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Guidelines for Private Investments in setting up of Hospitals in Tier 2 and Tier 3 cities

Thursday - January 10, 2019 9:25 am , Category : HEALTH

Government of India has launched Pradhan Mantri Jan ArogyaYojana (PMJAY) with effect from 23rd September 2018, a Centrally Sponsored Scheme, for providing hospitalisation cover of up to Rs.5 lac per family per year to over 10 crore poor and the deprived families (approx. 50 crore people) in the empanelled hospitals throughout the country. 33 States/UTs have signed MOU for implementing PMJAY out of which 29 have already launched the scheme.
The objective of the broad guidelines is to improve the supply of healthcare services in the underserved areas to ensure maximum utilisation of the benefits under PMJAY and to improve the demand for quality healthcare services at affordable prices to general public.

Hospital Models under the guidelines:
Model I     :  Doctor Owner (30 to 50 beds)
Model II    : Doctor Manager Partnership-Multispecialty (100 beds).
Model III  :  Multispecialty (100beds or more)

Interventions to incentivize private sector:
Land allotment
Facilitate various clearances with specific timelines
VGF for improving the financial viability and bankability of the project.

Roles and Responsibilities of various stake holders
Private Sector: Build, design, finance, manage operate and maintain with quality standards. Take market risk and provide services at PMJAY rates.
Government: Earmark and provide sufficient unencumbered land on lease or through bidding, facilitate various permissions and clearances through special window with timelines, compulsory empanelment of the hospitals for PMJAY and other Government scheme, ensure timely payments for services, VGF up to 40% of the total cost of the project , provide gap funding up to 50% of tax on Capital cost, restoration of status of hospital as industry for getting benefit of VGF, etc.(Source - Ministry of Health and Family Welfare)