Healthcare costs

India’s flagship health insurance scheme for the poor has failed to cut medical expenses. Here’s why

The Rashtriya Swasthya Bima Yojana suffers from poor enrollment, inadequate benefits and does not cover outpatient services.

When the Rashtriya Swasthya Bima Yojana or RSBY was launched in 2008-’09 it was heralded in as one of the most ambitious programmes of the Government of India that would finally provide free access to quality healthcare to the poor. However, after more than eight years’ expenditure of about Rs 5,000 crore, the programme has failed to protect poor households from financial risks due to healthcare.

Under the RSBY, Below Poverty Line or BPL households are entitled to hospitalisation coverage of up to Rs 30,000 annually. The programme functions through a network of about 8,700 hospitals and 14 insurance companies from both the public and private sectors. It has funded more than 14 million hospitalisations so far. This is less than two million hospitalisations per year, barely 3% of the total annual hospitalisation in the country and only about 10% of annual hospitalisation among the poor.

Our recent analysis on the impact of RSBY published in the journal Social Science and Medicine shows that the scheme has had little effect in reducing the level of health expenditure for poor families and that it has helped reduce the probability of catastrophic inpatient expenditure only marginally. Households enrolled under the scheme continue to have to make significant out-of-pocket payments to access healthcare, the probability of incurring such expenditure going up 30% under the scheme.

So, what has gone wrong? The impact evaluation study indicates several problems with the design and implementation of the scheme.

Inadequate outreach

There are approximately 36 million families enrolled in the RSBY. That is about 60% of all poor families in the 520 districts where the programme has been implemented among of India’s 625 districts. The number of families enrolled also makes up only about the 15% of the 250 million poor families in the country. To identify households eligible for the scheme, the health ministry used BPL data from censuses conducted by state governments. There are several problems with this list as indicated by numerous studies in the past.

It is well known that the BPL list is highly contaminated implying many poor households are left out and many non-poor households are in the list. In addition, most states conducted census exercises in 2002-’03, since when the economic status of many households may have changed.

Moreover, the scheme has not been able to reach all eligible BPL families, particularly living in remote areas. It is most likely that the families left out are those that are in the greatest need of free healthcare. With an enrollment rate far short of its target, the scheme failed even in its first major task.

Inadequate benefits

Providing Rs 30,000 per year for the healthcare needs of a family – the average size of which may be four people – is grossly inadequate. In India, the average expenditure in 2014 for a single hospitalisation at a private hospital was about Rs 26,000, according to data from the National Sample Survey Organisation. This implies that even if one member of a beneficiary family gets hospitalised, the family exhausts its RSBY coverage for the year, leaving it nothing for inevitable post-hospitalisation costs and possible healthcare needs of other family members.

This Rs 30,000 limit was fixed in 2008 and has not been revised since, even though costs of hospitalisation across the country have almost doubled since then.

However, starting this month, Chhattisgarh has raised the limit for free treatment for families with Health Smart Cards issued under RSBY from Rs 30,000 to Rs 50,000.

Outpatient services not covered

The RSBY does not provide coverage for outpatient care. But, outpatient care is the overwhelming component accounting for 70% of healthcare in India. Accordingly, out-of-pocket payments on outpatient care constitutes up to 60% of total healthcare expenditure in the country. Studies in the past have shown that outpatient related expenditure, not inpatient care, has caused the most catastrophic health expenditure to Indian households.

Unless all outpatient care or at least the treatment of chronic diseases is covered, healthcare coverage schemes cannot provide any significant financial risk protection to Indian families. This is particularly important in case of schemes for the poor, since they prefer to seek outpatient treatment instead of being hospitalised and losing on work days and daily wages.

Lack of information

The success of any pro-poor health insurance scheme depends on an effective information and education campaign. Such campaigns help potential beneficiaries understand the scheme. In case of a healthcare scheme like the RSBY, it is important to make beneficiaries aware of whom to consult when they need medical and hospital services.

In general, people enrolled under the RSBY have a poor understanding of how it works and the process of availing of healthcare services through it.

One side effect of a health insurance scheme is that doctors might over-prescribe medicines and recommend unnecessary treatments – the so called “moral hazard”. RSBY beneficiaries often face this situation. Hospitals over prescribe the treatment and try to inflate hospital bills beyond the Rs 30,000 limit and ask the RSBY patient to pay the balance. Most countries have found that providing health insurance without regulating practices of the health providers usually limits success of these schemes.

The government needs to establish mechanisms to monitor healthcare providers, set up payment methods that incentivise healthcare providers to reduce unnecessary prescriptions and tests, and set up a technology system to audit providers.

The writer is a health economist with the Indian Institute of Public Health, Public Health Foundation of India.

We welcome your comments at letters@scroll.in.
Sponsored Content BY 

What hospitals can do to drive entrepreneurship and enhance patient experience

Hospitals can perform better by partnering with entrepreneurs and encouraging a culture of intrapreneurship focused on customer centricity.

At the Emory University Hospital in Atlanta, visitors don’t have to worry about navigating their way across the complex hospital premises. All they need to do is download wayfinding tools from the installed digital signage onto their smartphone and get step by step directions. Other hospitals have digital signage in surgical waiting rooms that share surgery updates with the anxious families waiting outside, or offer general information to visitors in waiting rooms. Many others use digital registration tools to reduce check-in time or have Smart TVs in patient rooms that serve educational and anxiety alleviating content.

Most of these tech enabled solutions have emerged as hospitals look for better ways to enhance patient experience – one of the top criteria in evaluating hospital performance. Patient experience accounts for 25% of a hospital’s Value-Based Purchasing (VBP) score as per the US government’s Centres for Medicare and Mediaid Services (CMS) programme. As a Mckinsey report says, hospitals need to break down a patient’s journey into various aspects, clinical and non-clinical, and seek ways of improving every touch point in the journey. As hospitals also need to focus on delivering quality healthcare, they are increasingly collaborating with entrepreneurs who offer such patient centric solutions or encouraging innovative intrapreneurship within the organization.

At the Hospital Leadership Summit hosted by Abbott, some of the speakers from diverse industry backgrounds brought up the role of entrepreneurship in order to deliver on patient experience.

Getting the best from collaborations

Speakers such as Dr Naresh Trehan, Chairman and Managing Director - Medanta Hospitals, and Meena Ganesh, CEO and MD - Portea Medical, who spoke at the panel discussion on “Are we fit for the world of new consumers?”, highlighted the importance of collaborating with entrepreneurs to fill the gaps in the patient experience eco system. As Dr Trehan says, “As healthcare service providers we are too steeped in our own work. So even though we may realize there are gaps in customer experience delivery, we don’t want to get distracted from our core job, which is healthcare delivery. We would rather leave the job of filling those gaps to an outsider who can do it well.”

Meena Ganesh shares a similar view when she says that entrepreneurs offer an outsider’s fresh perspective on the existing gaps in healthcare. They are therefore better equipped to offer disruptive technology solutions that put the customer right at the center. Her own venture, Portea Medical, was born out of a need in the hitherto unaddressed area of patient experience – quality home care.

There are enough examples of hospitals that have gained significantly by partnering with or investing in such ventures. For example, the Children’s Medical Centre in Dallas actively invests in tech startups to offer better care to its patients. One such startup produces sensors smaller than a grain of sand, that can be embedded in pills to alert caregivers if a medication has been taken or not. Another app delivers care givers at customers’ door step for check-ups. Providence St Joseph’s Health, that has medical centres across the U.S., has invested in a range of startups that address different patient needs – from patient feedback and wearable monitoring devices to remote video interpretation and surgical blood loss monitoring. UNC Hospital in North Carolina uses a change management platform developed by a startup in order to improve patient experience at its Emergency and Dermatology departments. The platform essentially comes with a friendly and non-intrusive way to gather patient feedback.

When intrapreneurship can lead to patient centric innovation

Hospitals can also encourage a culture of intrapreneurship within the organization. According to Meena Ganesh, this would mean building a ‘listening organization’ because as she says, listening and being open to new ideas leads to innovation. Santosh Desai, MD& CEO - Future Brands Ltd, who was also part of the panel discussion, feels that most innovations are a result of looking at “large cultural shifts, outside the frame of narrow business”. So hospitals will need to encourage enterprising professionals in the organization to observe behavior trends as part of the ideation process. Also, as Dr Ram Narain, Executive Director, Kokilaben Dhirubhai Ambani Hospital, points out, they will need to tell the employees who have the potential to drive innovative initiatives, “Do not fail, but if you fail, we still back you.” Innovative companies such as Google actively follow this practice, allowing employees to pick projects they are passionate about and work on them to deliver fresh solutions.

Realizing the need to encourage new ideas among employees to enhance patient experience, many healthcare enterprises are instituting innovative strategies. Henry Ford System, for example, began a system of rewarding great employee ideas. One internal contest was around clinical applications for wearable technology. The incentive was particularly attractive – a cash prize of $ 10,000 to the winners. Not surprisingly, the employees came up with some very innovative ideas that included: a system to record mobility of acute care patients through wearable trackers, health reminder system for elderly patients and mobile game interface with activity trackers to encourage children towards exercising. The employees admitted later that the exercise was so interesting that they would have participated in it even without a cash prize incentive.

Another example is Penn Medicine in Philadelphia which launched an ‘innovation tournament’ across the organization as part of its efforts to improve patient care. Participants worked with professors from Wharton Business School to prepare for the ideas challenge. More than 1,750 ideas were submitted by 1,400 participants, out of which 10 were selected. The focus was on getting ideas around the front end and some of the submitted ideas included:

  • Check-out management: Exclusive waiting rooms with TV, Internet and other facilities for patients waiting to be discharged so as to reduce space congestion and make their waiting time more comfortable.
  • Space for emotional privacy: An exclusive and friendly space for individuals and families to mourn the loss of dear ones in private.
  • Online patient organizer: A web based app that helps first time patients prepare better for their appointment by providing check lists for documents, medicines, etc to be carried and giving information regarding the hospital navigation, the consulting doctor etc.
  • Help for non-English speakers: Iconography cards to help non-English speaking patients express themselves and seek help in case of emergencies or other situations.

As Arlen Meyers, MD, President and CEO of the Society of Physician Entrepreneurs, says in a report, although many good ideas come from the front line, physicians must also be encouraged to think innovatively about patient experience. An academic study also builds a strong case to encourage intrapreneurship among nurses. Given they comprise a large part of the front-line staff for healthcare delivery, nurses should also be given the freedom to create and design innovative systems for improving patient experience.

According to a Harvard Business Review article quoted in a university study, employees who have the potential to be intrapreneurs, show some marked characteristics. These include a sense of ownership, perseverance, emotional intelligence and the ability to look at the big picture along with the desire, and ideas, to improve it. But trust and support of the management is essential to bringing out and taking the ideas forward.

Creating an environment conducive to innovation is the first step to bringing about innovation-driven outcomes. These were just some of the insights on healthcare management gleaned from the Hospital Leadership Summit hosted by Abbott. In over 150 countries, Abbott, which is among the top 100 global innovator companies, is working with hospitals and healthcare professionals to improve the quality of health services.

To read more content on best practices for hospital leaders, visit Abbott’s Bringing Health to Life portal here.

This article was produced on behalf of Abbott by the Scroll.in marketing team and not by the Scroll.in editorial staff.