Abstract
BackgroundMany LMICs have implemented Publicly Funded Health Insurance (PFHI) programmes to improve access and financial protection. The national PFHI scheme implemented in India for a decade has been recently modified and expanded to cover free hospital care for 500 million persons. Since increase in annual cover amount is one of the main design modifications in the new programme, the relevant policy question is whether such design change can improve financial protection for hospital care. An evaluation of state-specific PFHI programmes with vertical cover larger than RSBY can help answer this question.Three states in Southern India - Andhra Pradesh, Karnataka and Tamil Nadu have been pioneers in implementing PFHI with a large insurance cover.MethodsThe current study was meant to evaluate the PFHI in above three states in improving utilisation of hospital services and financial protection against expenses of hospitalization. Two cross-sections from National Sample Survey’s health rounds, the 60th round done in 2004 and the 71st round done in 2014 were analysed. Instrumental Variable method was applied to address endogeneity or the selection problem in insurance.ResultsEnrollment under PFHI was not associated with increase in utilisation of hospital care in the three states. Private hospitals dominated the empanelment of facilities under PFHI as well as utilisation. Out of Pocket Expenditure and incidence of Catastrophic Health Expenditure did not decrease with enrollment under PFHI in the three states. The size of Out of Pocket Expenditure was significantly greater for utilisation in private sector, irrespective of insurance enrollment.ConclusionPFHI in the three states used substantially larger vertical cover than national scheme in 2014. The three states are known for their good governance. Yet, the PFHI programmes in all three states failed in fulfilling their fundamental purpose. Increasing vertical cover of PFHI and using either ‘Trusts’ or Insurance-companies as purchasers may not give desired results in absence of adequate regulation. The study raises doubts regarding effectiveness of contracting under PFHIs to influence provider-behavior in the Indian context. Further research is required to find solutions for addressing gaps that contribute to poor financial outcomes for patients under PFHI.
Highlights
Nations of the world have committed to the target of Universal Health Coverage (UHC) under Sustainable Health Goals [1]
In 2014, the proportion of respondents who reported being enrolled in any publicly funded health insurance scheme was lower in Karnataka and Tamil Nadu as compared to Andhra Pradesh (Table 1)
The study addresses the challenge of endogeneity when evaluating insurance and adds to understanding of insurance based health coverage in India
Summary
Nations of the world have committed to the target of Universal Health Coverage (UHC) under Sustainable Health Goals [1]. Many LMICs have implemented Publicly Funded Health Insurance (PFHI) programmes to improve access and financial protection. The national PFHI scheme implemented in India for a decade has been recently modified and expanded to cover free hospital care for 500 million persons. Three states in Southern India - Andhra Pradesh, Karnataka and Tamil Nadu have been pioneers in implementing PFHI with a large insurance cover. The objectives of the PFHI as articulated by state in 2013 were – “To improve equity of access to ‘Below Poverty Line’ (BPL) families to quality tertiary medical care both by strengthening the Public Hospital infrastructure as well as through purchase of quality private medical services to provide financial support for catastrophic health needs.” [36]. There were 586 hospitals empanelled under the scheme in 2014, of which 460 (78%) were private hospitals [40]
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