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How do you develop a patient centred healthcare system that serves vast numbers of transient poor people? India has an answer: Rashtriya Swasthya Bima Yojna (RSBY), which has won plaudits from the World Bank and the United Nations as one of the world's best health insurance schemes. RSBY combines state-of-the-art technology and incentive structures. It is paperless, does not use cash and provides affordable health insurance to millions of people. The overwhelming majority of who, are illiterate, transient people living below the poverty line. According to Dr Anshuman Kumar, Chief Oncosurgeon, Dharamshila Cancer Hospital and Research Centre in New Delhi,

“Since its launch, four years ago, Rashtriya Swasthya Bima Yojna covers some 40 million people many of whom have benefitted from in-patient hospital procedures. The scheme has been so successful that the Government is planning to extend it to India’s old age and disabled pension schemes”.

In developing countries, poverty and ill health are synonymous. Billions of poor people lack access to healthcare while being exposed to multiple health risks. This, not only increases the health consequences for those individuals and their families, but has both a direct and indirect effect on economies. Widespread poverty as well as ill health decreases productivity; lowers competiveness, increases fiscal pressure, creates further poverty and promotes greater inequity.

India is a rising global economic superpower with a GDP roughly equivalent to 3% of the world economy, but has a third of the world’s poor. In 2011 the World Bank reported that 33% of India’s population fell below the international poverty line of US$1.25 per day and 69% live on less than US$2 per day. Although India is on track to meet its poverty reduction goal set by the United Nations in 2000; by 2015, 53 million people are expected to be still living in extreme poverty and 24% of India’s population of 1.2 billion is expected to be still living on less than US$1.25 per day.

India is not unique in being a rich country with poor people. This is a phenomenon shared by several developing countries. For example, Mozambique, rich in gas, oil and minerals, is a fast growing rich country with poor people. Ninety nine per cent of Mozambicans are small scale farmers and a large proportion of these are poor. Mega projects, such as the planned US$6 billion investment by Vale, a Brazilian company, to create the world’s largest coal mine in Mozambique, do not generate large numbers of jobs, do not foster entrepreneurship and because of the tax incentives they receive, only make modest contributions to exchequers. African rich countries with poor people might do well to look to India’s RSBY health insurance scheme.

Like many fast growing developing economies, India needs to fuel economic growth by reducing the percentage of poor and reaping the benefit from her working age population. India’s declining fertility and mortality rates have resulted in a population bulge of about 0.45 billion people between the ages of 15 and 25 years. This gives India the world’s largest share of working age population: a demographic dividend. But, how does India finance and provide healthcare for this vast group, a third of which are illiterate, transient and live below the poverty line? The answer is RSBY.

RSBY employs cost effective, scalable technologies to help satisfy the health needs of a significant proportion of India’s poor. Enrolment of families into the scheme, biometric smart card generation, pre-authorization of admissions, as well as claim submission and approval, all occur electronically. Beneficiaries can use their smartcards in any empanelled hospital across India and therefore travel is no barrier to receiving healthcare. Patient data are transferred electronically between empanelled hospitals and insurance companies and claims are settled automatically. The scheme lowers costs, increases efficiency and reduces fraud.

RSBY is run on shared financial contributions by both central and state governments. Seventy five per cent of the premium is borne by the central government and the rest by state governments and all parties involved benefit. The Indian Government benefits by providing cost effective healthcare to millions of poor people. This helps to reduce poverty and increase productivity. Insurers benefit because they are paid for each household they recruit. Empanelled hospitals benefit as they are incentivised to provide treatment to a large number of participants. Non government agencies benefit because they are paid to find and recruit households. Poor people benefit because the scheme transforms them into customers and provides them access to healthcare, which they never had before. 

Beneficiaries receive hospitalization coverage up to US$560 per year for some 700 in-patient procedures. Central and state governments pay the premium to insurers who are selected by state governments on the basis of competitive bidding. Insurers monitor participating hospitals, which reduces unnecessary procedures and fraud. Beneficiaries need only pay about US$0.75 as an annual registration fee. The scheme has no age limit, it covers pre-existing ailments, provides surgical and health expenses for five family members and covers pre and post hospitalization charges and transport expenses of US$2 per visit.

RSBY’s has its challenges. There are human rights issues associated with biometric identification and the digitalisation and use of confidential personnel data. There have been delays in the issuance of smart cards. Some people have complained that they do not know how and where to utilise the scheme. Some hospital personnel have not been appropriately trained to use card-reading technology and there have been delays in the reimbursement of treatment expenses to hospitals and some hospitals stopped accepting patients under the scheme. On 12^th October 2012, the Times of India reported:

“Privatehospitals are reportedly milking Rashtriya Swasthya Bima Yojnaby carrying out fictitious or unnecessary surgical procedures on poor patients covered under the scheme. . . . . . When payers do not have a tight supervisory mechanism or do not care since the government is footing the bill, ultimately, hospitals get away with murder. The right thing to do is to align incentives, not put more constables on the hospital watch.”

India is not known for its good governance, especially among public officials, but challenges encountered by RSBY should not detract from the importance of this innovative and ambitious scheme.

Healthcare systems throughout the world are challenged by rising costs, poor quality of care and inaccessibility to healthcare. Healthcare systems will become unsustainable if they continue to focus on diseases rather than patients. Patient-centred care has become one of the principal goals of health advocacy. RSBY, based on digital technologies, makes patients the primary focus of the system and individuals are helped to self manage their conditions. It is not surprising that last summer a delegation of policy makers from Germany, Europe’s industrial powerhouse, spent time in India learning more about RSBY with the intent of changing Germany’s social security systems. Policy makers from rich countries with poor people might think of doing something similar.