Government-Sponsored Health Insurance in India Are You Covered?
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Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Human Development DIRECTIONS INDEVELOPMENT Government-Sponsored Health Government-Sponsored Insurance inIndia Gerard La Forgia andSomil Nagpal LaForgia Gerard Are You Covered? Are You Government-Sponsored Health Insurance in India Government-Sponsored Health Insurance in India Are You Covered? Gerard La Forgia and Somil Nagpal © 2012 International Bank for Reconstruction and Development / The World Bank 1818 H Street NW, Washington DC 20433 Telephone: 202-473-1000; Internet: www.worldbank.org Some rights reserved 1 2 3 4 15 14 13 12 This work is a product of the staff of The World Bank with external contributions. Note that The World Bank does not necessarily own each component of the content included in the work. The World Bank therefore does not warrant that the use of the content contained in the work will not infringe on the rights of third parties. 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Under the Creative Commons Attribution license, you are free to copy, distribute, transmit, and adapt this work, including for commercial purposes, under the following conditions: Attribution—Please cite the work as follows: La Forgia, Gerard, and Somil Nagpal. 2012. Government-Sponsored Health Insurance in India: Are You Covered? Directions in Development. Washington, DC: World Bank. doi:10.1596/978-0-8213-9618-6. License: Creative Commons Attribution CC BY 3.0 Translations—If you create a translation of this work, please add the following disclaimer along with the attribu- tion: This translation was not created by The World Bank and should not be considered an official World Bank translation. The World Bank shall not be liable for any content or error in this translation. All queries on rights and licenses should be addressed to the Office of the Publisher, The World Bank, 1818 H Street NW, Washington, DC 20433, USA; fax: 202-522-2625; e-mail: [email protected]. ISBN (paper): 978-0-8213-9618-6 ISBN (electronic): 978-0-8213-9619-3 DOI: 10.1596/978-0-8213-9618-6 Cover photo: Suvarna Arogya Suraksha Trust, Government of Karnataka, Bangalore, India Library of Congress Cataloging-in-Publication Data La Forgia, Gerard M. (Gerard Martin) Government-sponsored health insurance in India [electronic resource] : are you covered? / Gerard La Forgia, Somil Nagpal. 1 online resource. — (Directions in development) Includes bibliographical references. Description based on print version record and CIP data provided by publisher; resource not viewed. ISBN 978-0-8213-9619-3 (epub) — ISBN 978-1-118-13415-3 (pbk.) (print) I. Nagpal, Somil. II. World Bank. III. Title. [DNLM: 1. National Health Programs—economics—India. 2. Delivery of Health Care—economics—India. 3. Health Expenditures—India. 4. Insurance Coverage—India. 5. Insurance, Health—India. 6. National Health Programs—organization & administration—India. WA 540 JI4] 362.10954—dc23 2012021079 Contents Foreword xv Preface xix Acknowledgments xxxv Abbreviations xxxvii Chapter 1 Introduction 1 Analytical Framework and Methods 6 Case Study Selection and Summaries 8 Notes 14 References 15 Chapter 2 Understanding the Context: The Development of Health Insurance in India 17 A Brief Review of Health Finance and Delivery in India 17 Financial Burden 24 Service Delivery Issues 25 Health Insurance in India: Context and Historical Development 27 Not Cut from Whole Cloth 27 v vi Contents Notes 30 References 33 Chapter 3 Results and Cross-Cutting Issues 37 Population Coverage 37 Enrolment and Beneficiaries 40 Benefits 47 Utilization 53 Expenditures and Costs 58 Rate Setting and Provider Payment 65 Provider Networks, Quality, and Patient Satisfaction 70 The Role of Public Hospitals 77 Financial Benefits and Burdens on Patients 81 Cost Containment 87 Institutional Arrangements and Managerial Capacity 92 The Political Economy of Demand- and Supply-Side Financing 101 Conclusion: Successes and Challenges 104 Annex 3A Statistical Annex 109 Annex 3B Methods Used for Population-Coverage Projections 110 Annex 3C Methods Used for Expenditure Projections 111 Notes 111 References 120 Chapter 4 Addressing GSHIS Operational Challenges 127 Promoting Governance and Coordination 128 Strengthening Purchasing and Contracting Practices 130 Reinforcing Cost Containment: (1) Provider Payment Systems 131 Reinforcing Cost Containment: (2) Additional Measures 138 Establishing Robust Monitoring and Data Use 140 Fixing Targeting Mechanisms 142 Introducing Quality-Based Purchasing 143 Contents vii Expanding Public Hospital Autonomy 147 Strengthening the Collection and Dissemination of Consumer Information 150 Notes 154 References 158 Chapter 5 Pragmatic Pathways to Universal Coverage 165 Building Blocks for Change 167 Pathways to Expanding Population Coverage and Benefit Coverage 169 Consolidation of CGHS and ESIS 182 How Are the Recommendations Linked to the Goals of the 12th Five Year Plan? 183 What about Private Health Insurance? 184 Estimating the Costs of the Proposed Schemes 186 Research Agenda 188 Annex 5A Summary of Proposed Expansion of Services 195 Notes 196 References 200 Appendix A Employees’ State Insurance Scheme 205 Appendix B Central Government Health Scheme 227 Appendix C Yeshasvini Co-operative Farmers Health Care Scheme, Karnataka 253 Appendix D Rajiv Aarogyasri Community Health Insurance Scheme 275 Appendix E Rashtriya Swasthya Bima Yojana 295 Appendix F Chief Minister Kalaignar’s Insurance Scheme for Life Saving Treatments 315 Appendix G Vajpayee Arogyashri Scheme, Karnataka 333 Appendix H RSBY Plus Scheme, Himachal Pradesh 345 viii Contents Appendix I Apka Swasthya Bima Yojana (Proposed), Government of National Capital Territory (NCT) of Delhi 357 Appendix J Tool for Collecting Information on Government- Sponsored Health Insurance Schemes in India 365 Glossary 375 About the Authors 401 Boxes 1.1 Indian Law and Health Insurance 8 2.1 India: Organizational Arrangements for Risk Pooling 22 3.1 India: Alternative Organizational Arrangements of Public Hospitals 78 3.2 India: Constraints to Introducing Ambulatory Care Benefits in Health Insurance 87 4.1 Thailand: Sentinel Hospitals Evidence for DRG Cost Weights 135 4.2 International Experiences with Pay-for-Quality Incentives 145 4.3 International Experience in Public Hospital Reform 149 4.4 Areas of Consumer Information and Corresponding Questions 152 5.1 Extending Coverage to the Informal Sector: Lessons from Middle-Income Countries 170 5.2 Health Care Coordination in OECD Countries: Lessons for India? 174 5.3 International and Indian Experiences with Ambulatory Package Rates 179 5.4 Does India Have Fiscal Room to Finance Coverage Extension by 2015? 189 Figures 2.1 India and Comparators: Public Expenditures on Health as a Share of GDP and in Relation to Income per Capita, 2008 19 2.2 India: Main Actors and Fund Flows in Health System, ca. 2005 21 Contents ix 2.3 India and Comparators: Household Spending on Health Exceeding Thresholds 24 2.4 India: A Genealogy of Government-Sponsored Health Insurance Schemes 28 3.1 India: Households Falling below Poverty Line due to Inpatient and Outpatient Health Care Costs, Selected States, 2004 86 3A.1 India: Estimated Health Insurance Coverage, 2003–04, 2009–10, and 2015 109 3A.2 India: Estimated Health Insurance Expenditures 110 4.1 India: Data Infrastructure for Strengthening Package Rates, Bottom-Up Approaches for the Short and Long Term 133 5.1 India: Evolution of Health Financing Systems, by Income Level 168 5.2 Financial and Benefit Flows of Proposed Schemes 171 A.1 ESIS Institutional Framework 208 A.2 ESIS Beneficiaries, 1994–95 to 2009–10 210 A.3 ESIC: Revenue and Expenditure Trends, FY2000–2010 214 A.4 ESIS: Per Capita Spending, Selected States, 2008–09 216 A.5 ESIS: Trends in New Outpatient Visits for Common Causes, 2000–01 to 2008–09 218 A.6 ESIS: Trends in New Outpatient Visits, 2000–01 to 2008–09 219 A.7 ESIS: Trends in Hospital Admissions, 2000–01 to 2008–09 221 B.1 CGHS: Institutional Framework 230 B.2 CGHS: Trends in Total Estimated Expenditure, 2001–02 to 2009–10 238 B.3 GOI Spending on CGHS, by Major Expenditure Component, 2001–02 to 2009–10 239 C.1 Yeshasvini Institutional Framework 256 C.2 Yeshasvini: Trends in Number and Value of Claims, 2003–04 to 2009–10 262 C.3 Yeshasvini: Trends in Specialty Claim Shares of Total Claims, by Value, 2003–04 to 2009–10 263 C.4 Yeshasvini: Trends in Number of Claims, by Specialty, 2003–04 to 2009–10 264 C.5 Yeshasvini: Trends in Average Claim Values, Different Districts, 2006–07 to 2009–10 265 x Contents C.6 Yeshasvini: Contribution, Subsidy, and Expenditure, 2003–04 to 2009–10