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Environment

National health scheme brings 'smart' insurance to India's poor

A new smart card system is providing health insurance for Indians living below the poverty line. The scheme, implemented with the help of German development agency GIZ, has also attracted attention from other countries.

Patient Urmila Devi holds an RSBY Smart Card

The insurance plan aims to give people more healthcare choices

Chotew Lal has been laid up in hospital bed in Northern Delhi for several weeks with a broken shoulder.

"I came to this hospital because it's the nearest. When I came here, I had no money but my smart card," he said.

"I had no problems - I didn't have to wait, and my treatment started right away.“

Until recently, Lal couldn't have afforded to go to this private hospital for treatment. Working as a beekeeper's assistant on the outskirts of Delhi, the 26-year-old barely made enough money to survive.

Like most Indians, Lal did not have health insurance until a few months ago, when a friend told him about a new health offering for the poor. Heeding his friend's advice, Lal had his photo and fingerprints taken for the RSBY Smart Card.

A national insurance scheme

RSBY stands for "Rashtryia Svashtra Bima Yojana," or "National Health Insurance Scheme." Since its launch in 2008, more than 24 million smart cards have been activated, but the system aims to provide health insurance to more than 300 million poor Indians.

Dr. Rajesh Kumar Singh runs the private "Indian Hospital" in the Shalimar Bagh area of Northern Delhi. His was the first private hospital in the Indian capital to sign up for the new health scheme.

Indian Hospital in New Delhi

Dr. Singh's hospital was the first in the capital to sign up for the RSBY card scheme

Today, 123 private hospitals are part of the system - more than half of the private hospitals in the Indian capital.

Of the 102 beds in Dr. Singh's clinic, 45 are now reserved for RSBY patients like Chotew Lal. Dr. Singh acknowledged that the wards for poor patients are less spacious; between six and eight patients are squeezed into one room, leaving hardly any space to walk between the beds.

But before the smart card system, he said, private clinics wouldn't provide care for patients who didn't have money.

"We asked them to deposit some amount of money at the reception, so that we can start treatment," Dr. Singh said.

"But because they were poor patients; they were unable to deposit this money, and we used to send them back to the government hospital."

The public option

For Chotew Lal, at the Indian Hospital in Delhi, a private facility was his first choice - not just because it's much closer to home than a government hospital, where his treatment would have cost nothing.

"In government hospitals, we have to wait much longer until we get treated," he said. "You have to stand in a queue for hours until you finally see a doctor. But here in the private hospital, everything was much quicker."

People living in rural areas often have to travel long distances to reach a clinic. Compared to private hospitals, government facilities are frequently less well equipped and lack a well-educated medical staff.

Before RSBY private hospitals were unable to treat poor patients who needed life-saving operations. Dr. Singh, who runs two hospitals in Delhi, said private hospitals were initially reluctant to sign up to the scheme.

But with large numbers of RSBY patients coming in, it paid to invest the 15,000 rupees it cost to install computers and card readers. Thanks to the RSBY healthcare scheme, poor patients now have access to treatment like never before.

"The same patient has a 30,000 (rupee) smart card in his pocket, and we are bound to treat the patient," Dr. Singh said.

Facts and figures

The RSBY card covers up to 30,000 rupees - or 500 euros - in hospitalization fees for up to five family members. The patients pay an annual registration fee of about 30 rupees - approximately 50 euro cents - while the government covers the insurance premium of about 600 rupees, or 10 euros, per year.

Ambulance with RSBY logo

Ambulance costs are also covered by the RSBY insurance

When a patient receives treatment, the hospital's card reader automatically deducts the fee from the remaining amount on the smart card. The bill is sent electronically to the insurance company, and neither cash nor paperwork is required.

The German development organization GIZ has helped implement the RSBY scheme in India.

"It's a huge breakthrough in social security in India, because for the first time we can say we have a national-level health insurance scheme," said Nishant Jain, a GIZ technical advisor.

Jain said the number-one advantage to the card is that low-income earners do not have to take out a loan to get medical care.

"It's cashless, so they can go anywhere, give the card and get free hospitalization treatment," he said.

Moreover, the card is accepted in 27 states and nearly 8,700 hospitals around India.

Mass appeal

Common social security schemes in India have so far been restricted to formal sector employees, members of society who pay taxes, who make up less than 10 percent of India's labor population.

However, 90 percent of the workforce - more than 400 million people - are working in the informal sector. The majority of them - ranging from rickshaw-pullers, construction workers and street vendors to truck drivers and domestic workers - can hardly afford health insurance.

Many don't even earn a minimum daily wage of 200 rupees, or about 3 euros.

Anil Swarup, director-general of labour welfare at the Indian Ministry of Labour

Anil Swarup pioneered the RSBY smart card program in India

Despite efforts by the Indian government to provide free, universal healthcare through state clinics, national data shows that people continue to spend large amounts on treatment, even in government facilities.

Almost 80 percent of health bills are still paid out of patients' pockets and 64 percent of the poorest Indians are in debt every year because they have to take out loans to pay their hospital bills.

Anil Swarup, the man behind RSBY, and his team decided to map out a solution. Swarup is the director-general of labor welfare at the Indian Ministry of Labour - and said he is proud that the system has taken high-tech to the country's smallest villages.

"The prime minister, he was very keen that the poor people in this country should be provided with health insurance coverage - for the simple reason that a lot of impoverishment in the country, and elsewhere in the world, is caused by their inability to come up with funds when they fall ill," he said.

Before RSBY, the government had been providing health facilities where anyone could receive treatment, but Swarup said the scheme's primary objective is to "provide choice to the poor man, so that he could choose between public and private hospitals."

The new system has also turned the economics behind healthcare on its head, marking a departure from a supply-driven model, wherein the government simply pumped money into state hospitals.

"This is more demand-driven," Swarup said, "and we believe that being demand-driven, the quality of healthcare will improve."

Signing up

With an eye to gaining new customers, RSBY has been working with government staff to distribute cards to the poor in both rural and urban areas. That takes them to each village and township that has listed families as living below the poverty line (BPL).

A family poses for their electronic photo ID

RSBY teams are travelling the Indian countryside registering families in the program

Nationwide, more than 60 million families in India earn less than 2,500 rupees - or about 40 euros - each month.

For the biometric smart card, the mobile team fingerprints and takes a photo of each family member. The information is stored on a chip, and within a few minutes, people receive their smartcards and can start using them in one of the affiliated hospitals.

Swarup said the RSBY card has helped improve services in state-run facilities, too - which makes a big difference for the patient. The labor welfare director said government hospitals consider a card-carrying patient something akin to a "VIP," since the hospital can retain the money provided by insurance.

"There is an in-built financial incentive for the doctors to look after the beneficiary," he said. "So in some places, the people have complained that the below-poverty-line patients are being treated better than others."

Health benefits

Dr. Singh, from the private Indian Hospital in Delhi, said patients now come in earlier for treatment, which reduces health costs and improves their health.

Patients can afford to go to the hospital when a disease is in its early stages, rather than waiting until complications arise or it's already too late.

Thanks to RSBY, many women now have access to healthcare for the first time in their lives, GIZ technical advisor Jain said.

"It's much easier to reach women than if it's a cash act," he said.

Most of the family members registered on each card - apart from husband and wife - tend to be male, since the majority of families in India still spend more on boys than girls. But the smart card cannot be redeemed for money, which means that women do not have to secure funds before going to the hospital.

Health experts hope the smart card will help reduce maternal and infant mortality rates in India, which are among the highest in the world. The RSBY scheme gives poor women the option of giving birth in a hospital, since delivery and treatment for their newborn infants are now covered.

For women like Urmila Devi, 32, the smart card has made it possible for her to pay for a gynaecological operation at Dr. Singh's hospital.

Cost concerns

Sangeeta, a patient at hospital

The insurance scheme has been particularly beneficial to women

While Devi's surgery cost just a few thousand rupees, other services such as chemotherapy or heart surgery far exceed the coverage provided by the RSBY card.

The 30,000-rupee amount allocated to each family every year only covers basic medical needs.

Private hospital directors like Dr. Singh and his colleagues have demanded a fee hike, saying the current rates are insufficient. Hospitals earn 500 rupees per patient for each day of hospitalization and 1,000 rupees for a day in intensive care.

Dr. Singh said private hospitals were initially opposed to the scheme because the rates were too low.

"It is not a sufficient amount - in some cases, we require a higher amount, like antibiotics or life-saving drugs we have to use in this patient," he said.

But Dr. Singh said hospitals changed their tune once the RSBY scheme came into effect - and in the future, they expect the system to be profitable. The growing number of smart cards has already spurred the construction of new hospitals in remote areas that lack medical infrastructure.

Dr. Singh, for instance, decided to build a 1,000-bed hospital in his home district of Uttar Pradesh.

An RSBY smart card and scanner

The RSBY system makes for a cash-free visit to the hospital for cardholders

"I thought of those people who are poor, who are below the poverty line," he said. "They don't have any health facility in the nearby village or in the nearby area. This is a fantastic scheme which has started."

Dr. Singh expects his rural hospital to turn into a profitable business. But apart from bringing economic advantages to hospitals, insurance companies and patients, Jain from the GIZ said the card has also helped boost people's self-confidence.

He told the story of one woman in the state of Jharkand, who had a job as a domestic worker for a wealthy landlord. Once she received her smart card, she was able to go to the same large hospital her landlord visited for treatment. In a country with huge social disparities, that constitutes a major change.

A work in progress

Despite the success of the project, initiators of the RSBY scheme still face challenges that keep them on their toes. Jain said the first obstacles were simply making sure the hardware, software and printers for the cards could operate in temperatures of up to 45 degrees Celsius in dusty villages

"Now we are facing the second generation of challenges," he said. "Awareness-creation is the biggest challenge - how to make people aware that this is the scheme, this is the benefit, where they can go, how they can access the services, what to do if there are any problems."

There are information campaigns, including videos that aim to explain how the smart card works. The initiators also count on NGOs like SEWA Bharat to help inform and register the poor.

Geeta a community organizer for the NGO SEWA Bharat

Community organizers from SEWA Bharat are raising awareness about the scheme

SEWA Bharat organizes female workers in several parts of the informal labor sector, including those who produce handicrafts and textiles, as well as vendors and construction workers.

Community organizers Geeta and Ramkali said many people in Delhi's slum areas already know a bit about the RSBY scheme. But they have been less than enthusiastic about the smart cards, claiming that they don't work everywhere.

Some of the problems are technical in nature, including instances where cards have not been accepted by card-readers in hospitals. But other complaints include claims of unequal treatment.

"Private clinics still prefer patients who pay cash," one woman said.

Although some hospitals give RSBY patients excellent treatment, Geeta and Ramkali have heard people complain that private hospitals still prefer rich patients.

Since many poorer patients are illiterate and unfamiliar with the scheme, the doctors might become angry if patients don't tell them right away that they have a smart card, which doctors say hinders proper authorization.

SEWA community organizers said misconceptions persist about how the cards work, with some patients believing doctors will give them money if they have a smart card.

Improvements in the works

Hassid, a construction worker, in Delhi

Many construction workers have not heard of the smart card scheme

Anil Swarup from the Indian Ministry of Labour acknowledges that the RSBY scheme is still evolving and needs improvement. The government is also looking to expand the system to many more workers in the informal sector.

"The next step now is to extend the scheme beyond BPL categories," Swarup said. "The government has already taken a decision to extend the scheme to building and reconstruction workers who may or may not be under the poverty line."

Despite those efforts, there's still a gap on the public awareness front. Construction workers and builders have already begun to receive smart cards in Haryana state, but their counterparts in central Delhi had no idea that they could register for RSBY health insurance.

"I have no idea, I have never heard of this," one man said.

Yet Swarup is confident that a large number of poor Indians will receive healthcare coverage from the scheme in the coming years, as the rollout of the card continues across the country.

"I'm still surprised at the speed by which this is happening," he said. Nevertheless, making sure that the 430 million people earning below and slightly above the poverty line who need the card get coverage will be tough.

"I don't think in the next couple of years we can cover all of them," Swarup said. "But we should be able to cover a large number of them."

A regional sensation?

Despite the flaws, the RSBY scheme has allowed an increasing number of poor people in India to have more choices when it comes to healthcare.

Chotew Lal and other poor Indians will likely keep spending the 20 or 30 rupees for a quick doctor's consultation out of their own pocket. They might even continue to collect money from families and friends in the event of a health emergency.

But now, they can decide which hospitals they want to go to, all over the country.

The RSBY logo

The RSBY system has gotten attention from other countries

Indian health experts have also looked into exporting the RSBY system. More than a dozen countries in Africa and Asia are interested in using at least part of the scheme to improve their own healthcare programs.

That's meant that in addition to giving RSBY workshops across India, Jain from the GIZ has been doing plenty of travel outside the country.

"Pakistan, Bangladesh, Nepal, Ghana, Nigeria are interested (and) want to implement the scheme," Jain said, adding that the United Nation's Development program identified the Indian RSBY scheme as one of the most innovative case studies worldwide.

"In a lot of these countries, the situation is similar; they have an informal sector (and) similar kinds of problems," he said.

"They are interested in how India is able to do it, despite all the problems, and trying to learn from it."

Author: Anke Rasper, Lalita Chaturvedi (arp)
Editor: Stuart Tiffen

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