From FT website

Meanwhile, Vaatsalya is a chain of 15 hospitals based in areas just outside towns and in rural areas in Karnataka and Andhra Pradesh providing affordable healthcare to underserved populations. The potential for success for many of these so-called “frugal hospitals” has been bolstered by new state-sponsored health insurance schemes that aim to provide financial protection for the poor from “catastrophic” emergencies that require hospitalisation or surgery.
These new schemes – one run by the central government, and the rest set up by different state governments since 2007 – provide a flat fee to participating hospitals to treat patients for specified ailments and allow patients to choose their care provider.
About 240m Indians were covered by such schemes as of 2010, and a recent World Bank study argued the programmes were a “promising foundation” for reform.
But some experts are concerned that the state insurance schemes’ focus on major surgery or ailments requiring hospitalisation could affect funding for desperately needed improvements in primary care.