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    Rashtriya swasthya bima yojna  health insurance for the poor - a brief analysis with a focus on the state of kerala Rashtriya swasthya bima yojna health insurance for the poor - a brief analysis with a focus on the state of kerala Document Transcript

    • International Journal of ManagementISSN 0976 – 6502(Print), International Journal of Management (IJM), (IJM) ISSN 0976 – 6510(Online) Volume 1, Number 2, Aug - Sept (2010), © IAEMEISSN 0976 – 6502(Print), ISSN 0976 – 6510(Online) IJMVolume 1, Number 2, Aug - Sept (2010), pp. 208-221© IAEME, http://www.iaeme.com/ijm.html ©IAEME RASHTRIYA SWASTHYA BIMA YOJNA- HEALTH INSURANCE FOR THE POOR - A BRIEF ANALYSIS WITH A FOCUS ON THE STATE OF KERALA D. DHANURAJ Research Scholar Anna University of Technology Coimbatore Jothipuram, Coimbatore – 641 047, India E-Mail: dhanurajd@gmail.comABSTRACTMillions of the people in India do not have access to the medical facilities and qualitymedical care. Most medical treatments are prohibitively expensive. Each year almost 3.5million people are pushed below poverty line due to expensive medical care. Majority ofmedical bills are still private out of pocket payments. Government spending on healthcare is very low in India. Total per capita expenditure on health care is around$ 23 ofwhich government provides only around $4. In addition to that, medical insurance sectorin India is still in the nascent stages of development. In this scenario, The FederalGovernment, with the help of State governments implemented a health insurance schemecalled Rashtriya Swasthya Bima Yojna (RSBY) intended for absolute poor in the countryin 2008. It has been implemented in different states in India in such a short period of time.Some initial studies from different parts of the country reported challenges in enrollment,claim ratios and fraud claims from different hospitals. In order to validate such findings, astudy has been conducted in the state of Kerala. The goal was assess issues ofacceptability and management issues of the scheme among stake holders in an effort tomake RSBY more efficient and effective for all the stakeholders involved. Interviewswith administrators of different empanelled hospitals and insurance companyrepresentatives in Ernakulam district were included in the study. The study conformedsome of the challenges reported earlier about the scheme and further research in this areais indicated.INTRODUCTIONAccess to quality health care is still a distant dream for majority of population in India inspite its status as a rising economic power. Escalating prices on basic necessities iscontinuing to make the life of a common man miserable. As per WHO statistics in 2011,25.7 % of total population in India is living below poverty line which is about 300 millionof total population. Burden of communicable and non communicable diseases areincreasing in India and this is disproportionately affecting the vulnerable sections of thepopulation. About 40% of poor people had to borrow money from lenders with highinterest rates or have to sell their assets in order to ensure quality medical care. (RajeevAhuja, 2006) About 24% of total hospitalized population is pushed below poverty line 208
    • International Journal of Management (IJM), ISSN 0976 – 6502(Print), ISSN 0976 – 6510(Online)Volume 1, Number 2, Aug - Sept (2010), © IAEMEbecause of health care costs per year in India. (World Health Organization,2005)Incompliance due to high health care costs also a major problem faced by a hugesection of population. Deterioration of health and loss of work days is a mounting socialproblem that is especially affecting the lower quintiles of population. This phenomenonsignificantly reduces economic productivity of the country as a whole.Government expenditure on health is historically very low in a country where poor peopleconsists a major chunk of population. Total health expenditure in the country is 4.9% ofGDP. Out of this the government spends only 1.1% of the GDP per year. Per capita totalexpenditure on health in India was $23 in 2004 which was increased to 44.8 in 2009where Governmental spending per capita is only around $4 in 2004. (World HealthOrganization, 2005). This is lower than most similar Asian countries like China,Malaysia, Sri Lanka, Thailand and Bangladesh. Again, out of total health careexpenditure, public expenditure accounts for only 26.7% and the rest 71.6% was privateexpenditure. Among the private expenditure, 74.4% is out of pocket expenditure in India(World Bank, 2009). Medicines (40%, highest), hospitalization, surgery, consultation andtransport are the major expense areas in health care.This situation perplexed the policy makers and governments alike. Factors like poorhealth care delivery systems, inadequate access to health care facilities and absence ofany financing mechanisms made government to concentrate more on health issues of thepoor. In order to overcome the inequalities in the society and to provide financialprotection to the marginalized, the Central Government decided to increase the healthcare expenditure from 1.1 to 3 % of GDP per year. (Joint Learning Workshop, 2009) Inaddition, Governments, both States and Central, came up with different health insuranceschemes in response to increasing demand for alternative financing mechanisms forhealth care other than out of pocket expenditures. Most of these schemes failed due toinadequate policy designs, accountability and sustainability issues, dysfunctionalmonitoring and evaluation mechanisms and lack of awareness among target populations.LITERATURE REVIEWHealth care delivery system in India consists of private, public and mixed ownershipinstitutions. The government sector or the public sector includes medical colleges, districthospitals, primary health centers, community health centers and tertiary care hospitals.While the Central Government is limited to certain programs like family welfare anddisease control, the state governments are responsible for primary and secondary medicalcare. They are also in some extend responsible for specialty care in the state. All theseinstitutions work on a no or minimal fee basis and are intended for people who cannotafford to pay for their health care needs. But in reality even the most poor in India preferprivate care rather than government facilities in spite of huge out of pocket expenses inprivate hospitals. According to a UK based study on health care spending in India, it wasfound that there is not much difference in spending in private health care sector betweenpoor and non poor people in the country. Around 69% of poor people’s health careexpenditure is on private health care facilities compared to 75% of non poor. (Berg, R, &Ramachandra, 2010)Reasons for not relying on public hospitals include huge disparities in the standard ofcare, lack of proper infra structure, outdated equipments and unclean environments. Mostgovernment institutions are way below quality expectations of a normal hospital in Indiaand this, when combined with corruption make government hospitals and health centersscore very low in customer satisfaction. But one cannot deny the fact that they are a greathelp for the absolute poor in the country though not very high tech in nature. 209
    • International Journal of Management (IJM), ISSN 0976 – 6502(Print), ISSN 0976 – 6510(Online)Volume 1, Number 2, Aug - Sept (2010), © IAEMEThe private sector hospitals have more perceived quality than public hospitals by thegeneral population, which to a greater extend is true. Most hospitals are equipped withskilled staff, modern technology and imported machineries. Reduction of import dutiesand loosening of regulations helped in proliferation of quality private hospitals in thecountry in the last two decades. Now, India has such private hospitals that have all thefacilities and quality of care comparable to any state of the art hospitals in the developedcountries. Even though everything is available here in the country, majority of its citizenscannot access such high quality services due to unthinkably high healthcare costs. This isespecially true for the marginalized and unprivileged in the society. Again, private healthsector also has varying degree of quality of care as it operates in an unregulated market.Most people in India go to government hospitals not out of choice, but out of compulsiondue to poverty and huge health care costs in the private sector. Non compliance tomedical advice due to unbearable costs is another reason for increased morbidity andmortality since health insurance is not common at all. People have to pay the bills fromtheir own pockets. Affordable and accessible healthcare programs are to be developedimmediately to tackle this burgeoning problem in India.Health care access is found to be significantly reduced for poor quintile of population inIndia. Unequal geographic distribution of health care facilities, socioeconomic conditionsand existing gender norms all play an important role in significantly reduced access tohealth care especially by poor rural population. A person from the poorest quintile of thepopulation is six times less likely to access health care facilities than a person from therichest quintile in India. Also skilled birth attendance at the time of delivery is six timemore for women in rich quintile that the poor quintile of population. Geographic locationof health care facilities and reduced transportation services affect access to care. Thisscenario is exacerbated by reduction in governmental health spending and high cost forhealth care services in private sector. The inequality in health care services betweenpublic and private sector and economic constrains are found to affect health of the poorsector of population which constitutes majority of India. Corruption in governmentalhealth facilities, out of pocket expenditures and lack of insurance also affects utilizationand access of care by needy people. (Milind Deogaonkar, MD, 2004)In India, health care is financed through general tax revenue, community financing, out ofpocket payments and social and private health insurance schemes. Twenty four percent ofall hospitalized persons are pushed below poverty line in India due to huge health carebills in a single year (World Bank, 2002). In 2004, around 6.2% of household fell belowpoverty line as a result of huge health care costs. Among this, 1.3% as a result of inpatientcare and the rest 4.9% due to outpatient care. Out of pocket payments, still the majorhealth care financing system in India is responsible for such financial strain andbankruptcy that is especially affecting the lower and middle class population.Health insurance in IndiaInsurance industry in India has a history dating back to 18th century when Oriental LifeInsurance Company was first started in 1818 in Kolkata. After that many insurancecompanies were founded. In 1912, the Life Insurance Companies Act and the ProvidentFund Act were passed as a measure to regulate the insurance industry in India. Healthinsurance was introduced in India in this year. In 1972, the Parliament passed theGeneral Insurance Business (Nationalization) Act which brought 107 insurers under oneumbrella of General Insurance Cooperation with four subsidiary companies namelyNational Insurance Company Ltd., the New India Assurance Company Ltd., the OrientalInsurance Company Ltd and the United India Insurance Company Ltd. The General 210
    • International Journal of Management (IJM), ISSN 0976 – 6502(Print), ISSN 0976 – 6510(Online)Volume 1, Number 2, Aug - Sept (2010), © IAEMEInsurance commenced its business on January 1sst 1973. Again, the enactment of theInsurance Regulatory Development Act in 1999 facilitated the entry of private andforeign health insurance players into the Indian market.HEALTH INSURANCE MARKET IN INDIAHealth care financing plays a major role in improving access to quality health care andimproving health care delivery systems both in developed and developing countries. Buteven today, the penetration of health insurance market in India is very limited coveringabout 10% of the total population. But data indicates than the health insurance industry isgrowing much faster than the average industry growth. According to IRDA AnnualReport, 2007-2008, the premium collected from health insurance has been increased fromINR 4894 crore to INR 6088 crore in 2008-09. (Chawla, 2010) The industry isrecognizing the growth potential and is concentrating on more of getting volume thandepth to increase profitability. The schemes currently available in India can becategorized into the following:(1) Voluntary health insurance schemes or private-for-profit schemesMajor Players in Public sector: General Insurance cooperation; 4 subsidiaries- NationalInsurance cooperation, New India assurance company, United Insurance , LICPrivate sector: Bajaj Allianz, ICICI Lombard, Royal Sundaram, Cholamandalam GeneralInsurance(2) Employer-based schemesThese schemes are offered through employer managed facilities. Both private and publicemployers offer employer based schemes. Railways, defense and security forces,plantations, mining sector are covered by this type of policies. But coverage is minimal,only about 30 to 40 million people.(3) Insurance offered by NGOs / community based health insuranceCommunity based health insurance schemes are mainly targeting the poor population inbypassing unexpected health care costs. Such schemes aim to protect poor fromindebtedness by prepayment of a small premium rather than borrowing money. Theseschemes mainly operate through Non Governmental Organizations. (4) Mandatory health insurance schemes or government run schemes(ESIS, CGHS)Most of the above mentioned schemes and health insurance policies cater to middle andabove middle class population in India and there are not many takers for absolute poor inthe country. Either their employers do not give health insurance or simply cannot affordmonthly insurance premiums. Even if some community or faith based institutions offerhealth insurance for poor people in the country, they are not enough to cover the entireBPL population in the country.Though government has implementing different insurance schemes catering to differentsectors of population such as agricultural workers and marginalized women, it is notconsidered very successful so far. In order to provide quality medical access to the mostvulnerable absolute poor population in the society, various schemes have been launchedby both State and Federal governments. One such scheme is the Universal healthInsurance scheme from Central Government in 2003.Universal health Insurance Scheme:Central Government launched the Universal health Insurance Scheme in 2003 with theintention of covering low income population in the country. The term “universal” ismisleading as it only meant low income people in India. Though it was intended for alllow income individuals initially, the scheme ultimately was made available only to peoplewho were identified as people below poverty line (BPL) as per the Planning Commission 211
    • International Journal of Management (IJM), ISSN 0976 – 6502(Print), ISSN 0976 – 6510(Online)Volume 1, Number 2, Aug - Sept (2010), © IAEMErecommendations. The insurance is provided by four public companies and the benefitspackage offered include Rs 30,000 per year per family or 15,000 per individual per year.It also includes accident benefits and loss of wages benefit on daily basis. High subsidiesin insurance premium were offered by Government of India. The scheme was operatedthrough third party administrators or TPAs, which are independent agencies to coordinatebetween the various hospitals, customers and insurance agencies. (Nandraj, N. Devadasanand Sunil, 2006). The premium for joining the universal health insurance scheme is listedbelow.Premium rates for Universal Health Insurance Scheme Target population: BPL families in India Total premium for Payable by insured From joining the scheme Government subsidy For an individual Rs 365 Rs 165 Rs 200 For a family of 5 Rs 548 Rs 248 Rs 300 For a family of 7 Rs 730 Rs 330 Rs 400Source: (Nandraj, N. Devadasan and Sunil, 2006)In spite of low premium rates and coverage benefits, the scheme was faced with lowenrollment rates and had a very low claim ratio in the end of the year 2006, which wasonly 12%. Only 9252 families enrolled in the first year. In order to raise the enrollment inthe scheme, the government increased the subsidy share and reduced premium rates toRs.165 for an individual, 248 for a family of five and 330 for a family of 7. This movefrom the government’s part increased enrollment to a great extend but still there arelimitations noted in coverage and execution. The government failed to exploit theinsurance market by allowing only the public ones to supply insurance schemes. Alsothere was no flexibility in schemes offered and the insurance companies were not allowedto fit schemes to beneficiary’s needs. This seriously affected the enrollment rates for thescheme. Another problem faced by the scheme was the lack of proper infrastructure andweak health system delivery. Insured people were unable to access quality care due to thelack of proper health infrastructure nearby. (Rajeev Ahuja, 2006) This scheme also lackeda nodal agency which the Central or Sate Government can use to tap large number ofbeneficiaries.The Government of India, after realizing that the UHIS is not as successful as desired,launched Rashtriya Swasthya Bima Yojna in 2008. After incorporating various lessonsfrom similar schemes from the past and recommendations from various stake holders,professional think tanks and International organizations, policy makers came up with anexciting new scheme loaded with technology which targeted the absolute poor in thecountry.RASHTRIYA SWASHTYA BIMA YOJNA (RSBY)RSBY is a health insurance scheme for absolute poor, launched by the CentralGovernment through the Ministry of Labor and Employment in April 2008. This publicprivate partnership program is intended to provide financial protection for those identifiedas people below poverty line (BPL) in India by increasing access to quality health care 212
    • International Journal of Management (IJM), ISSN 0976 – 6502(Print), ISSN 0976 – 6510(Online)Volume 1, Number 2, Aug - Sept (2010), © IAEMEand covers most health care costs of beneficiaries that involve hospitalization. (Ministryof Labour, 2011).RSBY process Flow chartState Govt. CentralGovt. Set up agency when plan to implement RSBY BPL data (2)upload data (3) Nodal Agency (1) (13) Data& bill (14) PaymentRSBY website Bidding (4) BPL data TPA Insurance Company NGO (6) (11) Claims payment (12) Empanelment (5) Kiosk (9) BPL list issue smart cards (7) (10) Hospitals Smart cards Beneficiaries (8)RESEARCH METHODOLOGYThe World Bank prescribes four major tools for analyzing the existing policy by in whichreforms can be suggested. They are 1) stake holder analysis 2) political mapping 3)network analysis and 4) transaction cost analysis. In the context of this study stake holderanalysis, network analysis and transaction cost analysis are used. Political mapping is notconsidered as it is beyond the scope of this study. 213
    • International Journal of Management (IJM), ISSN 0976 – 6502(Print), ISSN 0976 – 6510(Online)Volume 1, Number 2, Aug - Sept (2010), © IAEMEAn in depth study was organized to understand Rashtriya Swasti Bhima Yojna (RSBY).Questionnaires was prepared and administered in the slums of Kochi. Stake holders’interviews with the accredited hospitals of RSBY in Kochi were also conducted. Resultswere analyzed.An overall understanding helped to suggest the recommendations and a new policyframework as suggested by World Bank policy study toolkit. Various methods are usedfor the analysis as given below • Secondary Research • Qualitative Research • Comparative Study • Systematic Review • Meta-AnalysisUsing secondary data analysis, the challenges for RSBY are found out as; 1) Accessibility issues 2) Low enrollment rates 3) Issues with transparency and false claims from hospitals 4) Low claim ratioIn order to validate the findings in literature review, a pilot study is being conducted inErnakulum district, Kerala to find out the challenges in management of the scheme bydifferent stakeholders. RSBY is a comparatively new policy which is in the process ofimplementation in many states. So it is hard to analyze a central government policy basedon what happened in just one or two states considering the huge socio economic anddemographic differences in different States in India. But it is never too early to criticallylook at a policy to find the current challenges of the scheme in order to improve it for thefuture. Again the challenges will be different in different parts of the country too. In orderto find more about the challenges faced by different stake holders in management of thescheme in Kerala, a pilot study has been conducted in Ernakulam district in the State ofKerala and included interviews with the insurance company and administrators in 6empanelled hospitals in the Ernakulam district in an effort to improve management andefficiency of the scheme and to increased access to quality health care.In Kerala, the State government decided to extend the scheme to the poor families notcovered under RSBY BPL guidelines by paying Rs.30 as premium/year and to thoseabove poverty line provided they contribute the full premium amount including smartcard costs. The extended version of RSBY is called Comprehensive Health InsuranceScheme or CHIS, The State government decided to launch the scheme in all 14 States in2008-09 itself. The nodal agency responsible for implementation of the scheme in theState is known as Comprehensive Health Insurance Agency of Kerala or CHIAK. UnitedIndia Insurance Company Limited is the insurer for RSBY CHIS scheme in the state.They are utilizing the services of community based organization called “Kudumbasree” inorder to raise awareness and enrollment of beneficiaries. (Comprehensive HealthInsurance Agency of Kerala, 2011)DATA ANALYSIS AD FINDINGS 1. Challenges with the claim process:A claim will be completed only if the empanelled hospital completes three processes.1. Registration:2. Swipe and block the money during admission.3. Hit again during dischargeOnly if the hospital completes these three hits, it is called a transaction and can beprocessed as a claim thereafter. For an insurance company, if any of these steps aremissing then it is not a claim and the company is not responsible to pay back the claim tothe hospitals. 214
    • International Journal of Management (IJM), ISSN 0976 – 6502(Print), ISSN 0976 – 6510(Online)Volume 1, Number 2, Aug - Sept (2010), © IAEMEInsurance companies responded that there was high frequency of claims from differentempanelled hospitals, especially public hospitals without completing these three steps.Last year, the claim from a public hospital in Kochi was approximately 82 lakhs (U.S$8.2 million)but the amount with TPA was only 33 lakhs (U.S $3.3 million), The rest , 49lakhs (U.S $4.9 million) of claim was withheld or rejected by TPAs because ofincomplete transactions by hospitals, even though the hospital did provide treatment. Thishappened mainly because beneficiaries left hospital after discharge and do not usuallycome back to the RSBY counter for swiping. This phenomenon was rare in privatehospitals but after two years experience, government hospitals are also trying to make itbetter as such incomplete transactions resulted in huge debts for hospitals. 2. Challenges with the reimbursement processThe number of days specified in the policy regarding reimbursement of claims tohospitals is 21 days. But serious delays are reported in that process by hospitals whichmade this scheme less lucrative to such institutions. Main complaints from hospitals waslate reimbursement from insurance companies which most often put them it huge debts.The reimbursement process can be summed up as follows:The TPAs are instructed to give the invoice of claims from hospitals to the insurancecompany on a weekly basis. After getting the invoice, the insurance company releases thecheque to TPA and from there it will be send to the concerned hospitals. The wholeprocess can take around 21 to 25 days. But normally there will be serious delays due to avariety of reasons. The insurance company complained that weekly invoice is nothappening from TPAs. Usually this will be twice monthly or even monthly in spite ofrepeated instructions from insurance companies.As of now in Kerala, there are 5 TPAs for the state and none of them have local bankaccounts. So cheques released from insurance companies will be sending to banks insomewhere out of state like Pune or Chennai which will again delay the process at leastby one week. There are some delays noted in dispatch time of cheques by TPAs tohospitals also. Initially insurance companies did not expect all these intricacies andconfusion in reimbursement delays which is one of the major complaints againstinsurance companies from hospitals. But now they are trying to respond to suchcomplaints. Recommendations from insurance company in sorting out the complicationsand to reduce delays include starting local accounts by TPAs and opening of a separateaccount by hospitals only for RSBY reimbursements. They are insisting on exclusiveaccounts because then it will be easy to sort out accounts if any in case of complaints oranomalies from claims. But this is not a very attractive alternative for hospitals since suchexclusive accounts will result in accountability for that amount of money for whichhospitals have to pay tax for. 3. Challenges with Out of pocket paymentsIn certain cases beneficiaries had to pay out of pocket payments which is strictlyprohibited by government scheme. This mostly happens by a process called clubbingwhich can be explained with an example. Suppose the beneficiary is hospitalized in theward for two days for hernia and the package rate for hernia is Rs. 7000 and the packageincludes all the services including stay in general ward. But the hospital will charge twodays of stay in the ward in addition to package charges, that is Rs 1000 extra for that case.But as per the package, the total amount reimbursed to the hospital will be only Rs. 7000.The balance Rs. 1000 will be OOP by clubbing surgical and nonsurgical package rates.Another scenario is that there occurred some requests from beneficiaries and otherstakeholders that the scheme should allow beneficiaries to cover the difference out ofpocket in order to avail more quality services like rooms instead of general wards ormore quality services than that of prescribed in the package. Those who argued for thisbenefit were ready to pay the difference in amount. But Government strictly rejectedsuch a request on the ground that if somebody can afford to pay such difference then 215
    • International Journal of Management (IJM), ISSN 0976 – 6502(Print), ISSN 0976 – 6510(Online)Volume 1, Number 2, Aug - Sept (2010), © IAEMEhe/she is not BPL anymore. Besides, accepting such requests are like questioning the verybasis of this scheme since this is for very poor people or marginally above absolutepoverty line. Again, if beneficiaries can do that, that will increase the chance for afraudulent BPL list. Already there are so much allegations about the list on which thewhole scheme is based on. There are complaints that the list includes large number of nonBPL population and left out many genuine poor. APL wanted to join the list since theycan avail all the benefits allotted to the BPL population. Once they realize that they canget only as per standards prescribed and not as per they wanted, there is a reduced chancefor such people for renewal of the scheme. 4. Challenges with premium levelReimbursement rates for staying in general ward is Rs. 500/day and in ICU it is Rs. 1000/day. Most high tech hospitals do not want to take up the scheme and those who areempanelled wanted to get out because of very low package rates as per their standardrates. Either they have to compromise on quality standards or had to opt out fromaccepting the scheme. It will be difficult for most hospitals to give quality treatments andmanage costs of administration because of insufficient amount of money quoted forprocedures, as per hospitals.Many hospitals responded that current payment rate of Rs. 500/day is manageable andwelcoming. But such responses were heard only from small private hospitals and publichospitals. High tech private hospitals expressed concerns over this as their standard pricesare much above this fixed rate. This may sometimes affect the quality of servicesprovided by such hospitals. They unanimously voted for an increment in per dayreimbursement rate at least to Rs. 700 /day. 5. Challenges with communication among stakeholdersThere is another challenge in reimbursement process due to lack of communicationsbetween different stakeholders. The hospitals expressed a need for more communicationflow with insurance companies regarding the pending amount and reason for not settlingclaims which can be explained below:Suppose a hospital bill the insurance company for 5 lakhs ($500,000). But the companyreimbursed the hospital only for 4 lakhs ($400,000). The next time, suppose the bill is 5lakhs, the hospital will bill for 6 lakhs($600,000) adding one lakhs($100,000) which theythink as pending from last transaction, to the present bill. Again the insurance companyreimburses a lesser amount and rejects the remaining claim. The hospitals keep on addingthe non reimbursed amount thinking that it is pending from insurance company. In reality,this is the amount rejected or with held by companies due to different reasons. But thecompany through TPA failed to communicate why there is a difference and what are thereasons for not paying the claim amount.The balance amount is actually rejected claims or amount withheld rather than pendingamount of reimbursement from insurance companies. This communication gap is mainlycaused by the format of document given to hospitals regarding claim reimbursement. Itjust shows that the amount reimbursed and there is no explanation on why they had toreceive reduced payment than claimed amount if that is the situation. As of now, thedocument includes claim amount from hospitals and reimbursing amount. It must includerejected/withheld amount and detailed explanations on why the amount is rejected as thisserve as a feed back of performance in a way for hospitals and ultimately will helphospitals understand the pitfalls in order to improve their performances. Such a formatwill avoid a lot of communication gaps in claim reimbursement processes. 6. Challenges during yearly renewal of insurance providersSevere delays in reimbursement and claim processing is noted during renewal time of thescheme every year. The change of insurance companies, software and cards on April 1stevery year is causing different problems in reimbursements and enrollment processes.The new software cannot read the smart cards from previous year resulted in many 216
    • International Journal of Management (IJM), ISSN 0976 – 6502(Print), ISSN 0976 – 6510(Online) Volume 1, Number 2, Aug - Sept (2010), © IAEME pending claim process and there is no way that hospitals can finish transactions or insurance companies can pay bay the pending amounts. Huge amounts are pending especially in government hospitals due to this problem. This can be solve to a greater extend by doing manual claims for that pending claims. But most insurance companies do not entertain such moves since it will increase administrative costs. 7. Challenges with false claims There are instances where hospitals claimed for unnecessary treatments from RSBY beneficiaries. Complaints about hospitals keeping the cards with them even after discharging the patient were heard during the study. They can swipe the card whenever needed and this will result in fraud claims. One hospital even reported two caesarian sections on the same patient within 10 days. After repeated claims for unnecessary long hospital stays, the rule has changed about blocking the money from the card. Earlier it was one time block for entire stay in the hospital. But now hospitals are allowed to block only for three days at first and after that for two days if needed. If hospitals need to keep the patient more than 5 days, then they will have to notify the insurance company before doing so. In order to control fraudulent claims from empanelled hospitals, insurance agencies have come up with different software applications to find duplication of claims. TPAs submit claims from hospitals to insurance companies in the form of floats. A float is the total number of claims in a fixed time period for all the empanelled hospitals in the districts allotted for that particular TPA by insurance companies. The float is numbered in ascending order as per the date of claims. A float will tell the insurance companies the total amount it has to pay in claim reimbursement in the concerned districts in a particular time period like for example 10 days. A float can be illustrated as below:TPA Card Patient Date of Date of Package District Hospital Hospital Totalcode number name Discharge Admission code code code name amount One float from single TPA will be about 500pages for 10 days. But it is important to check the whole document for claim verification and manual verification of such a huge document is laborious and often not feasible. In order to overcome this problem, the insurance companies introduced an efficient soft ware to check for duplication within each of the floats. But now they extended the process by making it intra as well as inter float checking for duplication of procedures. 8. Challenges in the market for insurance company Insurance companies are viewed as profit making mechanisms by government and beneficiaries alike. Though there certainly is a market aspect to it, trends in Kerala is not that great from an investor’s point of view as of now. In Kerala, insurance company is at least looking for a break even in order to consider the business successful. Besides the element of social commitment, every company needs some incentive to take the business forward. The normal way of doing business is an 80-20 profit margin where companies 217
    • International Journal of Management (IJM), ISSN 0976 – 6502(Print), ISSN 0976 – 6510(Online)Volume 1, Number 2, Aug - Sept (2010), © IAEMEare ready to spend 80% for claims with 20% profit margin which can be utilized foradministrative costs.As of now even a 10% profit can be considered as success as per the company. But lastyear the company suffered a loss ratio of 172% which is extraordinarily high. But Keralahas its own reasons for that like better infrastructure, awareness and high literacy ratecompared to rest of India. High number of claims occurred from Kerala was unexpectedto an extent because of the trend of low claim ratios almost throughout India.The insurance companies arrived at bidding rate by a trial and error method since it wasjust the starting in the State. In 2008, the insurance company quoted the premium basedon rough estimates which was Rs. 440/family. Total enrollment was 12 lakh families andthe total premium came up to Rs. 52, 80, 00,000 ($528 million) and the total claimamount was Rs. 60 crore ($600 million) from 130,000 claims. That year, there was a lossand the total loss for insurance company was 7.2cr ($72 million). In the second year,though the enrollment increased to 18 lakhs, the premium was Rs. 420/family. Thesecond year also showed huge loss for the insurance company, which was around 75crores ($750 million). The first two years bidding premium was a trial and error methodsince there were no statistics or yardsticks to compare. So for the third year of operation,the insurance company quoted a higher premium as Rs. 748/ family. The company ishoping that it will be a break even for the company and all the stakeholders involved. Butif the loss is continuing like this, the sector will no longer be attractive to companiesunless government decides to increase the premium level.As per the rule in India, health is the responsibility of the State government. As of now,the loss suffered to the insurance company is its own sole responsibility. But this is amodel that works because of the close coordination of all the stakeholders in the scheme.So government can give a hand by giving subsidies if the insurance company suffered anyloses so that they can have some security to enter into the business. A competitivecompany will give preference for profits rather than depending on government subsidies.Also, such a move can make the market a bit more lucrative for insurers too. 9. Challenges with monitoring and evaluationAnother problem incurred to beneficiaries and insurance company is the deduction ofamount from smartcards before it goes to monitoring and evaluation for fraud claims.Once the 3 step transaction is over, the amount is already deducted from the smart cardeven if it is a fraud claim. If in evaluation, it was found out that the amount deducted isfor fraud claim, the insurance companies are unable to return that amount deducted fromsmart card during transactions. If the claim is for Rs. 7000 and the original is Rs, 5000and by the time the insurance companies monitor the fraud, Rs, 7000 will already bededucted from the card and nobody can refund the smart card with the excess amountclaimed.Monitoring all the transactions real time before swiping the card means, insurancecompanies have to place an agent to monitor every transaction which will in turn prove tobe will be very expensive for the companies.Qualification of insurance representatives who are responsible for monitoring andevaluation of admissions are questioned in some hospitals. Most of them do not have anymedical background and hospitals had difficulties communicating with them about theneed for certain medications and procedures. 10. Challenges with enrollment process As per the policy requirements one enrollment center should have 2 laptops, one cardreader and one camera for enrolling 250 families. It will take approximately 8 hours toenroll 125-130 families if electricity supply is not fall short. But most units will workwith one laptop and this will result in delay in enrollment. The enrollment is usually donefor two days at a stretch and delays means, the units fail to enroll the families arrived atthat time which resulted in discontent among beneficiaries. In adequate infrastructure and 218
    • International Journal of Management (IJM), ISSN 0976 – 6502(Print), ISSN 0976 – 6510(Online)Volume 1, Number 2, Aug - Sept (2010), © IAEMEenrollment timings delayed the enrollment process in initial years. For example, someareas of Kerala economy is dependent on rubber plantations and most BPL populationhere work as tappers in such plantations. They leave early in the morning and return onlyafternoon. The morning enrollment in the first years considerably reduced theirenrollment rates which the insurance companies rectified with work oriented timings. 11. Challenges with packagesSome hospitals were concerned about the way packages were fixed too. For example, inRSBY chemotherapy has a fixed rate. But this procedure may require a mix of medicinesfrom different packages, say for example three. But the hospital cannot block threepackages. But in the Kerala version of RSBY scheme, CHIS (Comprehensive HealthInsurance Scheme), it is revised and put it as medicine package. But still there arecomplaints that they don’t include all the standard medicines in the medicine package. 12. Challenges with awarenessEven though most people are aware about the scheme, a majority is under wrong conceptsabout the package and the limit. They are not aware of the limit of Rs. 500/day andpackages but think that there is 30,000 and can use it however they want it to be.Handbooks and brochures will be helpful to raise right awareness about the schemeamong beneficiaries. Hospitals complained that there were frequent awareness programsand public service announcements during enrollment period but that it did not last long.CONCLUSIONS AND RECOMMENDATIONSInflux of beneficiaries for availing treatment is increasing steadily in all the hospitalsstudied regardless of the size and ownership of hospitals. But certain challenges incommunication and claim processing between TPAs, insurance companies andempanelled hospitals were noted. Regular updates and clarity in communication with theempanelled hospitals are recommended in order to reduce friction between thosestakeholders. Continuing workshops and training for hospital staff in the RSBY help deskis necessary to reduce erroneous and incomplete transactions.Out of Pocket expenditure are still reported in some hospitals. Government should takestrong initiatives to control such steps in the future for successful implementation of thescheme. Again, some government hospitals complained of underestimation of theircapacity by government and insurance companies alike. There are some governmenthospitals, though less in number, are exceptionally good in quality of services provided.If they claim more than as expected from a normal public hospital, then there will bedoubts and questions on their capacity and number of claims. Many hospitals surveyedrecommended CHIAK to conduct a study to assess the capacity of hospital, quality ofeach hospital, normal rates of procedures and their quantity of input before empanelmentof hospitals in order to avoid such situations.In many small hospitals where majority of patients are RSBY beneficiaries, it will bedifficult for them to manage hospitals costs if reimbursement is very late. Timelyreimbursement will make the scheme more acceptable for most hospitals studied. Thiswill again be possible only by more communication and coordination between hospitals,TPAs and insurance companies.The fixed package rates are definitely found good for small hospitals with reduced staffcapacity but for most big hospitals the present rate is less and was found difficult to makeends meet. The price rates for all the procedures are fixed in 2007 and did not changedafter that. It can increase since fixed rate is very low compared to regular prices of thesame surgeries if done outside the scheme. Seeking help from local NGOs andcommunity based organizations like kudumbasree proved to be very beneficial during theenrollment process. For example, many people in the same area have same common 219
    • International Journal of Management (IJM), ISSN 0976 – 6502(Print), ISSN 0976 – 6510(Online)Volume 1, Number 2, Aug - Sept (2010), © IAEMEnames included in the list. It will be easy for local bodies like kudumbasree to identifywho is on the list and who is not than people from outside.All respondents of the study responded that RSBY scheme is one of the massive schemefrom Central Government and beyond doubt is helping millions of people to access healthcare services that they never even dare to dream. But like most government schemes, ithad some concerns with the implementation and accountability part which should not beleft unaddressed. This is a process which can be made efficient by capacity building andcoordination of all the stakeholders in the loop. Government should also considerstrengthening the health systems in addition to provision of health insurance schemessince it is lame to have an insurance policy without a place to go for treatment. RSBY-CHIS is an evolving scheme and if done right, will definitely increase access to qualityhealth care facilities for millions of absolute poor people in the country.REFERENCES 1. Anil Swarup. (2010). Sharing Innovative experiences: Successful Social Protection Floor Experience. Retrieved 6 23, 2011, from UNDP: http://www.snap- undp.org/lepknowledgebank/Public%20Document%20Library/Social%20Pro tection%20Floor%20examples.pdf 2. Berg, E., R, D., & Ramachandra, M. (2010). Indias poor rely mainly on private health care. 3. Chawla, D. (2010, September). Insuring a Healthy Future. eHealth , pp. 12- 13. 4. Comprehensive Health Insurance Agency of Kerala. (2011). The Scheme:Comprehensive Health Insurance Agency of Kerala. Retrieved July 12, 2011, from CHIAK website: http://www.chiak.org/index.php?option=com_content&view=article&id=71 &Itemid=78 5. India’s health system: The financing and delivery of health care services. (2005). Retrieved June 13, 2011, from REPORT OF THE NATIONAL COMMISSION ON MACROECONOMICS AND HEALTH: http://www.whoindia.org/LinkFiles/Commision_on_Macroeconomic_and_H ealth_Section_2.pdf 6. Jain, D. N. (2010). Sector Initiative: Systems of Social Protection. Eschborn, Germany: Deutsche Gesellschaft für Technische Zusammenarbeit (GTZ) . 7. Joint Learning Workshop. (2009). Moving Toward Universal Health Coverage-RSBY, India. Delhi: Ministry of Labour and Employment. 8. Ministry of Labor. (2000). Informal Sector in India. Retrieved June 23, 2011, from Government of India: http://labour.nic.in/ss/INFORMALSECTORININDIA- approachesforSocialSecurity.pdf 9. Ministry of Labour. (2011). Retrieved June 23, 2011, from Rashtriya Swasthya Bima Yojna: Rashtriya Swasthya Bima Yojna 10. Nandhi, S. (Director). (2010). A study to analyze implementation of RSBY in Chattisgarh [Motion Picture]. 11. Nandraj, N. Devadasan and Sunil. (2006). Health Insurance in India. Retrieved June 2011, from WHOIndia: http://www.whoindia.org/LinkFiles/Health_Insurance_Operational_Guide_C hapter_01.pdf 220
    • International Journal of Management (IJM), ISSN 0976 – 6502(Print), ISSN 0976 – 6510(Online)Volume 1, Number 2, Aug - Sept (2010), © IAEME 13. Taylor, D. W. (2010). The Burden of NonCommunicable Diseases in India. The Cameron Institute. 14. WHO. (2005). Disease burden in India. WHO. 15. World Health Organization. (2005). HEALTH INSURANCE IN INDIA: CURRENT SCENARIO. 16. Patrick Krause (2000), Non-profit Insurance Schemes for the Unorganized Sector in India, Social Health Insurance, Retrieved from http://www.searo.who.int/LinkFiles/Social_Health_Insurance_an2.pdf 17. Milind Deogaonkar, MD. (2004). Socio-economic inequality and its effect on healthcare delivery in India: Inequality and healthcare. Electronic Journal of Sociology, Retrieved from http://www.sociology.org/content/vol8.1/deogaonkar.html 18. Devolved power: key for health care in India. An interview with Michael Tharakan (2011) Bulletin of the World Health Organization., Retrieved from http://www.who.int/bulletin/volumes/86/11/08-071108/en/ 221