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Government-Sponsored Health Insurance in India
of inpatient care for cost-effective care in an ambulatory setting. This could drive up costs. Ambulatory-sensitive conditions account for 18 percent of admissions in Spain, 13 percent in the U.S. state of New Jersey, and 30 percent in Brazil. In Brazil, spending on these conditions was estimated at $1.6 billion in 2002, 21 percent of total spending on inpatient care (Caminal, Starfield, and Sanchez 2004 and 2002; Vali 2001; La Forgia and Couttolenc 2008). Examination of recent trends in delivery models in OECD countries would be worthwhile for India (OECD 2010 a, b, c). Given the emerging burden of chronic diseases, changing demographic profiles, the introduction of new medical technologies and pharmaceuticals (particularly outpatient therapies and procedures) and increasingly mobile workforces—changes that have already commenced in India—nearly all OECD countries are reducing the number of acute hospitals beds. They are shifting care to alternative, but mostly ambulatory, settings while incentivizing coordination or integration among a range of providers. In OECD countries, health planners increasingly accept that the traditional emphasis on acute care hospitals reflects treatment practices and epidemiological profiles of bygone days (McKee and Healy 2002). Moreover, given the time it takes to design and build hospitals, many may become outdated soon after their inauguration (Guenther and Vittori 2008). A second concern relates to the possible expansion of small hospitals. The schemes may stimulate the proliferation of small, low-volume, and probably low-quality hospitals. Most hospitals in India are already small, most of them with fewer than 30 beds.60 A considerable body of literature exists on the poor outcomes of low-volume hospitals, particularly in performance of sophisticated procedures such as those covered in most of the schemes under study here (Birkmeyer et al. 2003 and 2002; Ho 2000; Halm, Lee, and Chassin 2002). This is compounded by the lack of quality monitoring by the schemes (and the broader health delivery system). International experience also suggests that smaller hospitals tend to be bypassed and increasingly underutilized as road networks improve, primary care is extended, and specialty care becomes concentrated in larger hospitals. For example, this has been the case in Brazil, where small hospitals (e.g., fewer than 50 beds) represent 61 percent of all hospitals (24 percent of total beds), but report occupancy rates of only 22 percent on average (La Forgia and Couttolenc 2008). Although small hospitals may address access issues in rural India, demand for their services may decline as geographical access to higher-quality (and higher-volume) facilities increases.61