India is rapidly positioning itself as a Global Pathfinder in Digital Health. As the World Economic Forum (WEF) highlighted in January 2024, initiatives like the Ayushman Bharat Digital Mission (ABDM), with its focus on Health IDs and interoperability, are creating a resilient ecosystem. This transformation is driven by a mandate for accessibility, affordability, and efficiency.

At the heart of this vision lies the colossal social promise of the Ayushman Bharat Pradhan Mantri Jan Arogya Yojana (AB-PMJAY). As the world’s largest health assurance scheme, AB-PMJAY provides a cover of ₹5,00,000 per family.

However, scaling a system this large requires more than just policy and digital infrastructure—it requires financial sustainability. This is where the often-overlooked necessity of granular costing and strategic pricing becomes the ultimate competitive and ethical challenge for Indian hospitals.

The Next Steps: Rebuilding the MVT Value Chain

The need for accurate costing splits the Indian healthcare landscape into two critical areas:

a)Costing for AB-PMJAY Empanelment: The Challenge of Fixed Rates

For the thousands of hospitals (both public and private) empanelled under AB-PMJAY, the economics are simple yet brutal: profitability hinges on efficiency.

The scheme offers beneficiaries cashless and paperless treatment through package rates fixed by the government for secondary and tertiary care. A hospital receives a fixed reimbursement, regardless of its internal operational costs.

• The Costing Blind Spot: If a hospital does not know its true cost of delivering a service (e.g., a cataract surgery or a gall bladder removal), it cannot guarantee that the government’s package rate covers its expenses.
• The Risk: Without detailed cost analysis, hospitals risk operating at a loss, leading to financial instability, which ultimately threatens the sustainability of the entire social welfare scheme. Accurate costing is not about maximizing profit in this scenario; it is about ensuring operational survival so the commitment to 50 crore beneficiaries can be met.

b)Costing for Non-Empanelled Hospitals: The Global Trust Builder

Hospitals that primarily serve private domestic patients or international Medical Value Tourism (MVT) clients face a different, but equally pressing, challenge: transparency builds trust and wins global business.

International patients, in particular, are accustomed to detailed, transparent billing in their home markets. While India’s primary appeal is cost-effectiveness, a lack of clarity in pricing leads to perceptions of “overcharging” and financial distrust—a significant barrier to capturing the high-value MVT market.

• The Pricing Imperative: Hospitals must move beyond ad-hoc pricing to offer strategic, all-inclusive packages that are benchmarked against international competitors.
• The Foundation: This is impossible without granular, credible cost data. Knowing the true internal cost is the floor upon which a globally competitive and trustworthy price ceiling must be built. Costing ensures ethical pricing and eliminates the “surprise bill” phenomenon.

Proactive Solutech: Bridging the Financial Gaps

You cannot set a credible price if you do not know your true cost. The perception of “overcharging” is a costing failure, not a pricing failure.

a)Granular Cost Analysis for AB-PMJAY Compliance

Proactive Solutech helps hospitals implement advanced costing methodologies (such as Time-Driven Activity-Based Costing) to accurately track the resources consumed by every procedure. This data allows empanelled hospitals to:

• Optimize Processes: Identify bottlenecks and cost drivers to streamline operations and ensure delivery costs fall below the fixed PM-JAY package rates.
• Inform Policy: Provide evidence-based data to government bodies for potential package rate adjustments, ensuring equitable financial flow throughout the system.

b)Strategic Transparency for Global Pricing

For private hospitals aiming to compete globally, Proactive Solutech facilitates the development of all-inclusive, fixed-price patient packages. By precisely defining the true cost floor, hospitals can:

• Build Trust: Offer transparent pricing that eliminates hidden charges, fostering the ethical integrity required to attract high-value MVT patients.
• Maintain Competitiveness: Strategically set prices that are significantly lower than western markets while guaranteeing a healthy, legitimate margin.

In the era of ABDM and digital transformation, the successful delivery of healthcare is defined not just by the quality of clinical outcomes, but by the integrity of its financial model. By leveraging advanced costing, hospitals can fulfill their dual responsibilities: ensuring social welfare through affordability while achieving financial viability and global trust.

Proactive Solutech specializes in healthcare financial management and cost optimization, helping hospitals align their economic models with the principles of affordability, transparency, and sustainability.