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CEHAT – TISS conference on Health Insurance and Universal Health Care (UHC) in India - Core findings and recommendations 13th and 14th of October, 2017, held at TISS, Mumbai

Core findings and recommendations emerging of the CEHAT – TISS conference on Health Insurance and Universal Health Care (UHC) in India

13th and 14th of October, 2017, held at TISS, Mumbai


The context: The Centre for Enquiry into Health and Allied Themes and the School of Health System Studies, Tata Institute of Social Sciences (Mumbai) collaborated to organize a joint conference on Health Insurance and its role in Universal Health Care.  The National Health Policy 2017 seeks to progressively achieve Universal Health Coverage. For secondary care hospitalization and tertiary care services, it seeks to strategically purchase services largely through insurance schemes. Thus in the larger context of ensuring Universal Health Coverage (UHC), government funded health insurance schemes seek to play a very large role. However, there is a need to ask critical questions such as: What have been the various bottlenecks, successes and failures of the existing national and state level insurance schemes? What are the lessons learnt so far for these to be scaled up? What have been the experiences of the users? What has been the experience of for-profit private health sector? What are the pros and cons for adopting the insurance approach to realize the goal of Universal Health Care? What are the crucial gaps that need to be addressed for health systems strengthening for UHC and how? This was the core focus of the CEHAT TISS conference.

Experts in the area were invited to share the findings of studies undertaken by them across the country on national as well as state level insurance schemes. We also invited studies by young researchers that were reviewed and cleared by a Technical Advisory Committee. Presentations were made, issues were discussed and debated. At the end of the one and half days, there was a clear consensus amongst the participants of the conference regarding the various evidence based findings from studies presented.

  1. Mis-targeting: All the national and state level insurance schemes have identified target populations that are eligible for the scheme.
  • There was clear evidence that these targeted insurance schemes faced a serious issue of mis-targeting or missing the target all together.
  • The marginalized poor populations, which are the beneficiaries of the scheme, have been found it difficult to access the schemes.
  1. Problems with using BPL list to identify beneficiaries:
  • There is a fundamental problem with using the Below Poverty Line (BPL) lists to identify and target beneficiaries due to criteria laid down – a debate that has been ongoing for decades.
  • It has been consistently found that those who fall below the poverty line are often not included in these lists and those who are well off have been known to have their names included.
  • Furthermore, these lists are also not updated, leaving the numbers constant, thereby leading to further exclusion of new beneficiaries.
  • Moreover, schemes that only cover BPL families, also omit APL population, particularly those that are just above the poverty line. These families too face catastrophic health expenditure and subsequent poverty due to health care costs.
  • Highly marginalized populations such as migrants, newly married, separated or widowed women are unable to enroll due to lack of identification proof.
  1. Very poor enrollment under the scheme and inefficient spending:
  • Despite the aim of full coverage of eligible population by 2012, in reality even today, very limited population of eligible population is covered under various schemes. State level variations are substantial and range from less than 5% to up to 65%.
  1. Limited impact on out of pocket (OOP) expenditure: Evidence across multiple studies presented has revealed that there is persistent OOP for healthcare despite using the schemes. The reasons for these are several –
  • These OOPs arise due to travel costs, unavailability of diagnostics and medicines at the empanelled hospital and so on.
  • OOPs also arise due to the narrow focus of the scheme on tertiary services versus the continuum of care approach. Maximum expenditure by patient is incurred prior to reaching the tertiary care hospital.
  • The inclusion of private sector under the scheme has not necessarily lead to increase in access and availability of tertiary care services. There has been inequitable empanelment of private hospitals and patients have been known to have to continue to travel across districts to avail healthcare services in order to avail benefits under insurance schemes.
  1. Schemes are not cashless as laid down: Both national and state level insurance schemes are supposed to be cashless.
  • However, the system of reimbursement, particularly for diagnostics and medicines, is common practice under the schemes. This essentially requires the patient to first pay up the required money for diagnostics and medicines at the time of seeking these from an external source. The bills are subsequently reimbursed. Thus the patient and the family are required to cough up significant amounts to start with.
  • The time taken; the delays and the unpredictability of actually receiving the reimbursements further disadvantage the patient who have often travelled from distant places to avail the scheme having been informed that it is cashless.
  • If these are outstation patients, then the follow ups to claim and collect these reimbursements add to their cost and inconveniences them and adds to their OOPs. Several grievances were also found to have been registered as the reimbursements have not come through.
  1. Public money but private means: Government insurance schemes are tax funded. Thus public money which hitherto went to the public sector, now through insurance schemes, gets directed to the private sector. This is highly problematic –
  • Instead of increasing expenditure on public health, a large chunk of the limited budget is being directed away from it. This compromises an already struggling public sector.
  • It is being directed to a sector which has hitherto not been monitored nor regulated and is known to practice irrational care. This can lead to supply side moral hazard.
  • Leads to an overall increase in the cost of healthcare.
  • Moreover, is it not irrational to expect the private sector play the role of the public sector or align itself to public sector goals?
  • Why are the public hospitals expected to compete with the private sector for public resources?
  1. Lack of Continuum of care approach: Insurance schemes at national and state level either focus on secondary and tertiary care or just tertiary care. In India, maximum OOPs are incurred as a result of outpatient costs. Thus the impact of insurance schemes in giving financial protection to the poor is doubtful as a result of the lack of continuum of care approach.
  1. Issue of supply side moral hazard (both private and public sectors): the private sector is known for irrational care and diagnostics and there is no monitoring or regulation of the quality or rationality of care provided.
  • Private sector hospitals were found to be staffing a large staff for the purpose of “recruitment” under insurance schemes with the purpose of using “business in numbers” model. Thus, while the cost of procedures in the private sector is more than laid down through insurance packages, higher numbers of patients and “quick exits” (procedures that do not require long term medical management or repeated hospitalization) are preferred. This then gives them access to a huge proportion of the population (being paid for by public money), that was so far not a part of their “client” list. 
  • There is thus a high risk of supply side moral hazard in case of the private sector.
  • State schemes wherein there was incentive to recruit patients under the scheme were also found to delay patient care until required procedure covered under the scheme (Chief Minister’s Comprehensive Health Insurance Scheme, Tamil Nadu). There is thus also the possibility of supply side moral hazard in the public sector.
  1. Complete absence of monitoring and regulation: the partnership with the private sector is not only being promoted in the absence of monitoring of the sector which has no accountability to the public. It was also found that charitable hospitals are shirking their responsibilities and not only not providing the stipulated free inpatient and outpatient care (legally mandated 10%), but also not participating in insurance schemes at the pretext of being overburdened already. Under these circumstances to enter into partnerships can prove nothing short of disastrous. To add to this, even the insurance schemes are not monitored and regulated stringently given the fact that the private sector now has access to a much larger and more vulnerable client pool as well as public money. Such a state of affairs is unacceptable.
  1. Evidence against strategic purchasing from the private sector: There is sufficient evidence to argue against the adoption of strategic purchasing. No health care services should be purchased from the private sector through any kind of purchase model. Instead, direct provision of health care by the government should be continued. All government subsidized health insurance programmes, excluding ESIS, should be folded up and this would free up a lot of resources of the government which could be directed to public health care delivery system. 
  1. Strengthening the public sector and primary care services leads to greater utilization, reduction in barriers, reduction in OOPs, reduced cost for the government:
  • Strengthening the public sector versus targeted insurance schemes is not only cheaper but also more universal.
  • Analysis of NSS data (71st Round) show that cost of providing primary health care services including non communicable diseases less than half of that in the private sector.
  • Universal Health Coverage pilots from Tamil Nadu also show that strengthening public facilities increases utilization and reduce OOPE substantially.
  • Thus investments made in the public sector to strengthen it would result in an increased access to health services for a larger and marginalized poor population which can then avail the same services directly through the public sector, rather than going through several layers of procedures to seek access after having already incurred a huge expense in outpatient costs. It also needs to be kept in mind that access to tertiary care services is usually in a state of multiple vulnerabilities from the perspective of the patient. Thus not only are they poor, but by the time they reach tertiary health care services, their health and finances are seriously compromised. Then to expect them to maneuver around the various procedures of availing insurance schemes, the procedures then actually prove to be barriers towards seeking healthcare. The poor and the marginalized should have free and easy access to health services made available through the public sector.
  • Moreover, even if the BPL lists are faulty, covering every member and ensuring 100% coverage requires budgetary allocations running into thousands of crores. This would be a huge chunk coming out of the public health budget. Some states were also found to spend up to a quarter of its health budget on insurance schemes that were still not ensuring complete coverage.
  1. Inefficient spending:
  • Several insurance schemes have incurred claims ratio what are very low. This could be an indirect indicator of inefficient spending or TPAs could also be lowering enrolment.
  • Moreover, the loading cost is too high and most states have allowed the insurance companies to keep at least 20% of the total premium revenue towards their so called administrative cost.
  • There is a large fragmentation of the insurance pool. There should be only one insurance pool per state.
  1. Financial coverage is completely lacking: Catastrophic expenditure is very high. Why do people still incur OOP to access services? The public investment has to be increased more than 1 % of the GDP and new health care financing initiatives should be explored rather than getting into the insurance trap especially when the resources are limited.


Recommendations and Conclusion:

  1. Government needs to increase the investment in the health sector and use this to strengthen primary health care services including for non communicable disease.
  2. Universal Health care is not the same as Universal Health Coverage. It refers to a publicly managed health system giving free, comprehensive and quality health care to all.  Its foundation is in the rights based accountability framework with four major components that are provisioning of care; regulation and governance; financing and addressing social determinants of health.
  3. Moreover, costs of service provision in the public sector are much less than in the private sector. Strengthening the public sector would be cheaper and has been proved to increase utilization even in case of non-communicable disease. It also promotes the continuum of care approach and would contribute significantly towards reduction of high cost of out-patient care for the poor protecting them from impoverishment. This is the key way forward to ensure universal health care and equity.
  4. Strategic purchase of health services from the private sector through insurance schemes does not protect the poor from financial risk. It has also been proved that it does not promote equity and universal health coverage. It in fact exacerbate the situation further. The marginalized continue to face catastrophic health expenditures and continued high OOPs. The schemes are also not cashless as laid down. They are in fact now facing increased barriers in accessing health care due to insurance schemes. The targeted approach has failed miserably.
  5. Moreover, through strategic purchasing, tax money is being utilized to fund further growth of the private sector and it is getting access to a larger client pool at the cost of limited public money. There is a very real risk and possibility of supply side moral hazard.
  6. In general, there should be strict monitoring and regulation of the private sector with implementation of standard treatment guidelines also focusing on quality of care and cost. The public sector too should be regulated for quality of care and services and patients rights.
  7. Universal health coverage necessitates universal access. Focus should be on removal of barriers towards ensuring free access to quality health care across all levels of health services.
  8. Use of generic drugs should be promoted and there should be quality control of generic drugs as well.


The conference presenters/contributors and participants include:

Dr VRM Muraledharan, Dr Nishant Jain, Dr Sakhtivel Selvaraj, Dr Sundaraman, Dr Soumitra Ghosh, Dr Lakshmi Lingam, Ms. Sulakshana Nandi, Shri Sunil Nandraj, Dr Padma Bhate – Deosthali, Dr HKV Narayan, Dr LaxmiTej Wundavalli, Dr Badrity Diengdoh, Dr Arupendra Mozumdar, Ms. Rajalakhsmi Prakash, Dr Varsha Gupta, Dr Nitika Sharma, Dr Yashica Chugh, Dr Divya Monga, Dr Soumya Moosa, Dr Utsav Mehta, Dr Narayan Rathod, Dr Aunj Gupte, Ms Sangeeta Rege, Ms. Tejal Jaitly, Ms Surabhi Shrivastava, Ms Anupriya Singh.