When many millions of citizens are classified as below poverty line (BPL), a government needs to think twice before launching a health insurance scheme that intends to be truly inclusive. Andhra Pradesh did, and came up with a unique model — the Rajiv Aarogyasri Community Health Insurance Scheme.
It’s a public-private partnership that ropes in a private insurer, public and private hospitals, and women’s self-help groups, along with the heavy involvement of the government to provide quality health care to the bulk of its population.
Just 15 months after it was run as a pilot project in three districts, a colossal 65 million people are members of Aarogyasri, the largest cashless scheme of its kind.
“The first thing we decided was not to follow any of the existing schemes, which are group-specific and limited in coverage,” says Babu A, chief executive of the Aarogyasri Health Care Trust which runs the programme.
“Our learning from studying these schemes is that none of them is working very well.”
For Andhra Pradesh, the primary issue was to resolve “the contradiction between our philosophy of social inclusiveness and that of insurance, which is based on the principle of exclusion”, says the official.
What it designed was a scheme in which “the government had a stake in everything”. Each and every case is monitored 24 hours, 365 days, through the trust’s portal where the Aarogyasri workflow system can be tracked from the entry point to treatment and discharge.
The especially designed software and state-wide IT network cost Rs 4.8 crore, but it’s an investment well worth the cost, since the possibility of leakages is minimal. There are strict protocols on the treatment, with around 800 medical and surgical packages listed and the costs fixed by the trust’s panel of doctors.
Behind this model is a holistic approach to healthcare, ensuring that people are given free health check-ups by the network hospitals — it is mandatory for every hospital to run a health camp in its vicinity every month — and that a 24-hour health helpline is available to people seeking advice and assistance. Manned by 100 doctors and 1,600 paramedics, the call centre handles about 53,000 calls a day.
In this scheme, beneficiaries pay nothing. Since the state believes it is the government’s responsibility to provide healthcare to the people, Aarogyasri comes free to all the white ration-card holders — the BPL segment.
This is a controversial issue since most other health insurance schemes floated by the government insist on a participatory contribution. Trust officials say it makes no sense to collect part of the premium, simply because the cost of collection would far exceed the contribution.
While the argument for collection of a premium is that it confers rights on the insured, the move has a downside. It limits membership without, in any way, bringing down costs.
For instance, the Yeshasvini Cooperative Farmers Health Scheme levies a premium of Rs 120 but, more often than not, cooperative societies are forced to cough up the premium for their members, resulting in what Andhra Pradesh is determined to avoid — adverse selection. Only those with enough funds are able to pay the premium.
Costs are what make Aarogyasri a winner. Andhra pays a premium of Rs 330 per BPL family for a cover of Rs 1.5 lakh, with provision for another Rs 50,000 in case of major surgeries. In addition, cochlear implants with related therapy are reimbursed fully up to a maximum of Rs 6.50 lakh, while some complex surgeries are also reimbursed in full.
The rates laid down by the trust have been carefully evaluated and have avoided the pitfalls apparent elsewhere — uneconomic rates that force hospitals to do a fiddle. All the top hospitals have been empanelled and there is a long wait list to join the schemes, say officials.
Government hospitals, too, are beginning to reap the benefits of joining Aarogyasri. To date, public hospitals have earned Rs 22 crore in total claims of Rs 203 crore, which is about 13 per cent of the total.
Although critics claim that the scheme is intended to benefit private hospitals in the state, government hospitals are getting a fresh lease of life from the payments made by the trust.
In any case, the argument is not tenable since there aren’t enough government hospitals to provide specialised tertiary care for such colossal numbers. All the top-rated private hospitals in the state have already been empanelled and there’s a queue waiting to join in.
Aarogyasri’s biggest plus is that it affords a major saving for the state in every way. Officials point out that the spur for the scheme was the endless line of people queuing up at the chief minister’s house every morning, seeking aid for medical treatment. Between May 2004 and June 2007, says an official note, financial help of Rs 168.5 crore was doled out from the Chief Minister’s Relief Fund to meet the hospitalisation expenses of the needy.
That’s how Chief Minister YS Rajasekhara Reddy, himself a doctor, decided that such help should be institutionalised to improve access to quality medical care for the masses.
The dramatic success of Andhra’s big-bang approach is having a ripple effect across the country. Officials from at least 13 states have visited the Aarogyasri office in Hyderabad for lessons on how to replicate the scheme.
Three factors appear to be absolutely essential for this — a complete database on the beneficiaries, which is one reason why the labour ministry’s Rashtriya Swasthya Bima Yojana (RSBY) is floundering already; the ability to regulate each and every case; and a strong commitment to meet the health needs of the disadvantaged.
Babu says the Aarogyasri Trust is willing to provide consultancy to the rest of the country because “no one can beat this product”. As other states begin to roll out similar schemes, it remains to be seen if this indeed is the case.