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In the past Government had tried to provide a health insurance cover to selected beneficiaries either at the State level or the national level. However, most of these schemes were not able to achieve their intended objectives. Often there were issues with either the design or implementation of these schemes.
Keeping these handicaps in mind, the Government of India decided to design a health insurance scheme which not only avoids the pitfalls of the earlier schemes but goes a step beyond and provides a world class model.
A critical review of the existing and earlier health insurance schemes was done with the objective of learning from their good practices as well as seeking lessons from the mistakes. After taking all this into account and also reviewing other successful models of health insurance in the world in similar settings, the Rashtriya Swasthya Bima Yojna (RSBY) was developed to help the poor. The RSBY is a pioneering public-private partnership in health insurance.
The Rashtriya Swasthya Bima Yojna (RSBY) was launched on 1 April 2008 with the objective of providing protection to Below Poverty Line ( BPL ) households from financial liabilities arising out of health setbacks that involve hospitalisation.
The main features of the Rashtriya Swasthya Bima Yojana are:
- Empowering the beneficiary – RSBY provides the participating BPL household with freedom of choice between public and private hospitals and makes him a potential client worth attracting on account of the significant revenues that hospitals stand to earn through the scheme.
- Business Model for all Stakeholders – The scheme has been designed as a business model for a social sector scheme with incentives built for each stakeholder. This business model design is conducive both in terms of expansion of the scheme as well as for its long run sustainability.
- Information Technology (IT) Intensive – For the first time IT applications are being used for the social sector scheme on such a large scale. Every beneficiary family is issued a biometric enabled smart card containing their fingerprints and photographs. All the hospitals empanelled under RSBY are IT enabled and connected to the server at the district level. This will ensure a smooth data flow regarding service utilisation periodically.
- Safe and foolproof – The use of biometric enabled smart card and a key management system attempts to make this scheme safe and foolproof. The key management system of RSBY ensures that the card reaches the correct beneficiary and there remains accountability in terms of issuance of the smart card and its usage. The biometric enabled smart card ensures that only the real beneficiary can use the smart card.
- Portability – The key feature of RSBY is that a beneficiary who has been enrolled in a particular district will be able to use his/ her smart card in any RSBY empanelled hospital across India. This makes the scheme truly unique and beneficial to the poor families that migrate from one place to the other. Cards can also be split for migrant workers to carry a share of the coverage with them separately.
- Robust Monitoring and Evaluation – RSBY is evolving a robust monitoring and evaluation system. An elaborate backend data management system is being put in place which can track any transaction across India and provide periodic analytical reports. The basic information gathered by Government and reported publicly should allow for mid-course improvements in the scheme. It may also contribute to competition during subsequent tender processes with the insurers by disseminating the data and reports.
Problems and Challenges
According to Dr. Rumki Basu, Professor of Public Administration, Department of Political Science, Jamia Millia Islamia, RSBY has its share of challenges and problems. Only about one third of the total number of Indian districts (June 2010 figures) has seen the enrolment of the poor. About eight States (U.P., Maharashtra, Punjab, Haryana, Chhattisgarh, Gujarat, Bihar and Kerala) account for over 85 per cent of all enrolled districts. The rest of the 20 Indian States and Union Territories have been slow in enrolment of BPL families in RSBY. Thus a large geographical area and about two third of total districts are still outside RSBY coverage. Overall, just about 50 per cent of the poor in selected districts have been enrolled in RSBY. The exception is Kerala which reported 80% coverage with some districts enrolling almost the entire number of poor households.
It is also time for the State Governments to understand the way premiums are set. It might be the case that the States are complacent as the Central Government doles out the bulk of the premium amount. But the situation could rapidly change as more private players get into the scheme and hospitalisation rates go up. A careful analysis of hospitalisation and costs cannot be avoided if premiums have to be kept under control.
Marketing of the scheme
- Since RSBY was not mandatory for State Governments, the Central Government had first to convince state Governments of the scheme. RSBY could succeed only if all State Governments bought into the idea whole-heartedly. When the scheme was first launched, there was a severe shortage of hardware such as smart card printers and fingerprint scanners. This was rectified to some extent.
Increasing enrolment and utilisation
- Initially, there were problems registering BPL people because of migration, death and inaccurate data, and because people were simply unaware of the scheme and its possibilities, utilisation rates were low.
- The availability of the hospitals in remote areas is another major challenge in increasing utilisation of the scheme.
Capacity development of stakeholders
- To successfully implement a complex scheme like RSBY, capacity building is necessary at all levels. Building the managerial and conceptual capacities of the organisation and individuals involved has proved to be a major challenge.
- At the Central Government level, RSBY is still being operated by the Ministry of Labour and Employment. One of the most urgent and difficult problems in the developing world, more so in India is how to finance and provide health care for more than a billion persons, a third of them impoverished and belonging to the low income groups. In the absence of financial risk pooling, the poor have to meet the costs of health care from their own pocket resulting in severe indebtedness. The common dilemma facing policy makers is with regard to the need for a Government sponsored health insurance cover despite health services being provided ‘free’ in Government hospitals. Besides, ceiling of on money may prove too less for major surgeries in private hospitals. The medical college hospitals have to contend with delays in insurance payments. The Government hospitals, including the medical college hospitals, used to have the services of additional doctors and paramedical staff appointed on contract by the National Rural Health Mission. With the Mission trying to streamline its funds utilisation the hospitals sometimes have been reported to meet the salary expenses from the RSBY funds. The Government should review the process properly, plug the loopholes and in the mean time should also increase the investments as the cost of treatment has escalated significantly.