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Journal of the Academy of Hospital Administration

Study of the Utilisation Pattern of Hospital-Based Health Insurance Plan Targeted Towards Lower Socio-Economic Group

Author(s): V.P. Bhaskaran*, Satyashankar P**, Rajendra P Patankar***

Vol. 16, No. 1 (2004-01 - 2004-06)

Key Words: Hospital based health insurance, utilization pattern.

Key Messages:

  • Manipal Health Card has helped in substantially improving the access for health care to the community.
  • The scheme is customer friendly and subsidized to the extent of 45%.
  • There is need to create awareness among the community about Health Insurance

Abstract

Health Insurance is a system of assurance to meet the contingencies of health care expenses. The main principle underlying it is ‘sharing risk’ as an advantageous way of meeting high and unpredictable costs. Its primary objective is to protect against financial losses caused by unforeseen health problems and at the same time relieving anxiety and mental tension. With the prime motive of providing healthcare to the weaker and poorer sections of the surrounding community, the Manipal Academy of Higher Education Group had come up with a comprehensive health benefit scheme, called the Manipal Health Card (MHC).

The purpose of this study was to study the salient features of the Manipal Health Card and to study its utilization pattern

Utilisation of the facilities by the MHC members was done by going through the financial and medical record data of all the five participated hospitals and the same was analysed. The statistics deduced from the study show that the MHC has helped in substantially improving the access for health care to the community. The figures also show that the scheme was highly customer friendly and was subsidized by the organizers to the extent of nearly customer friendly and was subsidized by the organizers to the extent of nearly 45%. The analysis showed how beneficial it was for those who had opted to enroll themselves for this health insurance scheme. It was observed that old aged predominantly males and those in immediate need of treatment were utilizing the services most effectively. Also from the study it was clear, how there is still a need to create awareness among the community about ‘Health’ and ‘Health Insurance’ and the need for the healthcare provider group to attract more & more interested and convinced people in order to provide the best of their services at the most economic costs.

The ultimate aim for us as a healthcare provider would be to bring in this turn-around of the perception in our community as justified by the saying “Health Is Wealth”.


Introduction

A person in good health may not remember sickness and its implications, but when he falls sick and simultaneously into the debts of treatment, he regrets why he had not insured his health.

In order to provide protection against the financial effects of health risks, a few European countries at the end of the 19th century introduced health insurance systems for workers – later followed by accident, old age, and disability insurance provisions (e.g. in Germany between 1883 and 1889). In the developing countries, social insurance is still confined to a minority of the population, e.g. through contributions to pension and health insurance funds that are directly deducted from the pay. This minority mainly consists of state employees, members of the armed forces, and employees of large companies.

It is primarily the rural population and the population in the informal urban sector who are excluded from protection against disease the accidents. They try to pay for health treatment mainly through solidarity structures based on family or ethnic allegiances. The members of these family or ethnic groups help each other mutually and pool resources when one of their members is in (financial) need.1 Private, commercial health insurance organizations exclude these two segments of the population from their services, as they are not regarded as being financially “solvent”. Neither the state nor the free market ensures adequate protection against critical health risks for the socially excluded population2

The population groups excluded are unprotected not only due to a lack of interest on the part of private insurance companies, but also because of their poor negotiating power. Individuals in such groups lack the money and status to be able to ask for an offer from commercial insurance companies tailored to their needs2. However, low demand is not necessarily equivalent to an inability to pay. Instead, what matters is the appropriateness of the services offered to these population groups and the conditions, which apply for the payment of premiums (i.e. how and when they are to be paid).

At the local level, this means that a manageable group of people, most of whom know one another, pay a contribution in cash or in kind to the insurance scheme, from which specific treatment costs and/or drug costs can be fully or partially borne by the insurance association (i.e. by all the members) if one of the members falls ill. This can sustainably improve the health situation for poor households and prevent them from the shock of very high treatment costs that would otherwise reduce them to poverty or even deepen it. In this way, setting up micro-health insurance organizations also helps to fight poverty at the local level.

The World Health Organization (WHO) regards so-called “pre-payment schemes” as a way of enabling poor people in developing countries to obtain access to health care services when state-organized social insurance has not (yet) been universally introduced due to inadequate organizational, institutional, and financial conditions3

However, the question arises as to whether the population hitherto excluded actually wants to join together to form a local health insurance organization. They may find that it makes more sense economically to save money as individuals or as families in case of illness, instead of paying into a common fund from which they may only benefit a long time in the future, while in the meantime paying for other people’s treatment. By not focusing on such a short sighted view and by adopting a utilitarian mode of thinking it may be analyzed that, with 70 per cent of population in Indian living in rural areas and 95 per cent of work-force working in unorganized sectors, and disproportionately large percentage of these populations living below poverty line, there is strong need to develop social security mechanisms for this segment of population4.

Health Insurance is a system of assurance to meet the contingencies of health care expenses. It is a way of paying some or all the costs of healthcare. The main principle of insurance is sharing risk as an advantageous way of meeting high and unpredictable costs. The primary objective of health insurance is to protect against financial losses caused by unforeseen health problems and at the same time relieving anxiety and mental tension. Hence it can be appropriately called as Health care insurance. Currently in Indian only 0.25 percent of population is covered under some form of health insurance, with about 200-300 million population of middle class who can be brought into this ambit5, given their capacity to spend at least Rs. 500-1,000 per year as insurance premium. Also if we intend to achieve our target health goal, by expanding our services to the poor and rural population we can benefit the society in general and the weaker sections in particular. A dynamic tripartite system comprising of healthcare providers or hospitals, managed care organsiations or health insurance providers have already set the momentum in our country. Added to this, is the opening up of the health insurance to the private sector and the setting of IRDA (Insurance Regulatory Authority of India).

In India Health Insurance is started mostly by the for-profit HMO’s, their only aim being to make business out of it, mainly by catering to the richer or elite class of our society with all kinds of special to executive health check-ups. The poor are the ones most likely to be excluded from insurance because they are too poor to pay, do not have regular employment for meeting regular payments, and may not be easily accessed for purposes of collecting payments. With the prime motive of providing healthcare to the weaker and poorer sections of the surrounding community, the Manipal Academy of Higher Education Group had come up with a comprehensive health benefit scheme, called the Manipal Health Card (MHC).

Aims and Objectives

  • To study the salient features of the Manipal Health Card.
  • To study the utilization pattern of the Manipal Health Card.

Methodology

Type of Study

  1. A retrospective study was conducted during 15th July 2002 15th Aug 2002, to understand the scheme and the activities involved during the implementation of the Manipal Health Card.
  2. Cardholders’ detailed profile was obtained from the database and the analysis of the same was done.
  3. Utililation of the facilities by the MHC members by going through the financial and medical record data of all the five participated hospitals and the same was analysed.
  4. Discussions were held with the Manager- Operations of MHC, the staff involved at all the constituent hospitals and analysis was done.

Observation

Applicability

With the prime objective of providing healthcare to the poorer sections of the society the Manipal group launched this unique health insurance plan mainly directed to the people living in the coastal belts of Karnataka and Kerala and primarily in the areas adjoining the districts of Dakshin Kannada, Kasargod, and Udupi. This health insurance card made available, to the cardholders, provided state of the art treatment facilities at any of its teaching hospitals. These included three tertiary care, two secondary care hospitals and 9 peripheral primary health centres with total bed strength ofnearly 2500 beds. These hospitals also provided services in all the specialized as well as supper specialized disciplines like cardiology, cardio thoracic surgery, urology, nephrology, paediatric surgery, gastro-enterology, plastic surgery, neurology and neuro-surgery. A specialized cancer research centre with facilities in radiation oncology, surgical and medical oncology, radiotherapy, nuclear medicine were also provided. Other services included Diagnostic services like CT scan MRI, Dialysis-unit, Multidisciplinary ICU’s, Ultra clean OT’s with HEPA systems, Digital Cath Lab, Blood Bank and 24 hours pharmacy services. A disciplined team of dedicated and expert staff was available to take care of any and every emergency.

Promotion of the scheme

Approaches adopted for reaching out to the community
In order to reach out to the community a massive advertisement campaign was launched to create awareness among the people living in these areas. Press Conferences were organized to communicate to the masses through the print media. Advertising was done through leading newspapers like Udayavani, Matrubhoomi, Malayala Manorama and Madhyamam. Radio and T.V. broadcasts, banners and handouts were others means utilized to reach the community. In order to get a good response ‘Agents’ including MHC’s permanent staff were appointed from among the community to enroll people for this health insurance scheme.

Features

The highlighting features of this scheme were

  1. 100% cover/discount on Bed charges (General Category), Consultation Charges, Surgeons fee, Admission Charges, Anaesthesia Fees, Operation Charges, Professional Charges, Sub Consultation Charges, and services charges.
  2. 30% cover/discount on lab investigation including radiology, CT scan/MRI/X-Ray, attendant charges, observation charges, ICU charges, Casualty charges, Trauma charges, Dialysis charges, Ventilator utilization, Monitor utilization, Nebulizers utilization, Dental treatment.
  3. Coverage for both In-Patients & Out-patients
  4. All pre-existing diseases were covered
  5. No lock in period.
  6. No age restriction.
  7. Full Maternity Benefits.
  8. Round the clock treatment facility at all the constituent hospitals.
  9. Only extra charges payable were those on consumables, drugs and implants.
  10. Cardholders could access any of the hospitals mentioned above.

Launch of the MHC

The Manipal Health card scheme was launched in December 2000 and applications were invited till 8th February 2001. the card was valid for a period of one year from the date of enrollment.

Enrolment of MHC

Enrolment was open for all people residing in the coastal belts of Karnataka and Kerala and in the adjoining areas, including but not limited to the districts of Dakshin Kannada, Kasargod, and Udupi. Enrollment required any document for identification like ration card, driving license, passport etc. to be submitted at any of the 100 listed collection centres identified in various areas of this region. The cards were issued to the members on month from closing of the scheme and were valid for one year from their date of registration.

Premium

The annual premium for the Manipal health card was kept very low taking into consideration the purpose and the customers to whom it was to be targeted. The premium was:
Rs. 140/- For Individual Card Members.
Rs. 300/- For Family Card Holders with family of four (Children being under 18).

Subscription

The subscription of the MHC was as follows-

  • Individual card - 8639
  • Family card - 4952
  • Total Individuals covered under the scheme - 23495

The subscription was comparatively low when compared to the estimated expected subscription of 1 Lakh population.

Age wise subscription of the MHC is as shown below:

Age Group (years) %
1 - 20 8.8
21 - 38.5 38.5
41 - 60 31.5
>60 20.8

The above table shows that among the population below 20 years, the rate of subscription was very low whereas, among geriatric age group the subscription rate was very high.

Family income of the Health Card population were analysed as given below-

Table 2 Showing the classification of the Health Card subscribers based on their family income.

Annual Income (rps) %
Below rps 25,000 72.6
25,000 - 100,000 22.3
100,000 - 300,000 4.9
Above rps 300,000 0.2

The above table shows that 72.6% of the subscribers had annual income less than Rs. 25000/-. This conforms to the objective of the health insurance provider toserve the economically weaker sections of the community.

Sex wise distribution of MHC subscribers were analysed as shown below.

Table showing the sex wide distribution of MHC subscsribers.

Sex %
Male 62.3
Female 37.7

Though the male : female ratio in this region is in favor of female population, percentage of female subscribers was very less

Out-patient Service Utilisation

Among the 23,495 subscribers, 18,102 members availed the Outpatient services from the participating hospitals, thus implying that there were 0.8 Outpatient visits per year per person. This is a almost three times more than the estimated 0.3 visits per year per person in India3.

In-patient Service Utilsiation

Among the 23,495 subscribers, 2,174 members got admitted in the participating hospitals for various ailments, thus implying that there were 0.09 admissions per year per person. This is about six times the estimated 0.015 admissions per year per person in India3.

The above statistics shows that the MHC has helped in substantially improving the access to health care for the community.

The study showed that the concession given during the first three months of the validity was approx 40% of the total concession given for the whole period of the card, thus indicating that those who were in need of immediate medical or surgical treatment subscribed for the card.

The average amount spent by the sponsors of the MHC per subscriber in terms of Hospital service as well as on promotion of the scheme was Rs. 200 and the average amount received per subscriber in terms of premium was Rs. 114/-.

These figures show that the scheme was highly customer friendly and was subsidized by the organizers to the extent of nearly 45%. Inspite of this, the low response for the card, shows that a lot needs to the done to create awareness among the community as subsidizing the cost further would not be feasible for the provider as well as the benefits realized by the community will be more if they utilize these services by enrolling in larger numbers.

Conclusions

A health insurance card was introduced by the Manipal Healthcare group at very low premium of Rs. 140/- for individual and Rs. 300/- for family with the prime motive of providing healthcare to the weaker and poorer sections of the surrounding community and at the same time making available to them the best treatment facilities in this part of the country. The study showed that the percentage age distribution of the subscribers of the card was favoring the middle to old age group as compared to the younger age group, thus implying fort the need to market the benefits of the card to this group in particular. The study conforms to the objective of providing health insurance to the economically weaker sections of the society as approximately 73% of the subscribers were under the low-income bracket of less than Rs. 25000/- per annum. As far as sex distribution among the subscribers was concerned it was found that there was a clear bias against the female sex and that our society has still not realized the importance of caring for the health of the female member of the family. The statistics for our outpatient and inpatient utilization showed that there was a three to six times more utilization than the average figures for our country. This makes us to analyze and plan our methods for future by:

  1. Creating of Awareness among the community about he need to care for their health. This is because spending on ‘HEALH’ is last on the people’s minds, especially when they are free of any health problem. This leads to expenditure on health to be deferred till such time that it becomes an absolute necessity.
  2. To try to change the mindset of the people regarding Health Insurance. Interacting with the community and explaining to them the pros and cons of having their health insured and convincing them of the advantages of having a minimum budget earmarked for their family’s health.
  3. The ultimate aim for us as healthcare providers would be to bring in this turn-around in the perception of our community as goes with the saying-“Health is Wealth”
  4. Liaising with the government to get subsidies on certain high cost equipments and such other purchases to enable the private healthcare providers to deliver more efficient, effective & economic services to our society.

References

  1. Cf. Hans Gsanger, Soziale Sicherungssysteme fur arme Bevolkerungsgruppen (Berlin: Deutsches Institut fur Entwicklungspolitik, 1993), pp. 36-48.
  2. B. Cf. David D. Dror and Christian Jacquier, Micro-Insurance: Extending Health Insurance to the Excluded (Geneva: Social Security Department, ILO Planning, Development and Standard Branch), pp. 2-3.
  3. C. Cf. World Health Organization, World Health Report 2000-Health System: Improving Performance (Geneva: WHO, 2000), p.98.
  4. Health Insurance in India, Report of the one day workshop organized on 30th Oct. 1999 at IIM, Ahemdabad.
  5. Express Healthcare Management Publication. Issue August 1-15th 2001. Page no-14.
  6. Catherine P Conn, Veronica Walford. An Introduction to Health Insurance for Low Income Countries. The health Systems resource Centre, Health Sector Development U.K., 1998. www.healthsystemsrc.org.

VP Bhaskaran
Professor and HOD of Hospital Adminstration, Medical Superintendent, Kasturba Medical College Hospital, Manipal- 576 104, Karnataka, India
Ph.: 91-820-2570201, Extn: 22587, Fax: 91-820-2571934
E-mail: [email protected]

Satyashankar P
Associate Professor, Dept. of Hospital Admn. & Asstt. Medical Superintendent, Kasturba Medical College Hospital, Manipal- 576 104, Karnataka, India
Ph.: 91-820-2570201, Extn: 22587, Fax: 91-820-2571934
E-mail: [email protected]

Rajendra P Patankar
Asstt. Manager-Medical Operations, Kasturba Medical College Hospital, Manipal- 576 104, Karnataka, India
Ph.: 091-9845384319
E-mail:[email protected]

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