Chhattisgarh’s Health Scheme Reaches Millions, Yet Struggles With Cost Efficiency

Prepared by the World Health Organization (WHO) Country Office for India in collaboration with IQVIA Pvt. Ltd, the report Evaluating the Financial Sustainability of Public Health Insurance Scheme in Chhattisgarh offers a sweeping evaluation of one of India’s most ambitious health insurance models. Since transitioning to a unified model in 2020 by integrating central and state schemes under Ayushman Bharat Pradhan Mantri Jan Arogya Yojana (AB PM-JAY) and Dr. Khoobchand Baghel Swasthya Sahayata Yojana (DKBSSY), Chhattisgarh has ensured that nearly its entire population is covered. Offering Rs. 5 lakh annual coverage to vulnerable groups and Rs. 50,000 to others, the scheme has enrolled 1.79 crore beneficiaries and issued 1.8 crore health cards. With 69 lakh families brought under its ambit and nearly 40 lakh claims processed in FY 2022–2023 alone, amounting to Rs. 3769 crores, this trust-mode scheme has achieved widespread coverage and efficient financial support for the state's population.

A Healthy Fiscal Landscape, but Warning Signs Ahead

Chhattisgarh’s macroeconomic position lends optimism for supporting large-scale public health programs. The state has kept its gross fiscal deficit at 3.3% of GSDP, well below the national ceiling, and enjoys a revenue surplus thanks to improved tax and non-tax revenue collections. Total revenue receipts reached Rs. 89,073 crores in 2022–2023. The health sector has also received increased fiscal attention, with budgetary allocations growing from Rs. 305 crores in 2018–2019 to Rs. 1154 crores in 2023–2024. However, rising utilization has consistently outpaced planned spending. For instance, in FY 2022–2023, the Rs. 550 crore allocation for DKBSSY had to be augmented by an additional Rs. 250 crores. Similarly, the following year, Rs. 164 crores were added to the initial Rs. 990 crore allocation. Despite a robust economy, these recurring budget shortfalls underline the growing financial burden the scheme imposes on the state.

Skyrocketing Claims and the Challenge of High-End Procedures

The report reveals a sharp escalation in claim amounts and coverage patterns. Although public hospitals see 65% of utilization, it is private hospitals that draw disproportionately higher payouts due to the cost of advanced treatments. In 2022–2023, over 80% of claims were for procedures above Rs. 10,000, and nearly 27% crossed the Rs. 50,000 threshold. Specialties like general medicine, obstetrics and gynecology, and oncology top the utilization charts. Moreover, the scheme’s benefit structure, Health Benefit Package (HBP) 2.2, includes 2404 procedures, but only 2057 were utilized in 2022–2023. 49 procedures overlap with national programs like Janani Shishu Suraksha Karyakram and the National Mental Health Programme, costing the state Rs. 291 crores. Price revisions for 223 procedures have led to cost inflation above 10% compared to the national master list. A stark example is burr hole surgery, which jumped from Rs. 7000 nationally to Rs. 59,000 in Chhattisgarh. This pricing divergence, though justified by local market realities, continues to stretch the state's financial capacity.

Governance Gaps, Underutilized Funds, and Audit Failures

While the scheme has scaled up impressively, its operational and institutional framework lags. The Chief Minister Public Hospital Transformation Fund (CMPHTF), designed to strengthen infrastructure in public hospitals, has collected Rs. 441 crores but disbursed only 34%. Hospitals in remote and tribal regions lack the technical capacity to draft funding proposals, leading to unequal distribution. On the auditing front, the picture is grimmer. Only 1% of the mandated 10% of claims were audited in 2022–2023. From 2019 to 2023, just 45 hospitals were penalized for fraud, recovering Rs. 21.9 crores, an amount considered negligible relative to the total outgo. A significant gap lies in staffing: the State Nodal Agency has only three technical staff managing the daily administration of a scheme that processes up to 3,000 transactions per day. With no mid-level leadership and limited autonomy, the agency’s capacity to monitor, audit, and adapt to evolving needs is severely constrained.

A Blueprint for Fiscal Sustainability and Operational Efficiency

The WHO report lays out a clear set of policy reforms to stabilize and sustain the scheme. On the revenue side, the state could introduce modest premiums for the APL (Above Poverty Line) population and consider earmarked taxes, often referred to as “sin taxes”, on tobacco, alcohol, and sugar-sweetened beverages. Other options include reviving entertainment taxes and levying agricultural income tax with safeguards for small farmers. Additionally, pooling health-related funds from departments like Labour and Social Welfare could ease financial strain. On the efficiency front, introducing gatekeeping systems that require PHC referrals for non-emergency treatments would prevent unnecessary high-level facility usage. AI-based claim processing, fraud detection, and HBP rationalization, such as removing low-impact procedures like enteric fever and diarrhea, which alone could save Rs. 91 crores, are also recommended. Reducing public hospital incentives from 40% to 15% and leveraging CMPHTF more strategically can further control costs.

Chhattisgarh has emerged as a national exemplar in delivering near-universal health insurance. However, the long-term success of its integrated public health insurance scheme hinges on bold fiscal reforms, administrative strengthening, and a pivot toward data-driven policy action. As utilization increases and health needs evolve, the state must not only continue to expand access but do so in a manner that is financially and institutionally sustainable. The path forward will demand political will, interdepartmental coordination, and strategic investment to ensure that this model of universal health care continues to thrive for generations to come.