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History
1883-84 (Germany):
Compulsory accident and sickness
insurance.
The same concept was also adopted by Great Britain, France,
Chile, the Soviet Union, and other nations after World War I.
1946 (Britain): NHI (came into effect in 1948)
- provided the compulsory medical care plan.
- providing free medical attention by participating doctors of National Health
Service.
- The cost was met by the national government.
Definition
Financial mechanism in which people are protected
against catastrophic financial burden arising from
unexpected illness or injury.
The reduction or elimination of the uncertain risk of loss
for the individual or household by combining a larger
number of similarly exposed individuals or households
who are included in a common fund that makes good the
loss caused to any member.
Principles of HI
Prepayment and risk pooling: Individuals or families pay when
they are healthy and are able to pay. However, when they are
affected by illness, the insurance fund can be used to finance
their healthcare needs.
Health insurance functions when there are large numbers
enrolled. This is because with large numbers, the chances of
adverse events are reduced and so is the outflow from the
insurance fund .
Solidarity: A successful health insurance programme requires
people to contribute, knowing fully well that their contribution
may not help them directly, but will help others who require
the support.
Equity: This promotes cross-subsidy between equals and also
between unequals .
Functions of HI
To increase access to healthcare
To protect households from high medical expenses at the time of illness.
Risks in HI Programme
1. Adverse Selection:
Normally we expect that both the healthy and sick would enrol in a health
insurance programme. However, there is a chance that the sick will enrol in
larger numbers as compared to the healthy. Thus the programme becomes
unviable.
Health insurance company has to accurately estimate the level of risk. But it
difficult to have complete information on the risk status of person.
So premium is set at an average risk level. So policy becomes expensive for low
risk customers, who therefore may choose not to buy insurance. Hence, best
risks select themselves.
2. Moral Hazard:
People are less fearful of illness, once they are insured,
which can change the way in which they act.
Insured consumers have an incentive to over-consume
healthcare which they would not choose if they were
directly paying for them.
They may not bother to follow a healthy lifestyle or to get
preventive check-ups.
Doctors too are tempted to over-treat and over-prescribe
medicines for their patients, knowing that costs of treatment
are covered by insurance.
Market &
Employer
based Schemes
Social
Government
or State based
Schemes
Community based/
Micro-insurance
NGO or
Cooperative
based CHI
Govt.
Donations
Health Fund
insured
SHI
Employment state
Insurance Scheme
(ESIS)
Central Govt.
Health Scheme
(CGHS)
CGHS
The CGHS was introduced in 1954 as a contributory health
scheme to provide comprehensive medical care to the
central government employees and their families.
Currently, there are approximately 5.5 million beneficiaries.
The staff contributes a nominal amount (ranging from Rs 30
to Rs 300 per month) from their salaries.
It provides service through Allopathic and AYUSH systems of
medicine.
Beneficiaries
Besides Central Government employees, the scheme also
provides services to:
Members and Ex-members of Parliament.
Judges of the Supreme Court and High Court (sitting and
retired).
Freedom Fighters.
Central Government Pensioners, Employees of Autonomous
bodies .
Ex-Governors and Ex-Vice-Presidents of India
Facilities
The benefit package includes both outpatient care and
hospitalization. The medical facilities are provided through
Wellness Centres and polyclinics .
248 Allopathic dispensaries
19 polyclinics
78 Ayush dispensary/units
3 Yoga Centres
65 Laboratories
17 Dental Units
Also uses the facilities of the government and approved private
hospitals to provide inpatient care and reimburses the expenses
to the patient.
Problems
Equity: In a country where the government spends about
few % of the GDP on healthcare, it is unacceptable that a
sizable amount of this goes to the better-off section of the
society.
Demand side moral hazard: It is noted that more than 80%
of the hospitalized patients are self-referred. It appears that
most patients prefer to bypass the dispensaries and directly
avail of specialist services .
Poor quality care: There are regular complaints about long
waiting periods, inadequate supply of medicines and
equipment and unhygienic conditions
High out-of-pocket expenditure
FINANCING
Pay/pension
<3,000
3001-6000
6001-10000
10001-15000
>15000
Contribution
(Rs/month)
15
40
70
100
150
O.P.D.
PRIVATE HOSPITAL
SERVICES
LAB. INV.
RADIODIAGNOSIS
FACILITIES
PAEDIATRIC
IMMUNIZATION
I.P.D
OPTICAL &
DENTAL AIDS
A.N.C
P.N.C
ESIS
ESIS
1948/ ESI ACT
1989/ amendment
establishment
Factories/compani
es/organizations
>10 employees
<15,000/- pm
SALIENT FEATURES:
Largest SHI scheme in India
Provide both medical & cash benefits
EMPLOYEE
EMPLOYER
1.75% OF WAGE
4.75% OF WAGE
E.S.I Corp.
MEDICAL
SICKNESS
DISABLEMENT
REHABILITATION
MATERNITY
EMPLOYEES
BENEFITS
IN
ESI SCHEME
FUNERAL
DEPENDANT
Over half of those covered do not seek care from ESIS facilities
because of unsatisfactory nature of ESIS services, low quality
drugs, long waiting periods, impudent behavior of personnel,
lack of interest or low interest on part of employees and low
awareness of ESI procedures.
Under the ESIS, there are 145 hospitals, 42 annexes and 1,398
dispensaries with over 19387 beds facilities; and 1678
empanelled private practitioners.
Act does not include employees of Indian navy, military or air
force; or whose wages exceed Rs. 15000 or as prescribed by the
Central Government .
To avail of the sickness benefit, the employee has to have
worked for 78 days prior to the sickness. Similarly, to avail of
the maternity benefit, the woman has to have worked for 70
days prior to the sickness.
Coverage
Coverage (As on 31st March, 2014)
(in crores)
1.95
No. of Employees
1.74
7.58
0.29
0.06
Contribution
State Governments share 1/8th of expenditure on medical
treatment and 7/8 being borne by the ESIC.
Benefits
Sickness Benefit: Sickness Benefit in the form of cash
compensation at the rate of 70 per cent of wages is payable to
insured workers during the periods of certified sickness for a
maximum of 91 days in a year. In order to qualify for sickness
benefit the insured worker is required to contribute for 78
days in a contribution period of 6 months.
Maternity Benefit: At the rate of full wages for a period of 84
days in case of pregnancy, 6 weeks in case of miscarriage or
MTP, which is extendable by further 1 month on medical
advice at the rate of full wage subject to contribution for 70
days in the preceding year.
Disablement Benefit: In cash, 90% of the wages is given to the
temporary disabled person during the period of disablement.
In case of permanent disablement, the payment is made at
the same rate for the whole of his life in the form of pension.
Problems
Less than half the enrolees use the ESIS facilities because of
the low quality of care
Many of the staff are not aware of the benefits. The
employers also do not disseminate the information to their
staff .
There is duality of control, with both the ESIC and the State
governments trying to establish superiority
Poor penetration in rural areas
Beneficiaries
RSBY provides for cash-less, smart card based health
insurance cover of `30,000 per annum to each enrolled
family, comprising up to 5 individuals, which includes the
head of household, spouse and up to 3 dependents.
The beneficiary family pays only Rs. 30 per annum, while
Government pays the premium to the insurer selected by the
State Government on the basis of a competitive bidding.
The scheme covers hospitalisation expenses (Out-patient
expenses are not covered), including maternity benefit, and
pre-existing diseases.
Financing
The premium payable to insurance agencies is funded by
Central and State Governments in a 75:25 ratio, which is
relaxed to 90:10 for the N-E region and J & K.
The maximum premium by the Central Government is
limited to `750 per insured family per year.
In the Union Budget for 2012-13, the government made a
total allocation of about 1100 crores towards RSBY.
Facts
RSBY was originally limited to BPL families but was later
extended to building & other construction workers, MNREGA
beneficiaries, street vendors, beedi workers and domestic
workers.
The scheme is currently being implemented in all 36
States/UTs.
Key feature of RSBY is that it provides for private health service
providers to be included in the system, if they meet certain
standards and agree to provide cash-less treatment which is
reimbursed by the insurance company.
About 1,06,30,269 persons have availed hospitalisation under
the scheme till September 2015 and the number of Active
smart cards issued is 4,04,30,279.
Advantages of RSBY:
Empowering the Beneficiary: Freedom of choice to BPL
Policy holder to choose hospitals.
IT intensive: Every beneficiary family is issued a biometric
enabled smart card containing their photographs and
fingerprints. All hospitals empanelled under RSBY are IT
Enabled and connected to the server at the district level.
Safe and Foolproof: The use of the biometric card and a key
management system makes this scheme safe and foolproof.
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To make it
Equitable
Affordable
Accessible
Qualitative
for the poor
& vulnerable
CHALLENGES
FOR SHI
In
INDIA
Asymmetric information
regarding schemes
Difference in
Demographic
Epidemiological
Delivery
capacity Of
health system