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Preface
government health expenditure. Including private, community, and other insurance spending that same year, total spending on health insurance accounted for Rs. 160 billion (Rs. 16,000 crores), 6.4 percent of the estimated total health expenditure of Rs. 2.5 trillion in 2009–10. To illustrate, GSHISs accounted, respectively, for 24 and 5.6 percent of GOI and KA own health expenditure in 2008–09. These contributions represent additional spending to supply-side subsidies. The government direct delivery system, including GOI’s flagship program, NRHM, and state health directorates, continues to account for about nine-tenths of the public health spending in the country. Nevertheless, GSHISs have an increasing share of the incremental public spending on health, reflecting strong political support for these schemes and a corresponding budgetary commitment. What do the utilization data of these schemes show with respect to the frequency of claims, disease patterns, and trends over time? Utilization rates vary significantly with the depth of benefit coverage, scheme maturity, and other factors such as the provider payment mechanism used (discussed below). Schemes in AP, TN, and KA (Vajpayee Arogyashri) provide coverage for low-frequency, high-cost tertiary care only, and their hospitalization frequency is thus the lowest among the schemes under study. They are not comparable with community averages, which are based on all types of inpatient stays. Consequently, their utilization rates are significantly lower (about 5 hospitalizations for 1,000 beneficiaries per year) than the inpatient utilization rates generated for these states from the National Sample Survey (NSS) data (between 22 and 37 hospitalizations per 1,000 inhabitants per year). However, Yeshasvini (in KA) covers mostly secondary care but also some tertiary care. RSBY covers mostly high-frequency secondary hospital care. Frequency of hospitalization for these two schemes is significantly higher, 22 and 25 admissions, respectively, per 1,000 beneficiaries per year and is more or less comparable to national community averages. Responding to likely adverse selection (which is expected in a voluntary context) and possible moral hazard, as well as the lack of adequate cost-containment mechanisms, utilization rates for private voluntary insurance dwarf those of GSHISs. Similar to RSBY and Yeshasvini, private insurers generally cover both secondary and tertiary inpatient care, but their members display a much higher frequency of hospitalization at about 64 admissions per 1,000 per year. How do the GSHISs pay the health care providers and how is it different from past practices? All schemes studied here use a system of “package rates”