Poor risk cover under govt. health scheme

An evaluation of the Rashtriya Swasthya Bima Yojana (RSBY) has concluded that the government-financed health insurance scheme had little or no impact on medical impoverishment in India.

In fact, the study found that despite high enrolment in RSBY, catastrophic health expenditures (when medical expenses push a family into poverty), hospitalisation expenditure and the percentage of total household outgo on out-of-pocket (OOP) expenses — medicines and other consumables that are not reimbursed by insurance — have steadily increased, for both in-patients and outpatients, over the last two decades.

The assessment was conducted by the Council for Social Development and published in its latest report, “India: Social Development Report 2014.”

The authors of the study compared data before and after the launch of RSBY to understand the emerging trends in out-of-pocket expenditure for medical care.

The aim was to study the impact of RSBY and evaluate how much financial risk protection it granted to beneficiaries. “Between 2004-05 and 2011-12, hospitalisation expenses have increased at a much higher rate (9.2%) compared to outpatient expenses (4.5%) or medicines (4.85%). The poorer income sections in RSBY have indeed experienced a rise in catastrophic headcount, a conclusive proof that RSBY and other state run insurance programmes have failed to provide financial risk protection,” the report noted.

With one of the most privatised hospital & insurance sector, government-financed health insurance schemes are providing insignificant protection against catastrophic health expenditure, said Shakti Selvaraj, co-author of the report and a health economist with the Public Health Foundation of India (PHFI).

“Many States are reserving significant proportion of procedures for government hospitals (especially in Andhra Pradesh & Tamil Nadu) to contain the costs. With RSBY, there is a serious concern of rampant systemic leakage of resources,” Dr. Selvaraj said.

Narrow focus

The report pointed out that a “major design flaw in RSBY and other such state health insurance programmes is their narrow focus on secondary and tertiary care hospitalisation. Essentially, these models are designed to address low-volume, high-value financial transactions that could result in catastrophic expenditure and impoverishment of households. However, evidence points in the opposite direction.” The study concluded that RSBY was being used mostly by those who already had better access (to healthcare services) and the most marginalised sections were being excluded further.


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