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Health insurance? Poor patients in Gujarat forced to make cash payments

By Rajiv Shah 
Despite being covered by a Government of India health insurance scheme, poor families in Gujarat are made to make cash payment for hospitalisation, both in private and public hospitals.
A recent research paper, “Promoting universal financial protection: evidence from the Rashtriya Swasthya Bima Yojana (RSBY) in Gujarat, India”, by a group of four researchers – Narayanan Devadasan, Tanya Seshadri (both from Institute of Public Health, Bangalore), Mayur Trivedi (Indian Institute of Public Health, Sardar Patel Institute Campus, Ahmedabad) and Bart Criel (Department of Public Health, Institute of Tropical Medicine, Antwerp, Belgium) – has said that despite the health insurance scheme to the below poverty line (BPL) families, in majority of cases health expenditure is met through out-of-pocket (OOP) payments at the time of illness. The study suggests, this is happening despite the fact that, to protect poor families, the Government of India launched the national health insurance scheme (RSBY) in 2008.
Under the scheme, the study, published in the London-based health journal, “Health Research Policy and Systems”, says, all BPL families are eligible to join the RSBY. “The premium is heavily subsidised by the government. The enrolled members receive a card and can avail of free hospitalisation care up to a maximum of US$ 600 per family per year. The hospitals are reimbursed by the insurance companies”, it says. Based on a sample of 2,920 BPL households from 78 villages in Patan district of Gujarat, the study underlines that despite the fact that 41 per cent of patients had enrolled themselves in RSBY and had used the RSBY card, they faced OOP payments at the time of hospitalisation.
Percent BPL families taking advantage of RSBY scheme
“The median OOP payment for the above patients was US$ 80 (interquartile range, $16–$200) and was similar in both government and private hospitals”, the study says, adding, “Patients incurred OOP payments mainly because they were asked to purchase medicines and diagnostics, though the same were included in the benefit package.” The study suggests that “while the RSBY has managed to include the poor under its umbrella, it has provided only partial financial coverage. Nearly 60 per cent of insured and admitted patients made OOP payments.” Recommending “better monitoring of the scheme”, the study says, the scheme is not reaching the needy despite the fact that India spends about 4.3 per cent of its gross domestic product (GDP) on healthcare.
Launched in April 2008, the RSBY is covered by the Government of India’s Ministry of Labour and Employment, and it provides protection for more than 30 million poor households across the country against direct hospital expenses. It is a voluntary private health insurance scheme, wherein a BPL family of (maximum) five people can enroll with an insurance company by paying a token enrolment fee of US$ 0.6 per family per year. Insurance companies enroll BPL families and provide them with a RSBY “smart card” that contains the biometric details of the enrolled family; the smart card is necessary for all transactions at the hospital. The premium for each family, which ranges from US$ 10 to US$ 12, is paid by the government directly to the insurance company.
As most of the 1,000 diagnostic related groups (DRG) packages are within the upper limit of US$ 600 of insurance cover, the study says, “It is expected that the majority of patients will walk out of the hospital without paying any money at the time of illness. This is expected to improve access to hospital care and protect the family from impoverishment.” While in India, approximately 55 per cent of the poor have enrolled in the scheme, as against 41 per cent in Gujarat, its coverage ranges from 11 per cent in Assam to 87 per cent in Tripura. “Low enrolment was due to problems with the BPL list, inadequate information and knowledge dissemination to the population, and technical glitches with the enrolment process itself. The average hospitalisation rate was 26/ 1,000 enrolled, ranging from 0.8/1,000 in Chandigarh to 52/1,000 in Kerala”, the study points out.
The majority of the families (2,866 out of 2,920) surveyed by the researchers were Hindus; 78 of the families were from a backward caste and 18 per cent belonged to the lowest caste (SC). Only 1.2 per cent of the surveyed families belonged to aboriginal groups (ST). There was a relatively even distribution of enrolled families in terms of distance from Patan town. The common reasons for admission were pregnancy related (96 patients) followed by hysterectomies (58 patients), injuries (53 patients) and cardio-vascular related diseases (51 patients). “Patients went mostly to private hospitals (73 per cent)”, the researchers say, adding, “While most patients were admitted in empanelled hospitals, 30 per cent of the patients were not aware of the empanelment status of the hospital where they were admitted”.
The study points out, “Of the 520 hospitalised, nearly half lived within 30 km of Patan town. Hospitalisation rates fell steadily with distance, and the admission rates for those who lived more than 30 km from the town was significantly lower than admission rates for those who lived within 30 km. Of the 520 admissions, only 13 (3 per cent) did not have to pay any money for their hospitalisation. The rest incurred a median expense of US$ 141 (range, $48–$343), either before, during or after admission.” This was happening even though the “RSBY scheme is expected to protect the patient from direct expenses during hospitalization.”
% BPL families covered under RSBY across Gujarat districts
“More than half of the admitted patients had made OOP payments to receive the appropriate care at the time of hospitalisation. This ranged from less than a dollar to more than US$ 500 in the case of 20 patients. The families who made OOP payments tended to live further away and were poorer compared to those who did not make OOP payments. Most patients from both groups, i.e., with and without OOP, used the private sector and were admitted mainly for delivery and hysterectomy. The median OOP payment in both private and government hospitals was US$ 100 (range, $46–$240). Despite being enrolled in the RSBY, 58 per cent of patients (299 out of 520) still made OOP payments at the time of hospitalisation”, the study underlines.
The study further says, “Our survey indicates that of the 299 patients who incurred OOP, 174 patients had used the RSBY card for hospitalisation. Despite having a RSBY card, the hospitals still collected money from 124 patients at the time of hospitalisation. Doctors admitted that they had stopped seeing RSBY patients with non-surgical conditions as it was ‘not remunerative’. Yet another reason mentioned by doctors were the delays and uncertainty of payment by the insurance companies. Hospitals, therefore, tended to ask for advances from patients, make them buy medicines and consumables and sometimes even pay the entire bill, with the promise to return the same when the insurance company reimburses the hospital.”
“Another fifty patients did not receive free care because of problems either with the card (30 patients) or with the card reader at the hospital (20 patients)”, the study informs, adding, “Patients mentioned that even a small spelling error on the card or a minor difference in age was reason enough for the hospital to refuse free treatment. Many times patients were asked to supplement the RSBY smart card with additional documents like ration card, BPL card, voter’s identity card, etc. Even the insurance companies insisted on documents from the hospitals, such as case sheets, patient identification details, etc.” The researchers quote a hospital administrator as telling them, “RSBY is a paperless scheme, only on paper”, adding, “The doctors justify taking money from patients by citing examples about how insurance companies delay or even refuse reimbursements on flimsy grounds.” One of the grounds was, “Everything matches, the name, the thumbprint, the address, the family details, but the gender may be wrongly entered in the card. That is enough for the insurance company to refuse our claim”. Another was, “Insurance companies see only data, not the case sheet.”
The study further says, “Unfortunately, some patients did not use the card because they did not know about it (46 patients), or forgot to use it (23 patients). Interviews show that while the insurance company launched intensive awareness campaigns, most of the messages were limited to ‘what’ the scheme is and ‘who’ is eligible; there was remarkably little information about ‘how’ to use the card and to benefit from the scheme. Therefore, we had a situation where many patients sought healthcare and made OOP payments, even though they had a RSBY card in their house. They were simply not aware that they could use this card to get free hospitalisation care.”
The study regrets, “What is worrying is the fact that the most vulnerable population, the aboriginal groups, lag behind in utilisation of benefits. It is also problematic that most of those who received the cards and who benefited from it live close to Patan town. A likely explanation is that the travel cost for those living far away forms a significant barrier to utilising hospital services. The state nodal agency would need to monitor this closely to ensure that those living far from the district headquarters also benefit from the RSBY. In order to increase the people’s financial coverage, the organisers of the scheme need to ensure that patients are protected from making OOP payments.”
On the supply side, the study says, “The organisers need to prevent providers from collecting money from both the patient as well as the insurance company. The fact that nearly 60 per cent of insured patients had to spend about 10 per cent of their annual income on hospital expenses, despite being enrolled, is problematic. Enrolment in the scheme and utilisation of the RSBY card are merely intermediate steps in a process of having cashless benefits that protects the families from OOP payments. If this objective is not met, then the entire purpose of the scheme is jeopardised.”
The study also finds, “Hospitals that force RSBY patients to buy medicines and pay hospital bills are paid twice: first by the patient, second by the insurance company. Patients are often not in a position to negotiate as they are vulnerable at the time of admission. A major responsibility for the state nodal agency would be to prevent hospitals from charging RSBY patients, which implies close monitoring and taking necessary action when appropriate. Possible suggestions would be to operate a round-the-clock helpline that patients can call or to randomly make calls to patients discharged from hospitals to find out whether they had made OOP payments or to systematically sample patients and find out which hospitals are indulging in this fraudulent activity.”

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