In India more than two third of expenditure on health is through Out of Pocket (OoP) which is the most inefficient and least accountable way of spending on health. The Unorganized Workers Social Security Act (2008) was enacted by the Parliament to provide for the social security and welfare of the unorganized workers. This act recommends that the Central Government should provide social security schemes to mitigate risks due to disability, health shocks, maternity and old age which all unorganized workers get exposed to and are likely to suffer from.
Supply side financing on health alone has not been found to be successful in reducing OoP expenditure on health substantially and therefore, to test the demand side financing approach, Government of India, decided to introduce Rashtriya Swasthya Bima Yojana (RSBY) a Health Insurance Scheme for the Below Poverty Line families with the objectives to reduce OoP expenditure on health and increase access to health care.
Objective of RSBY-To provide financial protection against catastrophic health costs.
To improve access to quality health care for below poverty line households and other vulnerable groups in the unorganized sector.
RSBY was launched in early 2008 and was initially designed to target only the
Below Poverty Line (BPL) households, but has been expanded to cover other
defined categories of unorganised workers.
The premium cost for enrolled beneficiaries under the scheme is shared by Government of India and the State Governments.
Beneficiaries under RSBY are entitled to hospitalization coverage of up to Rs. 30,000 for most of the diseases that require hospitalization.
Government has even fixed the package rates for the hospitals. Since 1st April, 2015, it has been transferred to Ministry of Health & Family Welfare on “as is where is” basis.
Health Protection Scheme
New health protection scheme which will provide health cover up-to rupees one lakh per family. For Senior citizens of the age 60 years and above belonging to this category,an additional top-up package up to Rs.30,000 will be provided.However, the HPS needs careful design, as otherwise, well-recognised market failures in medical insurance schemes would effectively ensure that each entitled household runs up the full limit of Rs.1 lakh per year on benefits, with scant improvement in well-being.
NITI Aayog has proposed few measures for improving the scheme such as:
All MBBS doctors in the rural areas, trained as family physicians, would be contracted by the government and paid in accordance with the number of patients who avail their primary health-care services.
At secondary health-care levels, public and private facilities would be “incentivised” to provide “efficient” treatment, that is, being more efficient =
having more compensation.
At the tertiary stage, All India Institute of Medical Sciences (AIIMS) like public hospitals and “low cost” private hospitals would be contracted.
There is a possibility that the proposals reportedly discussed at NITI Aayog could lead to a new inspector raj system, and may not be cost-effective.
At each stage, each player would seek to maximise its compensation by providing unnecessary treatment, thereby inflating costs. Curtailing this would require intensive and honest monitoring, which is very difficult. The more likely result is collusion between providers and inspectors to mutual benefit at the cost of the public exchequer.