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Social Health Protection and Publicly Funded Health Insurance Schemes in India: The Right Way Forward?

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Abstract

This paper presents an assessment of publicly funded health insurance (PFHI) schemes as a measure of social health protection (SHP) in the country. The study uses secondary data from the nationally representative large-scale survey data on household social consumption related to health from three National Sample Survey (NSS) rounds—60 (2004), 71 (2014), and 75 (2017–18). The analysis of PFHI schemes is done on three metrics—population coverage, service coverage, and financial coverage. The analytical framework of the paper is based on the conceptual framework of the universal health coverage (UHC) cube of the World Health Organization (WHO) (“UHC cube” exhibits three dimensions of coverage: i.e., breadth of the cube—the population [who is covered?], depth of the cube—services [which are covered], and height of the cube—cost sharing [what proportion of costs are covered?]). To achieve the long-standing goal of UHC, improvements need to be made across each dimension in order to help fill the cube (Van Leberghe 2008). From the available data on population coverage, the national estimates of PFHI coverage in the country show a limited proportion of rural and urban population being covered in 2017–18. PFHI schemes provide coverage for only selective secondary and tertiary care, and not comprehensive care as per the design of the schemes. Outpatient care including diagnostics, and medicines are not covered under these schemes. High out-of-pocket expenditures (OOPEs) despite PFHI schemes are observed with disproportionately higher expenditures in private hospitals. This raises serious concerns with the direction of public policy that prioritises the national PFHI, PMJAY (Pradhan Mantri Jan Aarogya Yojana) to solve the social health protection (SHP) problem for the workforce of the country. The existing social health insurance ESIS (Employees’ State Insurance Scheme) which only covers a small section of the labour force is, however, relatively better in terms of its benefits cover (second arm of the UHC cube) and financial protection (third arm of the UHC cube) as seen in the OOPE per hospitalisation case as compared to PFHI schemes and might offer useful lessons for expanding social security to the country’s workforce.

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Fig. 1

Source: https://www.who.int/health_financing/topics/benefit-package/UHC-choices-facing-purchasers/en/

Fig. 2

Source: Author’s estimates using unit-level NSS 75th round data

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Notes

  1. The World Health Organization (WHO) defines UHC as “all people having access to the health care they need without suffering financial hardship”.

  2. Shahra, Razavi (2022) Making the Right to Social Security a Reality for All Workers The Indian Journal of Labour Economics 65(2)

  3. ESIS is the statutory and contributory social health insurance for factory workers employed in factories with more than 10 workers and earning up to a ceiling of ₹21,000 per month and their families.

  4. It also includes workers in shops, hotels, cinema halls, restaurants, road motor transport, newspapers, warehouses, ports, airports, NBFCs, insurance business establishments. Workers in educational institutes, private medical colleges are also included in 27 states.

  5. ESIC Annual Report 2019–20 (Ministry of Labour and Employment, 2020)

  6. https://cghs.nic.in/.

  7. See https://www.pmjay.gov.in/.

  8. Surabhi (2023) https://www.thehindubusinessline.com/economy/policy/centre-looks-to-expand-coverage-revamp-working-of-esic-epfo/article65805352.ece.

  9. See World Health Report (2008).

  10. RSBY was launched by the Union government by the Ministry of Labour and Employment in 2008 to provide respite from hospitalisation expenses (mainly secondary care) up to ₹30,000 annual coverage for BPL households. It aimed to cover 70 million families or 350 million persons by the end of 2017. In 2011, it was expanded to cover unorganised sector workers including construction labourers, beedi workers sanitation workers, street vendors, domestic workers, rag-pickers, taxi and rickshaw drivers, and mine workers.

    (https://pib.gov.in/newsite/PrintRelease.aspx?relid=108156).

  11. https://www.who.int/news-room/fact-sheets/detail/universal-health-coverage-(uhc), Last accessed on 31.12.2020 at 3:57 pm.

  12. See World Health Report (2008).

  13. See Table 3 for direct reference in Hooda (2020).

  14. The availability of good medical care tends to vary inversely with the need for it in the population served (Hart 1971 p 412). It is further argued that the law operates more completely with greater exposure to market forces in medical care and vice versa.

  15. https://dashboard.pmjay.gov.in/publicdashboard/#/.

  16. See https://pmjay.gov.in/about/pmjay

  17. https://www.esic.gov.in/information-benefits.

  18. Purchaser–provider split translates into a clear separation between financing of services provided and facilities where these services would be provided. Purchasing is the situation when rather than providing the services directly by themselves, a health actor asks another party to provide the services in exchange for a payment (Perrot 2006).

  19. Hooda (2020) cites the government claim of official coverage of PFHIschemes till 2017–18 for 27 states of the country as 10.9 crore families, while NSS 75th round coverage is 3.46 crore families.

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Acknowledgements

I thank Dr. Dipa Sinha and the anonymous referee for their comments. I would also like to thank ISLE for giving a platform to present my work at the ISLE 62nd Labour Economics Conference, held at IIT Roorkee (11-13 April 2022). The suggestions and feedback received at the Conference helped to solidify my research findings.

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  1. School of Liberal Studies (SLS), Ambedkar University Delhi, Delhi, India

    Anandita Sharma

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Table 11 State-wise PFHI coverage in India 2017–18
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11

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Sharma, A. Social Health Protection and Publicly Funded Health Insurance Schemes in India: The Right Way Forward?. Ind. J. Labour Econ. 66, 513–534 (2023). https://doi.org/10.1007/s41027-023-00445-6

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