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Government-Sponsored Health Insurance in India
Targeting. Though not under the purview of the GSHISs, the BPL lists are fraught with problems. These lists are notorious for an unacceptably high incidence of false positives and negatives. This situation severely undermines the pro-poor orientation of the schemes and may lead to diversion of resources to the non-poor combined with undercoverage of the deserving poor. This situation could result in political challenges to the schemes’ legitimacy. Provider behaviors and markets. Providers have an incentive to induce demand, provide unnecessary care, and substitute inpatient for outpatient care. Much more needs to be done to detect, control, and penalize such behaviors. Further, a case can be made that the schemes are stimulating a hospital-centric delivery system—already obsolete in most OECD countries. In the long term, such a system would become unaffordable as well as ineffective in dealing with the emerging large burden of chronic diseases in India. Given the low minimum number of beds required for empanelment, schemes may be promoting the expansion of small hospitals where clinical management may be too meager and volume too small to meet minimal quality standards. Provider competition. In theory, providers compete for beneficiaries. However, evidence is sketchy that this happens in practice. Utilization is concentrated in a limited number of “prestigious” facilities in nearly all schemes. Beneficiaries residing in distant areas may be unable to access providers located in urban areas. The schemes limit the ability of insurers to selectively contract higher quality or more efficient providers due to lax empanelment criteria and one-size-fits all package rates. As discussed above, schemes also don’t have sufficient information (e.g. on costs and quality) to selectively contract providers and foster competition. Finally, under current organizational arrangements, few public facilities can compete with their private peers. Quality of care. The schemes are not using their financial leverage to improve the quality of network providers. The schemes do not demand or collect quality information from providers. Postempanelment inspections to verify compliance with minimal empanelment criteria are rare. Providers have no incentives to improve standards of care or put in place quality-improvement measures.