Health insurance in india

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HEALTH IS A HUMAN RIGHT

ITS AFFORDABILITY & ACCEPTABILITY HAS TO BE ASSURED FOR URBAN

A/W/A RURAL, WELL TO DO TO THE POORER SECTION OF THE SOCIETY.


Agenda Healthcare and health insurance in India

• Macroeconomic trends and indices• Current schemes and coverage

Global experience and the objectives of health insurance reform

Devising an appropriate model for India• Segmenting the market• Framework for reform

Managing the reform processBrought to you byThe Nurses and attendants staff we provide for your healthy

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Health Care scenario• Before independence - dismal condition.• High morbidity, mortality and Infectious

diseases.• After independence - emphasis on PH care.• Present Problem-• High mortality, negligible MCH care.• Urban-Rural divide:70:30.• Population Size of the country.• Declining funds to HealthCare Sector-CG/State.


Health Care Scenario……contd

At any given point of time 40 to 50 million of population on medication

for major sickness. About 200 million days are lost annually.

The annual rate (range) of out-patient: rural 30-152/1000, urban 9-81/1000 and for hospitalization: rural 16-76/1000, urban 5-38/1000.


HEALTH CARE FINANCING IN INDIA

•The share of public financing in total health care is just about 1% of GDP compared to 2.8% in other developing countries.•Beneficiaries are both poor a/ w/ a well-fed section of society.•Over 80% of the total health financing is private financing,much of which is out-of-pocket payments (i.e. User charges) and not any prepayment schemes.


2004 US UK Mexico Brazil China IndiaLife expectancy (avg. # of years)

77.4 78.3 72.6 71.4 72.5 64.0

# of Physicians per 1,000 people

2.7 1.9 1.7 1.2 1.7 0.4

Healthcare spend (USD per capita)

5,365 3,036 336 236 62 32

Healthcare spend (% of GDP)

13.2 8.4 5.5 7.5 5.0 5.3

Health care spend in India is considerably lower than that in other countries


The proportion of insurance in health care financing in India is extremely low

0%

100%

Source of finance Means of finance

86% from out-of-pocket

expenses

83% from private sector

spending

Health care financing in India 2002, %


The World Health Organization has defined possible approach to financing of health

expenditure

Total health expenditure

Public

Private

Social security

Externally funded

Tax-funded

Private health ins.

Externally sourced

Out-of-pocket

Using central / state revenues for health

Compulsory premium contributions to health

Channeling loans, grants etc. to healthcare

Payments to health care providers for servicesPremium contributions towards health supportChanneling donations etc. to healthcare


Social Security: Concept

Defined as “the security that the society furnishes to some organizations against certain risks to which the members of society are exposed”


Social Security: Advantage

The financial burden of sickness cannot be borne by the individual. It must be widely distributed throughout the country.

Sickness is not an individual’s misfortune but the calamity is to taken as community & state responsibility.


Health insurance typically helps a patient manage health care costs beyond a threshold amount through pooling

As a contingent claim

instrument, health insurance

is an efficient way to help individuals prepare for health care

Insurer payment(from premium

pool)

Individual payment

Deductible Co-insured

Health care expenditure (INR)

Patient expenditure

(INR)

Stop-loss level


WHAT IS HEALTH INSURANCE?

SYSTEM OF ASSURANCE TO MAKE CONTINGENCIES OF HEALTH CARE EXPENSES.

TO PROVIDE PROTECTION AGAINST FINANCIAL LOSS BY UNFORSEEN SICKNESS.

TO MEET COST OF GOOD MEDICAL CARE.

RELIEVES ANXIETY AND TENSION.Brought to you byThe Nurses and attendants staff we provide for your healthy


Origin of Health Insurance: International 1883 Bismarck- sickness benefit to workers. 1911 Lloyd George- National Health Insurance

Scheme to cover sickness expense, medical relief, drugs & compensation of wages lost, to improve quality of life and improve industrial production.

J.F.Kimball: prepayment system of health care.


Origin of Health Insurance: National:1923: Workman’s compensation Act.1948: ESI Act passed.1952: First ESI hospital established.Mudaliar Committee(1959-1961)

recommendations:1. Long range health insurance policy

for all.2. Small fee for availing health services.


Origin of Health Insurance…contd

National: 1999: IRDA act passed. 2001: Insurance amendment Act: Emphasis on TPAs.


Forms of Insurance Available Indemnity Insurance: where the insurer first

pay to the hospital and claim is made. E.g. Jeevan Asha II, Asha Deep II, Mediclaim.

Cashless Claim Facility:TPAs who bear the expenses on behalf of insurance company. Patients need not to pay directly as a rule e.g. Bajaj Alliance.

CBHI (Community Based Health Insurance).


The key issue related to financing of health care in India revolves around the lack of

adequate insurance . . . Limited coverage

– Only around 10% of the population is covered through health financing schemes

– Geographic spread in terms of health care facilities and financing awareness is limited

– Selection criteria by suppliers often restricts the poor (and more likely to be ill) from affordable pre-payment schemes

Moral hazard and Adverse selection– Claims ratios for Mediclaim and Jan Arogya policies

have been in the range of 120 – 130%.


The key issue related to financing of health care in India revolves around the lack of adequate

insurance … contd

System leakages– Provider malpractices leading to over-

charging or pre-selection / selective recommendation

Lack of universal schemes– Limitations in terms of coverage of illnesses

as well as treatment options – Alternative therapies often not considered /

included under insuranceBrought to you byThe Nurses and attendants staff we provide for your healthy


The experience of different countries suggests that private insurance has an

important role to play in overall health care Source of health insurance in countries with

targeted, non-universal access to health care coverage e.g. Netherlands restricts public health coverage to

an income threshold Private health insurance has enhanced access to

timely hospital care e.g. In UK, waiting time reduction and private health

insurance coverage have led to a virtuous cycle.


The experience of different countries suggests that private insurance has an

important role to play in overall health care Private health insurance has increased service

capacity and supply by injecting financial resources up front e.g. In the US, private health insurance has financed hospitals in terms of doctors and facilities through the HMO set-up

Private health insurance increases choice (provider, benefits, cost-sharing) for the individual e.g. In Australia, private health insurance offer the option of access to spare capacity and elective care in non-public institutions


Global experience provides some key learning on health insurance policy design Balancing risk-spreading and incentives offered

– Balancing the need to encourage health insurance against moral hazard (individuals choose more care) and principal-agent problems (providers supply more care)

Integration of insurance and health care provision– Managing doctor loyalties with patient and insurer

under managed care


Global experience provides some key learning on health insurance policy

design . . .contd

Approach to competition and portability– Balancing the need for consumer choice

against adverse selection (sick preferring more generous plans)

Focus on health as against financing of health care– The over-riding objective should be to

improve health rather than the financing of health care services


Some key considerations related to formulation of approach to HI in India . . .

Differential approach -Formal sector (government and non-government workers)

– Self-employed segment– Poor / Unemployed segment

Scope and structure of health insurance cover– Product and segment coverage– Portability across service providers– Cap on premium amounts– Risk-adjusted approach

Nature of fiscal incentives– Subsidies and tax incentives for health insurance as against health

care


As a result, the traditional model for health insurance needs to change...

Individual

Insurer/

Provider

Government / Employer

Fixed feesService charges

Voluntary premiums

Mandatory premium

Mandatory premium

Costs up to deductible

Could be allied to insurer or be a government approved provider

Inter-mediaries

TPAs etc.

Financial flowsService flows


… to one that allows the flexibility to serve different segments of the

population, in an efficient manner

• Health insurance providers may need to align themselves to overall health care including financing, preventive health care and health outreach in order to grow coverage

• Regulations and policy must be designed to encourage this


Community-based initiatives have been particularly cost- efficient in reaching out to the poor / unemployed

segmentsRole in Community-based health initiative (CBHI)

Health intermediary

Health manager

Health provider

Example of some CBHIs / NGOs

SEWA / ACCORD

Tribhuvandas Foundation

Sewagram / VHS

Nature of health risk covered

Inpatient, non-health related

Inpatient Inpatient, Outpatient

Access to benefits After certain period

At time of discharge

At time of utilization

Administrative costs Moderate Low Low

Nature of pool formation

Occupation / geography-based

Occupation / geography-based

Geography-based


How CBHI can be made Reachable

Effort for social mobilization & strengthening of people organization

Training and capacity building, special emphasis on PRIs and Women Organization

Demand Driven social services, Building of alliances and partnerships

Advocacy for Pro poor policies.Brought to you byThe Nurses and attendants staff we provide for your healthy


Managing the reform process would require several infrastructural and

market changes to be effected Appropriate market segmentation, awareness initiatives,

product innovation, and incentives Easing of entry norms for specialist health insurance

companies Provider rating and credentialing Centralized database for health insurance experience

statistics Efficient back-office support for underwriting and claims

processing


Conclusion

Health insurance is an emerging important financial tool in meeting health care needs

of the people of INDIA. CBHI is to be further explored so that the disadvantaged section

get maximum benefit. In India at present no Pan-India Model of HI.

All different forms need to be explored.


This platform has been started by Parveen Kumar Chadha with the vision that nobody should suffer the way he has suffered because of lack and improper healthcare facilities in India. We need lots of funds manpower etc. to make this vision a reality please contact us. Join us as a member for a noble cause.


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Date post:	15-Jan-2017
Category:	Health & Medicine
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Health insurance in india

Health & Medicine