India
The Government of India has recognized inequities in its health delivery and financing infrastructure and has introduced various reform measures. Several health insurance schemes were introduced in the early-mid 2000s but dissolved due to poor policy design, lack of clear accountability at the state level, weak monitoring and evaluation, and poor awareness among the intended beneficiaries, among other hurdles.
The Government of India has recognized inequities in its health delivery and financing infrastructure and has introduced various reform measures. Several health insurance schemes were introduced in the early-mid 2000s but dissolved due to poor policy design, lack of clear accountability at the state level, weak monitoring and evaluation, and poor awareness among the intended beneficiaries, among other hurdles. Learning from the experiences of other major government and non-government health insurance schemes, the national and state level governments began a renewed effort to increase health coverage.
Health care in India is financed through various sources, including individual out-of-pocket payments, central and state government tax revenues, external aid, and private employers. National Health Accounts data shows that central, state, and local governments together account for only about 20% of total health expenditures in India, with greater than 75% of health spending comprised of un-pooled, out-of-pocket expenditures. This level of out-of-pocket expenditure is one of the highest in the world. External aid to the health sector, either to the government or via NGOs, accounts for a negligible 2% of the total health expenditure.
In India, the government is both a financer as well as a provider of health care. Households, particularly poor households, are expected to seek care in the grossly under-resourced network of government health services. Not surprisingly, due to uneven quality of care and high absenteeism, patients often shift away from public health services to private health services for their care. Studies show that about 72% of outpatient care and about 40-60% of inpatient care is sought from the private health sector. This has implications for lower-income patient communities. About 6% of patients who require hospitalization do not seek health care because they cannot afford it. Among those who seek hospital care, about 25-40% of patients have to borrow or sell their assets to meet their medical expenses. These figures are aggregate; the picture is worse if one disaggregates along the divides of urban/rural, male/female, upper quintile/lower quintile, upper caste/lower caste, etc.
The national government as well as several state governments have recognized inequities in health delivery and financing and have introduced various measures to address them. One measure at the national level was to increase the budgetary allocations for health care. The National Rural Health Mission (NRHM) promised to increase the government spending on health care from the current 0.9% of GDP to 3% of GDP. Various states have introduced programs designed to improve access to care, especially among certain populations or for certain types of treatment. However, increasing the budget for health is not a solution in itself, and it has been seen that absorptive capacity of the public health care system is not adequate; even the current level of spending by the government is not being properly utilized.
The government has introduced various demand-side financing mechanisms to provide financial protection for vulnerable populations. Health insurance schemes like the Universal Health Insurance Scheme (UHIS) launched by the Ministry of Finance in 2003, the Sanjeevani Scheme launched by the Punjab government in 2005, and the Chief Minister’s health insurance scheme launched by the Assam Government in 2004 are some examples. However, most of these schemes have been dissolved due to poor policy design, lack of clear accountability at the state level, lack of sustained efforts in implementation, weak monitoring and evaluation, unclear roles and responsibilities of different stakeholders, and/or poor awareness among beneficiaries about the schemes. Learning from the experiences of other major government and non-government health insurance schemes in India, progress is being made to roll out new health insurance schemes at both a national and state level.
India
Historical Context
The Government of India has recognized inequities in its health delivery and financing infrastructure and has introduced various reform measures. Several health insurance schemes were introduced in the early-mid 2000s but dissolved due to poor policy design, lack of clear accountability at the state level, weak monitoring and evaluation, and poor awareness among the intended beneficiaries, among other hurdles. Learning from the experiences of other major government and non-government health insurance schemes, the national and state level governments began a renewed effort to increase health coverage.
Health care in India is financed through various sources, including individual out-of-pocket payments, central and state government tax revenues, external aid, and private employers. National Health Accounts data shows that central, state, and local governments together account for only about 20% of total health expenditures in India, with greater than 75% of health spending comprised of un-pooled, out-of-pocket expenditures. This level of out-of-pocket expenditure is one of the highest in the world. External aid to the health sector, either to the government or via NGOs, accounts for a negligible 2% of the total health expenditure.
In India, the government is both a financer as well as a provider of health care. Households, particularly poor households, are expected to seek care in the grossly under-resourced network of government health services. Not surprisingly, due to uneven quality of care and high absenteeism, patients often shift away from public health services to private health services for their care. Studies show that about 72% of outpatient care and about 40-60% of inpatient care is sought from the private health sector. This has implications for lower-income patient communities. About 6% of patients who require hospitalization do not seek health care because they cannot afford it. Among those who seek hospital care, about 25-40% of patients have to borrow or sell their assets to meet their medical expenses. These figures are aggregate; the picture is worse if one disaggregates along the divides of urban/rural, male/female, upper quintile/lower quintile, upper caste/lower caste, etc.
The national government as well as several state governments have recognized inequities in health delivery and financing and have introduced various measures to address them. One measure at the national level was to increase the budgetary allocations for health care. The National Rural Health Mission (NRHM) promised to increase the government spending on health care from the current 0.9% of GDP to 3% of GDP. Various states have introduced programs designed to improve access to care, especially among certain populations or for certain types of treatment. However, increasing the budget for health is not a solution in itself, and it has been seen that absorptive capacity of the public health care system is not adequate; even the current level of spending by the government is not being properly utilized.
The government has introduced various demand-side financing mechanisms to provide financial protection for vulnerable populations. Health insurance schemes like the Universal Health Insurance Scheme (UHIS) launched by the Ministry of Finance in 2003, the Sanjeevani Scheme launched by the Punjab government in 2005, and the Chief Minister’s health insurance scheme launched by the Assam Government in 2004 are some examples. However, most of these schemes have been dissolved due to poor policy design, lack of clear accountability at the state level, lack of sustained efforts in implementation, weak monitoring and evaluation, unclear roles and responsibilities of different stakeholders, and/or poor awareness among beneficiaries about the schemes. Learning from the experiences of other major government and non-government health insurance schemes in India, progress is being made to roll out new health insurance schemes at both a national and state level.
In 2007, the state of Andhra Pradesh launched the Aarogyasri health insurance scheme, gradually extending coverage for catastrophic, inpatient care to the entire below-poverty-line (BPL) population statewide. Similar programs are now being adopted in neighboring states based on the Aarogyasri model. One year later at the national level, the Ministry of Labour and Employment (MoLE) launched the Rashtriya Swasthya Bima Yojana (RSBY) program to provide health insurance benefits to BPL populations. It is being implemented by state governments in 23 different states, with plans to cover the entire BPL population in India (approx 300 million people) by 2012-2013.
In 2007, the state of Andhra Pradesh launched the Aarogyasri health insurance scheme, gradually extending coverage for catastrophic, inpatient care to the entire below-poverty-line (BPL) population statewide. Similar programs are now being adopted in neighboring states based on the Aarogyasri model. One year later at the national level, the Ministry of Labour and Employment (MoLE) launched the Rashtriya Swasthya Bima Yojana (RSBY) program to provide health insurance benefits to BPL populations. It is being implemented by state governments in 23 different states, with plans to cover the entire BPL population in India (approx 300 million people) by 2012-2013.
These programs are similar in several ways, from both a design and implementation perspective. To this point, they have both targeted the BPL populations within their respective geographies. Aarogyasri has covered 65 million people to this point, while RSBY has covered 40 million people across 23 states and plans to continue growing at a rapid pace. Both programs provide primarily inpatient benefits and have defined lists of covered procedures. This indicates an emphasis on preventing catastrophic health expenditures, by covering many of the most expensive and complex procedures.
Both programs are entirely cashless, with no required co-payments at the point-of-service. Aarogyasri requires no member contribution whatsoever, while RSBY has made the decision to charge beneficiaries a small registration fee. This fee has proven to increase the perceived value of the scheme, and increase utilization as beneficiaries feel that they have “bought into” the scheme and therefore are entitled to receive services from it.
Both programs are financed through general government revenues. RSBY is financed through a mix of central and state government revenues, while Aarogyasri is financed entirely at the state level with no support of the central government. Both schemes have included both public and private sector hospitals, and in fact, the majority of hospitals in each case are private. The inclusion of private hospitals has given beneficiaries access to many state-of-the-art facilities that they otherwise would not be able to afford.
Both programs have also made use of commercial insurers for administrative functions, including enrollment, collections (where necessary), provider management, and claims processing and reimbursement. In both cases, the selected insurer is paid a defined premium from the government per beneficiary, and carries the actuarial risk of program beyond that point.
The RSBY program is unique in its involvement of local NGOs in the process of building awareness, and indentifying and enrolling targeted beneficiaries. RSBY uses “enrollment camps”, or defined periods for enrollment into the scheme, at a district level. RSBY has also used innovative technology to aid enrollment and claims processing, particularly through use of SmartCards. SmartCards are issued, one per family, at the time of enrollment and include information, including fingerprints and photographs, on all enrolled members of the family.
The Aarogyasri program is unique in its use of Aarogya Mithras, health workers who serve as patient advocates and first points of contact for beneficiaries seeking care. There are presently over 4,000 Aarogya Mithras, with one located in each primary health center, to help guide beneficiaries through the process of seeking care and inform them about the available benefits. Aarogyasri also employs robust technology, including enrollment cards that store vital beneficiary information as well as patient visit records.
India
Summary of Reforms
In 2007, the state of Andhra Pradesh launched the Aarogyasri health insurance scheme, gradually extending coverage for catastrophic, inpatient care to the entire below-poverty-line (BPL) population statewide. Similar programs are now being adopted in neighboring states based on the Aarogyasri model. One year later at the national level, the Ministry of Labour and Employment (MoLE) launched the Rashtriya Swasthya Bima Yojana (RSBY) program to provide health insurance benefits to BPL populations. It is being implemented by state governments in 23 different states, with plans to cover the entire BPL population in India (approx 300 million people) by 2012-2013.
These programs are similar in several ways, from both a design and implementation perspective. To this point, they have both targeted the BPL populations within their respective geographies. Aarogyasri has covered 65 million people to this point, while RSBY has covered 40 million people across 23 states and plans to continue growing at a rapid pace. Both programs provide primarily inpatient benefits and have defined lists of covered procedures. This indicates an emphasis on preventing catastrophic health expenditures, by covering many of the most expensive and complex procedures.
Both programs are entirely cashless, with no required co-payments at the point-of-service. Aarogyasri requires no member contribution whatsoever, while RSBY has made the decision to charge beneficiaries a small registration fee. This fee has proven to increase the perceived value of the scheme, and increase utilization as beneficiaries feel that they have “bought into” the scheme and therefore are entitled to receive services from it.
Both programs are financed through general government revenues. RSBY is financed through a mix of central and state government revenues, while Aarogyasri is financed entirely at the state level with no support of the central government. Both schemes have included both public and private sector hospitals, and in fact, the majority of hospitals in each case are private. The inclusion of private hospitals has given beneficiaries access to many state-of-the-art facilities that they otherwise would not be able to afford.
Both programs have also made use of commercial insurers for administrative functions, including enrollment, collections (where necessary), provider management, and claims processing and reimbursement. In both cases, the selected insurer is paid a defined premium from the government per beneficiary, and carries the actuarial risk of program beyond that point.
The RSBY program is unique in its involvement of local NGOs in the process of building awareness, and indentifying and enrolling targeted beneficiaries. RSBY uses “enrollment camps”, or defined periods for enrollment into the scheme, at a district level. RSBY has also used innovative technology to aid enrollment and claims processing, particularly through use of SmartCards. SmartCards are issued, one per family, at the time of enrollment and include information, including fingerprints and photographs, on all enrolled members of the family.
The Aarogyasri program is unique in its use of Aarogya Mithras, health workers who serve as patient advocates and first points of contact for beneficiaries seeking care. There are presently over 4,000 Aarogya Mithras, with one located in each primary health center, to help guide beneficiaries through the process of seeking care and inform them about the available benefits. Aarogyasri also employs robust technology, including enrollment cards that store vital beneficiary information as well as patient visit records.
The Government of India intends to cover a total of 250-300 million people in next four years, as well as extend coverage to new population groups (e.g., unorganized workers) in coordination with other government agencies, ministries, and departments. The experience of both the Aarogyasri and RSBY schemes in the field has been quite encouraging since its inception. More and more people are not only enrolling, but also utilizing services.
The Government of India intends to cover a total of 250-300 million people in next four years, as well as extend coverage to new population groups (e.g., unorganized workers) in coordination with other government agencies, ministries, and departments. The experience of both the Aarogyasri and RSBY schemes in the field has been quite encouraging since its inception. More and more people are not only enrolling, but also utilizing services.
In any health insurance scheme, a critical point in improving utilization is building awareness about the scheme. The experience in India is no exception: in districts where awareness campaigns have been organized, claims ratios are higher, whereas in districts where awareness campaigns have not been effectively organized, claims ratios are very low. Data shows that claims ratios are increasing slowly as awareness about the scheme is increasing among the beneficiaries. This underscores the importance of maintained focus on information dissemination and awareness campaigns.
To improve the efficiency of implementation and ensure that the scheme benefits are utilized by beneficiaries, the government is planning to organize a nationwide capacity building exercise for various stakeholders. It is also planning to engage in large scale IEC and BCC activities to disseminate information about the scheme and its benefits to the target population.
Additionally, the government is in the process of designing a quality management system for health care providers. This will encourage providers to improve their quality as they will be incentivized through quality and performance-driven payments; hospitals with higher assessed quality will be graded higher and thus eligible for higher reimbursements from insurers.
India
The Way Forward
The Government of India intends to cover a total of 250-300 million people in next four years, as well as extend coverage to new population groups (e.g., unorganized workers) in coordination with other government agencies, ministries, and departments. The experience of both the Aarogyasri and RSBY schemes in the field has been quite encouraging since its inception. More and more people are not only enrolling, but also utilizing services.
In any health insurance scheme, a critical point in improving utilization is building awareness about the scheme. The experience in India is no exception: in districts where awareness campaigns have been organized, claims ratios are higher, whereas in districts where awareness campaigns have not been effectively organized, claims ratios are very low. Data shows that claims ratios are increasing slowly as awareness about the scheme is increasing among the beneficiaries. This underscores the importance of maintained focus on information dissemination and awareness campaigns.
To improve the efficiency of implementation and ensure that the scheme benefits are utilized by beneficiaries, the government is planning to organize a nationwide capacity building exercise for various stakeholders. It is also planning to engage in large scale IEC and BCC activities to disseminate information about the scheme and its benefits to the target population.
Additionally, the government is in the process of designing a quality management system for health care providers. This will encourage providers to improve their quality as they will be incentivized through quality and performance-driven payments; hospitals with higher assessed quality will be graded higher and thus eligible for higher reimbursements from insurers.