India's health cover for poor attracts world

Discussion in 'Politics & Society' started by ejazr, Oct 15, 2010.

  1. ejazr

    ejazr Stars and Ambassadors Stars and Ambassadors

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    http://economictimes.indiatimes.com...r-poor-attracts-world/articleshow/6750697.cms

    NEW DELHI: India’s ambitious public health insurance scheme covering 19 million poor families is now going global, after the World Bank recommended it for the rest of the world.

    After the multilateral development institution flagged it as a “model of good design and implementation”, countries such as Indonesia, Pakistan, Bangladesh, Nepal, Nigeria and Ghana have evinced interest in learning from the experience.

    The Maldives government has asked the Union labour ministry, the nodal ministry for implementing the Rashtriya Swasthya Bima Yojana (RSBY), to design a similar project for its people.

    “We have just had a meeting with the finance minister of Maldives. He not only wants us to design a health insurance scheme for them, but also is keen on empanelling our hospitals,” said Anil Swarup, director general , labour and welfare . If the plan comes through, it will be the first experiment with transnational insurance and could actually bring business to our hospitals, said Mr Swarup, the man behind the scheme.

    Maldives has just three hospitals and several hospitals in southern India get asubstantial number of patients from the country every year.

    Other countries in Asia and Africa with sizable number of poor people have shown interest in replicating the Indian scheme that provides cashless treat-ment up to Rs 30,000 annually to a family of five at empanelled government and private hospitals through smart cards.

    About 4,500 private hospitals and 2,000 public hospitals are part of the RSBY scheme.

    Indonesia has invited Mr Swarup to Bali next week to give a presentation on how the scheme works while Nigeria’s health department has already had a meeting through video conferencing.

    Pakistan and Bangladesh have also discussed the possibility of introducing the scheme in their countries at various international forums, Mr Swarup said. “It is the smart card-driven foolproof technology , which makes the scheme unique and is the reason behind its success in India,” said M Ramadoss, chairman and managing director of public sector insurance company New India Assurance , one of the insurance providers under the scheme.

    Countries such as Ghana and the Philippines, which already have a functional public health insurance schemes in place but have problems in settling accounts of hospitals, want to use the smart card technology to make their schemes smoother.

    The biometric card has the finger print of the cardholder and a mere swipe allows a free treatment at empanelled hospitals.

    The Indian labour department has now started work on the tender document that Maldives should float to select an insurance company to run the scheme. “The procedural costs will be more (than in India) as transportation costs will also have to be taken into account,” Mr Swarup said.

    The premium for providing the Rs 30,000 medical cover to a poor household of five varies from state to state and ranges from Rs 300-600. Medical emergency is one of the biggest reasons for indebtedness among the poor.

    Free insurance under the RSBY is now being extended to non-BPL families for identified categories like domestic workers, vendors and rickshaw pullers. Other citizen groups may also be allowed to benefit under the scheme by paying their own premium.
     
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  3. Energon

    Energon DFI stars Stars and Ambassadors

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    This plan is very sound in theory and a great concept overall; unfortunately I'm not too optimistic in terms of returns.

    When it comes to the government of India, I can't think of a single social program meant for the "welfare of the poor" that didn't end up being a disaster. And more often than not it leads to an effect that is exactly opposite to the intended one.

    Problem is that the destitution is so widespread that nobody has the incentive to help these "people" who have not lived a dignified human life for over an eon. This problem goes back a long way, unfortunately Jawaharlal Nehru himself never realized that poor countries cannot be welfare states.

    The government would be better off diverting resources toward a good infrastructure and rural capital investments that would enable India's poor to become part of an economic system. Only after people have been afforded the dignity to generate an income (small as it may be) can there be room for mass welfare programs.
     
  4. ejazr

    ejazr Stars and Ambassadors Stars and Ambassadors

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    That has been true traditionally, but this scheme and the Nationa Rural Employment guarantee scheme have been an overall sucess. I guess this is precisely because its not just a "handout" like traditional schemes. Also the social audtiing, use of smart cards and IT enabled provisioning has resulted in better utilisation of funds.

    Another report on this.

    Govt widens ambit of rural health cover
    NEW DELHI: The government has extended a health insurance scheme earlier restricted to people living below the poverty line to a wider range of groups, a development which could drive down insurance premiums and treatment costs at hospitals.

    The Rashtriya Swasthya Bima Yojana, or RSBY — the United Progressive Alliance government’s flagship health insurance scheme for the poor — can now be tapped by all sections of society, even those above the poverty line, labour minister Mallikarjun Kharge told ET.

    RSBY offers the so-called cashless medical insurance facility in which payments are made directly by the insurance company to the hospital.

    Experts believe widening the ambit of the scheme, widely regarded as a success, could alter the face of the health insurance market in India , as it solves a fundamental problem faced by insurers — high risk of losses due to fraudulent claims, inflated bills put up by hospitals and lack of standardised rates for medical procedures and surgeries. Individual citizens above the poverty line can join the scheme as part of a group.

    The government’s aim is to bring sections such as truck drivers and street vendors within the scheme’s remit because the overwhelming majority of these sections are above the poverty line, but usually do not have access to medical insurance from government-owned or private insurers.

    Access to health insurance is crucial for reducing the incidence of poverty, as many Indians slip below the poverty line due to high out-of-pocket spends on healthcare.

    “We have been receiving demands from several groups such as truck drivers and small enterprises to allow them to use the RSBY platform,” Mr Kharge said. “Clearly, people see value in the scheme and are willing to pay for it. So, we have opened it up to all groups of citizens,” he added.

    Launched in April 2008, RSBY has become a rare success story among myriad government schemes plagued by weak implementation and financial leakages. Nearly two crore poor families across 27 states receive annual medical care cover of Rs 30,000 under the scheme.

    Citizen groups interested in joining the RSBY will have to apply to the Centre with data about its membership. “All we are saying is that the group should be large and homogeneous,” Mr Kharge said.

    The insistence on groups is to avoid the prospect of only sick and vulnerable individuals seeking health cover — what experts call the adverse selection risk in insurance. Insurers who compete to cover the poor RSBY beneficiaries in each state would now be asked to quote premium rates for the poor as well as the non-poor groups allowed into the scheme.

    The move would drive down the overall premium rates paid by the government for the poor, while giving non-poor citizens better rates and benefits than those available on individual mediclaim policies.

    “Pooling risks of groups with different profiles would help insurers,” said the CEO of a large private sector insurer, who spoke on condition of anonymity. Actual premium quotes will depend on the risk profiles of the beneficiary groups.

    Industry also expects employers who offer group health cover to their workers to evaluate the RSBY option closely. “If the government scheme offers better premium rates and benefits, we would see a significant shift out of current group policies,” said a senior official in a public sector general insurance firm.

    While the cashless promise of mediclaim policies available in the market has become unreliable in recent months, the RSBY functions like a smart credit card that allows the insured to choose between private and public hospitals with no upfront costs.

    Moreover, fixed rates have been assigned for medical procedures for all the hospitals empanelled under the scheme. So, consumers will not be left stranded waiting for reimbursements while insurers and hospitals fight it out over costs — as they now do under mediclaim policies available in the market.

    Expanding the scheme will also mean more business for the 4,500 odd private hospitals and 2,000 public hospitals that are part of the scheme. The premium for providing Rs 30,000 medical cover to a poor household of five varies from Rs 300-600 across states.

    Groups, which opt for the scheme, would be able to get a bigger medical cover by topping up premium payments, so that they can also get tertiary healthcare for complex procedures such as cardiac surgeries.

    Himachal Pradesh is doing exactly that — topping up the premium — to give the state’s poor families a much higher cover of Rs 1.75 lakh. Kerala, for its part, has begun implementing the scheme for citizens above the poverty line.

    Since September 1, about a lakh people from different groups such as coir and plantation workers have been enrolled, a senior official in Kerala’s health department told ET. States like West Bengal are expected to follow soon, with an eye on quick electoral gains.

    Mr Kharge’s ministry is also set to bring four million domestic workers and twice as many street vendors under the scheme. The Centre and states will pick up the entire insurance premium for them, while beneficiaries would pay a one-time cost of Rs 30.

    “We have received the finance ministry’s approval for vendors and domestic workers and are taking this for Cabinet approval soon,” Mr Kharge told ET. Similar plans are in the offing for rickshaw pullers and rag-pickers.

    The government may have to pay Rs 300 crore as annual premium for covering all domestic workers and over Rs 500 crore for vendors.

    “We expect to start the scheme in 2011-12 and fully implement it over the next three-four years,” a ministry official said.

    The robustness of RSBY’s IT-enabled platform and its unique design have received global acclaim. G20 nations, the World Bank, Harvard University and a slew of think tanks have lauded the model, while several developing countries, including Pakistan, want India’s help in replicating the scheme.
     
  5. Ray

    Ray The Chairman Defence Professionals Moderator

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    What is the feedback from the poor?

    Or is it the usual all gas and no go plans that proliferate for populist gains?

    I am not being cynical, but then look at all the schemes. They are good in intent and poor and corrupt in implementation, making a mockery of the schemes.
     
  6. pmaitra

    pmaitra Moderator Moderator

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    Good news like this is always music to my ears.

    I, however, have a few questions:
    1. India already has a network of hospitals and clinics (which I believe are in the State List). What is ailing them?
    2. What deficiencies in the current system does the new RSBY plug?
    3. What are the statuses of ESI hospitals?
    4. What are the statuses of the Railway hospitals? To my understanding they are doing an above average job for railway employees.

    Thanks
     
  7. Energon

    Energon DFI stars Stars and Ambassadors

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    **This is not a digression, I'm merely using the MNREGA example to make a point which extends to the RSBY scheme.**
    The national rural employment guarantee scheme (MNREGA) can hardly be deemed an overall success. The only success it has attained is that of a great populist tool for the central government. However in reality this is yet another venture that is slated to yield an effect opposite to the one intended.

    The socioeconomic impact of the MNREGA on the larger scale is actually teetering toward the negative not the positive. Not only has this program increased corruption at the local level (that's a given) but it is going to result in widening of the social gap without alleviating poverty. As with all poverty elimination schemes of yore, the benefits are actually confined to the rural rich not the poor. The select landlords with government contacts will get a few roads paved and irrigation canals built for throwaway prices. These are same people who get free electricity, phone lines and an assortment of subsidies which are actually meant for the poor. The random selection criteria (since it's for low skill labor) also means that local politicos/feudal lords have the liberty to offer employment along caste lines and charge rents which furthers social fragmentation (while winning them elections). Considering the participants are made to work 10-12 hrs a day for a little over $2 (of which they get to keep only a fraction) it hardly seems like a good deal. The only reason people show up is because they are all vying for subsistence. Furthermore large scale nationalized cheap labor schemes pretty much abort any incentive to introduce technology and mass mechanization. IMO this is one of the major explanation of why India's level of industrialization remains pathetic for a nation that produces so many technologically competent people.

    So yes, this is a great social program on paper and biggest of its kind (as are most things with India) which brings many accolades to the Indian government worldwide. However to me it looks like a government sponsored cheap labor scheme which is a bonanza for bureaucrats with sticky fingers and a god send for corrupt third rate local politicians who further their feudal structure through promotion of sectarianism all the while ensuring that their incorrigible reign gets extended in the upcoming election. The end products are the iconic Indian dilapidated roads and canals manually forged by undernourished laborers who don't know anything about building roads or canals, but toil away at them for 12 hours a day nonetheless... all for a whopping $2.24 most of which they don't get to keep anyways. So at the end of the day the marginal benefit in subsistence means very little if the structure of poverty and destitution is kept intact. Most of all, everything that comes out of this scheme is antithetical to the original intent. There is only so much credit you can give to the adage "India is a nation of contradictions" in order to hide poor governance.

    Instead of entertaining inadequate hand made roads and canals it would be far more beneficial to invest in mass scale mechanized infrastructural projects major roads and highways, sophisticated irrigation canals etc. There is ample data showing that good highway and communication network stimulates local economies and leads to urbanization which in turn overrides caste barriers to a certain extent. It also leads to labor specialization which is far, far better than a temporary state sponsored slave labor scheme.

    Again, based on the history I expect very little real improvement from RSBY program. The only thing that will help a great deal in the future is the biometric ID card system... and that's because it falls under the category of a large scale mechanized infrastructure project.
     
    Last edited: Oct 16, 2010
  8. ejazr

    ejazr Stars and Ambassadors Stars and Ambassadors

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    The official RSBY health insurance scheme website http://www.rsby.gov.in/

    The official Rural employment scheme website http://www.nrega.nic.in/netnrega/home.aspx

    Lots of good information and FAQs on both schemes.

    The good thing is that by computerizing all records, the chances of fraud get reduced although ofcourse not eliminated. But these schemes are definitely much better than otehr populist scheme that make no economic sense like free colour TVs or Rice at 3Rs/kg.
     

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