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Planning hospital for Ayushman Bharat Patients

Ayushman Bharat is a social security scheme in which more than 50 crore people are covered. This scheme has its genesis in RSBY (Rashtriya Swyasth Bima Yougjna). Health is a state subject, which means all Hospitals and clinical establishments have to follow state laws. Mass social health schemes are also run by the State government. Some Schemes like ESIC, ECHS, and CGHS are central government schemes. A lot of states also run their own scheme, like Swasth Sathi in West Bengal. It is estimated that more than 75% of the population is covered in these kinds of Social Security health schemes. These states subsume the Ayushman Bharat scheme.  Here I am going to write about State Social Security Health (let’s abbreviate it SSSH) Schemes. Hi, I am Major Paresh Singhal (ex) a Healthcare Infrastructure specialist. I have spent 10 + years in the hospital industry, built 15 + hospitals, and designed 25 + Hospitals. I have run hospitals catering to RSBY people and sharing my experience doing it. If you are planning to start a hospital you can’t ignore the SSSH scheme as the majority of the population is covered under this. 

The SSSH scheme is for Hospitalisation. A marked difference in the SSSH scheme, as compared to Health insurance is that the rates for a particular ailment are Fixed. In private/corporate insurance, hospitals bill insurance companies for all the items and services separately. But in the SSSH scheme hospitals get fixed prices for an ailment. The price of these ailments is very low and generally 4 times less than what hospitals normally charge their patients. Eg  Gall bladder operation will cost around 60000 rs to a patient in a standard hospital, whereas in the SSSH scheme, the government pays around 15000 Rs to a hospital. You can’t charge a single paisa from patients, in fact, you have to give 100 rs to patients for travel back home. 

ARPOB: Average Revenue per Occupied Bed. Is a quantitative parameter used in the hospital industry to measure their revenue? For a standard hospital to survive ARPOB should be around 10000 rs. But in the case of the SSSH scheme, it is around 4000 rs. Hence it becomes very difficult for many hospitals to provide services to patients of SSSH schemes. Please do not think if some hospitals are treating patients in SSSH schemes and surviving then it means other hospitals are making huge margins by charging 2.5 X of that. This is because service delivery standards and hospital capital costs are very low.  

Today I will elaborate on what should be your capital cost (land + building + Equipment) if you want to build a hospital to provide services under these schemes. Kindly read my article “Cost Component of Hospital Project” to get an idea of the costs for building a standard 3-star hospital. 

If 75% of the population is covered under these schemes, you can’t ignore it. one can be profitable and pay its staff salaries, payment to its vendors and Pay EMI, providing services under the SSSH scheme if he plans accordingly. 

Capital Cost: It has 3 major components Land + Building Infra and Equipment. You should build a minimum 100-bed hospital to keep costs down. Do not spend more than 10 crores (10 Lakhs per bed).  This is 3 times less than the cost I indicated in my article “Cost Component of Hospital Project”. The broad Break up will be

  • Land: 10 crore 
  • Building : 35000 sqft @ 7000 rs = 24.50 crores
  • Equipment: 12 crores.  

Plan for 3-4 surgical specialties: General Surgery, Gyne Obs and Ortho, Eye. Medicine specialties are not viable. Some people may condemn this statement, but it’s the fault of the government to not pricing correctly so that institutes can provide services under SSHS schemes with honesty.  

I have panned, build and run hospitals providing services in the SSSH scheme and can help you set up one. For an end to end support in planning, designing and building your hospital pl approach us. We are an expert Hospital planner and builder,if you are looking to build a hospital I and my team of experts are there, we guarantee a saving of 5 % on your project.

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