Sunday, November 2, 2008

How Technology Enables Health Insurance Scheme for the Poor

Gurcharan Das writes about Health Insurance scheme for India's poor.

Technology should be customized for mass Indian use and Vijay Anand's point about Indians trying to do US businesses here in India makes a lot of sense. Gurcharan Das explains how the magical smart card will make the National Health Insurance Scheme successful while others have failed. Extracts from the article below:

Nearly 65% of India’s poor get into debt and 1% fall below the poverty line each year because of illness, according to National Sample Survey Organisation (NSSO) 2004. The answer, of course, is health insurance, but only 6% of India’s workers have it. Free public hospitals are not an option as two out of five doctors are absent, and there is a 50% chance of receiving the wrong treatment, according Jishnu Das and Jeffrey Hammer’s study. This tragic state of affairs is, however, set to change dramatically with Rashtriya Swasthya Bima Yojana (RSBY), a visionary national health insurance scheme, which provides Rs 30,000 ‘in patient’ health benefits at a premium of Rs 600, which the government pays if you are poor.

A brainchild of an IAS officer, Anil Swarup, this scheme will succeed when others have failed because of choice, competition and a magical ‘smart card’. A patient can choose from almost 1,000 private or government hospitals. States can choose from 18 public or private insurance companies. Insurers have the incentive to recruit the poor as they earn premiums by doing so. Hospitals will not turn away the poor because they don’t want to lose the Rs 30,000 in potential revenue. The poor have a choice to exit a bad hospital, something that only the rich can do today. Competition between hospitals will improve the quality of healthcare and new hospitals will come up because there is now money in catering to the poor.

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