Focus on infrastructure, questions over AB-ArK package revision

Karnataka's Budget focuses on health infrastructure, revises AB-ArK treatment rates, and proposes new palliative care services.

Although the State government has retained its health sector allocation at 4% of the total Budget, amounting to ₹17,817 crore, almost similar to last year, this year’s Budget places a stronger emphasis on improving health infrastructure, expanding critical services and strengthening digital health systems.

Chief Minister Siddaramaiah announced a ₹900-crore grant for infrastructure development in the health sector. The Budget also earmarks ₹45 crore to strengthen trauma care services across all district and taluk hospitals. In a significant relief, the government has also proposed free insulin pens for children up to 18 years with Type-1 diabetes.

Responding to a long-standing demand from hospitals, the Budget has proposed revising treatment package rates under Ayushman Bharat – Arogya Karnataka (AB-ArK). The existing 2018 treatment package rates will be updated by adopting the Centre’s Health Benefit Package (HBP)-2022 rates. An additional ₹400 crore has been earmarked for this move.

However, stakeholders remain cautious about the implementation. According to industry estimates, adopting the revised package rates would require an additional budgetary support of nearly ₹1,200 crore. Despite multiple discussions between private hospital representatives, the Health Department and senior officials, the proposal submitted by the Suvarna Arogya Suraksha Trust (SAST) — the nodal agency for the scheme — is pending with the Finance Department.

Pavan Kumar Patil, a member of the Karnataka Private Medical Establishments Act (KPMEA) expert committee on price fixation for government health schemes, said, “With the overall allocation remaining largely unchanged, it suggests there may be no immediate fiscal provision to support the implementation of the revised HBP-2022 packages. The proposal appears to be more of an eye-wash.”

However, Harsh Gupta, Principal Secretary (Health), said the revised packages would be implemented by converging funds from multiple schemes, including the Yashasvini scheme, the Karnataka Building and Other Construction Workers Welfare Board, and the Employees’ State Insurance Corporation. “For beneficiaries who are also covered under Yashasvini and other schemes, available funds will be utilised. This convergence will help ensure better access,” he said.