India Development News & Foreign Investment Opportunities

Guidelines for private hospitals in Tier 2 and 3 cities

Govt to provide land for hospitals


Govt to provide land for hospitals



The government has released broad guidelines for private investments in setting up hospitals in Tier 2 and Tier 3 cities as a follow on to the national health scheme, Pradhan Mantri Jan ArogyaYojana (PMJAY), of 23 September 2018, Health Ministry said on 8 Jan 2019.

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 (100 beds 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 of the hospitals and related facilities as well as services. 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.

PMJAY, a Centrally Sponsored Scheme, is for providing hospitalisation cover of up to Rs.5 lakh per family per year to over 10 crore poor and the deprived families (approx. 50 crore people) in the empanelled hospitals throughout the country.

Thirty-three States/UTs have signed MOU for implementing PMJAY out of which 29 have already launched the scheme.

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