RSBY: a government initiative that (Gasp!) seems to work ...

1 RSBY: a government initiative that (Gasp!) seems toworkBYVISHYONFEBRUARY 22, 2012 The RSBY smart card for BPL families[Editor's Note: RSBY expands to Rashtriya Swasthya Bima Yojna (Hindi for "NationalHealth Insurance Policy"). The brainchild of IAS officer and Director GeneralofMinistry of Labour and Employment,Anil Swarup, the scheme was formallylaunched in 2008 to provide health insurance coverage for Below Poverty Line (BPL)families. I first heard Anil Swarup speak on a panel at the2011 Sankalp , a good friend and editor Anil Swarup's detailedRSBY presentation fromthe Health conference. This post is based on Swarup'spresentation and related research.]

2 ]These days we rehard pressed to chance upon any good news that can be directlyattributed to good governance or sound government policy. Whether it s the latest inalong series of national shamesor an education policy thataims to scuttle India sdemographic dividend, can the government get ANYTHING right?The RSBY program might justbe one of those good news. On that note of cautiousoptimism, let s get started. Did you know that 94% of India s workforce isunorganized? Is it then a wonder that most of the things that we digerati take forgranted (automatic savings, loans, life insurance, health insurance, etc.) areunavailable to the unorganized sector?

3 Overall, health insurance coverage in India isabysmally low 83% of health spending is Out of : a government initiative that (Gasp!) seems toworkBYVISHYONFEBRUARY 22, 2012 The RSBY smart card for BPL families[Editor's Note: RSBY expands to Rashtriya Swasthya Bima Yojna (Hindi for "NationalHealth Insurance Policy"). The brainchild of IAS officer and Director GeneralofMinistry of Labour and Employment,Anil Swarup, the scheme was formallylaunched in 2008 to provide health insurance coverage for Below Poverty Line (BPL)families. I first heard Anil Swarup speak on a panel at the2011 Sankalp , a good friend and editor Anil Swarup's detailedRSBY presentation fromthe Health conference.]

4 This post is based on Swarup'spresentation and related research.]These days we rehard pressed to chance upon any good news that can be directlyattributed to good governance or sound government policy. Whether it s the latest inalong series of national shamesor an education policy thataims to scuttle India sdemographic dividend, can the government get ANYTHING right?The RSBY program might justbe one of those good news. On that note of cautiousoptimism, let s get started. Did you know that 94% of India s workforce isunorganized? Is it then a wonder that most of the things that we digerati take forgranted (automatic savings, loans, life insurance, health insurance, etc.)

5 Areunavailable to the unorganized sector? Overall, health insurance coverage in India isabysmally low 83% of health spending is Out of : a government initiative that (Gasp!) seems toworkBYVISHYONFEBRUARY 22, 2012 The RSBY smart card for BPL families[Editor's Note: RSBY expands to Rashtriya Swasthya Bima Yojna (Hindi for "NationalHealth Insurance Policy"). The brainchild of IAS officer and Director GeneralofMinistry of Labour and Employment,Anil Swarup, the scheme was formallylaunched in 2008 to provide health insurance coverage for Below Poverty Line (BPL)families. I first heard Anil Swarup speak on a panel at the2011 Sankalp , a good friend and editor Anil Swarup's detailedRSBY presentation fromthe Health conference.]

6 This post is based on Swarup'spresentation and related research.]These days we rehard pressed to chance upon any good news that can be directlyattributed to good governance or sound government policy. Whether it s the latest inalong series of national shamesor an education policy thataims to scuttle India sdemographic dividend, can the government get ANYTHING right?The RSBY program might justbe one of those good news. On that note of cautiousoptimism, let s get started. Did you know that 94% of India s workforce isunorganized? Is it then a wonder that most of the things that we digerati take forgranted (automatic savings, loans, life insurance, health insurance, etc.)

7 Areunavailable to the unorganized sector? Overall, health insurance coverage in India isabysmally low 83% of health spending is Out of s no shortage ofevidence showing that healthcare expenses are among thetop reasons for poorfamilies descending into abject poverty. According to a 2004 Duke Universitystudy,between one-half to two-thirds of poor households attribute illnesses,accidents, and health-related expendituresto their descent into poverty. The NSSO data quantifies this further 64% of India s poorest become indebted due to in-patient care (aka hospitalization ).The genesis of theRSBY scheme is to provide health insurance to India s poorest( BPL family lists sourced from states ), specifically to mitigate the economic impactof hospitalization expenses.

8 A total sum of Rs. 30,000 insures a BPL family (up to amaximum of five familymembers). No diseases (including pre-existing) are excludedfrom coverage. A smartcard (pictured above) enables cashless transactions andservice delivery through anelaborate automated RSBY process pays what?75% of the program cost and the Rs. 60 smartcard cost is borne by the centralgovernment while 25% of the program cost and administrative costs are borne by theparticipating state. The state has an option to fund additional benefits. The BPLbeneficiary pays a yearly registration fee of Rs. 30 and can choose from private orpublic Adoption Stats(as of Feb 20, 2012) Cards millionoApproximately 27,000 incremental new cards are being issued monthly People benefited so million Hospitals empaneled:9,697 States participating in RSBY: 25 Insurance companies involved:12 Using the 2011 census data and state-level lists of empaneled hospitals, I created acomparative view of RSBY adoption in the 25 statessorted byHospitals-per-BPL-population (million).

9 UP, Gujarat and Maharashtra lead in terms of total number ofempaneled hospitals but it s more interesting to look at theHospitals-per-BPL-There s no shortage ofevidence showing that healthcare expenses are among thetop reasons for poorfamilies descending into abject poverty. According to a 2004 Duke Universitystudy,between one-half to two-thirds of poor households attribute illnesses,accidents, and health-related expendituresto their descent into poverty. The NSSO data quantifies this further 64% of India s poorest become indebted due to in-patient care (aka hospitalization ).The genesis of theRSBY scheme is to provide health insurance to India s poorest( BPL family lists sourced from states ), specifically to mitigate the economic impactof hospitalization expenses.

10 A total sum of Rs. 30,000 insures a BPL family (up to amaximum of five familymembers). No diseases (including pre-existing) are excludedfrom coverage. A smartcard (pictured above) enables cashless transactions andservice delivery through anelaborate automated RSBY process pays what?75% of the program cost and the Rs. 60 smartcard cost is borne by the centralgovernment while 25% of the program cost and administrative costs are borne by theparticipating state. The state has an option to fund additional benefits. The BPLbeneficiary pays a yearly registration fee of Rs. 30 and can choose from private orpublic Adoption Stats(as of Feb 20, 2012) Cards millionoApproximately 27,000 incremental new cards are being issued monthly People benefited so million Hospitals empaneled:9,697 States participating in RSBY: 25 Insurance companies involved:12 Using the 2011 census data and state-level lists of empaneled hospitals, I created acomparative view of RSBY adoption in the 25 statessorted byHospitals-per-BPL-population (million).