- RSBY beneficiaries have hospitalization coverage of up to INR30,000 for a majority of diseases that require hospitalization (up to five members of the family are entitled to benefit from the coverage, which includes the head of the household, spouse and up to three dependents)
- The RSBY gives the beneficiary the choice of choosing private or public healthcare providers
- The government has streamlined the process by fixing the hospital tariffs for certain routine procedures
- Coverage for pre-existing conditions begins from the first day and there is no limitation on age
- Beneficiaries need to pay INR30 as a registration fee while the central and state governments pay the premium to the insurer selected by the state government on the basis of a competitive bidding
- The beneficiary is also paid INR100 by the hospitals as transportation expense at the time of the discharge
- However, total transportation assistance cannot exceed INR1,000 per year and is a part of the total coverage of INR30,000. No proof is required to be submitted by the beneficiary for transportation assistance.
Under the scheme, the majority of the financing, ~75 percent, is provided by the Government of India (GoI), while the remainder is paid by the respective state government. In case of Northeastern states and Jammu and Kashmir, the GoI’s contribution is 90 percent and the remainder is paid by the respective state governments.
Benefits of the program for key stakeholders
Insurance companies, providers and government are the key stakeholders with the following incentives:
- The premium paid for every household is an incentive for the insurer to target as many BPL households as possible
- Hospitals are paid for each beneficiary treated and will therefore aim to treat as many BPL patients covered by the scheme
- The insurance companies monitor participating hospitals and help prevent any unnecessary procedures/tests. This not only ensures adequate cost containment but also safeguards the patient from unnecessary discomfort and unease
- By paying only a maximum sum up to INR750 per family per year, the government enables accessibility of quality healthcare to a wide majority of the BPL population
- The functioning of RSBY also involves the participation of various intermediaries, including NGOs and MFIs that reach out to BPL households. They help create awareness about the scheme and encourage participation.
Leveraging IT for program success
RSBY is an example of how IT can be leveraged at a large scale, in the social sector, to centralize and track service utilization.
- Every beneficiary family is issued a biometric enabled smart card containing their fingerprints and photographs
- The participating hospitals are IT enabled and connected to the server at the district level. This system also ensures the scheme is safe and free from dubiousness
- The key management system of RSBY ensures the card reaches the correct beneficiary and there remains accountability in terms of issuance of the smart card and its usage. The feature also enables portability – a beneficiary enrolled in a particular district will be able to use his/her smart card in any RSBY empanelled hospital across India.
RSBY aids the beneficiary by ensuring a cashless transaction in any of the participating hospitals. The patient only needs to carry his/her smart card to avail the required treatment after the cost has been ascertained by the insurer (in case it is not a part of a predefined package). From a provider’s perspective, it is a paperless and simple transaction settled electronically by the insurer.
After rendering the service to the patient, the hospitals are mandated to send an electronic report to the insurer/Third Party Administrator (TPA). The insurer/TPA assess the information and make the payment to the hospital within a specified time period.
Variations in RSBY implementation
The RSBY is a fairly flexible scheme and has encouraged state governments to modify it for their state to make it more beneficial for their BPL population. Himachal Pradesh has extended the coverage to USD3,500 p/a and Kerala has added an additional one million poor families over and above the 1.18 million families classified as BPL by the Planning Commission.
States like Rajasthan, Tamil Nadu and Andhra Pradesh have their own staterun schemes and have showed a mixed response to the RSBY. Andhra Pradesh has not participated in the RSBY program as it has its own health insurance (the Rajiv Aarogyasri Health Insurance Scheme). On the other hand, Karnataka, which has its own scheme (Yeshasvini Cooperative Farmers Health Care scheme), is actively implementing RSBY.
While there is no reported integration between schemes, governments are devising strategies to segregate populations to ensure that low income individuals can avail the benefits of at least one scheme.
New initiatives: Outpatient coverage
To decrease the out-of-pocket payments and their related impact on the poor, RSBY is testing new mechanisms to provide outpatient healthcare, which complements the existing inpatient modalities.
The first experiment is being conducted with the support of International Labor Organization (ILO) and ICICI Foundation for Inclusive Growth (ICICI Foundation).
How it works
The outpatient coverage program is being implemented via a selected insurance company. The same insurance company which provides RSBY inpatient benefits to the beneficiaries in the experimental districts will also be the insurer for OPD benefits to the same set of beneficiaries. The RSBY central team and the designated State Nodal Agencies (SNAs) will facilitate and monitor the scheme to capture response, success and initial functioning so that the experiment can be a proof-of-concept for further scale-up.
Social Impact and measuring success
Coverage: Presently, 13 insurance companies are implementing the program in partnership with RSBY. A total of 10,862 hospitals have been enrolled under RSBY – 7,576 private facilities and 3,286 that are government-owned. The initiative has covered over 400 districts – recording over six million hospitalizations from BPL families. The success of the program can be gauged by the fact it is operational even in Naxal-prone districts (including Gajapati, Malkangiri, Rayagarh, Sambalpur and Deogarh), which have experienced antigovernment violence and kidnappings.
High-quality healthcare services: Apart from the healthcare benefits it extends to the underprivileged, the scheme works in favor by not compromising on quality while ensuring affordability. It is a technologically evolved, fool-proof scheme that aims to harness transparency and efficiency in healthcare delivery.
Incentives for all stakeholders: With its ability to incentivize all the stakeholders involved, it proves to be a successful business model. It creates a healthy competition between public and private providers which will consequently improve the functioning of the public healthcare providers.
The OPD aspect of the scheme, which is still in pilot stage, will improve access to healthcare services, ensuring the right treatment at the right time by early detection and treatment of disease. This will aid in the sustainability of RSBY by decreasing burden on high-cost hospitalization procedures.