Health ministry plans new trust-based model for insurance-based health scheme

The RSBY is flagship scheme of the government which provides cashless health insurance cover to below poverty line families.

Written by Abantika Ghosh | New Delhi | Updated: June 2, 2015 10:14:46 am
Health scheme, Union Health Ministry, Prime Minister’s Office, Rashtriya Swasthya Bima Yojana, Health Ministry, RSBY, insurance based healthcare, healthcare scheme, According to the proposal, state-run trusts with funds contributed by the Centre and states will process and settle claims of hospitals that provide such services to the poor, instead of insurers.

The Health Ministry has proposed a new trust-based model for the Rashtriya Swasthya Bima Yojana (RSBY), an insurance-based healthcare scheme for poor and migrant workers, just when it appeared to have stabilised seven years after its launch.

According to the proposal, state-run trusts with funds contributed by the Centre and states will process and settle claims of hospitals that provide such services to the poor, instead of insurers.

The Health Ministry has moved a Cabinet proposal to change the implementation model based on the recommendations of a committee of secretaries that was apparently inspired by the Arogyasri scheme in Andhra Pradesh and Yeshasvini programme in Karnataka. Both are self-funded initiatives with support from the states, and without cover from insurance companies.

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RSBY, which was earlier with the Labour Ministry, was shifted to the Health Ministry from April 1 with plans to roll out a National Health Assurance Mission to provide universal healthcare.

Launched in 2008, RSBY provides health cover to BPL households, with beneficiaries entitled to hospitalisation cover of Rs 30,000 for a range of diseases; even pre-existing conditions of up to five members in a family are covered.

However, the shift to a trust-based model has triggered concerns that it would “kill a good scheme”, which has had its teething troubles but had stabilised over the last couple of years.

Healthcare service providers have already started talking about being forced to exit the scheme —- much like the exodus of private hospitals from the Central Government Health Scheme (CGHS) because of alleged non-payment of dues.

Interestingly, the RSBY shift comes at a time when the government is considering a insurance-based model for CGHS.

Under RSBY, smart cards are issued to BPL families; according to official figures, there are currently approximately 3.72 crore active smart cards. Beneficiaries pay only Rs 30 as registration fee and the central and state governments pay the premium. There is no age limit for registration, and package rates for hospitals for a large number of diseases are fixed by the government.

Till April 2014, there were as many as 71,63,935 hospitalisations and the total insurance payout could be to the tune of Rs 20,000 crore, said officials.

RSBY has also been praised by the World Bank, United Nations and the International Labour Organisation. And despite allegations of cartelisation between mid-level government functionaries and insurance company employees, awareness about the scheme has increased over the years, particularly because it is not restricted to big-ticket surgeries or tertiary care.

“RSBY was transferred to us on an ‘as is where is’ basis and that is how we have been running it… we have now sent a proposal to the Cabinet that states should gradually move to a trust model. They can choose to stay on in insurance, but a trust is certainly the preferred model to which everybody will have to move at some point,” said a source in the Health Ministry.

In its report, the committee of secretaries had said: “In view of the fact that insurance companies are governed by profit motive and the health insurance model for vulnerable sections has not found to be very successful globally, a Health Assurance Agency Model would be introduced by (the Health Ministry). The Health Assurance Agency could be a society, trust or a Section 25 company. This model would incorporate the learning of the insurance companies in respect of RSBY with reference to contractual issues, poor access to intended beneficiaries etc. At the same time, learning of trust models of states would also be examined for suitable adaptation of best practices.”

Service providers and officials instrumental in the RSBY rollout say taking it out of insurance may be a recipe for killing one of the best social sector schemes in the country. The present model, they point out, at least leaves hospitals with the option of approaching the Insurance Regulatory and Development Authority (IRDA).

”While RSBY had been facing allegations of low bidding by insurance companies who then try to avoid payments, the move towards state-run trusts, while being welcome, does raise certain concerns on the state’s ability to process claims and make payments in time. This process could be improved by creating ring-fenced funds that are independent of the consolidated fund of the state and are run by independent medical professionals to ensure that the systems are run transparently and autonomously,” said Dr Sabahat Azim, a former bureaucrat who is now the managing director of Glocal, a chain of hospitals that provides primary and secondary care in in tier II cities.

“The trust is run by the government. Who can take on the government? There is no recourse for claims being refused,” said a senior official from another hospital, who did not wish to be named.

”It may simply degenerate into a inspector raj with the trust sending out its personnel to verify claims of service providers. This will eventually lead to piling up of dues of service providers, since the trust cannot be expected to have expertise in processing claims. There are instances of hospitals closing down due to non-payment of dues under CGHS,” said the chief executive of another hospital, on condition of anonymity.

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