased during the second and third waves of the COVID-19 pandemic.[1] Before 2022–2024 package rates revisions, several packages were priced below realistic costs; private hospitals “backed off” or cherry-picked, and claim denials/revisions were common. Subsequent to the HBP 2.0/2022 revisions, there was an improved utilization, especially where packages had been most under-priced, showing that prior tariffs were a structural bottleneck. Research from the scheme’s early implementation highlights bottlenecks at helpdesks, delays in authorizations/discharge, poor communication (e.g., SMS/info flows), and inconsistent grievance redressal – limiting “responsiveness” and patient satisfaction. SOMATIC LOW BACK PAIN Mental health coverage has shrunk and is hard to use. The mental health package list was cut from 17 to 10 (December 2019). On the ground, both public and private psychiatric facilities report missing operational guidelines, heavy paperwork, coordination gaps (especially for interstate patients), and reimbursement frictions – creating de facto access barriers. STRATEGIC PURCHASING IS STILL MATURING India’s cost studies and payment-rate work (Costing of Health Services in India [CHSI], provider-payment research) came after initial tariffs, so purchasing levers (bundled prices, package constructs, and quality-linked differentials) lagged practice; this slowed empanelment depth and appropriate case-mix, especially outside metros. UNDERSTANDING COST OF EXPENDITURE ON PER-BED-PER-DAY BASIS The calculation of per-bed-per-day expenditure in hospitals provides an essential lens to understand the financial burden borne by the respective institutions in delivering the quality medical care. Quantifying these expenditures not only improves transparency but also helps policymakers and administrators align reimbursement rates, optimize resource allocation, and design sustainable financing models. Studies from India show significant variance in the cost of inpatient care depending on the type and ownership of the facility [Table 2]. Chatterjee et al. estimated that the per-bed-day cost ranged from as low as ₹345 in a private teaching hospital to as high as ₹6996 in a private multispecialty hospital, with Government District Hospitals and Tertiary Hospitals falling in the midrange (₹394–₹614).[3] Similarly, the large-scale CHSI study covering 54 hospitals reported that the unadjusted cost per admission was ₹3447 in district hospitals, ₹4839 in private hospitals, and ₹5690 in tertiary care facilities.[2] Intensive care services were costlier, with per-bed-day intensive care unit (ICU) expenditure exceeding ₹10,000 in private hospitals compared to ₹2537 in district hospitals and ₹6031 in tertiary centers.[2] More granular costing using activity-based costing at AIIMS Bhubaneswar revealed that a surgical ICU bed costs ₹11,241 per day to the hospital, while patients were charged a token amount of ₹35 in general wards and ₹1000 in private wards.[4] These findings underline the substantial gap between actual costs incurred and the prices patients pay in public institutions.Table 2: Analysis of cost spent per day per bed in a hospitalBreaking down the cost structure highlights human resources as the dominant component in government hospitals, often accounting for more than 50% of total expenditure.[3] In contrast, capital expenditure on buildings, land, and high-end equipment forms a larger share in private hospitals. Consumables – including medicines, surgical supplies, and laboratory reagents – range between 12% and 43% of operating costs, varying across types of hospitals.[3] In ICUs, consumables and medicines assume greater importance, reflecting the intensive resource requirements.[4] This cost breakdown has important implications for patient billing. While hospitals in the public sector absorb most of the costs, subsidizing care for patients, whereas private facilities transfer a larger share to its users. If one considers a comprehensive per-day cost of ₹4000–₹6000 for general medical inpatients and ₹10000–₹12000 for surgical or ICU patients in a well-equipped hospital, it becomes evident that the “daily bill” for patients should ideally reflect these realities. Even with government-backed schemes like Ayushman Bharat PM-JAY, the healthcare providers argue that in most instances, the reimbursement rates do not match with actual expenditure, creating sustainability concerns.[4] Transparent disclosure of per-bed-per-day costs can serve multiple purposes, namely (i) it sensitizes the public to the value of services received, (ii) guides policymakers in rationalizing insurance package rates, and (iii) motivates hospitals to enhance efficiency. More importantly, it emphasizes that high-quality hospital care is inherently resource-intensive and that sustainable financing mechanisms are critical to bridge the widening gap between expenditure and reimbursement [Table 3].Table 3: Illustrative comparison of daily hospital expenditure per bedCOST ANALYSIS OF HEALTH BENEFIT PACKAGE 2.0 The package for spine surgeries is distributed in “Neurosurgery” and “Orthopedics” domains. Table 1 shows the financial assistance-wise distribution of various codes and packages related to Spine surgery. Table 2 shows an approximate “per-bed” cost of treatment in the Indian scenario which has been drawn from our institute and available literature. The average bed occupancy being taken as 80% of the total available bed, i.e. 500. A deeper analysis of Table 2 highlights the fact that an average cost of expenditure per bed per day (CEPBPD) ranges from 7000 to 11000 INR, for which government is charging <10% and subsidizing the remaining 80%–90%. This substantial amount actually covers the part of training, research, and academics in these tertiary institutes. The CEPBPD, as per the present Ayushman Bharat Package rates, will substantiate 50,000–70,000 INR for 5–7 days of admission. Now, as shown in Table 1, we found that SB022, SB041, SN042, SN043, SN032, SN034, SN026, SN029, SN030, and SN036 are ten codes which crosses the CEPBPD by 10,000–30,000. Thus, the packages marginally cover CEPBPD of a government tertiary-level hospital. The cost of ventilators, ICUs, marketing and advertising, negotiations, and technology updation are additional costs to be borne by private players. In our institutional analysis, the salary part constitutes nearly 40%–50% of total CEPBPD. Other similar analysis suggests that manpower cost varies from 42.5% to 54% in Singh and Pillar et al.’s[4] and Chatterjee et al.’s[2] study, respectively. Thus, a major proportion of CEPBPD constitutes of salaries, and the above calculated CEPBPD is based on government salaries to doctors, nursing, and other paramedical staff which is nearly one-third to one-fourth of what the doctors and staff are paid in a corporate hospital. If we scale the CEPBPD by 30% (hike in salary), it will be impossible to meet the new adjusted CEPBPD of corporate hospitals with the current packages of PMJAY 2.0. No package in Table 1 will meet adjusted CEPBPD in a good multispecialty or corporate hospital. In addition, the rates of implant mentioned in packages force a surgeon to downgrade their skills of minimally invasive transforaminal lumbar interbody fusion or oblique lumbar interbody fusion to open posterior lumbar interbody fusion or else compromise to the quality of implants. There are proven disadvantages of a smaller number of screws, non-magnetic resonance imaging compatible screws, monoaxial screws, and cross screws for more than three levels of fixation. Finally, a majority of codes mention about implants as an additional cost, but there is no provision of mentioning “number” of implant in dashboard. Therefore, the price is capped to four, or six or eight, or whatever number of implants is being used in the surgery. KEY ISSUES WITH SPINE SURGERY PACKAGES HEALTH BENEFIT PACKAGE 2.0 While the average cost of minimally invasive spine care or scoliosis corrections is relatively high, the reimbursement rates for procedures like spine fixation, more than three-level fixation, and percutaneous “kyphoplasty” or “vertebroplasty” are often cited as being too low, particularly when compared to private insurance companies or self-pay patients pay. In a similar situation for cardiac patients, a study in Karnataka found that the median billing amount for PTCA under Ayushman Bharat was significantly lower than what self-pay patients or privately insured patients pay. The low reimbursement packages indirectly pressurize one to opt for overuse of procedures. There have been reports and studies suggesting the potential for misuse or overuse of procedures under the scheme. The “fee-for-service” nature of the payment system can create incentives for hospitals to perform unnecessary interventions, as seen in a study that estimated unnecessary expenditure for cardiovascular procedures. On detailed analysis of packages, we found that SN039 for extradural hematoma evacuation has no mention of implants; the traumatic spine injury in most of the cases demands fixation. It is less common to find an isolated hematoma requiring on one- or two-level laminectomy and hematoma evacuation. Second, the code for SN042 for extradural spinal tumor with fixation lacks a mention of “cage.” The extradural peripheral nerve sheath tumor and large schwanomma require a 360° fixation and 30,000 INR as an umbrella for implants is not justifiable. The codes such as SN032, SN034, and tumor codes consider human spine as a single unit and mention “cervical/thoracic/lumbar;” however, the cost or package treatment differs largely on the level of vertebrae. The cervical spine patients’ needs longer care, may be ICU care, and are more liable of respiratory sequelae. On the other hand, the lumbar region patients will not need ICUs but demand endoscopy or minimally invasive day care treatment. On one hand, the world is moving towards “Day care” spine surgery, and on the other side, the HBP 2.0 packages warrants to admit patient in ICUs for at least 24 h and above. The technically better Indian surgeons feel succumbed to these schemes and administrative issues and fail to produce their actual expertise level as compared with their western colleagues. Many surgeons face issues of either early discharge than needed or increasing hospital stays to meet administrative issues related to the scheme. CONCLUSION Ayushman Bharat HBP 2.0 is a robust country-wide health scheme and provides financial assistance to a majority of its citizens. However, the scheme needs improvement in the administrative dashboard, refund turn-around-time, and grievance redressal system. Average CEPBPD for a tertiary government hospital ranges from 7000 to 11,000 INR, depending upon medical management or surgical management. The Ayushman Bharat HBP 2.0 SPINE codes have certain fallacies which needs to be taken care of. The package cost does not meet the expenditure cost and adequate salary of doctors in most of the multispecialty or corporate hospitals. The technical procedures mentioned in Spine packages need to be redefined and “cervical” codes should be separated from “lumbar codes.” A separate code for minimally invasive spine surgery should be added to mitigate the additional cost of “man and materials.”