The Indian National Congress is slated to unveil its election manifesto today. The big promise in the manifesto is expected to be the Right to Health, coupled with a National Health insurance scheme. If elected to power, Congress leaders say their government would increase public spending on health from the current level of 1.2 per cent of GDP to 3 per cent. While public health activists welcome the increase in government spending, many of them frown upon the idea of routing it through health insurance.
This might sound counter-intuitive. Both academic work and anecdotal evidence suggest that healthcare expenses are a major factor in pushing and keeping people in poverty in India. If the government could bear the burden of healthcare costs by providing free insurance to all, wouldn’t that significantly improve health outcomes in India and reduce financial shocks?
Apparently not. The experience of current schemes shows mixed results.
Karnataka launched the Yeshasvini Health Insurance Scheme in 2003. Andhra Pradesh started the Rajiv Aarogyasri Scheme in 2007. The next year, the Union Ministry of Labour rolled out the Rashtriya Swasthya Bima Yojana for below the poverty line families. Under RSBY, a poor person can get treated for up to Rs 30,000 at any hospital of his choice. Together, these schemes have led to a leap in health insurance coverage in India from a mere 75 million people in 2007 to 302 million people in 2010, roughly one-fourth of India's population.
The expanded coverage has been uneven. A note prepared by the Jan Swasthya Abhiyan, an umbrella group of Indian health activists connected with the international People’s Health Movement, points out, “In most states more private than public hospitals have been empanelled for providing services under the insurance scheme.” Since private hospitals are clustered in the cities, people living in rural, tribal and remote areas have been left out.
More significantly, the Ministry of Health itself has raised several concerns in an internal policy note prepared in December 2012, a copy of which is with Scroll.in. Here are some of the red flags waved by both the activists and the government:
1. Irrational care: The insurance schemes provide pre-determined packages to hospitals for surgeries. This has created a perverse incentive for private hospitals to recommend surgeries even when they might not be needed. Surgeries that involve higher expenditure are being prioritised over others, distorting public health spending. "In Andhra Pradesh, about 25% of the health budget is allocated to specific diseases that require high cost surgical interventions accounting for less than 2% of the total disease burden of the State," says the Ministry of Health's note, citing a 2012 study.
The most extreme example of unnecessary surgeries are hysterectomies, or the surgical removal of the uterus. Under RSBY, hysterectomies are eligible for the highest rate of payment – Rs 30,000 per surgery. This appears to have triggered a spate in the removal of women's uteruses in many states. As the Ministry of Health's policy note states, "Unethical practices are so rampant that in 2011 punitive action was launched by the Trust against 66 hospitals." Faced with a public uproar, Andhra Pradesh banned hysterectomies being done on the government’s insurance money.
Reports have also come from Rajasthan, Chhattisgarh, and Bihar of forced and hasty hysterectomies. Usually recommended for older women, several instances of women in their twenties going under the surgical knife too have come to light. The reports have provoked such alarm that this year, the National Family Health Survey is collecting data on hysterectomies for the first time.
2. Cherry-picking by private hospitals: Whether or not they are benefiting poor patients, the insurance schemes have come as a bonanza for private hospitals. The 2012 study of the Andhra Pradesh scheme showed that private hospitals were selecting low-risk, high-profitability cases and passing on high-risk and emergency cases to government hospitals. The average amount per patient earned by Osmania General Hospital, a government hospital, came to just Rs 12,298, while a private hospital, Care Banjara, made an average of Rs 78,808 per patient.
In Chhattisgarh, a study by Sulakshana Nandi and others found "very low enrolment and usage in remote villages and among vulnerable communities... Private empanelled facilities were providing narrow and selective range of services. They picked and chose more profitable conditions/packages though experiencing an increase in case load."
3. Rising health expenses: The insurance schemes rest on the promise of cashless health services to the poor. But studies have found that patients availing health insurance continue to pay from their pocket. In fact, in the districts where RSBY was implemented, there has been a rise in real per capita healthcare expenditure of poor patients, particularly on hospitalisation, according to a study done by Sakthivel Selvaraj and Anup K Karan of the Public Health Foundation of India. Another study in Gujarat showed that 85% of the hospitalised RSBY beneficiaries bore out-of-pocket – or OOP – expenses. "83% of hysterectomy patients, 55% of cataract surgery patients, and 72% of deliveries had OOP. The median OOP payment to the providers being an additional 100-160% of the actual package rates," said the Ministry of Health's note.
4. Fraud: With low levels of literacy and awareness among the poor, and lack of monitoring by the government, “it is very easy for hospitals to make fraudulent claims.” The Ministry of Health’s policy note says, “Many hospitals in Uttar Pradesh, Bihar and Gujarat, have been found to file false insurance claims in collusion with patients. They are either made to sign up for costlier procedures irrespective of the actual treatment, or claim money for patients who haven’t got any care. Patients are paid a small amount by the provider, which claims larger amount from insurance companies."
The outcomes of health insurance schemes are poor, but their costs are high. As the Ministry of Health’s policy note concludes, “We may also note that only nations with over 40 times GDP per capita and over 7 to 10 times our percentage of public spending on health have managed large scale insurance programmes as their main health care financing mode. What this means is that we have to commit far more than the 2.5% of the GDP we are willing to commit now if we choose the health insurance route to universal healthcare - nearer 10% of the GDP.”
Now, clearly, that's not what the Congress is promising.
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This might sound counter-intuitive. Both academic work and anecdotal evidence suggest that healthcare expenses are a major factor in pushing and keeping people in poverty in India. If the government could bear the burden of healthcare costs by providing free insurance to all, wouldn’t that significantly improve health outcomes in India and reduce financial shocks?
Apparently not. The experience of current schemes shows mixed results.
Karnataka launched the Yeshasvini Health Insurance Scheme in 2003. Andhra Pradesh started the Rajiv Aarogyasri Scheme in 2007. The next year, the Union Ministry of Labour rolled out the Rashtriya Swasthya Bima Yojana for below the poverty line families. Under RSBY, a poor person can get treated for up to Rs 30,000 at any hospital of his choice. Together, these schemes have led to a leap in health insurance coverage in India from a mere 75 million people in 2007 to 302 million people in 2010, roughly one-fourth of India's population.
The expanded coverage has been uneven. A note prepared by the Jan Swasthya Abhiyan, an umbrella group of Indian health activists connected with the international People’s Health Movement, points out, “In most states more private than public hospitals have been empanelled for providing services under the insurance scheme.” Since private hospitals are clustered in the cities, people living in rural, tribal and remote areas have been left out.
More significantly, the Ministry of Health itself has raised several concerns in an internal policy note prepared in December 2012, a copy of which is with Scroll.in. Here are some of the red flags waved by both the activists and the government:
1. Irrational care: The insurance schemes provide pre-determined packages to hospitals for surgeries. This has created a perverse incentive for private hospitals to recommend surgeries even when they might not be needed. Surgeries that involve higher expenditure are being prioritised over others, distorting public health spending. "In Andhra Pradesh, about 25% of the health budget is allocated to specific diseases that require high cost surgical interventions accounting for less than 2% of the total disease burden of the State," says the Ministry of Health's note, citing a 2012 study.
The most extreme example of unnecessary surgeries are hysterectomies, or the surgical removal of the uterus. Under RSBY, hysterectomies are eligible for the highest rate of payment – Rs 30,000 per surgery. This appears to have triggered a spate in the removal of women's uteruses in many states. As the Ministry of Health's policy note states, "Unethical practices are so rampant that in 2011 punitive action was launched by the Trust against 66 hospitals." Faced with a public uproar, Andhra Pradesh banned hysterectomies being done on the government’s insurance money.
Reports have also come from Rajasthan, Chhattisgarh, and Bihar of forced and hasty hysterectomies. Usually recommended for older women, several instances of women in their twenties going under the surgical knife too have come to light. The reports have provoked such alarm that this year, the National Family Health Survey is collecting data on hysterectomies for the first time.
2. Cherry-picking by private hospitals: Whether or not they are benefiting poor patients, the insurance schemes have come as a bonanza for private hospitals. The 2012 study of the Andhra Pradesh scheme showed that private hospitals were selecting low-risk, high-profitability cases and passing on high-risk and emergency cases to government hospitals. The average amount per patient earned by Osmania General Hospital, a government hospital, came to just Rs 12,298, while a private hospital, Care Banjara, made an average of Rs 78,808 per patient.
In Chhattisgarh, a study by Sulakshana Nandi and others found "very low enrolment and usage in remote villages and among vulnerable communities... Private empanelled facilities were providing narrow and selective range of services. They picked and chose more profitable conditions/packages though experiencing an increase in case load."
3. Rising health expenses: The insurance schemes rest on the promise of cashless health services to the poor. But studies have found that patients availing health insurance continue to pay from their pocket. In fact, in the districts where RSBY was implemented, there has been a rise in real per capita healthcare expenditure of poor patients, particularly on hospitalisation, according to a study done by Sakthivel Selvaraj and Anup K Karan of the Public Health Foundation of India. Another study in Gujarat showed that 85% of the hospitalised RSBY beneficiaries bore out-of-pocket – or OOP – expenses. "83% of hysterectomy patients, 55% of cataract surgery patients, and 72% of deliveries had OOP. The median OOP payment to the providers being an additional 100-160% of the actual package rates," said the Ministry of Health's note.
4. Fraud: With low levels of literacy and awareness among the poor, and lack of monitoring by the government, “it is very easy for hospitals to make fraudulent claims.” The Ministry of Health’s policy note says, “Many hospitals in Uttar Pradesh, Bihar and Gujarat, have been found to file false insurance claims in collusion with patients. They are either made to sign up for costlier procedures irrespective of the actual treatment, or claim money for patients who haven’t got any care. Patients are paid a small amount by the provider, which claims larger amount from insurance companies."
The outcomes of health insurance schemes are poor, but their costs are high. As the Ministry of Health’s policy note concludes, “We may also note that only nations with over 40 times GDP per capita and over 7 to 10 times our percentage of public spending on health have managed large scale insurance programmes as their main health care financing mode. What this means is that we have to commit far more than the 2.5% of the GDP we are willing to commit now if we choose the health insurance route to universal healthcare - nearer 10% of the GDP.”
Now, clearly, that's not what the Congress is promising.
