In June 2011, the World Bank came out with its first-ever review of social welfare policies in India. For most part, the review panned the policies for their faulty design and sloppy implementation. However, there was one exception—the Rashtriya Swasthya Bima Yojna (RSBY), or the national health insurance scheme.
“…the RSBY health insurance programme for BPL households is path-breaking in its design and has pioneered approaches to delivery which provide a model for other public programmes,” it stated.
The scheme is today the world’s largest medical insurance programme covering over 120 million poor people in the country (see box). It provides a maximum cover of Rs 30,000 to each BPL (below poverty line) household in the country. However, the insurance is available only for in-patient care (or hospitalisation).
The RSBY has received rave reviews even from international organisations. The GIZ (or the German Agency for International Cooperation that, along with the World Bank, was involved in designing the scheme) in its January 2013 report has found that based on data from three states—Bihar, Uttarakhand and Andhra Pradesh—90 percent of the respondents were satisfied with the scheme.
So, it comes as a surprise that academics and health experts alike see its expansion as the greatest threat to achieving universal health care in India.
HOW IT ALL BEGAN
Sudha Pillai, then the labour and employment department secretary, led the design of the scheme. In 2008, she says, the RSBY—which was part of the UPA’s Common Minimum Programme—was started to provide social security for workers in the unorganised sector. This was after the health ministry washed its hand of the scheme, stating it already had a lot on its plate.
Pillai used a similar government-funded medical insurance proposal from the Kerala government and the home ministry’s efforts to provide smart cards to citizens in the border areas to come up with the RSBY model. Since its inception, RSBY has grown rapidly, both in terms of its coverage as well as budget allocations, the latter being quadrupled to Rs 1,137 crore (2013-14).
Over the years, RSBY has garnered an enviable position in India’s policy space. The United Nations Development Programme (UNDP) and International Labour Organization (ILO) picked it up as one of the top 18 social security schemes in the world.
Interestingly, the scheme has been championed by non-Congress states like Chhattisgarh, which has expanded the scope of RSBY beyond the BPL category to cover every citizen. On the other hand, the worst performers are Congress-ruled states Delhi, Maharashtra and Rajasthan.
IS THE DIRECTION WRONG?
Despite such eagerness shown by the governments both at the Centre and the states, observers feel RSBY is pushing India’s health care into a deeper mess. The criticism against RSBY is at two broad levels.
According to experts like Sakhtivel Selvaraj of the Public Health Foundation of India, the first concern is that, in the absence of a strong primary and secondary health infrastructure, it increases the tendency among patients to get hospitalised at the first instance. As an off-shoot, it leads to increased frauds. Various studies and reports have shown how empanelled hospitals did not have adequate facilities, or how hospitals conducted unnecessary hysterectomies on patients to make easy money through the cashless insurance schemes.
Anil Swarup, the additional secretary in the ministry of labour and employment and the man heading RSBY at the Centre, is aware of such problems. “We are addressing those issues. We have de-empanelled 270 hospitals in the country. Tell me one scheme in the country which has taken such action. We must not throw the baby with the bath water,” he says.
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(This story appears in the 22 March, 2013 issue of Forbes India. To visit our Archives, click here.)