AAP's health insurance plan for Delhi sounds great, but such schemes have a history of failing

A room full of visitors greeted Delhi Health Minister Satyender Jain on a Wednesday morning in June. Gathered at an office near his residence in Civil Lines, they complained about delays in surgeries in government hospitals in the city, sometimes by up to three years.

To tackle this problem of overcrowding and delays in public hospitals, the Aam Aadmi Party government in Delhi has proposed an insurance scheme to cover every citizen of the national capital. Such schemes typically have a network of public and private hospitals.

The scheme, which is yet to be finalised, offers free treatment to the economically weaker section and an insurance premium of up to Rs 3,000 for higher-income groups. The scheme received an in-principle nod from the Delhi cabinet earlier this month.

“Public health for the past 70 years has been so bad that it cannot be fixed in two years,” said Jain. “Delhi has many private hospitals, where more than 25,000 beds go unoccupied. They are running on 50% occupancy. We feel that in such a scenario, a scheme like this can work."

Chequered history

There are several government-sponsored health insurance schemes in the country. The Rashtriya Swasthya Bima Yojana is a Central scheme for below poverty line households and certain categories of unorganised workers. State-run schemes include Rajiv Aarogyasri in Andhra Pradesh, Rajiv Gandhi Jeevandayi Arogya Yojana in Maharashtra, Chief Minister's Comprehensive Health Insurance scheme in Tamil Nadu and Bhamashah Health Insurance Scheme in Rajasthan.

However, evidence of cases of induced demand, illegitimate charges, and fraud (including false claims and ghost patients) have been seen in many such schemes, said a World Bank report in 2012.

More recently, in May, a task force appointed by the Maharashtra government had found “irregularities and unfair trade practices” worth Rs 500 crore in the implementation of the Rajiv Gandhi Jeevandayee Arogya Yojana in three-and-half years. This compelled the government to do away with the third-party administrators for the scheme and form a society to look into its functioning.

The most shocking misuse of government-sponsored schemes has been unnecessary hysterectomies allegedly conducted by doctors to pocket insurance money. This has been reported in Bihar, Chhattisgarh, Rajasthan and Andhra Pradesh so far. In May, the Bihar State Human Rights Commission compensated over 708 women who had been undergone unnecessary hysterectomies under the Rashtriya Swasthya Bima Yojana in 2012.

In 2013, Dr Narendra Gupta, from Prayas, a non-government organisation, filed a public interest litigation seeking compensation for victims of unnecessary hysterectomies in Rajasthan, Bihar and Chhattisgarh. The Supreme Court issued notices to all the states and the Centre to file replies. Dr Gupta said that very few states have filed replies, and the case has not moved much since 2013.

In Rajasthan, after the launch of the Bhamashah Health Insurance Scheme last year, many patients have complained of lack of access to health services. “There have been cases where the state hospitals are not admitting patients if they do not have any identification cards,” said Gupta. “Which patient carries a ration card or any identification to go to a state hospital?”

Incomplete coverage

Most state-level schemes focus on tertiary care – mainly, high-cost surgeries or procedures – and do not cover high-frequency but less complex conditions which could require hospitalisation, such as diarrhoea, dysentery, respiratory infections and malaria, the World Bank paper said. Most of the schemes also do not factor in ambulatory services and post-operative care, including medicines.

As a result, out-of-pocket expenses are known to be high and drain the finances of poor people.

The WHO paper notes that beneficiaries may have limited knowledge about what is and is not covered. For example, patients may be required to bear the costs of surgical implants, follow-up tests or other post-hospitalisation costs, which may not be covered by these schemes.

Empanelling good private hospitals in these schemes is another major operational issue.

“In many instances, [private] hospitals have opted out of the scheme because they are not paid on time,” said Ravi Duggal, country co-ordinator for the International Budget Partnership, an international advocacy. “The number of rejected insurance claims are increasing.”

In Rajasthan and Maharashtra, many private hospitals have opted out of state-insurance schemes because the rates offered by the government are not profitable enough for them. Only mid-level hospitals or nursing homes are interested in joining the schemes.

The schemes are grossly underfunded. “The schemes are allotted just 5% of the total National Rural Health Mission funds,” said Amit Sengupta, convenor or Jan Swasthya Abhiyaan, a network of organisations working on public health. “If it has to have more reach, the investment needs to be higher.”

Outsourcing of healthcare?

Globally too, government-funded insurance schemes have not improved access to public health systems, said health rights activists.

“Problems in state-funded insurance models have been highlighted so many times,” said Suchitra Wagle from the Centre for Enquiry Into Health and Allied Themes, a non-profit working on public health in Mumbai. “Still, governments insist on implementing these.”

An alternative that activists have been pressing for is universal healthcare (as opposed to insurance) funded by public money. Most European countries and Canada have healthcare plans that run on taxes and social security funds. With insurance schemes on the other hand, healthcare is paid for, but often outsourced, activists said.

“What prevents you from using it for public health service?” asked Sengupta. “Let’s cut through the jargon and say that this [health insurance] is outsourcing of tertiary care to the private sector. We are not trying to reinvent the wheel here.”

Sengupta said it has proved impossible to regulate the quality and service in government-funded health insurance systems.

Lessons for the capital

The Delhi government, said Jain, is aware of the problems with such schemes and is trying to plug all holes.

“We feel that [the case with] Delhi is different,” said Jain. “There is no rural population here. It’s easier for us to cross-check what is happening to a patient. We are trying to put in place a system of verification. So when someone is admitted, a message will automatically be sent to the third-party administrator, the insurance company and the government.”

Healthcare activists, however, are disappointed that the Delhi government, which runs on the mandate of transparency in governance, are taking the insurance route.

“If you build the capacity of the public health system, it is an asset,” Sengupta said. “If you outsource [healthcare], you are just strengthening the private sector.”