Rashtriya Swasthya Bima Yojana (RSBY) for Universal Health Coverage

Abstract

On 10 June 2012, Anil Swarup, Additional Secretary, Ministry of Labour & Employment, Government of India (GOI), reviewed the report submitted to the Planning Commission of India by High Level Expert Group (HLEG) on universal health coverage (UHC) for India; 1 he had mixed feelings about this report. It (HLEG) reported that the main impeding factor to UHC in India is the heavy out-of-pocket (OOP) expenditure on health, that is, 61.7 per cent of the total health expenditure by Indians as compared to the global average of 20.5 per cent. Looking for a solution for this problem, the report appreciated his brainchild, the Rashtriya Swasthya Bima Yojana (RSBY), a social health insurance scheme rolled out in 2008 to reduce OOP expenditures for healthcare. The scheme also aimed to cut down a substantial financial burden on the poor by the GOI. The RSBY scheme was lauded for its innovative approach in financing mechanism, 2 public private partnership (PPP) model for enrolment process, use of information and communication technology for delivery of healthcare services. However, the report questioned the potential of RSBY to achieve UHC due to issues in its sustainability. The scheme faced challenges of low coverage ratio, unfair practices in enrolment and hospitalization processes in many parts of the country, inconsistent usage patterns of services, and backing out by insurance companies as result of high claims ratio. 3 Swarup was in a dilemma of how to address these issues and make RSBY a platform to implement universal health coverage (prime area of concern for GOI) in India.

This case was prepared for inclusion in Sage Business Cases primarily as a basis for classroom discussion or self-study, and is not meant to illustrate either effective or ineffective management styles. Nothing herein shall be deemed to be an endorsement of any kind. This case is for scholarly, educational, or personal use only within your university, and cannot be forwarded outside the university or used for other commercial purposes.

2024 Sage Publications, Inc. All Rights Reserved

Resources

Exhibit 1: Healthcare Scenario in India

The Indian healthcare industry is full of paradoxes. On the one hand, it has the largest number of medical colleges in the world; it produces the largest number of doctors in the developing world. Doctors produced from these medical colleges spread across the globe, and they are considered among the best in the world. Indian hospitals get medical tourists from many developed countries reflecting the high standard of medical skill and expertise here. They seek care in its state-of-the-art, high-tech hospitals which compare with the best in the world. India is the fourth largest producer of drugs by volume in the world and is among the largest exporter of drugs in the world. Despite all these resources, the majority of citizens have very limited access to quality healthcare services, and have poor health indicators. Still one-fourth of our children remain unimmunized till the age of one year. Similarly, a minimum of three antenatal care check-ups (WHO, 2013) during pregnancy remains unavailable for half of all pregnant women. As a result, India’s Infant Mortality Rate (IMR) and Maternal Mortality Ratio (MMR) lagged behind the average for the low and middle income countries (LMIC), as did the country’s overall life expectancy. On the resources front, the Indian healthcare sector faced shortages of workforce and infrastructure. India has over 600,000 physicians with a density of 0.60 physicians per 1000 population. The number of specialist nurse per 1000 population is 0.80 whereas the number of dentists is lower, that is, 0.08 as per WHO (2006). The ratio of doctors to patients is only 0.04 in rural areas against 1.90 in urban India. Hospital bed density in the country was 0.67 per 1000 population in the year 2002, well below the global average of 2.6 and WHO benchmark of 3.5 which has just increased to 1.3 per 1000 population in the year 2010. Rural Health Statistics (RHS) 2012 pointed out that there is shortfall of 43,776 Sub-centres (SCs, 23 per cent), 7954 Primary Health Centres (PHCs, 26 per cent) and 3044 Community Health Centres (CHCs, 40 per cent) across the country. Of the total health spending in the country, all levels of government make just one-fourth, while the remaining major portion is shelled out by ordinary citizens from their pockets. This makes the healthcare system in this country one of the most privatized systems in the world. Taking loans or selling assets pays for two out of five hospitalization episodes. Health insurance including the Central Government Health Scheme (CGHS), Employees’ State Insurance Scheme (ESIS), Government Sponsored Schemes and Private Health Insurance covered approximately 302 million individuals or 25 per cent of India’s population in 2010.

Exhibit 2. Premium Rates, Coverage Amounts and Sources of Revenue under Different Schemes

Scheme

Beneficiary Contribution

Subsidies

Average Premium Rates * (in ₹)

Coverage Amount (in ₹)

RSBY

No

100%, Centre (75%) and State (25%)

400 to 750

30,000 per family per year

Rajiv Aarogyasri Scheme (AP)

No

100%, State

267

150,000 per family per year with additional buffer of 50,000

Kalaignar (TN)

No

100%, State

NA

150,000 per family per year with additional buffer of 50,000

Vajapayee Arogyasri Scheme (KN)

No

100%, State

469

100,000 per family (floating over 4 years)

Yeshasvini (KN)

Yes

40%, State

150

200,000 per person

RSBY Plus (HP)

No

100%, State

NA

175,000 over the RSBY cover of 30,000

Notes:

*Per family per year.

NA—Not Applicable, Scheme does not charge any amount.

Source: Scheme documents and reports.

Exhibit 3. State-wise RSBY Cards Issued (in ‘000) to BPL Families

Figure

Notes:

Data are provisional. Length of bars in the chart is not to scale. Percentages denote the conversion rates in enrolment. Numbers in the bracket with name of the states denote number of active district(s).

*Data for Kerala includes state BPL families.

**Data for Rajasthan pertain to families under MGNREGA.

Source: http://www.rsby.gov.in/overview.aspx cited on 19 June 2012.

Exhibit 4. State-wise No. of Healthcare Providers Empanelled and BPL Families Enrolled

State

Districts Selected

Private Hospitals

Public Hospitals

BPL Families Enrolled

BPL Families Still Not Enrolled

Arunachal Pradesh

14

2

39,615

50,697

Assam

5

27

22

204,548

290,381

Bihar

38

767

37

7,417,064

7,594,506

Chandigarh

1

8

3

4,913

4,755

Chhattisgarh

18

302

453

1,673,015

803,409

Delhi

10

129

95,597

892,227

Gujarat

26

1134

412

1,810,326

1,829,308

Haryana

21

658

58

584,995

792,994

Himachal Pradesh

12

38

170

235,131

60,552

Jammu and Kashmir

14

3

2

35,134

30,871

Jharkhand

24

239

262

1,553,973

1,385,139

Karnataka

30

425

317

1,680,913

1,990,291

Kerala

14

200

153

1,748,471

862,848

Maharashtra

32

1181

15

2,079,768

2,417,993

Manipur

3

4

50,862

29,337

Meghalaya

5

8

65

74,702

94,003

Mizoram

8

13

74

43,256

26,043

Nagaland

11

7

1

101,124

30,058

Orissa

30

116

284

3,321,149

1,970,822

Pondicherry

1

9,345

5,797

Punjab

20

354

165

221,979

225,715

Rajasthan

7

353,713

393,600

Tripura

4

29

317,359

127,950

Uttar Pradesh

72

1392

676

3,882,413

6,944,528

Uttarakhand

13

88

85

338,879

274,074

West Bengal

19

483

1

4,545,239

3,104,104

Total

452

7576

3286

32,423,483

32,232,002

Source: http://www.rsby.gov.in/Overview.aspx as on 9 September 2012.

Exhibit 5. Availability and Utilization of Healthcare Facilities for RSBY Scheme

State

Avg. Hosp. Ratio per Smart Card (%)

Claim/Burn Out Ratio (%)

Assam

0.24

27.70

Bihar

4.33

60.61

Chhattisgarh

3.27

48.47

Delhi

11.76

115.86

Goa

0.20

27.65

Gujarat

14.53

128.37

Haryana

7.96

82.14%

Himachal Pradesh

2.32

46.46

Jharkhand

4.36

67.77

Kerala

13.45

100.20

Maharashtra

4.78

66.04

Nagaland

8.89

136.14

Punjab

2.82

54.51

Tamil Nadu

3.46

46.86

Uttar Pradesh

7.21

86.97

Uttarakhand

2.19

50.16

West Bengal

3.92

72.08

Chandigarh

0.31

32.94

Total

7.15

79.66

Note: Data from 145 districts that have completed one year of RSBY policy in November 2010.

Source: Data/Information from the Scheme.

Exhibit 6. A Public Private Partnership Model of RSBY

Figure

Source: Swarup (2008).

Exhibit 7. Package Rates for Similar Procedures, 2009-2010 (in ₹)

Procedures

Rajiv Aarogyasri Scheme (AP)

Kalaignar (TN)

Yeshasvini (KN)

Vajapayee Arogyasri Scheme (KN)

RSBY

Coronary bypass surgery

95,000

90,000

60,000

95,000

Up to 30,000

Coronary angioplasty

60,000

60,000

25,000

60,000

Transurethral resection on prostate

30,000

25,000

12,000

20,000

14,250

Nephrolithotomy

10,000

25,000

14,000

10,000

10,000

Nepherectomy

40,000

40,000

14,000

10,000

10,000

Appendectomy

18,000

NA

9,000

NA

6,000

Cholecystectomy

20,000

25,000

9,000

NA

10,000

Hysterectomy

20,000

25,000

6,000

NA

10,000

Tympanoplasty

15,000

NA

3,500

NA

7,000

Normal delivery

NA

NA

NA

NA

2,500

Note: NA: Not Applicable, Service Not Covered.

Source: Scheme documents and websites of various schemes.

Exhibit 8: RSBY Process Flow (Swarup and Jain, 2011)

RSBY involves a set of complex but well-defined processes (Exhibit 8 Figure). The process flow for RSBY is as follows:

  • Once the decision to implement RSBY is taken by a state government, an independent body, a State Nodal Agency, is set up.
  • The State Nodal Agency collects/prepares BPL data in the specified RSBY format.
  • Once the data is prepared, an insurance company is selected through an open bidding process.
  • Annually, an electronic list of eligible BPL households is provided to insurers by the state. An enrolment schedule for each village, along with dates, is prepared by the insurance company with the help of district officials. The insurance company is given a maximum of four months to enrol BPL families in each district.
  • Insurance companies are required to hire intermediaries to reach the beneficiaries. In addition, the list of BPL families is posted in each village at the enrolment station and in prominent places prior to the enrolment camp. The date and location of the enrolment camp are also publicized in advance.
  • Mobile enrolment stations are established at local centres (for example, public schools) in each village at least once a year. These stations are equipped by the insurer with the hardware to collect biometric information (fingerprints) and photographs of the members of the household covered and a printer to print smart cards with photo. The smart card, along with an information brochure describing benefits, hospitals in network, etc., is provided to all enrolees once they have paid the ₹30 (US$0.50) registration fees. The process normally takes less than ten minutes.
  • A government official from the district (field key officer, FKO) needs to be present at the camp and must insert his own government-issued smart card and provide his fingerprint to verify the legitimacy of the enrolment. In this way, each enrolee can be tracked to a particular official. In addition to the field key officer, an insurance company/smart card agency representative is present at the enrolment camp.
  • At the end of the enrolment camp, a list of enrolled households is sent to the State Nodal Agency by the insurer. The list of enrolled households is maintained centrally.
  • Before commencement of the enrolment process, the insurance company empanels both public and private hospitals. Each empanelled household is provided with Hospital Authorization Cards (HAC) in the form of smart cards with unique identification numbers.
  • A beneficiary, after receiving the smart card and after the start of the insurance policy, can visit any empanelled hospital across the country to avail the benefits.

Figure

Source: Swarup and Jain (2011).

This case was prepared for inclusion in Sage Business Cases primarily as a basis for classroom discussion or self-study, and is not meant to illustrate either effective or ineffective management styles. Nothing herein shall be deemed to be an endorsement of any kind. This case is for scholarly, educational, or personal use only within your university, and cannot be forwarded outside the university or used for other commercial purposes.

2024 Sage Publications, Inc. All Rights Reserved

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