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MAHARASHTRAKAGAD KACH PATRA KASHTKARI PANCHAYAT(WASTE PICKERS’ UNION) HEALTH INSURANCE                 SCHEME             ...
CONTENTS Acknowledgement                              4 Executive Summary                            5 I. The Scheme at a ...
3.4. Claims Incidence by Age Group                            39   3.5 Claims Amount Settled                              ...
ACKNOWLEDGEMENTI am thankful to Ms. Laxmi Narayan, Ms. Poornima Chikarmane and Ms. Shabana Dilerof the Kagad Kach Patra Ka...
EXECUTIVE SUMMARYIn 1989, the Department of Adult and Continuing Education of the SNDT Women’sUniversity in Pune started c...
•   KKPKP acts not only as an intermediary between all stakeholders (on behalf of the    members) to ensure smooth functio...
are asked for bills for submission to insurer, they hike up the charges) and differentialcharges for the same disease cond...
o To give the community a stake in deciding the type of insurance cover they              want for themselves•   Capacity ...
Insurer Level:•   To enter in to a formal MOU with KKPKP to act as an agent.•   to enter in to a formal MOU with       few...
I. THE SCHEME AT A GLANCE                            10
OPERATIONAL MECHANISMS Type of Scheme:                  In House / Partner Agent                    Partner Agent Type of ...
Payment Modality:         Cashless / Reimbursement                Reimbursement MAIN CHARACTERISTICSDesignation of the sch...
Administration Responsibility: voluntarily taken up by Kagad Kach Patra KashtkariPanchayat without any financial return fr...
Total                         -                     25,000               25,000              25,000            25,000admin...
Premium to Payout trend                   400000                   350000                   300000 Amount (in Rs.)        ...
DEVELOPMENT PLAN1. Insurance Plan:Objectives:   1.1:   Increase the overall coverage of the scheme in terms of membership....
among the most vulnerable urban communities, a holistic cover needs to be provideby the government as a social security me...
Strategy:An efficient MIS can be designed which makes communication faster, claimsettlement quicker and rejection fewer.At...
II. DESCRIPTION OF THE SCHEME                                19
INTRODUCTIONThe tragedy with India is that those who have the capacity to buy healthcare from themarket most often get hea...
this profit to be approximately, Rs. 16 million. The Trade Union argued that while thefinancial benefits (savings in trans...
Gradually there has been a systematization of operations both at the insurer and the TradeUnion’s level. Systematic catego...
MUNICIPALINSURER                              CORPORATION              WASTE PICKERS’ UNION     CLIENT                    ...
The main functions of the waste pickers’ Union in the scheme are:•   As far as the role of the Union in the general day to...
informal sector workers so that they have a ‘safety net’ mechanism which prevents themfrom falling back in to the traps of...
The insurance plan is only open to members of the Kagad Kach Patra KashtkariPanchayat (waste pickers’ union), Pune. Age of...
about 150 hospitals in Pune provide healthcare and hospitalisation to the members of theunion. There has been no written a...
The NIA claims department looks at the claims and scrutinize it for admissibility. Onsatisfying itself with all informatio...
FLOW OF CASH AND INFORMATION                                                             (3). PMC calculates total        ...
Development PerspectiveKKPKP has some developmental plans for the scheme in the years to come. These are:   •   KKPKP is p...
III. ANALYSIS.                    31
1. COVERAGE                  Coverage wise, the scheme is evaluated on the absolute as well as proportionate change       ...
The first year of the scheme was a voluntary insurance programme in which the memberspaid their own premium. Only 32 membe...
Though the membership has shown an average growth of 145%, gender wise the majority ofthe members are female (nearly 70% f...
From the above graph it is clear that over the years the largest chunk of membership has been in the age group 18-45 years...
decrease which indicates that though the amount may have increased in absolute number but has not increased proportionatel...
3. CLAIMS ANALYSIS             The claim analysis looks at the evolution of claims in terms of gender and age break up of ...
3.2. Frequency of Claims:   Frequency of Claim (from 2003-06)                     No. of Claimants               Single Cl...
3.3 Claims Incidence by Gender:   Gender                                        Claim                    2003            2...
Age wise break up of claims                    80                    70                    60                    50   No. ...
3.5. Claims Amount Settled:                            Year I     Year II      Year III              Year IV        Total ...
Payout in Rs                                         Claims                        1-1000                                 ...
3.6: Premium to Payout Trend:                                2003           2004            2005           2006           ...
However it also shows that the maximum sum insured is not sufficient for the members to meettheir health needs. Hence keep...
Disburasal per Claim vs maximum Sum Insured                    6000                    5000  Amount (In Rs.)              ...
scheme. Hence there is a need for providing a larger cover than is currently provided by thescheme which is not only compr...
gets rejected in most cases when the claimed amount approaches the maximum sum insured(Rs.5000)                           ...
3.11. Claim by Hospital*:  Type of                                     Number of Claims  Hospital         2003           2...
perception favouring private hospital seen to be providing a better quality care as comparedto government facility.Alka Si...
* Total numbers of claims 319. Information not available for 41.Most of the claims show a higher percentage of hits in the...
3.13: common diseases reported:       Diseases                                      Year                        2003      ...
3.14: Discrepancy in cost incurred for various diseases for 2005 and 2006:           Diseases                             ...
From the above it is clear that the minimum time from the patient getting discharged toultimate reimbursement of claims ta...
Overall the analysis of the claim shows that there has been a healthy payout ratio of 0.62(amount spent to amount received...
If the administrative cost is calculated as a percentage of the premium collected for all theyears it would be as follows:...
IV. CONCLUSIONS ANDRECOMMENDATIONS                      56
What started as a commendable effort by the department of Adult and continuingEducation of the SNDT Women’s’ University in...
•    As most of the members come from lower socio-economic strata, they access     smaller hospitals and nursing homes (le...
all the stakeholders who have faced the initial teething problem in the scheme to itspresent state where it provides overa...
provide compulsory health insurance cover to the members, programmatically it may        not be possible. However some ele...
(3). Less utilisation of Municipal Hospital:As the data shows, about 7.2% of the insured goes to Municipal hospital for he...
Kagad kach patra kashtkari panchayat health insurance scheme
Kagad kach patra kashtkari panchayat health insurance scheme
Kagad kach patra kashtkari panchayat health insurance scheme
Kagad kach patra kashtkari panchayat health insurance scheme
Kagad kach patra kashtkari panchayat health insurance scheme
Kagad kach patra kashtkari panchayat health insurance scheme
Kagad kach patra kashtkari panchayat health insurance scheme
Kagad kach patra kashtkari panchayat health insurance scheme
Kagad kach patra kashtkari panchayat health insurance scheme
Kagad kach patra kashtkari panchayat health insurance scheme
Kagad kach patra kashtkari panchayat health insurance scheme
Kagad kach patra kashtkari panchayat health insurance scheme
Kagad kach patra kashtkari panchayat health insurance scheme
Kagad kach patra kashtkari panchayat health insurance scheme
Kagad kach patra kashtkari panchayat health insurance scheme
Kagad kach patra kashtkari panchayat health insurance scheme
Kagad kach patra kashtkari panchayat health insurance scheme
Kagad kach patra kashtkari panchayat health insurance scheme
Kagad kach patra kashtkari panchayat health insurance scheme
Kagad kach patra kashtkari panchayat health insurance scheme
Kagad kach patra kashtkari panchayat health insurance scheme
Kagad kach patra kashtkari panchayat health insurance scheme
Kagad kach patra kashtkari panchayat health insurance scheme
Kagad kach patra kashtkari panchayat health insurance scheme
Kagad kach patra kashtkari panchayat health insurance scheme
Kagad kach patra kashtkari panchayat health insurance scheme
Kagad kach patra kashtkari panchayat health insurance scheme
Kagad kach patra kashtkari panchayat health insurance scheme
Kagad kach patra kashtkari panchayat health insurance scheme
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Kagad kach patra kashtkari panchayat health insurance scheme

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The case study highlights the scheme Kagad Kach Patra Kashtkari Panchayat (Waste Pickers. Union) health insurance scheme which proved to be a step in the right direction to a social security measure by the State for the workers of the unorganized sector in the country who are exposed to health risks due to their occupation. The study was documented by Centre for Insurance and Risk Management on behalf of the International Labour Organisation (ILO) as an example of a 'best practice' in the sector for micro health insurance in India . The study involved informal meetings, formal interviews and other form of interactions with all the stakeholders involved with the insurance programme. The case study tries to bring out the uniqueness of the scheme, the rationale behind its genesis, the practical constraints faced by each stakeholder and also the needs of the beneficiaries. The case study has also tried to capture the overarching vision of the trade union of the waste pickers in making their views heard to the Government and civic authorities in their constant endeavour to lead their lives in dignity and self respect.

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Kagad kach patra kashtkari panchayat health insurance scheme

  1. 1. MAHARASHTRAKAGAD KACH PATRA KASHTKARI PANCHAYAT(WASTE PICKERS’ UNION) HEALTH INSURANCE SCHEME CASE STUDY Compiled by: Dr. Sayed Imtiaz Ahmed
  2. 2. CONTENTS Acknowledgement 4 Executive Summary 5 I. The Scheme at a Glance 10 • Operational Mechanism 11 • Main characteristics 12 • Key Indicators 13 • Evolution Profile 14 • Development Plan 16 II. Description of the Scheme 19 • Introduction 20 • Flow of Cash and Information 29 • Development Perspective 30III. Analysis 31 • Coverage 32 • Contribution 35 • Claims 37 • Administrative cost 54IV. Conclusions and Recommendations 56 V. Stakeholder Speaks 70List of Tables: 1.1. membership evolution 32 1.2. membership by Gender 33 1.3. membership by Age Group 34 2.1 Evolution of Contribution 35 2.2 Age wise total Premium Paid 36 3.1. Current Claims Incidence 37 3.2. Frequency of Claims 38 3.3. Claims Incidence by Gender 39 2
  3. 3. 3.4. Claims Incidence by Age Group 39 3.5 Claims Amount Settled 41 3.6. Premium to Payout Trend 43 3.7. Disbursal per Claim 44 3.8. Claims Settlement 45 3.9. Claims Rejection Rate 46 3.11. Claims by Hospital 48 3.12. Claims Incidence by Specialty 49 3.13. Common Diseases Reported 51 3.14. Discrepancy in Cost Incurred for various diseases 52 3.15. Time Lag in Claim Settlement 52 3.16. Evolution of time lag in claim settlement 53Annexure:Annexure-I: About the Organisation 73Annexure-II: History of the Scheme 76Annexure-III: ILO Value Chain Analysis 78Annexure-IV: Jan Arogya Bima Policy Prospectus 79Annexure – V: Jan Arogya Bima Policy Claims Form 87Annexure – VI: Pune Municipal Corporation Identity Card 89 3
  4. 4. ACKNOWLEDGEMENTI am thankful to Ms. Laxmi Narayan, Ms. Poornima Chikarmane and Ms. Shabana Dilerof the Kagad Kach Patra Kashtkari Panchayat, Pune for extending all support andcooperation to me during the duration of the case study. Further I am grateful to Ms.Poornima Chikarmane for helping me with the data analysis process and also providingme with valuable insights in to the programme.I am also grateful to all the officials and staff of Pune Municipal Corporation, New IndiaAssurance Company and provider hospitals for extending all possible support to me byproviding me information necessary for the case study.Lastly I am grateful to all the grass root workers of Kagad Kach Patra KashtkariPanchayat, Pune and all the community members for their help in completing my study. 4
  5. 5. EXECUTIVE SUMMARYIn 1989, the Department of Adult and Continuing Education of the SNDT Women’sUniversity in Pune started conducting classes with the children of waste pickers. Closerinteraction with this community provided the University, with a deeper understanding ofthe risks and challenges that the waste pickers were exposed to. Gradually, a largenumbers of waste pickers came together and by 1993, with the support of SNDTwomen’s University, were registered as a Trade Union, named Kagad Kach PatraKashtkari Panchayat (KKPKP). A continuous advocacy effort with the Municipalitybore fruit in the year 1996 when the Pune and Pimpri Chinchwad Municipal Corporationformally recognized the Union and endorsed its members, recognizing their photoidentity card.A Value Chain Analysis study, conducted in 2000, by a team of researcher of SNDTWomen’s University on behalf of the International Labour Organisation (ILO, revealedthat the waste pickers played a critical role in the Municipal’s work of garbage collectionand contribute substantively to lessening the work burden of the municipality. The studyalso, quantified this profit to be approximately, Rs. 16 million. Using this evidence theUnion advocated with the Municipal Corporation to provide basic health services to thewaste pickers. Officially recognizing the efforts of the waste pickers, the Pune MunicipalCorporation (PMC) in 2003, decided to provide basic health insurance cover by payingfor the annual premium, thus becoming the “first municipality in the country to do so”.The scheme has the following unique features:• For the first time a vulnerable and neglected group of the society (the rag pickers) made their voices heard and got it endorsed by a civic body which not only endorsed their view officially by providing them identity card but also agreed to pay for the entire annual premium for all the members for health insurance coverage 5
  6. 6. • KKPKP acts not only as an intermediary between all stakeholders (on behalf of the members) to ensure smooth functioning of the programme but also ensures that the larger goals (of recognition of the efforts of the waste pickers by the government and civic body, giving them a collective voice and ensuring provision of social security measures to address their vulnerability) is not lost sight of and continuously pursued• The scheme is a result of solidarity among the members of the Union (majority of which are women) who, as a result of the scheme are socially and financially empowered to meet their health eventualities at the same time• All the registered hospitals within the Pune Municipal Corporation (nearly 150) act as provider hospitals providing a satisfactory level of service, despite there being no formal agreement with the PMC or the insurer• Most of the members coming from lower socio-economic strata, access neighbourhood/proximal smaller hospitals and nursing homes (less than 15 beds) as these hospitals are closer to them (cutting down on transport related cost), the staffs know them and also they can avail hospitalisation on a credit basis. Taking in to consideration these facts, the insurer has agreed to waive off the criteria of minimum requirement of 15 beds for a qualifying provider hospitalThe scheme started off with an initial enrolment of 3707 members in 2003 to 5411members in 2007; registering a growth of 145%.While historically the claims pending ratio was low for the first time in 2006, theprogramme saw a total of 40 claims pending which was due to internal problems likehigh turn over of employee, frequent strikes and frequent transfer of staffs dealing withthe insurance scheme at New India Assurance Company.Most of the claims were for hospitalisation due to communicable diseases much higherthan the natural average. This could be due to the unhealthy working condition which thewaste pickers face as part of their profession.Another key issue is the fact that there is no formal agreement between the insurer andproviding hospitals. This allows for hiking of price for hospitalisation (e.g when hospitals 6
  7. 7. are asked for bills for submission to insurer, they hike up the charges) and differentialcharges for the same disease condition among other issues.From a financial point of view, the payout to premium percentage is increasing slowlywith the present payout amount coming closer to the maximum sum insured. This isbecause the total sum insured is clearly not sufficient to cover for the health needs of themembers.Also, in its present arrangement, the programme does not allow for schematic orprogrammatic modifications based on community feedback. However it is felt that theinsurer can run this beneficial programme for the most deprived community like thewaste pickers by internally cross subsidizing it with its other profitable portfolio in thecommercial arena.Based on the analysis of the scheme and the context, the following recommendations aremade at various levels of operations:PMC Level:• To encourage and enhance community participation in the insurance scheme (as the current design of the insurance scheme does not allow much scope for community participation) in the following aspects: o in bringing about better understanding of the product coverage and exclusions,( Insurance Literacy)for the beneficiary o To understand better client needs, their ability and willingness to pay as well as specific product features.(Understanding Demand issues) o To bring about better health awareness and improve the overall Health Seeking Behaviour of the community (preventive and promotive health) o Community participation will help in bringing down cost as they will then have a better understanding of the processes o It will also lead to faster claims processing as the members will submit the requisite documents with the insurer 7
  8. 8. o To give the community a stake in deciding the type of insurance cover they want for themselves• Capacity building and Education of the hospital network: o Standardization of Treatment Protocol as well as cost of hospitalisation to be approved and made mandatory for all the provider hospitals (as a regulation) so that the quality of care improves and also the cost is brought down o Education about the Health Insurance programme for the provider hospital so that the claim settlement process is expedited (as requisite claim settlement paper will be given out to the patients) and also will train them to be good gatekeepers. This will control cost and make programme viable.KKPKP Level:• To design and implement a standardized MIS for all the stakeholders by customizing and improving on the current MIS which is run by the organisation• Efforts should be made to cover the remaining 10% rag pickers of the city who have not been registered• To take up a formal role of an agent by undergoing training as required under micro insurance regulation so that it can act as an agent in the insurance scheme and can receive agenting fee which will lessen the burdens of the cost of servicing the insurance scheme• Design and implement insurance literacy programme for all stakeholders which can be paid by the insurer as it is going to bring about efficiency in the entire programme, faster claim processing and settlement which should make business logic for the insurer• Rate negotiation with the hospital as well as advocating with the PMC for standardization of treatment protocol and costs• More emphasis on preventive and promotive health care in the form of health education for the members for which the insurer can pay as it is going to bring down claim load in future with improvement in health status of the community 8
  9. 9. Insurer Level:• To enter in to a formal MOU with KKPKP to act as an agent.• to enter in to a formal MOU with fewer provider hospital (who can be selected based on some quality parameters) for better efficiency and accountability rather than all the hospitals in Pune which leads to huge disparity in the kind of care provided as well as rates charged• To introduce an electronic system of communication (either web based or in the form of an electronic biometric health card) which will ensure speedy claim settlement and also will bring about transparency in the system for all the stakeholders (KKPKP, PMC,NIA and provider hospitals)• Initiate insurance literacy programme (for the members and the hospitals) in partnership with KKPKP and municipality which will not only bring about more insurance awareness on the part of the members and hospitals but will also ensure less claim rejection arising out of wrong submission of documents• Bring about cashless model of insurance rather than reimbursement model like Dharmasthala insurance programme in Karnataka where the NGO acts as an agent this will reduce the load member for having to raise large sums of money in case of health emergency which s/he borrow at usurious rates• Standardization of operating procedure especially in the claims department 9
  10. 10. I. THE SCHEME AT A GLANCE 10
  11. 11. OPERATIONAL MECHANISMS Type of Scheme: In House / Partner Agent Partner Agent Type of Risk: Single Risk / Risk Package Single Risk (basic hospitalisation) Type of Enrolment: Voluntary / Compulsory Compulsory Insured Unit: Individual / Family Individual Prem. Payment Mechanism: Up Front / Easy Payment Mechanism PMC pays all the premium Subsidy to the Scheme: Direct / Indirect Direct HEALTH: Scope of Health Benefits: Limited / Broad Limited Level of Health Benefits: Low / High Low Tie-up with Health Facilities: Private / Public All registered hospital within Pune Administration TPA / No TPA No TPA Responsibility: Additional Financial Benefit: Discount / No Discount Access to Health Services: Free Access / Pre-Authorization Required Free Access Co-Payment: Yes / No Yes 11
  12. 12. Payment Modality: Cashless / Reimbursement Reimbursement MAIN CHARACTERISTICSDesignation of the scheme: Kagad Kach Patra Kashtkari Panchayat (waste pickers’union) Health Insurance SchemeStarting date: 1st January 2003Plan Term: 1 yearInsurance Year: January 1st – December 31stOwnership: Pune Municipal CorporationManagement Responsibility: Informal responsibility voluntarily taken up by the wastePickers’ UnionType of Insurance Scheme: partner AgentTarget Population: Members of Kagad Kach Patra Kashtkari Panchayat or the wastepickers’ union.Outreach: Pune Municipal Corporation jurisdiction areaEligibility Condition: Open to all Members of Kagad Kach Patra Kashtkari Panchayat orthe waste pickers’ union from age group 18 to 70 years of ageEnrolment Modalities: AutomaticPremium Amount: Charged as per the standard rates of Jan Arogya Policy of New IndiaAssurance Company LimitedBenefits: Hospitalisation up to a maximum sum of Rs. 5000Service Delivery: All registered Hospital within Pune Municipal Corporation jurisdictionareaType of Service delivery arrangement: Formal contract only between the insurer andthe Municipal Corporation. All other arrangements are informal and voluntary in nature.Type of services: ReimbursementWaiting Period: NoneCo-payment: None 12
  13. 13. Administration Responsibility: voluntarily taken up by Kagad Kach Patra KashtkariPanchayat without any financial return from the insurer. KEY INDICATORSIndicators 2007 2006 2005 2004 2003Total no. of 5411 4725 4207 3348 3707insuredPercentage of 71.1% 69.1%womenTotal 405520 363720 330680 254210 292140contributionsfrom PMCOverall - 73% 94% 107% 31%premium toclaims amountratioDisbursal per - 3408 3400 3200 3102claimClaims - 2.6% 2.4% 2.77% 1.05%incidence rateClaims - 87.3% - - 67.5%incidence bygenderClaim rejection - 5.5% 9.9% 8.6% 25%rateAmount - 0.61 0.67 0.50 0.72received toamount spentratioPending claims - 40 None None None 13
  14. 14. Total - 25,000 25,000 25,000 25,000administrationcost EVOLUTION PROFILE Evolution of Members 6000 5000 No. 4000 of Members 3000 Evolution of Members 2000 1000 0 2002 2003 2004 2005 2006 2007 Year Age Wise Break up of Members 6000 5000 4000 66-70 No. of Members 3000 56-65 2000 46-55 Up to 45 years 1000 0 2003 2004 2005 2006 2007 Year Evolution of Contribution by PMC 450000 400000 350000 Amount in Rs. 300000 250000 14 Amount (In Rs.) 200000 150000
  15. 15. Premium to Payout trend 400000 350000 300000 Amount (in Rs.) 250000 Premium Paid 200000 Claim amount received 150000 100000 50000 0 2003 2004 2005 2006 Year Evolution of Claims settled 350000 300000 250000Amount (Rs.) 200000 Claims settled 150000 100000 50000 0 Year I Year II Year III Year IV Year Disburasal per Claim vs maximum Sum Insured 6000 5000 Amount (In Rs.) 4000 Disbursal per claim (in Rs.) 3000 Maximum sum insured 2000 15 1000 0
  16. 16. DEVELOPMENT PLAN1. Insurance Plan:Objectives: 1.1: Increase the overall coverage of the scheme in terms of membership. Strategy: The existing network of members and workers can be used to identify unregistered members (at present 10% waste pickers in the city are not covered) who can be encourage to join. The staff and members involved can be incentivised to venture to newer slums and settlement areas of waste pickers. 1.2: Encourage the introduction of family floater system Strategy: There is a need to explore the possibility of a product which will provide for the health care needs of the entire family while at the same time taking care of the cost and keeping it financially viable. This will systematically reduce the cost of premium while at the same time increasing the coverage which will mean that high end care which is typically expensive and unaffordable will be covered. To bring about such a change in product at the official level, the issue can be taken up by the trade union with the government. It can be argued that since the rag pickers are 16
  17. 17. among the most vulnerable urban communities, a holistic cover needs to be provideby the government as a social security measure for the worker as well as his family asthe members of the family of the waste pickers are as vulnerable and exposed tovarious health risk as the members themselves. This can be provided as benefits tothe worker in the non formal sector. This cover needs to be holistic covering theentire range of diseases and costs.1.3:Improve insurance literacy and health awarenessStrategy:It can be discussed with the insurer that by providing insurance literacy programme,efficiency and speed can be brought about in the system as the members will followprescribed procedure in claim submission and will submit correct documents. Byhealth awareness, the overall health seeking behaviour of the members will increasewhich will help in preventing diseases due to knowledge regarding hygiene,sanitation and nutrition thereby substantially bringing down claim load.A suggested way of doing this will be to carry out a year long prospective study in thecommunity to study the health impact of these measures in areas where thesemeasures are administered vs. the area where these measures were not administered.A similar study can be done to measure the impact of insurance literacy on the overallefficiency of the system. These evidences can be used with the insurer so that it istaken up on a formal basis.1.4:Try to clear backlog of pending claims and also an effort to systematically decrease inthe claim rejection to make the scheme more popular. 17
  18. 18. Strategy:An efficient MIS can be designed which makes communication faster, claimsettlement quicker and rejection fewer.At present KKPKP has an existing MIS which needs to be customized so that it canbe made available online for use by all stakeholders thereby bringing in speed andefficiency in the process.1.5:Make the scheme participative and process the product in a manner so that it incorporatesmore community participations and feedback.Strategy:Member representatives can be Elected or selected from within the Union and subsequentlybe given a short training programme by the insurer to impart them the nuances of insurance.This will lead to empowerment of the members who will have more say in the operationalaspect of the scheme. 18
  19. 19. II. DESCRIPTION OF THE SCHEME 19
  20. 20. INTRODUCTIONThe tragedy with India is that those who have the capacity to buy healthcare from themarket most often get healthcare without having to pay for it directly, and those who arebelow the poverty line or living at subsistence levels are forced to make direct payments,often with a heavy burden of debt, to access healthcare from the market. National datareveals that 50 per cent of the bottom quintile sold assets or took loans to access hospitalcare. Hence loans and sale of assets are estimated to contribute substantially to financinghealthcare. With less than 10% insurance penetration for health and in absence of anyofficial social security measure, the hardest hit are the poor and workers of unorganizedsector1 for whom each day of work loss not only translate in to a loss of wage for a daybut also means the associated financial burden spent on availing treatment.In such a scenario the introduction of a social security measure for the poor and workersof the unorganized sector not only becomes imperative but also an overriding concern fora welfaristic state like India. The insurance scheme for the waste pickers of Pune is a stepin the right direction in this regard and can serve to act as the guiding light to acomprehensive social security measure by the state for the workers of the unorganizedsector in the country. This will not only provides a social security measure to theseworkers but also will acknowledge and appreciate the contribution that they have made tothe economy as also the country as a whole.The scheme came in to being as an effort by the Waste Pickers’ Trade Union, KagadKach Patra Kashtkari Panchayat. (For details on the organisation see Annexure-1). TheTrade Union did Value Chain Analysis study, conducted in 2000, on behalf of theInternational Labour Organisation (ILO). This study revealed that the waste pickersplayed a critical role in the Municipal’s work of garbage cleaning and contributessubstantively to lessening the work burden of the municipality. The study also, quantified1 About 90% of the working population in India falls in the unorganized section according to Census ofIndia Data, 2001. 20
  21. 21. this profit to be approximately, Rs. 16 million. The Trade Union argued that while thefinancial benefits (savings in transportation costs) accrued to the municipalities, the costs(health costs) of contributing to municipal solid waste management were borne entirelyby the waste-pickers labouring under abominable conditions of work leading to higherlevels of morbidity. The argument was substantiated by the findings of a studiesconducted by Chikarmane, Deshpande, Narayan in 2001 that showed that waste-pickerssuffered from occupation related musculo-skeletal problems, respiratory and gastro-intestinal ailments. Scrap collectors, particularly women, tended to ignore minor illnessestill they assumed dangerous proportions and became regular conditions. Using theevidence of both the ILO study and the study conducted by Chikarmane, Deshpande andNarayan, the Union advocated with the Municipal Corporation to provide basic healthservices to the waste pickers. Officially recognizing the efforts of the waste pickers andalso the contribution that they make towards solid waste management, the PuneMunicipal Corporation (PMC) in 2003, decided to provide identity card (see Annexure-VI) and basic health insurance cover by paying for the annual premium, thus becomingthe “first municipality in the country to do so”.New India Assurance Company was chosen to be the insurer and the scheme that wasoffered for insurance coverage was the Jan Arogya Policy. (For details on the schemeplease refer to Annexure-IV)The scheme started off with an initial number of 3707 insured members to 5411 membersat present.To start off with there was initial teething problem and hence rigidity on the part of theinsurer. Some issues included like the minimum bed requirement (fifteen beds) to qualifyas a provider hospital. As most of the waste pickers are poor, they prefer to go to smallernursing homes and hospitals which has less than the requisite bed number because of amultiple facts like proximity of the hospital, treatment on credit, overall good rapportwith the doctor and staff. This was discussed with the insurer who has agreed to waiveoff this requirement. Further pre-existing diseases were excluded and claims wererejected on that basis in the beginning but an argument was put before the insurer by theTrade Union that it was not a case of fraud as the waste pickers were never aware of thisfact nor was it ever been tested diagnostically prior to her/his hospitalisation at present. 21
  22. 22. Gradually there has been a systematization of operations both at the insurer and the TradeUnion’s level. Systematic categorization of members in to various age groups, devisingof an efficient MIS, smoothening of the claim settlement processes, gradual insuranceawareness building among the members are some of the steps in the right direction.An analysis of the claims shows that most of the diseases reported by the insured arecommunicable diseases which again indicate the abominable and unhygienic conditionunder which they work. However, the average claim amount shows that it is very close tothe maximum sum insured showing that the cover may not be adequate for the healthneed of the members and there is a need to explore an alternative cover which caters tothe need of the members while keeping the product financially feasible for the insurer.However another reason for average claim amount coming closer to the maximum suminsured is because of the fact that most of the insured access private hospital where nostandardization of rate exists and also rates has not been negotiated with these hospitalswho charge differential rates to the insured for the same disease condition.The case study was documented by Centre for Insurance and Risk Management on behalfof the International Labour Organisation (ILO) as best practices in the sector for microhealth insurance in India. The study entailed informal meetings, formal interviews andother form of interactions with all the stakeholders involved with the insuranceprogramme. While informal interaction was mostly done with the beneficiaries (the wastepickers) to know about their overall perspectives and also to understand the context, theinteraction with the Trade Union, Insurer and the hospitals was more at a formal level tounderstand management issues and operational issues. The case study tries to bring outthe uniqueness of the scheme, the rationale behind its genesis, the practical constraintsfaced by each stake holders and also the needs and aspirations of the stakeholders(especially the beneficiaries) as regards the scheme. The case study has also tried tocapture the overarching vision of the Trade Union of the waste pickers as regards makingtheir views heard to the government and civic authority and their constant endeavour tolead their lives in dignity and self respect. 22
  23. 23. MUNICIPALINSURER CORPORATION WASTE PICKERS’ UNION CLIENT PROVIDER HOSPITAL 23
  24. 24. The main functions of the waste pickers’ Union in the scheme are:• As far as the role of the Union in the general day to day functioning of the scheme isconcerned, they are: o Act as an intermediary, interface and channel of communication between the Client, Municipal Corporation, Insurer and Provider Hospital o Carry out the paper work for Enrolment, Claim Paper Processing and Scrutiny of claim papers before submission to the insurer o Act as the channel for disbursing the claims amount from the insurer to the beneficiary o Advocates on behalf of the client with the insurer in case of claim rejection o Does literacy programme to generate insurance literacy and positive health seeking behaviour o Maintenance of data base and MIS of the scheme o Maintaining a time log to observe the delay in registration, claim processing, disbursement and official delay so that efficiency can be brought aboutAs far as the long term strategic goal of the Union is concerned it ensures that in the dayto day running of the scheme, the basic aim of advocacy for the right and dignity of thewaste pickers are not lost sight of. Hence it carries out the following functions along sidethe routine work of running the scheme:• To act as a platform for advocacy of the right of the waste pickers and ensure thattheir cause is recognized by the government and civic authorities so that they can lead alife of dignity• To advance the argument of provision of social security measures (paid through userfees or through subsidy) for the vulnerable category of people like the waste pickers and 24
  25. 25. informal sector workers so that they have a ‘safety net’ mechanism which prevents themfrom falling back in to the traps of poverty which should be the concern of not only thegovernment but also the private sectorObjectives: • the main objective of providing a health insurance cover by the municipality emerged from the fact that while the financial benefits (savings in transportation costs) accrued to the municipalities, the costs (health costs) of contributing to municipal solid waste management were borne entirely by the waste-pickers labouring under abominable conditions of work leading to higher levels of morbidity. Hence providing health insurance by the municipality will not only take care of their health concern but also largely gain an official recognition from the civic authorities (the Municipality in this case) as regards the contribution they make to Solid Waste Management effort of the city as a whole.Target Population:The target population is rag pickers, scrap collectors and itinerant buyers. At present thetotal number is 5411.The Product:The product is called the Jan Arogya Policy (JAP) of New India Assurance Company(NIA). The type of enrolment is compulsory and the insured unit is an individual. Theperiod of cover is one year with the insurance year starting on 1st of January.Eligibility Condition: 25
  26. 26. The insurance plan is only open to members of the Kagad Kach Patra KashtkariPanchayat (waste pickers’ union), Pune. Age of the insured is from 18 years to 70 years.There is no health check up required prior to enrolment.Exclusions:Refer to the exclusion criteria in the annexure of the Jan Arogya Policy document of theNew India Assurance Company.Benefits:It is a reimbursement of hospitalisation/domiciliary hospitalisation for illnesses/diseasesor injury sustained. The maximum ceiling amount that can be reimbursed is Rs. 5000.Premium:The entire premium amount is paid by Pune Municipal Corporation. The premium isdifferent for different age group (as specified by the New India Assurance CompanyLimited).Benefits Age group (Years) Contributions (in Rs).Healthcare : 18 to 45 70Up to Rs.5000 maximum 46-55 100 56-65 120 66-70 140Service Delivery:In the 1st year, the Pune Municipal Corporation issued a letter of request to all registeredhospital within the jurisdiction of Pune Municipal Corporation to cooperate in terms ofadmitting patients and providing healthcare to the members of this scheme. As of now 26
  27. 27. about 150 hospitals in Pune provide healthcare and hospitalisation to the members of theunion. There has been no written agreement or MOU with these hospitals. The onlycriterion that PMC has is that the hospital should have a minimum of 15 beds to qualifyas a provider hospital. According the union, out of the 150 hospitals, about 20-30 are themost frequented by the members. As of now there has been no rate negotiation with thehospitals either by the PMC or NIA.The Mechanism:Most of the waste pickers in Pune have been registered by KKPKP (nearly 90%) andPMC. All of them are provided with an identity card. The detailed MIS of the memberswith card number and other details are present with the Municipal Corporation. Anupdate of new member is regularly provided by KKPKP to the PMC before 1st of Januaryevery year. Based on this information, the premium in each age category is calculated byKKPKP based on which the total amount is paid by PMC to New India AssuranceCompany Limited.When any of the members falls ill, he gets herself/himself admitted to any of theregistered hospital within Pune Municipal Corporation area limit.All the expenses incurred during hospitalisation are paid for by the members. Then themembers approach KKPKP with the filled in claims form which contains variousinformation of the patient (see claims form of NIA in Annexure-V). A detailed statementof cost is also given by the patient which shows break up of the total expenditure in tovarious sub components. The patient submits the following documents in support of theclaim: • Bills, receipt and discharge certificate from the hospitals/nursing home • Prescription of doctors and bills for medicines • Receipts for doctor, surgeons and specialists feeAll these details and documents are scrutinized by the office staff of KKPKP beforeforwarding it to the NIA office for approval. 27
  28. 28. The NIA claims department looks at the claims and scrutinize it for admissibility. Onsatisfying itself with all informations and details, it releases the amount to KKPKP whofinally disburses it to the members.Typically it takes about a period of 3 months from the time a claim gets submitted withKKPKP and then move to the insurer to finally getting the amount disbursed to themembers which might go up to a maximum of 9 months. 28
  29. 29. FLOW OF CASH AND INFORMATION (3). PMC calculates total premium and send it to NIA INSURER NIA PMC (8). Scrutinised (2). Updated document and registration MIS claim form sent sent (9). Release of KKPKP money to KKPKP (7). Informs hospital about the necessary(1). Registered with document requiredKKPKP as members (10). Disburses cash to client (6). Submits claim form and other documents for scrutiny CLIENTS (4). Pays cash for hospitalisation PROVIDER HOSPITAL (5). Provide documents and information required for claim settlement Flow of Information Flow of Cash 29
  30. 30. Development PerspectiveKKPKP has some developmental plans for the scheme in the years to come. These are: • KKPKP is planning to come up with a separate cooperative of rag pickers who will collect wastes from door step. In this scheme of things, a changed health insurance is visualized to be provided by the cooperative. As shared by Ms. Laxmi Narayan, under this scheme, KKPKP is planning out to do the following: o To introduce a family floater scheme for the entire family on a cashless basis by exploring alternate insurance scheme o To increase the sum assured from Rs. 5000 to more • Bring about efficiency within its own organisation and also the entire process. • At present the organisation is maintaining time log to record the time taken for carrying out various processes and trying to improve and reduce the time. It is planning to streamline and institutionalize this process • To improve outreach and communication with various stakeholders through mobile and internet connectivity • To increase insurance awareness of the provider hospital regarding the process of claim settlement with help from the insurer • To ensure more involvement and participation of the members in the process through more insurance literacy • To ensure a positive improvement in the health seeking behaviour of the community 30
  31. 31. III. ANALYSIS. 31
  32. 32. 1. COVERAGE Coverage wise, the scheme is evaluated on the absolute as well as proportionate change in the numbers of insured followed by the evolution of gender and age distribution within the scheme. 1.1 Membership Evolution: Year Numbers insured %ge change in absolute numbers (Year -0 ) 32 - 2002-2003* (Year – I) 3707 199.27 2003-2004 (Year – II) 3348 -10.7 2004-2005 (Year – III) 4207 20.4 2005-2006 (Year- IV) 4725 29.14 (Year – V) 5411 12.6*Individual insurance programme paid by members Evolution of Mem ebers 6000 5000 4000 No. of Members 3000 Evolution of Mem ebers 2000 1000 0 2002 2003 2004 2005 2006 2007 32 Year
  33. 33. The first year of the scheme was a voluntary insurance programme in which the memberspaid their own premium. Only 32 members enrolled as all members were not able to pay thepremium. The next year, the scheme was taken up by the PMC which paid for the premiumof all members which saw a sudden jump in the enrolled numbers by 199.27%.this wastypically because the members came to know that the entire premium will be paid by thePMC. However in year II, there was a drop in membership by 10.7%. The reasons for this soas in 1st year all rag pickers were enrolled irrespective of their membership status. Howeverin year II, the process was streamlined and the list was scrutinized for filtering out non-members which explains the drop in membership. From then till now the scheme has seen aconsistent growth till date. (An overall average growth of 145% from year I)1.2 Membership by Gender: Gender Year-I year-II Year-III Year-IV Year-V No. % No. % No. % No. % No. % Male - - 1146 30.9 - - 1368 28.8 - - Female - - 2562 69.1 - - 3367 71.1 - - Year II Gender Break Up Year IV Gender Break Up m ale male 2 8 .8 % 30.9% fem ale f emal e 69.1% 71. 1% 33
  34. 34. Though the membership has shown an average growth of 145%, gender wise the majority ofthe members are female (nearly 70% for the data available). As most of the insured arefemale and also belong to socio-economically vulnerable category like the waste pickers,hence providing a safety net product like health insurance to them stands justified and alsorecognizes their contribution to the city by the civic authority.1.2: Membership by Age Group: Age group 2003 2004 2005 2006 2007 (according to JAP of NIA) 18 to 45 2866 2771 3266 3772 4656 years 46-55 518 452 579 736 564 56-65 275 123 326 215 177 66-70 48 2 36 2 14 Age Wise Break up of Members 6000 5000 4000 66-70 No. of Members 3000 56-65 46-55 2000 Up to 45 years 1000 0 2003 2004 2005 2006 2007 Year 34
  35. 35. From the above graph it is clear that over the years the largest chunk of membership has been in the age group 18-45 years which is the economically productive age group. Also the fact that they are women, make them vulnerable to exploitation-economic, sexual and in the domestic space. It is seen that the number of rag picker in this age group has gone up from 2866 in 2003 to 4656 in 2007. Coverage wise it is seen that there had been an average growth of 145% since the introduction of the scheme. Most of the members are female and belong to the economically productive age group of 18-45 years. 2. CONTRIBUTION2.1. Evolution of Contribution:Contribution to the premium is entirely made by the Pune Municipal Corporation at thebeginning of each year (1st of January). Here an evolution of contribution of the PMC over theyears as well as age break up of this premium in to various age categories is shown. Year Amount (In Rs.) Percentage increase/decrease Year – I 292140 - Year – II 254210 -12.9% Year – III 330680 30% Year – IV 363720 9.9% Year – V 405520 11.4% G.Total 1240750 Premium amount paid towards premium of the insured over a three year period came to a total of Rs. 12.40 lakhs which has been paid till date by Pune Municipal Corporation for this scheme. The evolution of contribution over the year’s shows a gradual percentage 35
  36. 36. decrease which indicates that though the amount may have increased in absolute number but has not increased proportionately. The reason for this is because in the beginning of the scheme age wise categorization was not done too strictly; hence the amount of premium could have been more even for less aged members. Further, over the years the new members joining the Union were mostly younger members, (as seen in the age wise break up of members over the year in table- 1.3) decreasing the proportionate amount contributed by PMC. (As in JAP, the premium is calculated in various age brackets) 2.2. Age wise total Premium Paid:Age Group Amount paid (in Rs.) 2003 2004 2005 2006 Total18- 45 years 200620 193970 228620 264040 887250 (71.5%) 46-55 51800 45200 57900 73600 228500 (10.5%) 56-65 33000 14760 39120 25800 112680 (9%) 66-70 6720 3348 4207 4725 12320(0.9%) Of the total premium paid by the PMC, 71.5% is paid for the age group up to 45 years. Incidentally, this age group has the highest number of claims which questions the calculation of the insurer which says that old people (56-70 years category) are more risky and hence premium charged to them should be more.(Which may be true from a life insurance perspective). Of the total 12.50 lakh premium paid by the PMC, it is seen that most of it (71.5%) goes for the age group 18-45 years. 36
  37. 37. 3. CLAIMS ANALYSIS The claim analysis looks at the evolution of claims in terms of gender and age break up of claims, claims accepted and rejected. It also looks at the type of diseases predominant in the insured and also what is the preferred healthcare facility of the members as well as the cost incurred to avail these cares and the time delay in the claims getting reimbursed. Overall through these analyses it tries to understand systemic inefficiency which needs to be addressed to bring about better claim experience for both the insured and the insurer. 3.1 Current Claims Incidence: 2003 2004 2005 2006 No. of No. of %ge No. of No. of %ge No. of No. of %ge No. of No. of %ge Members claims Members claims Members claims Members claims 3708 39 1.05 3352 93 2.77 4208 101 2.4 4735 125 2.6 %ge 138change1st year %ge 8.6change1st year %ge 23.7change1st year It was seen that the claim shot up in 2004 by 138% in 2004. The reason being that typically as there was no insurance awareness (on the part of the members) the claim went up manifold. However in subsequent years, with increased insurance awareness and improved method of communication with the insured as well as the insurer, the claim maintained a stabilized trend. 37
  38. 38. 3.2. Frequency of Claims: Frequency of Claim (from 2003-06) No. of Claimants Single Claim 224 (88.8%) 2 claims 23 (9.1%) 3 claims 4 (1.5%) 4 claims 1 (0.39%)It is seen that about 88.8% of the claims received from 2003-06 are one claim made by aninsured in a given year. This shows the increased insurance awareness that the membershave as a result of the effort of the Trade Union. No. of Claimants Single Claim 2 claims 3 claims 4 claimsThis shows that although the frequency of claim per insured may not be high, yet the amountclaimed is more almost nearing the maximum sum insured. 38
  39. 39. 3.3 Claims Incidence by Gender: Gender Claim 2003 2004 2005 2006 Male 13 N.A N.A 16 (32.5%) (12.6%) Female 27 N.A N.A 110 (67.5%) (87.3%)N.A: Not AvailableIn the year for which data are available, it is clearly seen that the majority of the claimantsare female.In KKPKP most of the registered members are women. Being female exposes them tovarious discrimination and harassment. They are not only subjected to sexual harassmentfrom perverts in the streets but also looked upon suspiciously by their husband as regardstheir moral integrity. Being female also snatches away the bargaining power which they canhave with the scrap dealer. The formation of the Union in general and this scheme inparticular have helped give them a dignity in life and also a knowledge that they are notalone in their struggle for existence and to eke out a living.3.4. Claims Incidence by Age Group*: age of 2003 2004 2005 2006 total claimant 19 to 45 19 75 68 58 220 46-55 9 6 12 16 43 56-65 1 0 6 1 8*Only Received Claims 39
  40. 40. Age wise break up of claims 80 70 60 50 No. of Claims 40 18 to 45 46-55 30 56-65 20 10 0 2003 2004 2005 2006 YearIt is seen that through the years, the maximum claim has come from the age group 18- 45years. (Nearly 81.18%). This is so because majority of the rag pickers belong to this agegroup which is also the economically productive age group.Although 19-45 years pays the least premium but has the highest number of claims (81.18%).This shows that unlike life insurance, age wise risk calculation of premium does not holdgood for health insurance. For community health insurance the health and disease profile ofthe community, their average annual health expenditure, their paying capacities and preferredhealthcare provider are the data which is required apart from age which does not play a verysignificant role. 40
  41. 41. 3.5. Claims Amount Settled: Year I Year II Year III Year IV Total Claims 89953 271995 309365 274362 945675 settled (In Rs.) Pending - - - 241910 241910 for payment (In Rs.)From the data it is seen that the claim settled over the years has systematically gone up. Oneof the reasons can be because of increased enrolment of members over the years. The otherreason can be because of lack of a strict gate keeping mechanism. Evolution of Claims se ttled 350000 300000 250000 Amount (Rs.) 200000 Claim s settled 150000 100000 50000 0 Year I Year II Year III Year IV3.6. Claims Payout: Year 41
  42. 42. Payout in Rs Claims 1-1000 20 1001-2000 41 2001-3000 56 3001-4000 55 4001-5000 112 Total 284 It has been observed in the scheme that the maximum payout has been in the range of Rs.4001-Rs.5000 showing that the claim amount is close to the total sum insured. This shows that the maximum sum assured is not adequate for the health needs of the insured. This also explains the concern of the insurer about the unviability of the programme from a business perspective. However it can be run as a social security measure for health coverage for the poor and vulnerable section of the society like the waste pickers. There can be internal cross subsidization from the other commercially profitable product of the insurer. Claims for various Category 120 100 80Claims 60 Claim s 40 20 0 1-1000 1001-2000 2001-3000 3001-4000 4001-5000 Claim Amount 42
  43. 43. 3.6: Premium to Payout Trend: 2003 2004 2005 2006 Total Premium 292140 254210 330680 363720 1240750 Paid Claim 89953 271995 309365 265862 937175 amount disbursed (Payout) Payout to 31 107 94 73 76 premiumratio (as apercentage)Except for 2003, where the claim disbursed (payout) to premium percentage was 31%, allother years showed a high premium to payout percentage (an average of 76%) with themaximum being 107% in 2004. Further in the year 2004 the payout (Rs.271995) was higherthan the premium paid (Rs. 254210). As is evident from the graph, the payout is hoveringcloser to the premium paid from 2005 onwards. As also seen in table-3.6, where themaximum number of claims is in the category of Rs4000-Rs. 5000. This is the reason whythe insurer is finding the programme financially not very lucrative. Premium to Payout trend 400000 350000 300000 Amount (in Rs.) 250000 Premium Paid 200000 Claim amount received 150000 100000 50000 0 2003 2004 2005 2006 43 Year
  44. 44. However it also shows that the maximum sum insured is not sufficient for the members to meettheir health needs. Hence keeping these two opposing view point in mind, there is a need toexplore the possibility of an insurance product which makes it more comprehensive in terms ofmeeting the health needs of the insured as well making it viable commercially from the insurer’sperspective.3.7. Disbursal per Claim: 2003 2004 2005 2006Claim amount 89953 271995 309365 265862 received No. of claims 29 85 91 78 clearedDisbursal per 3102 3200 3400 3408claim (in Rs.)The disbursal per claim is around Rs. 3277.50 showing that it is closely approaching themaximum cap of Rs. 5000 progressively over the years. This again shows that the maximumsum insured is not sufficient to meet the basic hospitalisation expense of the members. It alsopoints to the fact that rates have not been negotiated with the hospital which leads to highermedical bills. However for members (who were till now footing the entire bill which wasproving to be a huge financial burden) the scheme has come to them as the greatest boon. Inthe words of Mangal Jagganath Gaikwad a member who lives in the Indira bashat nearAundh.3 years ago she suffered from cholera and was admitted to Medi-point Hospital, D.PRoad in Pune. She incurred an expense of Rs. 5000 and got the whole amount reimbursedwithin one year of submission of discharge paper, prescription and other document requiredby the insurance company. “We feel that this cover is of great help to us and helps usfinancially to meet our health costs which previously we were unable to meet”. 44
  45. 45. Disburasal per Claim vs maximum Sum Insured 6000 5000 Amount (In Rs.) 4000 Disbursal per claim (in Rs.) 3000 Maximum sum insured 2000 1000 0 2003 2004 2005 2006 Year3.8. Claims Settlement- Amount Spent vs. Amount Received: Year Average Amount Average Amount Amount received to spent Spent (in Rs.) Received (in Rs.) ratio 2003 4287 3101.82 0.72 2004 6383 3199.94 0.50 2005 5009 3381 0.67 2006 5510 3388 0.61The average ratio for amount received to amount spend is 0.62. However the average masks themaximum amount which might go up to Rs.25, 000 for surgeries which is not provided by the 45
  46. 46. scheme. Hence there is a need for providing a larger cover than is currently provided by thescheme which is not only comprehensive but also is financially viable. Average Amount spent vs.Average Amount Received 7000 6000 5000 Amount (in Rs.) Average Amount Spent (in Rs.) 4000 3000 Average Amount Received (in Rs.) 2000 1000 0 2003 2004 2005 2006 Year3.9. Claim Rejection Rate: 2003 2004 2005 2006 Claims 10 8 10 7 Rejected Claims 30 85 91 79* Accepted Total claims 40 93 101 126 Rejection 25% 8.6% 9.9% 5.5% Rate (%ge)* 40 claims pending in 2006Except for the 1st year, the claims rejection rate has been stable over the years. One of themain reasons for rejection of claim is non-submission of requisite documents. Further claims 46
  47. 47. gets rejected in most cases when the claimed amount approaches the maximum sum insured(Rs.5000) Claims Accepted vs Claims Rejected 100 90 80 70 No.of Claims 60 Claims Rejected 50 Claims Accepted 40 30 20 10 0 2003 2004 2005 2006 Year 3.10: Pending claims: In 2005 there were 2 pending claims (total amount not available) while in 2006 there were 38 pending claims taking the total to 40 pending claims till date. Out of 2 claims in 2005, no reasons were cited for the pending claims while in 2006, out of 40 claims, (total amount Rs. 2,58, 461) only reasons were given for 2 claims. Out of the reason given are frequent transfer and turnover of employees which delays in the processing of claims. 47
  48. 48. 3.11. Claim by Hospital*: Type of Number of Claims Hospital 2003 2004 2005 2006 Total Private 20 70 67 113 270 (82%)Public trust 3 11 7 8 29 (8.8%) Municipal 0 1 2 3 6 (1.8%)State Govt. 7 10 4 3 24 (7.2%)* Total claim during the period 360. The information available for 31 claims. Total 1.80% 7.20% 8.80% Private Public trust Municipal State Govt. 82%Most of the claimant access private hospital because of proximity issue, faith in the doctor,flexibility in payment mechanism (hospitalisation and treatment is provided on a credit basiswhich is repaid to the hospital on realisation of amount through reimbursement) andperceived better quality of private provider. As expressed by the members, there is a popular 48
  49. 49. perception favouring private hospital seen to be providing a better quality care as comparedto government facility.Alka Sidhgasate lives in Parwat Peta Basti in 132, dandekarpur in Pune. She had colitis 2years back. She went to a nearby private hospital (Parween hospital). “In Parween hospital Ihad detailed diagnosis, medication and stayed in the hospital for 8 days. I feel overall theirservices were better than what is being provided in the government hospital though it isexpensive than that at the government hospital”The next largest segment of the client goes to the public hospital. The reason being that it ischeaper and also because the clients have to pay the money upfront. It is seen that most of theaccident cases go to the government hospital as it is a medico-legal matter and FirstInformation Report (FIR) for primary investigation needs to be filed as a legal requirement.3.12. Claims Incidence by Specialty*: Department Year 2003 2004 2005 2006 Total Medicine 8 39 41 79 167 (52.35%) Obs & Gyn 2 8 4 5 19 (5.95%) Orthopedic 1 20 18 29 68 (21.3%) Neurology 1 0 0 0 1 (0.31%) Cardiology 1 2 0 2 5 (1.5%) Casualty/Emergency 6 10 12 13 41 (12.8%) Ophthalmology 1 1 0 6 8 (2.5%) Surgery 5 2 2 1 10 (3.1%) Total 25 82 77 135 319 49
  50. 50. * Total numbers of claims 319. Information not available for 41.Most of the claims show a higher percentage of hits in the medicine ward. These cases weremostly suffering from communicable diseases which could have resulted from their exposureto organic garbage and other harmful wastes which is a breeding ground of germs andpathogens. These diseases include gastroenteritis, cholera, typhoid, worm infestations,diarrhea, dysentery and food poisoning. The next category of claims is from the orthopedicward indicating accident cases. These accidents are mostly due to the accidental falling in tothe waste bins, road traffic accident, and incident of domestic violence.These informations explain the abominable and potentially hazardous condition that thewaste pickers are exposed to as part of their daily profession. 3% 3% 13% medicine 2% Obs &Gyn 0% Orthopedic Neurology cardiology 52% casualty 21% opthalmology surgery 6% 50
  51. 51. 3.13: common diseases reported: Diseases Year 2003 2004 2005 2006 Total Anemia 2 1 3 1 7 Gastro enteritis 0 6 10 12 28 Enteric fever 0 0 3 8 11 Chicken gunya 0 0 0 4 4 Hysterectomy 0 2 1 2 5 Injury 3 2 1 3 9 G.Total 64As seen in table 3.13, most of the diseases suffered by the insured are communicable diseases.The total numbers of communicable diseases (gastroenteritis, enteric fever and chicken gunya)are 43 in number (out of a total of 64) which is about 67.18% of the entire disease reported forclaim. This shows that there is a large burden of communicable disease which can becontrolled by basic preventive and promotive education (which can be funded by the insurer asit will brings down the claim load) coupled with the insurance awareness programme. 35 30 Injury 25 Hysterectomy 20 Chicken gunya 15 Enteric fever Gastro enteritis 10 Anemia 5 0 2003 2004 2005 2006 51
  52. 52. 3.14: Discrepancy in cost incurred for various diseases for 2005 and 2006: Diseases Range of expenditure (Rs.) 2005 2006 Gastroenteritis 3000-11000 2000-8000 Fever 3000-8000 2000-7000 Typhoid fever 2000-3000 4000-7000 Hysterectomy 11000-12000 17000-19000For the two year for which the analysis was done, it was seen that there is huge discrepancy incost of care for the same condition. For example for gastroenteritis, the cost incurred variesfrom Rs. 3000 to Rs.11000. This is because there has been no cost negotiation with theprovider hospitals by the insurer and also due to lack of standardization of procedure and astandard treatment protocol. 3.15. Time Lag in Claim Settlement: Process Time Lag (Delay) Minimum Maximum From discharge of patient 1 month 3 months to submitting claim paper to KKPKP From submission of 1 week 3 weeks claims to KKPKP to the submission by KKPKP to the insurer From submission of claim 2 months 6 months to NIA to the client getting reimbursed 52
  53. 53. From the above it is clear that the minimum time from the patient getting discharged toultimate reimbursement of claims takes from a minimum time of 3 moths to maximum of 9months.3.16: Evolution of time lag for claim settlement: Year Average day taken from discharge to claim settlement 2003 50 2004 62 2005 48 2006 68The average time for claim settlement shows a sinusoidal pattern with one year showing arise and then fall in the subsequent year with a maximum average time of 68 days reported in2006. The reason for this delay is more to do with internal problems within the insurer likestrike, frequent transfer and other administrative problems. The reason also lies to someextent with the client for not submitting correct claim papers and also to a very little extentlies with the organisation (KKPKP) for processing and sending it to the insurer. average days taken 80 70 average days taken 60 50 40 average days taken 30 20 10 0 2003 2004 2005 2006 year 53
  54. 54. Overall the analysis of the claim shows that there has been a healthy payout ratio of 0.62(amount spent to amount received) which augurs well for the members. The claimrejection rate was initially high (25%) but has stabilized over the years. Most of themembers were seen to claim only once which indicates towards some insuranceawareness on their part which is due to the effort put in by the Union which imparts thisawareness during their group meeting.Most of the diseases for which claim had come in are communicable diseases whichagain points out to the fact that the waste pickers are constantly exposed to potentiallyhazardous condition having adverse effect on their health.The amount claimed is mostly in the range of Rs.4000-5000 showing that the schememay not be sufficient for the healthy requirements of the members and hence alternatescheme needs to be looked at for providing a holistic coverage.As in all other segments of the society, the popular perception of the waste pickers is onthe perceived better quality of private provider than the public provider. This leads tohigher claims amount as these private entities do not have any standardization of ratesand also by the fact that no rate negotiation has been carried out with them by the insurer.The time between a claim getting submitted and approved ranges from 3 months to 9months which is financially a burden on the poor household who get money throughborrowing from money lenders at high rate of interest or through credit from the providerhospital. In the later case the faith of the provider hospital is eroded if there is latepayment which consequentially affects the subsequent visit by the member in which casethey may not be entertained by the hospitals. 4 ADMINISTRATION COST:The administration cost incurred by KKPKP is Rs. 25, 000 per year for all the years. Thiscost is recovered by levying an annual service charge of Rs.25 from the insured byKKPKP. 54
  55. 55. If the administrative cost is calculated as a percentage of the premium collected for all theyears it would be as follows:Total premium calculated for all the years (5 years) =Rs.12, 40, 750Total administrative cost collected for all the years (5 years) = Rs.1, 25, 000Administrative cost ratio = 1, 25,000/1240750 X 100% = 10.0746%Any scheme with an administrative cost ratio of 10% overall is considered to be costeffective one.As per the recent IRDA regulation, 15% commission needs to be paid to the agent for theservices provided. As KKPKP is doing the entire job ob an agent, the insurer canconsider paying agenting fees to it (KKPKP). 55
  56. 56. IV. CONCLUSIONS ANDRECOMMENDATIONS 56
  57. 57. What started as a commendable effort by the department of Adult and continuingEducation of the SNDT Women’s’ University in Pune has come to be recognized as thefirst effort where the Municipality has undertaken to provide health insurance to thepoorest and most vulnerable section of the society: the rag pickers.The scheme is a very good example of evidence based advocacy which uses action basedresearch as its tool. This is also a good example in mass based movement where thepeoples’ support has made it possible in eliciting recognition and acknowledgement fromthe civil authority of the effort put by the rag pickers for the general welfare of thecommunity.Some of the unique features of the scheme are as follows:• The scheme is unique in the sense that for the first time a vulnerable and neglected group of the society (the rag pickers) made their voices heard and got it endorsed by a civic body which not only endorsed their view officially by providing them identity card but also agreed to pay for the entire annual premium for all the members for health insurance coverage• KKPKP not only acts as an intermediary between all stakeholders (on behalf of the members) to ensure smooth functioning of the programme but also ensures that the larger goals (of recognition of the efforts of the waste pickers by the government and civic body, giving them a collective voice and ensuring that a social security measures to address their risk) is not lost sight of and continuously pursued• The scheme is a result of solidarity among the members of the Union (majority of whom are women) who as a result of the scheme is treated with respect within the household as well as the community and are financially empowered to meet their health eventualities at the same time• All the registered hospitals within the Pune Municipal Corporation (nearly 150) act as provider hospitals providing a satisfactory level of service despite there being no agreement of them with either the PMC or the insurer 57
  58. 58. • As most of the members come from lower socio-economic strata, they access smaller hospitals and nursing homes (less than 15 beds) as these hospitals are closer to them, the staffs know them and also they can avail hospitalisation on a credit basis. Taking in to consideration these facts, the insurer has agreed to waive off the criteria of minimum requirement of 15 beds to qualify as provider hospitalOver all the scheme has shown an impressive growth in the number of insured with 3707insured in the first year of the scheme to a total of 5411 insured at the last count. Of thetotal number of the insured, nearly 70% are female. The number of insured will grow inthe coming year with the Union planning to start a cooperative of waste pickers whichwill help in door-to-door collection of garbage.Most of those insured fall within the age category of 18-45 years which is theeconomically productive age group. This age group accounts for the maximum premiumpayout (71.5%) of the total premium paid by the PMC as also the maximum number ofthe claims. It was seen that most of the claims were for hospitalisation arising out ofcommunicable diseases which explains the abominable condition in which these wastepicker’s work which is potentially unsafe for health.Further an analysis of average payout for claims submitted shows that it is closelyapproaching the maximum sum insured (Rs. 5000). This shows that the cover is notadequate to meet the health needs of the members and a comprehensive policy needs tobe explored which takes care of the health needs as well as making the schemefinancially viable. One of the main reasons for higher cost of claim is because there hasnot been any rate negotiation with the hospital by the insurer which charges varied ratesfor a similar disease condition. Besides, government health institutions are not preferred(which are relatively cheaper) by the members because of perceived poor quality,bureaucracy and unfriendly behaviour of staffs.One of the major concerns over the year has been the number of rejected and pendingclaims. While the rejection rate has come down systematically over the years (25% inyear - I to 5.5% in 2006), in 2006 alone there were a total of 40 claims pending.Overall the scheme has been successful from the perspective of providing a safety net formeeting the health needs of the waste pickers. It has been a great learning experience for 58
  59. 59. all the stakeholders who have faced the initial teething problem in the scheme to itspresent state where it provides overall satisfactory coverage to the insured members.There has been a gradual systematization of operations both at the insurer and theUnion’s level. over the years, systematic categorization of members in to various agegroup, devising of an efficient MIS, smoothening of claims settlement process, gradualinsurance awareness building of the members and overall a sense of satisfaction and prideon the part of the members in their quest for asserting self determination and leading alife of dignity. This can be summed up in the words of one of the member, ShantabaiVithal Choudhury from Kasiwadi, Bhawani Pet in Pune. She was traveling with 5 otherwomen members when she met with a terrible road accident. “I was the most injuredamong the 5 women with cut injury in both legs and thighs. I was admitted to SasoonHospital from where I was referred to Panchsheel hospital where I stayed for one and ahalf months. My son spent Rs.40, 000 for the 1 and half month of my stay in the hospital.I got Rs.5000 from the insurer for my expenses. Though it is not a great amountcompared to my total expenses yet it really made me feel happy at the fact that I amcovered by such a policy and also proud that it is as a result of my profession. I truly feelthat it is like an employee benefit scheme for people like me”. LIMITATIONS AND SUGGESTIONS Although the scheme it’s quite unique in its approach and also provides the much needed financial security for the health risk of the unorganized sector workers like waste pickers, yet it has some limitations which can be corrected to make the scheme more popular and bring about operational efficiency. . These can be dealt at various levels as follows: I.PMC Level: (1). Need for institutionalized Community Participation: The present structure of the insurance scheme does not allow for much community participation programmatically. As the entire premise of the programme was to 59
  60. 60. provide compulsory health insurance cover to the members, programmatically it may not be possible. However some element of community participation needs to be integrated for the following favourable outcome which will ensure better functioning of the scheme:• in bringing about better understanding of the product coverage and exclusions,( Insurance Literacy)• To understand better client needs, their ability and willingness to pay as well as specific product features.(Understanding Demand issues)• To bring about better health awareness and improve the overall Health Seeking Behaviour of the community• Community participation will help in bringing down cost as they will then have a better understanding of the processes• To give the community a stake in deciding the type of insurance cover they want for themselves Suggestion: The PMC can have a group of workers of KKPKP, and some elected or selected members who will regularly interface with insurer, PMC, hospital and KKPKP. The time can be so chosen that it does not interfere with their work hours(2).Capacity building and Education of the hospital network: • Standardization of Treatment Protocol as well as cost of hospitalisation to be approved and made mandatory for all the provider hospitals (as a regulation) so that the quality of care improves and also the cost is brought down (form the average payout of Rs.3277.50 to less) • Education about the Health Insurance programme for the provider hospital so that the claim settlement process is expedited (as requisite claim settlement paper will be given out to the patients) and also will train them to be good gatekeepers. This will control cost and make programme viable. 60
  61. 61. (3). Less utilisation of Municipal Hospital:As the data shows, about 7.2% of the insured goes to Municipal hospital for healthcare. The municipal hospital/dispensary can improve their quality of care so that moreand more insured goes to their health facility which will bring down cost of care andmake the scheme much more viable financially.Suggestions:An improvement in the quality of treatment provided in the municipal hospital can beone suggestion to address this issue. Alternatively, municipal hospital should focusintensively on primary care which not only decrease the diseases load in thecommunity, improve the overall health of the community but also act as an effectivegate keeping mechanism.II. Insurer Level:(1). No formal MOU with hospital and KKPKP:For acting as the provider to the scheme, the insurer has no formal agreement with theprovider hospital. The PMC has requested informally to hospitals within Pune tocooperate. As there is no formal agreement, it leads to unstandardised services metedout and differential rates being charged (refer table-3.15). This is so because as thereis no formal MOU, there has been no rate negotiation with hospitals as well asstandardization of treatment protocol leading to cost escalation.Similarly the insurer does not have a formal MOU with KKPKP, making it difficultfor KKPKP to act in the best interest of the client and with more authority whiledealing with hospitals and insurer. 61

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