KAGAD KACH PATRA KASHTKARI PANCHAYAT (WASTE PICKERS UNION) HEALTH INSURANCE SCHEME

Transcription

1 MAHARASHTRA KAGAD KACH PATRA KASHTKARI PANCHAYAT (WASTE PICKERS UNION) HEALTH INSURANCE SCHEME CASE STUDY Compiled by: Dr. Sayed Imtiaz Ahmed

2 CONTENTS Acknowledgement 4 Executive Summary 5 I. The Scheme at a Glance 10 Operational Mechanism 11 Main characteristics 12 Key Indicators 13 Evolution Profile 14 Development Plan 16 II. Description of the Scheme 19 Introduction 20 Flow of Cash and Information 29 Development Perspective 30 III. Analysis 31 Coverage 32 Contribution 35 Claims 37 Administrative cost 54 IV. Conclusions and Recommendations 56 V. Stakeholder Speaks 70 List of Tables: 1.1. membership evolution membership by Gender membership by Age Group Evolution of Contribution Age wise total Premium Paid Current Claims Incidence Frequency of Claims Claims Incidence by Gender 39 2

3 3.4. Claims Incidence by Age Group Claims Amount Settled Premium to Payout Trend Disbursal per Claim Claims Settlement Claims Rejection Rate Claims by Hospital Claims Incidence by Specialty Common Diseases Reported Discrepancy in Cost Incurred for various diseases Time Lag in Claim Settlement Evolution of time lag in claim settlement 53 Annexure: Annexure-I: About the Organisation 73 Annexure-II: History of the Scheme 76 Annexure-III: ILO Value Chain Analysis 78 Annexure-IV: Jan Arogya Bima Policy Prospectus 79 Annexure V: Jan Arogya Bima Policy Claims Form 87 Annexure VI: Pune Municipal Corporation Identity Card 89 3

4 ACKNOWLEDGEMENT I am thankful to Ms. Laxmi Narayan, Ms. Poornima Chikarmane and Ms. Shabana Diler of the Kagad Kach Patra Kashtkari Panchayat, Pune for extending all support and cooperation to me during the duration of the case study. Further I am grateful to Ms. Poornima Chikarmane for helping me with the data analysis process and also providing me with valuable insights in to the programme. I am also grateful to all the officials and staff of Pune Municipal Corporation, New India Assurance Company and provider hospitals for extending all possible support to me by providing me information necessary for the case study. Lastly I am grateful to all the grass root workers of Kagad Kach Patra Kashtkari Panchayat, Pune and all the community members for their help in completing my study. 4

5 EXECUTIVE SUMMARY In 1989, the Department of Adult and Continuing Education of the SNDT Women s University in Pune started conducting classes with the children of waste pickers. Closer interaction with this community provided the University, with a deeper understanding of the risks and challenges that the waste pickers were exposed to. Gradually, a large numbers of waste pickers came together and by 1993, with the support of SNDT women s University, were registered as a Trade Union, named Kagad Kach Patra Kashtkari Panchayat (KKPKP). A continuous advocacy effort with the Municipality bore fruit in the year 1996 when the Pune and Pimpri Chinchwad Municipal Corporation formally recognized the Union and endorsed its members, recognizing their photo identity card. A Value Chain Analysis study, conducted in 2000, by a team of researcher of SNDT Women s University on behalf of the International Labour Organisation (ILO, revealed that the waste pickers played a critical role in the Municipal s work of garbage collection and contribute substantively to lessening the work burden of the municipality. The study also, quantified this profit to be approximately, Rs. 16 million. Using this evidence the Union advocated with the Municipal Corporation to provide basic health services to the waste pickers. Officially recognizing the efforts of the waste pickers, the Pune Municipal Corporation (PMC) in 2003, decided to provide basic health insurance cover by paying for the annual premium, thus becoming the first municipality in the country to do so. The scheme has the following unique features: For the first time a vulnerable and neglected group of the society (the rag pickers) made their voices heard and got it endorsed by a civic body which not only endorsed their view officially by providing them identity card but also agreed to pay for the entire annual premium for all the members for health insurance coverage 5

6 KKPKP acts not only as an intermediary between all stakeholders (on behalf of the members) to ensure smooth functioning of the programme but also ensures that the larger goals (of recognition of the efforts of the waste pickers by the government and civic body, giving them a collective voice and ensuring provision of social security measures to address their vulnerability) is not lost sight of and continuously pursued The scheme is a result of solidarity among the members of the Union (majority of which are women) who, as a result of the scheme are socially and financially empowered to meet their health eventualities at the same time All the registered hospitals within the Pune Municipal Corporation (nearly 150) act as provider hospitals providing a satisfactory level of service, despite there being no formal agreement with the PMC or the insurer Most of the members coming from lower socio-economic strata, access neighbourhood/proximal smaller hospitals and nursing homes (less than 15 beds) as these hospitals are closer to them (cutting down on transport related cost), the staffs know them and also they can avail hospitalisation on a credit basis. Taking in to consideration these facts, the insurer has agreed to waive off the criteria of minimum requirement of 15 beds for a qualifying provider hospital The scheme started off with an initial enrolment of 3707 members in 2003 to 5411 members in 2007; registering a growth of 145%. While historically the claims pending ratio was low for the first time in 2006, the programme saw a total of 40 claims pending which was due to internal problems like high turn over of employee, frequent strikes and frequent transfer of staffs dealing with the insurance scheme at New India Assurance Company. Most of the claims were for hospitalisation due to communicable diseases much higher than the natural average. This could be due to the unhealthy working condition which the waste pickers face as part of their profession. Another key issue is the fact that there is no formal agreement between the insurer and providing hospitals. This allows for hiking of price for hospitalisation (e.g when hospitals 6

7 are asked for bills for submission to insurer, they hike up the charges) and differential charges for the same disease condition among other issues. From a financial point of view, the payout to premium percentage is increasing slowly with the present payout amount coming closer to the maximum sum insured. This is because the total sum insured is clearly not sufficient to cover for the health needs of the members. Also, in its present arrangement, the programme does not allow for schematic or programmatic modifications based on community feedback. However it is felt that the insurer can run this beneficial programme for the most deprived community like the waste pickers by internally cross subsidizing it with its other profitable portfolio in the commercial arena. Based on the analysis of the scheme and the context, the following recommendations are made at various levels of operations: PMC Level: To encourage and enhance community participation in the insurance scheme (as the current design of the insurance scheme does not allow much scope for community participation) in the following aspects: o in bringing about better understanding of the product coverage and exclusions,( Insurance Literacy)for the beneficiary o To understand better client needs, their ability and willingness to pay as well as specific product features.(understanding Demand issues) o To bring about better health awareness and improve the overall Health Seeking Behaviour of the community (preventive and promotive health) o Community participation will help in bringing down cost as they will then have a better understanding of the processes o It will also lead to faster claims processing as the members will submit the requisite documents with the insurer 7

8 o To give the community a stake in deciding the type of insurance cover they want for themselves Capacity building and Education of the hospital network: o Standardization of Treatment Protocol as well as cost of hospitalisation to be approved and made mandatory for all the provider hospitals (as a regulation) so that the quality of care improves and also the cost is brought down o Education about the Health Insurance programme for the provider hospital so that the claim settlement process is expedited (as requisite claim settlement paper will be given out to the patients) and also will train them to be good gatekeepers. This will control cost and make programme viable. KKPKP Level: To design and implement a standardized MIS for all the stakeholders by customizing and improving on the current MIS which is run by the organisation Efforts should be made to cover the remaining 10% rag pickers of the city who have not been registered To take up a formal role of an agent by undergoing training as required under micro insurance regulation so that it can act as an agent in the insurance scheme and can receive agenting fee which will lessen the burdens of the cost of servicing the insurance scheme Design and implement insurance literacy programme for all stakeholders which can be paid by the insurer as it is going to bring about efficiency in the entire programme, faster claim processing and settlement which should make business logic for the insurer Rate negotiation with the hospital as well as advocating with the PMC for standardization of treatment protocol and costs More emphasis on preventive and promotive health care in the form of health education for the members for which the insurer can pay as it is going to bring down claim load in future with improvement in health status of the community 8

9 Insurer Level: To enter in to a formal MOU with KKPKP to act as an agent. to enter in to a formal MOU with fewer provider hospital (who can be selected based on some quality parameters) for better efficiency and accountability rather than all the hospitals in Pune which leads to huge disparity in the kind of care provided as well as rates charged To introduce an electronic system of communication (either web based or in the form of an electronic biometric health card) which will ensure speedy claim settlement and also will bring about transparency in the system for all the stakeholders (KKPKP, PMC,NIA and provider hospitals) Initiate insurance literacy programme (for the members and the hospitals) in partnership with KKPKP and municipality which will not only bring about more insurance awareness on the part of the members and hospitals but will also ensure less claim rejection arising out of wrong submission of documents Bring about cashless model of insurance rather than reimbursement model like Dharmasthala insurance programme in Karnataka where the NGO acts as an agent this will reduce the load member for having to raise large sums of money in case of health emergency which s/he borrow at usurious rates Standardization of operating procedure especially in the claims department 9

10 I. THE SCHEME AT A GLANCE 10

11 OPERATIONAL MECHANISMS Type of Scheme: In House / Partner Agent Partner Agent Type of Risk: Single Risk / Risk Package Single Risk (basic hospitalisation) Type of Enrolment: Voluntary / Compulsory Compulsory Insured Unit: Individual / Family Individual Prem. Payment Mechanism: Up Front / Easy Payment Mechanism PMC pays all the premium Subsidy to the Scheme: Direct / Indirect Direct HEALTH: Scope of Health Benefits: Limited / Broad Limited Level of Health Benefits: Low / High Low Tie-up with Health Facilities: Private / Public All registered hospital within Pune Administration Responsibility: TPA / No TPA No TPA Additional Financial Benefit: Discount / No Discount Access to Health Services: Free Access / Pre-Authorization Required Free Access Co-Payment: Yes / No Yes 11

12 Payment Modality: Cashless / Reimbursement Reimbursement MAIN CHARACTERISTICS Designation of the scheme: Kagad Kach Patra Kashtkari Panchayat (waste pickers union) Health Insurance Scheme Starting date: 1st January 2003 Plan Term: 1 year Insurance Year: January 1 st December 31 st Ownership: Pune Municipal Corporation Management Responsibility: Informal responsibility voluntarily taken up by the waste Pickers Union Type of Insurance Scheme: partner Agent Target Population: Members of Kagad Kach Patra Kashtkari Panchayat or the waste pickers union. Outreach: Pune Municipal Corporation jurisdiction area Eligibility Condition: Open to all Members of Kagad Kach Patra Kashtkari Panchayat or the waste pickers union from age group 18 to 70 years of age Enrolment Modalities: Automatic Premium Amount: Charged as per the standard rates of Jan Arogya Policy of New India Assurance Company Limited Benefits: Hospitalisation up to a maximum sum of Rs Service Delivery: All registered Hospital within Pune Municipal Corporation jurisdiction area Type of Service delivery arrangement: Formal contract only between the insurer and the Municipal Corporation. All other arrangements are informal and voluntary in nature. Type of services: Reimbursement Waiting Period: None Co-payment: None 12

13 Administration Responsibility: voluntarily taken up by Kagad Kach Patra Kashtkari Panchayat without any financial return from the insurer. KEY INDICATORS Indicators Total no. of insured Percentage of 71.1% 69.1% women Total contributions from PMC Overall - 73% 94% 107% 31% premium to claims amount ratio Disbursal per claim Claims - 2.6% 2.4% 2.77% 1.05% incidence rate Claims % % incidence by gender Claim rejection - 5.5% 9.9% 8.6% 25% rate Amount received to amount spent ratio Pending claims - 40 None None None 13

14 Total administration cost - 25,000 25,000 25,000 25,000 EVOLUTION PROFILE Evolution of Members No of Members 3000 Evolution of Members Year Age Wise Break up of Members No. of Members Up to 45 years Year Evolution of Contribution by PMC Amount in Rs Amount (In Rs.) 14

15 0 Premium to Payout trend Amount (in Rs.) Premium Paid Claim amount received Year Evolution of Claims settled Amount (Rs.) Claims settled Year I Year II Year III Year IV Year Disburasal per Claim vs maximum Sum Insured Amount (In Rs.) Disbursal per claim (in Rs.) Maximum sum insured 15

16 DEVELOPMENT PLAN 1. Insurance Plan: Objectives: 1.1: Increase the overall coverage of the scheme in terms of membership. Strategy: The existing network of members and workers can be used to identify unregistered members (at present 10% waste pickers in the city are not covered) who can be encourage to join. The staff and members involved can be incentivised to venture to newer slums and settlement areas of waste pickers. 1.2: Encourage the introduction of family floater system Strategy: There is a need to explore the possibility of a product which will provide for the health care needs of the entire family while at the same time taking care of the cost and keeping it financially viable. This will systematically reduce the cost of premium while at the same time increasing the coverage which will mean that high end care which is typically expensive and unaffordable will be covered. To bring about such a change in product at the official level, the issue can be taken up by the trade union with the government. It can be argued that since the rag pickers are 16

17 among the most vulnerable urban communities, a holistic cover needs to be provide by the government as a social security measure for the worker as well as his family as the members of the family of the waste pickers are as vulnerable and exposed to various health risk as the members themselves. This can be provided as benefits to the worker in the non formal sector. This cover needs to be holistic covering the entire range of diseases and costs. 1.3: Improve insurance literacy and health awareness Strategy: It can be discussed with the insurer that by providing insurance literacy programme, efficiency and speed can be brought about in the system as the members will follow prescribed procedure in claim submission and will submit correct documents. By health awareness, the overall health seeking behaviour of the members will increase which will help in preventing diseases due to knowledge regarding hygiene, sanitation and nutrition thereby substantially bringing down claim load. A suggested way of doing this will be to carry out a year long prospective study in the community to study the health impact of these measures in areas where these measures are administered vs. the area where these measures were not administered. A similar study can be done to measure the impact of insurance literacy on the overall efficiency of the system. These evidences can be used with the insurer so that it is taken up on a formal basis. 1.4: Try to clear backlog of pending claims and also an effort to systematically decrease in the claim rejection to make the scheme more popular. 17

18 Strategy: An efficient MIS can be designed which makes communication faster, claim settlement quicker and rejection fewer. At present KKPKP has an existing MIS which needs to be customized so that it can be made available online for use by all stakeholders thereby bringing in speed and efficiency in the process. 1.5: Make the scheme participative and process the product in a manner so that it incorporates more community participations and feedback. Strategy: Member representatives can be Elected or selected from within the Union and subsequently be given a short training programme by the insurer to impart them the nuances of insurance. This will lead to empowerment of the members who will have more say in the operational aspect of the scheme. 18

19 II. DESCRIPTION OF THE SCHEME 19

20 INTRODUCTION The tragedy with India is that those who have the capacity to buy healthcare from the market most often get healthcare without having to pay for it directly, and those who are below the poverty line or living at subsistence levels are forced to make direct payments, often with a heavy burden of debt, to access healthcare from the market. National data reveals that 50 per cent of the bottom quintile sold assets or took loans to access hospital care. Hence loans and sale of assets are estimated to contribute substantially to financing healthcare. With less than 10% insurance penetration for health and in absence of any official social security measure, the hardest hit are the poor and workers of unorganized sector 1 for whom each day of work loss not only translate in to a loss of wage for a day but also means the associated financial burden spent on availing treatment. In such a scenario the introduction of a social security measure for the poor and workers of the unorganized sector not only becomes imperative but also an overriding concern for a welfaristic state like India. The insurance scheme for the waste pickers of Pune is a step in the right direction in this regard and can serve to act as the guiding light to a comprehensive social security measure by the state for the workers of the unorganized sector in the country. This will not only provides a social security measure to these workers but also will acknowledge and appreciate the contribution that they have made to the economy as also the country as a whole. The scheme came in to being as an effort by the Waste Pickers Trade Union, Kagad Kach Patra Kashtkari Panchayat. (For details on the organisation see Annexure-1). The Trade Union did Value Chain Analysis study, conducted in 2000, on behalf of the International Labour Organisation (ILO). This study revealed that the waste pickers played a critical role in the Municipal s work of garbage cleaning and contributes substantively to lessening the work burden of the municipality. The study also, quantified 1 About 90% of the working population in India falls in the unorganized section according to Census of India Data,

21 this profit to be approximately, Rs. 16 million. The Trade Union argued that while the financial benefits (savings in transportation costs) accrued to the municipalities, the costs (health costs) of contributing to municipal solid waste management were borne entirely by the waste-pickers labouring under abominable conditions of work leading to higher levels of morbidity. The argument was substantiated by the findings of a studies conducted by Chikarmane, Deshpande, Narayan in 2001 that showed that waste-pickers suffered from occupation related musculo-skeletal problems, respiratory and gastrointestinal ailments. Scrap collectors, particularly women, tended to ignore minor illnesses till they assumed dangerous proportions and became regular conditions. Using the evidence of both the ILO study and the study conducted by Chikarmane, Deshpande and Narayan, the Union advocated with the Municipal Corporation to provide basic health services to the waste pickers. Officially recognizing the efforts of the waste pickers and also the contribution that they make towards solid waste management, the Pune Municipal Corporation (PMC) in 2003, decided to provide identity card (see Annexure- VI) and basic health insurance cover by paying for the annual premium, thus becoming the first municipality in the country to do so. New India Assurance Company was chosen to be the insurer and the scheme that was offered for insurance coverage was the Jan Arogya Policy. (For details on the scheme please refer to Annexure-IV) The scheme started off with an initial number of 3707 insured members to 5411 members at present. To start off with there was initial teething problem and hence rigidity on the part of the insurer. Some issues included like the minimum bed requirement (fifteen beds) to qualify as a provider hospital. As most of the waste pickers are poor, they prefer to go to smaller nursing homes and hospitals which has less than the requisite bed number because of a multiple facts like proximity of the hospital, treatment on credit, overall good rapport with the doctor and staff. This was discussed with the insurer who has agreed to waive off this requirement. Further pre-existing diseases were excluded and claims were rejected on that basis in the beginning but an argument was put before the insurer by the Trade Union that it was not a case of fraud as the waste pickers were never aware of this fact nor was it ever been tested diagnostically prior to her/his hospitalisation at present. 21

22 Gradually there has been a systematization of operations both at the insurer and the Trade Union s level. Systematic categorization of members in to various age groups, devising of an efficient MIS, smoothening of the claim settlement processes, gradual insurance awareness building among the members are some of the steps in the right direction. An analysis of the claims shows that most of the diseases reported by the insured are communicable diseases which again indicate the abominable and unhygienic condition under which they work. However, the average claim amount shows that it is very close to the maximum sum insured showing that the cover may not be adequate for the health need of the members and there is a need to explore an alternative cover which caters to the need of the members while keeping the product financially feasible for the insurer. However another reason for average claim amount coming closer to the maximum sum insured is because of the fact that most of the insured access private hospital where no standardization of rate exists and also rates has not been negotiated with these hospitals who charge differential rates to the insured for the same disease condition. The case study was documented by Centre for Insurance and Risk Management on behalf of the International Labour Organisation (ILO) as best practices in the sector for micro health insurance in India. The study entailed informal meetings, formal interviews and other form of interactions with all the stakeholders involved with the insurance programme. While informal interaction was mostly done with the beneficiaries (the waste pickers) to know about their overall perspectives and also to understand the context, the interaction with the Trade Union, Insurer and the hospitals was more at a formal level to understand management issues and operational issues. The case study tries to bring out the uniqueness of the scheme, the rationale behind its genesis, the practical constraints faced by each stake holders and also the needs and aspirations of the stakeholders (especially the beneficiaries) as regards the scheme. The case study has also tried to capture the overarching vision of the Trade Union of the waste pickers as regards making their views heard to the government and civic authority and their constant endeavour to lead their lives in dignity and self respect. 22

23 INSURER MUNICIPAL CORPORATION WASTE PICKERS UNION CLIENT PROVIDER HOSPITAL 23

24 The main functions of the waste pickers Union in the scheme are: As far as the role of the Union in the general day to day functioning of the scheme is concerned, they are: o Act as an intermediary, interface and channel of communication between the Client, Municipal Corporation, Insurer and Provider Hospital o Carry out the paper work for Enrolment, Claim Paper Processing and Scrutiny of claim papers before submission to the insurer o Act as the channel for disbursing the claims amount from the insurer to the beneficiary o Advocates on behalf of the client with the insurer in case of claim rejection o Does literacy programme to generate insurance literacy and positive health seeking behaviour o Maintenance of data base and MIS of the scheme o Maintaining a time log to observe the delay in registration, claim processing, disbursement and official delay so that efficiency can be brought about As far as the long term strategic goal of the Union is concerned it ensures that in the day to day running of the scheme, the basic aim of advocacy for the right and dignity of the waste pickers are not lost sight of. Hence it carries out the following functions along side the routine work of running the scheme: To act as a platform for advocacy of the right of the waste pickers and ensure that their cause is recognized by the government and civic authorities so that they can lead a life of dignity To advance the argument of provision of social security measures (paid through user fees or through subsidy) for the vulnerable category of people like the waste pickers and 24

25 informal sector workers so that they have a safety net mechanism which prevents them from falling back in to the traps of poverty which should be the concern of not only the government but also the private sector Objectives: the main objective of providing a health insurance cover by the municipality emerged from the fact that while the financial benefits (savings in transportation costs) accrued to the municipalities, the costs (health costs) of contributing to municipal solid waste management were borne entirely by the waste-pickers labouring under abominable conditions of work leading to higher levels of morbidity. Hence providing health insurance by the municipality will not only take care of their health concern but also largely gain an official recognition from the civic authorities (the Municipality in this case) as regards the contribution they make to Solid Waste Management effort of the city as a whole. Target Population: The target population is rag pickers, scrap collectors and itinerant buyers. At present the total number is The Product: The product is called the Jan Arogya Policy (JAP) of New India Assurance Company (NIA). The type of enrolment is compulsory and the insured unit is an individual. The period of cover is one year with the insurance year starting on 1 st of January. Eligibility Condition: 25

26 The insurance plan is only open to members of the Kagad Kach Patra Kashtkari Panchayat (waste pickers union), Pune. Age of the insured is from 18 years to 70 years. There is no health check up required prior to enrolment. Exclusions: Refer to the exclusion criteria in the annexure of the Jan Arogya Policy document of the New India Assurance Company. Benefits: It is a reimbursement of hospitalisation/domiciliary hospitalisation for illnesses/diseases or injury sustained. The maximum ceiling amount that can be reimbursed is Rs Premium: The entire premium amount is paid by Pune Municipal Corporation. The premium is different for different age group (as specified by the New India Assurance Company Limited). Benefits Age group (Years) Contributions (in Rs). Healthcare : 18 to Up to Rs.5000 maximum Service Delivery: In the 1 st year, the Pune Municipal Corporation issued a letter of request to all registered hospital within the jurisdiction of Pune Municipal Corporation to cooperate in terms of admitting patients and providing healthcare to the members of this scheme. As of now 26

27 about 150 hospitals in Pune provide healthcare and hospitalisation to the members of the union. There has been no written agreement or MOU with these hospitals. The only criterion that PMC has is that the hospital should have a minimum of 15 beds to qualify as a provider hospital. According the union, out of the 150 hospitals, about are the most frequented by the members. As of now there has been no rate negotiation with the hospitals either by the PMC or NIA. The Mechanism: Most of the waste pickers in Pune have been registered by KKPKP (nearly 90%) and PMC. All of them are provided with an identity card. The detailed MIS of the members with card number and other details are present with the Municipal Corporation. An update of new member is regularly provided by KKPKP to the PMC before 1 st of January every year. Based on this information, the premium in each age category is calculated by KKPKP based on which the total amount is paid by PMC to New India Assurance Company Limited. When any of the members falls ill, he gets herself/himself admitted to any of the registered hospital within Pune Municipal Corporation area limit. All the expenses incurred during hospitalisation are paid for by the members. Then the members approach KKPKP with the filled in claims form which contains various information of the patient (see claims form of NIA in Annexure-V). A detailed statement of cost is also given by the patient which shows break up of the total expenditure in to various sub components. The patient submits the following documents in support of the claim: Bills, receipt and discharge certificate from the hospitals/nursing home Prescription of doctors and bills for medicines Receipts for doctor, surgeons and specialists fee All these details and documents are scrutinized by the office staff of KKPKP before forwarding it to the NIA office for approval. 27

28 The NIA claims department looks at the claims and scrutinize it for admissibility. On satisfying itself with all informations and details, it releases the amount to KKPKP who finally disburses it to the members. Typically it takes about a period of 3 months from the time a claim gets submitted with KKPKP and then move to the insurer to finally getting the amount disbursed to the members which might go up to a maximum of 9 months. 28

29 INSURER NIA (1). Registered with KKPKP as members CLIENTS FLOW OF CASH AND INFORMATION (3). PMC calculates total premium and send it to NIA (8). Scrutinised document and claim form sent (2). Updated registration MIS sent (9). Release of money to KKPKP KKPKP (7). Informs hospital about the necessary document required (6). Submits claim form and other documents for scrutiny (10). Disburses cash to client (4). Pays cash for hospitalisation (5). Provide documents and information required for claim settlement Flow of Information Flow of Cash PMC PROVIDER HOSPITAL 29

30 Development Perspective KKPKP has some developmental plans for the scheme in the years to come. These are: KKPKP is planning to come up with a separate cooperative of rag pickers who will collect wastes from door step. In this scheme of things, a changed health insurance is visualized to be provided by the cooperative. As shared by Ms. Laxmi Narayan, under this scheme, KKPKP is planning out to do the following: o To introduce a family floater scheme for the entire family on a cashless basis by exploring alternate insurance scheme o To increase the sum assured from Rs to more Bring about efficiency within its own organisation and also the entire process. At present the organisation is maintaining time log to record the time taken for carrying out various processes and trying to improve and reduce the time. It is planning to streamline and institutionalize this process To improve outreach and communication with various stakeholders through mobile and internet connectivity To increase insurance awareness of the provider hospital regarding the process of claim settlement with help from the insurer To ensure more involvement and participation of the members in the process through more insurance literacy To ensure a positive improvement in the health seeking behaviour of the community 30

31 III. ANALYSIS. 31

32 1. COVERAGE Coverage wise, the scheme is evaluated on the absolute as well as proportionate change in the numbers of insured followed by the evolution of gender and age distribution within the scheme. 1.1 Membership Evolution: Year Numbers insured %ge change in absolute numbers (Year -0 ) * (Year I) (Year II) (Year III) (Year- IV) (Year V) *Individual insurance programme paid by members Evolution of Memebers No. of Members Evolution of Memebers Year 32

33 The first year of the scheme was a voluntary insurance programme in which the members paid their own premium. Only 32 members enrolled as all members were not able to pay the premium. The next year, the scheme was taken up by the PMC which paid for the premium of all members which saw a sudden jump in the enrolled numbers by %.this was typically because the members came to know that the entire premium will be paid by the PMC. However in year II, there was a drop in membership by 10.7%. The reasons for this so as in 1st year all rag pickers were enrolled irrespective of their membership status. However in year II, the process was streamlined and the list was scrutinized for filtering out nonmembers which explains the drop in membership. From then till now the scheme has seen a consistent growth till date. (An overall average growth of 145% from year I) 1.2 Membership by Gender: Gender Year-I year-ii Year-III Year-IV Year-V No. % No. % No. % No. % No. % Male Female Year II Gender Break Up Year IV Gender Break Up male 30.9% male 28.8% female 69.1% female 71.1% 33

34 Though the membership has shown an average growth of 145%, gender wise the majority of the members are female (nearly 70% for the data available). As most of the insured are female and also belong to socio-economically vulnerable category like the waste pickers, hence providing a safety net product like health insurance to them stands justified and also recognizes their contribution to the city by the civic authority. 1.2: Membership by Age Group: Age group (according to JAP of NIA) 18 to years Age Wise Break up of Members No. of Members Up to 45 years Year 34

35 From the above graph it is clear that over the years the largest chunk of membership has been in the age group years which is the economically productive age group. Also the fact that they are women, make them vulnerable to exploitation-economic, sexual and in the domestic space. It is seen that the number of rag picker in this age group has gone up from 2866 in 2003 to 4656 in Coverage wise it is seen that there had been an average growth of 145% since the introduction of the scheme. Most of the members are female and belong to the economically productive age group of years. 2. CONTRIBUTION 2.1. Evolution of Contribution: Contribution to the premium is entirely made by the Pune Municipal Corporation at the beginning of each year (1 st of January). Here an evolution of contribution of the PMC over the years as well as age break up of this premium in to various age categories is shown. Year Amount (In Rs.) Percentage increase/decrease Year I Year II % Year III % Year IV % Year V % G.Total Premium amount paid towards premium of the insured over a three year period came to a total of Rs lakhs which has been paid till date by Pune Municipal Corporation for this scheme. The evolution of contribution over the year s shows a gradual percentage 35

36 decrease which indicates that though the amount may have increased in absolute number but has not increased proportionately. The reason for this is because in the beginning of the scheme age wise categorization was not done too strictly; hence the amount of premium could have been more even for less aged members. Further, over the years the new members joining the Union were mostly younger members, (as seen in the age wise break up of members over the year in table- 1.3) decreasing the proportionate amount contributed by PMC. (As in JAP, the premium is calculated in various age brackets) 2.2. Age wise total Premium Paid: Age Group Amount paid (in Rs.) Total years (71.5%) (10.5%) (9%) (0.9%) Of the total premium paid by the PMC, 71.5% is paid for the age group up to 45 years. Incidentally, this age group has the highest number of claims which questions the calculation of the insurer which says that old people (56-70 years category) are more risky and hence premium charged to them should be more.(which may be true from a life insurance perspective). Of the total lakh premium paid by the PMC, it is seen that most of it (71.5%) goes for the age group years. 36

37 3. CLAIMS ANALYSIS The claim analysis looks at the evolution of claims in terms of gender and age break up of claims, claims accepted and rejected. It also looks at the type of diseases predominant in the insured and also what is the preferred healthcare facility of the members as well as the cost incurred to avail these cares and the time delay in the claims getting reimbursed. Overall through these analyses it tries to understand systemic inefficiency which needs to be addressed to bring about better claim experience for both the insured and the insurer. 3.1 Current Claims Incidence: %ge change 1 st year %ge change 1 st year %ge change 1 st year No. of No. of %ge No. of No. of %ge No. of No. of %ge No. of No. of %ge Members claims Members claims Members claims Members claims It was seen that the claim shot up in 2004 by 138% in The reason being that typically as there was no insurance awareness (on the part of the members) the claim went up manifold. However in subsequent years, with increased insurance awareness and improved method of communication with the insured as well as the insurer, the claim maintained a stabilized trend. 37

38 3.2. Frequency of Claims: Frequency of Claim (from ) No. of Claimants Single Claim 224 (88.8%) 2 claims 23 (9.1%) 3 claims 4 (1.5%) 4 claims 1 (0.39%) It is seen that about 88.8% of the claims received from are one claim made by an insured in a given year. This shows the increased insurance awareness that the members have as a result of the effort of the Trade Union. No. of Claimants Single Claim 2 claims 3 claims 4 claims This shows that although the frequency of claim per insured may not be high, yet the amount claimed is more almost nearing the maximum sum insured. 38

39 3.3 Claims Incidence by Gender: Gender Claim Male 13 (32.5%) N.A N.A 16 (12.6%) Female 27 (67.5%) N.A N.A 110 (87.3%) N.A: Not Available In the year for which data are available, it is clearly seen that the majority of the claimants are female. In KKPKP most of the registered members are women. Being female exposes them to various discrimination and harassment. They are not only subjected to sexual harassment from perverts in the streets but also looked upon suspiciously by their husband as regards their moral integrity. Being female also snatches away the bargaining power which they can have with the scrap dealer. The formation of the Union in general and this scheme in particular have helped give them a dignity in life and also a knowledge that they are not alone in their struggle for existence and to eke out a living Claims Incidence by Age Group*: age of total claimant 19 to *Only Received Claims 39

40 Age wise break up of claims No. of Claims to Year It is seen that through the years, the maximum claim has come from the age group years. (Nearly 81.18%). This is so because majority of the rag pickers belong to this age group which is also the economically productive age group. Although years pays the least premium but has the highest number of claims (81.18%). This shows that unlike life insurance, age wise risk calculation of premium does not hold good for health insurance. For community health insurance the health and disease profile of the community, their average annual health expenditure, their paying capacities and preferred healthcare provider are the data which is required apart from age which does not play a very significant role. 40

41 3.5. Claims Amount Settled: Claims settled (In Rs.) Pending for payment (In Rs.) Year I Year II Year III Year IV Total From the data it is seen that the claim settled over the years has systematically gone up. One of the reasons can be because of increased enrolment of members over the years. The other reason can be because of lack of a strict gate keeping mechanism. Evolution of Claims settled Amount (Rs.) Claims settled 3.6. Claims Payout: 0 Year I Year II Year III Year IV Year 41

42 Payout in Rs Claims Total 284 It has been observed in the scheme that the maximum payout has been in the range of Rs.4001-Rs.5000 showing that the claim amount is close to the total sum insured. This shows that the maximum sum assured is not adequate for the health needs of the insured. This also explains the concern of the insurer about the unviability of the programme from a business perspective. However it can be run as a social security measure for health coverage for the poor and vulnerable section of the society like the waste pickers. There can be internal cross subsidization from the other commercially profitable product of the insurer. Claims for various Category Claims Claims Claim Amount 42

43 3.6: Premium to Payout Trend: Premium Paid Claim amount disbursed (Payout) Payout to premium ratio (as a percentage) Total Except for 2003, where the claim disbursed (payout) to premium percentage was 31%, all other years showed a high premium to payout percentage (an average of 76%) with the maximum being 107% in Further in the year 2004 the payout (Rs ) was higher than the premium paid (Rs ). As is evident from the graph, the payout is hovering closer to the premium paid from 2005 onwards. As also seen in table-3.6, where the maximum number of claims is in the category of Rs4000-Rs This is the reason why the insurer is finding the programme financially not very lucrative. Premium to Payout trend Amount (in Rs.) Premium Paid Claim amount received Year 43

44 However it also shows that the maximum sum insured is not sufficient for the members to meet their health needs. Hence keeping these two opposing view point in mind, there is a need to explore the possibility of an insurance product which makes it more comprehensive in terms of meeting the health needs of the insured as well making it viable commercially from the insurer s perspective Disbursal per Claim: Claim amount received No. of claims cleared Disbursal per claim (in Rs.) The disbursal per claim is around Rs showing that it is closely approaching the maximum cap of Rs progressively over the years. This again shows that the maximum sum insured is not sufficient to meet the basic hospitalisation expense of the members. It also points to the fact that rates have not been negotiated with the hospital which leads to higher medical bills. However for members (who were till now footing the entire bill which was proving to be a huge financial burden) the scheme has come to them as the greatest boon. In the words of Mangal Jagganath Gaikwad a member who lives in the Indira bashat near Aundh.3 years ago she suffered from cholera and was admitted to Medi-point Hospital, D.P Road in Pune. She incurred an expense of Rs and got the whole amount reimbursed within one year of submission of discharge paper, prescription and other document required by the insurance company. We feel that this cover is of great help to us and helps us financially to meet our health costs which previously we were unable to meet. 44

45 Disburasal per Claim vs maximum Sum Insured Amount (In Rs.) Disbursal per claim (in Rs.) Maximum sum insured Year 3.8. Claims Settlement- Amount Spent vs. Amount Received: Year Average Amount Spent (in Rs.) Average Amount Received (in Rs.) Amount received to spent ratio The average ratio for amount received to amount spend is However the average masks the maximum amount which might go up to Rs.25, 000 for surgeries which is not provided by the 45

46 scheme. Hence there is a need for providing a larger cover than is currently provided by the scheme which is not only comprehensive but also is financially viable. Average Amount spent vs.average Amount Received Amount (in Rs.) Average Amount Spent (in Rs.) Average Amount Received (in Rs.) Year 3.9. Claim Rejection Rate: Claims Rejected Claims * Accepted Total claims Rejection Rate (%ge) 25% 8.6% 9.9% 5.5% * 40 claims pending in 2006 Except for the 1st year, the claims rejection rate has been stable over the years. One of the main reasons for rejection of claim is non-submission of requisite documents. Further claims 46

47 gets rejected in most cases when the claimed amount approaches the maximum sum insured (Rs.5000) Claims Accepted vs Claims Rejected No.of Claims Year Claims Rejected Claims Accepted 3.10: Pending claims: In 2005 there were 2 pending claims (total amount not available) while in 2006 there were 38 pending claims taking the total to 40 pending claims till date. Out of 2 claims in 2005, no reasons were cited for the pending claims while in 2006, out of 40 claims, (total amount Rs. 2,58, 461) only reasons were given for 2 claims. Out of the reason given are frequent transfer and turnover of employees which delays in the processing of claims. 47

48 3.11. Claim by Hospital*: Type of Number of Claims Hospital Total Private (82%) Public trust (8.8%) Municipal (1.8%) State Govt (7.2%) * Total claim during the period 360. The information available for 31 claims. Total 8.80% 1.80% 7.20% Private Public trust Municipal State Govt. 82% Most of the claimant access private hospital because of proximity issue, faith in the doctor, flexibility in payment mechanism (hospitalisation and treatment is provided on a credit basis which is repaid to the hospital on realisation of amount through reimbursement) and perceived better quality of private provider. As expressed by the members, there is a popular 48

49 perception favouring private hospital seen to be providing a better quality care as compared to government facility. Alka Sidhgasate lives in Parwat Peta Basti in 132, dandekarpur in Pune. She had colitis 2 years back. She went to a nearby private hospital (Parween hospital). In Parween hospital I had detailed diagnosis, medication and stayed in the hospital for 8 days. I feel overall their services were better than what is being provided in the government hospital though it is expensive than that at the government hospital The next largest segment of the client goes to the public hospital. The reason being that it is cheaper and also because the clients have to pay the money upfront. It is seen that most of the accident cases go to the government hospital as it is a medico-legal matter and First Information Report (FIR) for primary investigation needs to be filed as a legal requirement Claims Incidence by Specialty*: Department Year Total Medicine (52.35%) Obs & Gyn (5.95%) Orthopedic (21.3%) Neurology (0.31%) Cardiology (1.5%) Casualty/Emergency (12.8%) Ophthalmology (2.5%) Surgery (3.1%) Total

50 * Total numbers of claims 319. Information not available for 41. Most of the claims show a higher percentage of hits in the medicine ward. These cases were mostly suffering from communicable diseases which could have resulted from their exposure to organic garbage and other harmful wastes which is a breeding ground of germs and pathogens. These diseases include gastroenteritis, cholera, typhoid, worm infestations, diarrhea, dysentery and food poisoning. The next category of claims is from the orthopedic ward indicating accident cases. These accidents are mostly due to the accidental falling in to the waste bins, road traffic accident, and incident of domestic violence. These informations explain the abominable and potentially hazardous condition that the waste pickers are exposed to as part of their daily profession. 2% 0% 13% 3% 3% medicine Obs &Gyn Orthopedic Neurology 21% 52% cardiology casualty opthalmology 6% surgery 50

51 3.13: common diseases reported: Diseases Year Total Anemia Gastro enteritis Enteric fever Chicken gunya Hysterectomy Injury G.Total 64 As seen in table 3.13, most of the diseases suffered by the insured are communicable diseases. The total numbers of communicable diseases (gastroenteritis, enteric fever and chicken gunya) are 43 in number (out of a total of 64) which is about 67.18% of the entire disease reported for claim. This shows that there is a large burden of communicable disease which can be controlled by basic preventive and promotive education (which can be funded by the insurer as it will brings down the claim load) coupled with the insurance awareness programme Injury Hysterectomy Chicken gunya Enteric fever Gastro enteritis Anemia

52 3.14: Discrepancy in cost incurred for various diseases for 2005 and 2006: Diseases Range of expenditure (Rs.) Gastroenteritis Fever Typhoid fever Hysterectomy For the two year for which the analysis was done, it was seen that there is huge discrepancy in cost of care for the same condition. For example for gastroenteritis, the cost incurred varies from Rs to Rs This is because there has been no cost negotiation with the provider hospitals by the insurer and also due to lack of standardization of procedure and a standard treatment protocol Time Lag in Claim Settlement: Process From discharge of patient to submitting claim paper to KKPKP From submission of claims to KKPKP to the submission by KKPKP to the insurer From submission of claim to NIA to the client getting reimbursed Time Lag (Delay) Minimum Maximum 1 month 3 months 1 week 3 weeks 2 months 6 months 52

53 From the above it is clear that the minimum time from the patient getting discharged to ultimate reimbursement of claims takes from a minimum time of 3 moths to maximum of 9 months. 3.16: Evolution of time lag for claim settlement: Year Average day taken from discharge to claim settlement The average time for claim settlement shows a sinusoidal pattern with one year showing a rise and then fall in the subsequent year with a maximum average time of 68 days reported in The reason for this delay is more to do with internal problems within the insurer like strike, frequent transfer and other administrative problems. The reason also lies to some extent with the client for not submitting correct claim papers and also to a very little extent lies with the organisation (KKPKP) for processing and sending it to the insurer. average days taken average days taken year average days taken 53

54 Overall the analysis of the claim shows that there has been a healthy payout ratio of 0.62 (amount spent to amount received) which augurs well for the members. The claim rejection rate was initially high (25%) but has stabilized over the years. Most of the members were seen to claim only once which indicates towards some insurance awareness on their part which is due to the effort put in by the Union which imparts this awareness during their group meeting. Most of the diseases for which claim had come in are communicable diseases which again points out to the fact that the waste pickers are constantly exposed to potentially hazardous condition having adverse effect on their health. The amount claimed is mostly in the range of Rs showing that the scheme may not be sufficient for the healthy requirements of the members and hence alternate scheme needs to be looked at for providing a holistic coverage. As in all other segments of the society, the popular perception of the waste pickers is on the perceived better quality of private provider than the public provider. This leads to higher claims amount as these private entities do not have any standardization of rates and also by the fact that no rate negotiation has been carried out with them by the insurer. The time between a claim getting submitted and approved ranges from 3 months to 9 months which is financially a burden on the poor household who get money through borrowing from money lenders at high rate of interest or through credit from the provider hospital. In the later case the faith of the provider hospital is eroded if there is late payment which consequentially affects the subsequent visit by the member in which case they may not be entertained by the hospitals. 4 ADMINISTRATION COST: The administration cost incurred by KKPKP is Rs. 25, 000 per year for all the years. This cost is recovered by levying an annual service charge of Rs.25 from the insured by KKPKP. 54

55 If the administrative cost is calculated as a percentage of the premium collected for all the years it would be as follows: Total premium calculated for all the years (5 years) =Rs.12, 40, 750 Total administrative cost collected for all the years (5 years) = Rs.1, 25, 000 Administrative cost ratio = 1, 25,000/ X 100% = % Any scheme with an administrative cost ratio of 10% overall is considered to be cost effective one. As per the recent IRDA regulation, 15% commission needs to be paid to the agent for the services provided. As KKPKP is doing the entire job ob an agent, the insurer can consider paying agenting fees to it (KKPKP). 55

56 IV. CONCLUSIONS AND RECOMMENDATIONS 56

57 What started as a commendable effort by the department of Adult and continuing Education of the SNDT Women s University in Pune has come to be recognized as the first effort where the Municipality has undertaken to provide health insurance to the poorest and most vulnerable section of the society: the rag pickers. The scheme is a very good example of evidence based advocacy which uses action based research as its tool. This is also a good example in mass based movement where the peoples support has made it possible in eliciting recognition and acknowledgement from the civil authority of the effort put by the rag pickers for the general welfare of the community. Some of the unique features of the scheme are as follows: The scheme is unique in the sense that for the first time a vulnerable and neglected group of the society (the rag pickers) made their voices heard and got it endorsed by a civic body which not only endorsed their view officially by providing them identity card but also agreed to pay for the entire annual premium for all the members for health insurance coverage KKPKP not only acts as an intermediary between all stakeholders (on behalf of the members) to ensure smooth functioning of the programme but also ensures that the larger goals (of recognition of the efforts of the waste pickers by the government and civic body, giving them a collective voice and ensuring that a social security measures to address their risk) is not lost sight of and continuously pursued The scheme is a result of solidarity among the members of the Union (majority of whom are women) who as a result of the scheme is treated with respect within the household as well as the community and are financially empowered to meet their health eventualities at the same time All the registered hospitals within the Pune Municipal Corporation (nearly 150) act as provider hospitals providing a satisfactory level of service despite there being no agreement of them with either the PMC or the insurer 57

58 As most of the members come from lower socio-economic strata, they access smaller hospitals and nursing homes (less than 15 beds) as these hospitals are closer to them, the staffs know them and also they can avail hospitalisation on a credit basis. Taking in to consideration these facts, the insurer has agreed to waive off the criteria of minimum requirement of 15 beds to qualify as provider hospital Over all the scheme has shown an impressive growth in the number of insured with 3707 insured in the first year of the scheme to a total of 5411 insured at the last count. Of the total number of the insured, nearly 70% are female. The number of insured will grow in the coming year with the Union planning to start a cooperative of waste pickers which will help in door-to-door collection of garbage. Most of those insured fall within the age category of years which is the economically productive age group. This age group accounts for the maximum premium payout (71.5%) of the total premium paid by the PMC as also the maximum number of the claims. It was seen that most of the claims were for hospitalisation arising out of communicable diseases which explains the abominable condition in which these waste picker s work which is potentially unsafe for health. Further an analysis of average payout for claims submitted shows that it is closely approaching the maximum sum insured (Rs. 5000). This shows that the cover is not adequate to meet the health needs of the members and a comprehensive policy needs to be explored which takes care of the health needs as well as making the scheme financially viable. One of the main reasons for higher cost of claim is because there has not been any rate negotiation with the hospital by the insurer which charges varied rates for a similar disease condition. Besides, government health institutions are not preferred (which are relatively cheaper) by the members because of perceived poor quality, bureaucracy and unfriendly behaviour of staffs. One of the major concerns over the year has been the number of rejected and pending claims. While the rejection rate has come down systematically over the years (25% in year - I to 5.5% in 2006), in 2006 alone there were a total of 40 claims pending. Overall the scheme has been successful from the perspective of providing a safety net for meeting the health needs of the waste pickers. It has been a great learning experience for 58

59 all the stakeholders who have faced the initial teething problem in the scheme to its present state where it provides overall satisfactory coverage to the insured members. There has been a gradual systematization of operations both at the insurer and the Union s level. over the years, systematic categorization of members in to various age group, devising of an efficient MIS, smoothening of claims settlement process, gradual insurance awareness building of the members and overall a sense of satisfaction and pride on the part of the members in their quest for asserting self determination and leading a life of dignity. This can be summed up in the words of one of the member, Shantabai Vithal Choudhury from Kasiwadi, Bhawani Pet in Pune. She was traveling with 5 other women members when she met with a terrible road accident. I was the most injured among the 5 women with cut injury in both legs and thighs. I was admitted to Sasoon Hospital from where I was referred to Panchsheel hospital where I stayed for one and a half months. My son spent Rs.40, 000 for the 1 and half month of my stay in the hospital. I got Rs.5000 from the insurer for my expenses. Though it is not a great amount compared to my total expenses yet it really made me feel happy at the fact that I am covered by such a policy and also proud that it is as a result of my profession. I truly feel that it is like an employee benefit scheme for people like me. LIMITATIONS AND SUGGESTIONS Although the scheme it s quite unique in its approach and also provides the much needed financial security for the health risk of the unorganized sector workers like waste pickers, yet it has some limitations which can be corrected to make the scheme more popular and bring about operational efficiency.. These can be dealt at various levels as follows: I.PMC Level: (1). Need for institutionalized Community Participation: The present structure of the insurance scheme does not allow for much community participation programmatically. As the entire premise of the programme was to 59

60 provide compulsory health insurance cover to the members, programmatically it may not be possible. However some element of community participation needs to be integrated for the following favourable outcome which will ensure better functioning of the scheme: in bringing about better understanding of the product coverage and exclusions,( Insurance Literacy) To understand better client needs, their ability and willingness to pay as well as specific product features.(understanding Demand issues) To bring about better health awareness and improve the overall Health Seeking Behaviour of the community Community participation will help in bringing down cost as they will then have a better understanding of the processes To give the community a stake in deciding the type of insurance cover they want for themselves Suggestion: The PMC can have a group of workers of KKPKP, and some elected or selected members who will regularly interface with insurer, PMC, hospital and KKPKP. The time can be so chosen that it does not interfere with their work hours (2).Capacity building and Education of the hospital network: Standardization of Treatment Protocol as well as cost of hospitalisation to be approved and made mandatory for all the provider hospitals (as a regulation) so that the quality of care improves and also the cost is brought down (form the average payout of Rs to less) Education about the Health Insurance programme for the provider hospital so that the claim settlement process is expedited (as requisite claim settlement paper will be given out to the patients) and also will train them to be good gatekeepers. This will control cost and make programme viable. 60

61 (3). Less utilisation of Municipal Hospital: As the data shows, about 7.2% of the insured goes to Municipal hospital for health care. The municipal hospital/dispensary can improve their quality of care so that more and more insured goes to their health facility which will bring down cost of care and make the scheme much more viable financially. Suggestions: An improvement in the quality of treatment provided in the municipal hospital can be one suggestion to address this issue. Alternatively, municipal hospital should focus intensively on primary care which not only decrease the diseases load in the community, improve the overall health of the community but also act as an effective gate keeping mechanism. II. Insurer Level: (1). No formal MOU with hospital and KKPKP: For acting as the provider to the scheme, the insurer has no formal agreement with the provider hospital. The PMC has requested informally to hospitals within Pune to cooperate. As there is no formal agreement, it leads to unstandardised services meted out and differential rates being charged (refer table-3.15). This is so because as there is no formal MOU, there has been no rate negotiation with hospitals as well as standardization of treatment protocol leading to cost escalation. Similarly the insurer does not have a formal MOU with KKPKP, making it difficult for KKPKP to act in the best interest of the client and with more authority while dealing with hospitals and insurer. 61

62 Suggestion: The insurer could have a legal MoU with hospital and KKPKP. This will ensure that rates can be negotiated and treatment protocol can be standardized for provider hospitals for them to act as the paneled hospital. Alternately, as the members go to various care provider according to their convenience, they can be given two options - to go to paneled hospital or non-paneled hospital explaining them the benefit of going to the panel hospital where the quality of care is better as well as the cost is low (as it will be a negotiated cost).as far as KKPKP is concerned, it can act as an agent which is allowed under micro insurance regulation. This will ensure that the client is relieved of the financial contribution that s/he was making as annual insurance servicing fee to KKPKP. (2). Long claim settlement duration and pending claims: There is a considerable time lag between the claims getting submitted to the final disbursement. At any given time there is a backlog of unsettled claims. The claim is generally routed through KKPKP to the insurer and sometimes returns back due to lack of proper document. The organisation again coveys these matter to the members who get back to them with the necessary documents. These documents are mostly receipts and bills from hospitals. The hospitals hike up the price when bills and receipts are asked from them. Further there are other delays caused due to internal administration problem, staff strikes, frequent transfer of staff and absences within the insurance company. As it is seen in the analysis (refer table-3.13), the time for claim settlement may range from 3 months to 9 months. This is not conducive from the insured point of view who might have taken loan at high interest rate which will translate to further debt to pay off the interest amount of the loan. This delay also acts adversely for the insured as most of them access hospitals or nursing homes which give them services on credit with promise that as soon as money is received from the insurer, they (members) would pay them back. When 62

63 there is a delay in payment, the good will between the insured and the hospital is eroded which does not augur well for the former in the long run.. Suggestions: An electronic Management Information System (MIS) can be designed which allows for submission of claim from KKPKP to NIA. This will also contain scanned copy of documents required for claim settlement along with the claims form. Money can be transferred electronically (upon authorisation of the claims) to the orgainsation s bank account which will then disburse the amount. (3). Claim pending and Rejection: In the third and fourth year of the policy, it is seen that there has been a rise in claims rejection and pending with increased enrolment. (Refer table- 3.11) The main reason cited are the non submission of requisite documents (due to lack of insurance literacy of the members and hospitals), the differential rates meted out by the various hospitals, high turnover and frequent transfer of staffs. Suggestions: The insurer needs to streamline its in house operations to bring about efficiency. The insurer can also identify few standard hospitals (out of the total list of 150 hospitals) and negotiate rates with them. A standardized treatment protocol can also be drawn up by a panel of doctors of these hospitals to be applicable for the insured. This will not only cut down costs, maintain uniformity of rates and ensure quality of service provided. For ensuring adequate insurance literacy, the insurer should itself or through the help of KKPKP design an insurance literacy programme for the clients. Leaflets, audiovisual programme and street play can be organized to educate the members about insurance, 63

64 how it works and what are the various requirements for a claim to get honoured. Similarly, awareness campaign in the form of a workshop can be organized for the doctors and hospital staff to teach them about the nuances about insurance and what is expected of them to expedite the process. (4). Lack of Cashless services: Presently the insurance scheme (Jan Arogya Policy) of NIA runs on a reimbursement model. This leads to lot of problems on the part of the insured as s/he has to borrow money or take credit from the health providers. Some times the money spent by the insured may go as high as Rs.25, 000. Incase of delay, the high rate of interest on such large sum of money makes repayment difficult. In case of credit, the creditworthiness of the insured gets eroded with the provider hospital who may not entertain her/him the next time. Suggestions: It is suggested that the insurance benefit can be made cashless with the insurer paying money directly to the hospital. For this KKPKP can explore other insurance scheme available with the insurer. The mechanism works as follows: The insured falls sick, gets admitted to a hospital, the hospital/kkpkp worker send in the pre-authorisation form (which contains various diagnostic report, provisional and final diagnosis of the doctor) to the insurer, the insurer looks at the pre-authorisation form for admissibility and depending on whether the disease or sickness is covered by the scheme, gives preauthorization. Similar example of cashless micro health insurance in the country can be seen. E.g Sampoorna Suraksha Programme in Dharmastahala, Karnataka run by Sri Kshetra Dharmastahala Rural Development Trust and ICICI Lombard. 64

65 (6). Frequent Iteration with KKPKP: Frequent meeting is done with KKPKP on similar issues which were discussed earlier. For example rejection of claim on the basis of minimum bed strength of hospital was discussed and it was decided mutually to waive off such pre requisite. However for each similar case, the claim is rejected and again the entire cycle of iteration is repeated. Another example is rejection of cases due to diabetes. The Union argued it out that if a person has never been hospitalized or tested for diabetes, how s/he can know and get admitted with a mala fide intention of getting care. A series of discussion convinced the insurer who now does not reject similar claims. Further due to frequent transfer of concerned staff at NIA, frequent interaction is required on part of KKPKP with the new official for rapport building. Suggestions: There needs to be documented guidelines for the claims department of NIA on things mutually agreed upon. Further a person is required to be assigned to deal with the programme for sometime instead of their frequent transfer. III. At KKPKP Level: (1). Lack of an integrated MIS: At present though the Union has a detailed MIS, yet there is no standardized MIS for all stakeholders. Hence all stakeholders have different levels and types of information which does not fit in to each other. 65

66 Suggestions: KKPKP can customize their existing MIS for this purpose which can be made available online for use by all stakeholders The MIS should be such that it will ensure electronic transfer of data, authorisation of claims and cash movement. (2). Improving Outreach: At present the outreach of the organisation to all the rag pickers of Pune is not there. Currently 90% of the rag pickers of Pune are covered. Suggestions: Such non-enrolled members need to be identified and enrolled immediately by the existing members and workers of the Union. They should be made to see the benefit of joining the organisation and the strength that this solidarity derives. (3). Lack of Proactive role in Insurance: At present the organisation can not take a proactive role in dealing with various stakeholders as it does not have any formal defined role. Suggestions: KKPKP can take up the role of an insurance agent which requires some man day of training according to micro health insurance regulations. (4). Insurance literacy programme: Though the organisation shares information regarding the insurance scheme with its members in various meetings and gatherings, it does not have a formal insurance literacy 66

67 programme which means that its members do not know much about nuances of insurance; especially the process of claims settlement. Suggestions: A formal insurance literacy programme, for various stakeholders (members, hospitals and its own staff) can be initiated. The funding can be obtained from the insurer as this will ensure that the number of claims goes down and also the accompanying hassles. This needs to be taken up by the Union and advocated with the insurer. (5). Linkages with Current Programme: At present KKPKP has savings and credit programme for its members. However, there is no linkage between it and the insurance programme. Suggestions: A strong linkage need to be established as both are financial services and will complement each other. Further a fix deposit scheme can be initiated for a certain amount the interest of which can e used to pay for the rest of the family members who are not covered as of now. IV. At Members Level: (1). Lack of Insurance Knowledge: As the members do not know about insurance, hence are not able to submit correct documents and get reimbursement. This means that delay in claims getting reimbursed. As the members are financially poor, s/he has to borrow money or take credit from the health providers. Incase of delay, the high rate of interest makes repayment difficult. In case of credit from the hospital with a promise of paying when the reimbursement is 67

68 received, the creditworthiness of the insured gets eroded with the provider hospital who may not entertain her/him the next time. Suggestions: The organisation (KKPKP) needs to do insurance literacy as mentioned in point. 4 above. (2). Lack of negotiation Skill: In the absence of formal rate negotiation by any of the stakeholders, it comes upon the members to negotiate rates and pay the bill. As most of the members (82%) access private healthcare provider (refer table-3.10), they are confronted with high charges for hospitalisation and other care which are not standardized across all private provider hospital. Also because of their total lack of knowledge about medical procedures and associated rates in this regard, sees them paying more than the standard rate. Suggestions: The Union needs to have some trained staff to accompany the sick member to the hospital and negotiate the rates and also advices on the type of services to take i.e whether general ward or specialized ward etc in which case the heath care will be the same but the member will end up paying more for higher class facility and ambience. In the long run rate negotiation with the network hospital needs to take place at a formal level. (3). Less Health Awareness: The members typically work with garbage and organic wastes (which are typically the breeding place of disease causing organism), as they do not know about safety measures 68

69 to be taken, they most often end up getting ill. Most of the diseases (67.18%) that the members face is communicable disease refer table-3.17). Suggestions: The organisation, municipal corporation and insurer needs to start some preventive and promotive programme which teaches the members about safety measures to be undertaken while handling wastes besides information about other hygienic practices. The funding can come from the insurer as in the future this awareness will bring down claims load. 69

70 STAKEHOLDER SPEAKS Nitin Kareer, Municipal Commissioner, Pune Municipal Corporation The idea of an Urban Local Body covering waste pickers under an insurance programme is both revolutionary and logical. A waste picker's work has health implications, so provision of basic health insurance is a must. The actual economic and environmental contribution made by waste pickers to formal Solid Waste Management in the city, are well established. The insurance scheme is thus a formal mechanism to recognise and endorse that contribution. I am glad that Pune is the first municipal corporation to move ahead in this direction. I am also proud that today PMC is integrating waste pickers in doorstep collection of segregated garbage through a unique public private participation (a cooperative). The cooperative will be responsive to citizen needs, put minimal demand on the city's exchequer, help recover materials as well as provide a better income and decent livelihood to a large group of poor people in this city. I see this as the next step in the direction of preventive health care which should follow basic health protection. Shubhangi Deshpande, Administration Officer (Development) The New India Assurance Company Ltd. Pune. Overall the scheme is not a profitable venture. It is just a social obligation that is done by the company. As the company is a large PSU, it is able to sustain such a loss. The loss ratio is currently %. For a better coverage, lower premiums are not the solution. The premium should be raised so that the product is able to offer more. For a premium of Rs. 400 per person the maximum sum insured may be Rs.25, 000 which will cover most of the health expenses and contingencies of the members. 70

71 Laxmi Narayan, KKPKP, Pune We are very happy that as a mass based organisation which does evidence based policy level advocacy, the mass support of our members have helped in making the scheme see the day of the light and also convincing the municipal corporation to acknowledge the contribution made by them to the society. At present there are some systemic error within the scheme as far as its functioning is concerned. There are delays in settlement of claims, rejection of claims as well as the increasing concern of KKPKP about pending claims. More efficiency is required on the part of the insurer as well as more synergy requires to be built in between KKPKP and the insurer. As developmental plan for the scheme we are contemplating a new co-operative of waste pickers who will collect wastes from home. The number of membership is slated to go up and we are planning a new insurance programme for them which will be an improvement on the current insurance programme. We are also considering family floater for the entire family of our members. However, due to the present scheme the overall health behaviour of the community has changed for the better. Dr.Pungaliya, Pungaliya Hospital Most of the members of KKPKP come here for hospitalisation and are covered by health insurance. However neither the insurer nor the PMC has ever interacted with us regarding the insurance scheme. Patient come here, spend out of pocket and later get their money reimbursed is what I have heard from the patient who are covered by this scheme. We do not have any networking or referral facility with other provider hospital for this scheme. The present cover of Rs.5, 000 is not sufficient. In my opinion the cover should be increased to Rs. 30, 000. Of the administrative problem that we face in this scheme is when the members ask us to contact the organisation for getting their bills paid which we can not do because of the load of work we have at the hospital. 71

72 V.ANNEXURES 72

73 ANNEXURE-I ABOUT THE ORGANISATION: The genesis of KKPKP was in the year It was while implementing the National Adult Education Programme through the SNDT Women s University in 1990 that Poornima Chikarmane along with Laxmi Narayan first met child waste-pickers at one education centre. They accompanied them on their (child waste picker s) forays into the garbage bins and soon realised that collection of source segregated scrap would offer them better working conditions and more time for.education. A campaign was started in an elite neighbour hood for source segregation of garbage nearby so that the girls could source the scrap easily. Excited by the prospect, their mothers, who were also waste-pickers offered to collect the segregated scrap while their daughters go to school to study. About thirty adult women waste-pickers were issued identity cards by SNDT for collecting source segregated scrap in the neighbour hood. Their earnings improved dramatically because source segregated scrap fetched better rates, reduced their hours of work and improved the actual physical conditions of their work. There was an intervention from one entrepreneur who owned up carrying garbage carts and offered to start a motorised garbage collection service which was unacceptable to the waste pickers as it threatened to deprive them of the only livelihood opportunity that they had..the situation was explained to the entrepreneur as well the residents but finally, when nobody paid heed, the activists resorted to Bin Chipko Andolan (held on to the bins so that they could not be carted away), and this mounting pressure forced the entrepreneur to withdraw. By this time it was clear to the rag pickers that there could be other claimants to the "wealth in waste" and that small group endeavours were not likely to counter the threat and this became the basis for organising waste pickers on a mass scale. Further the necessity of organising in to a formal body or Union related directly to the critical issues that were revolving around the waste picker s dignity of labour. They always attracted 73

74 suspicions in diversified ways from not only society at large but from their husbands as well. It is these critical issues that informed the process of organising and then sought to establish an alternate identity for waste-pickers as "workers" premised on the belief that scrap collection was socially relevant, economically productive and environmentally beneficial "work", and that the working conditions could be changed. These issues helped the waste pickers as well as the SNDT Women s University in determining a separate identity for these workers and also reiterated the fact that their profession was beneficial to social masses. A convention of waste pickers was organized under Dr. Adhav in May 1993 and this lent credibility to the effort. This convention acted as a platform for these pickers to raise their grievances. The resolutions accruing from the convention stressed on seeing Kagad Kach Patra Kashtkari Panchayat (KKPKP) as a registered trade union to represent the collective identity and interests of scrap collection in the larger struggles against injustice and exploitation. The organisation would not only address the immediate/ sectoral needs of members but also be part of the larger struggle against injustice and exploitation, for a socially just, equitable and humane society Even though the organisation offered no hints at tangible benefits, it offered hope that collective action would benefit the workers. KKPKP has, over the years, earned credibility as a responsible, methodical and mature organisation on the basis of its peaceful and disciplined agitational methods. The Pune and the Pimpri Chinchwad municipalities became the first municipal corporations in the country to officially register (through the efforts of KKPKP) and endorse the identity cards of the waste pickers in recognition of their contribution to the management of the urban solid waste. Municipal endorsement of identity cards transformed the stereotypical image of waste pickers in their own eyes as well as those of the public. Scrap collectors have independently used the I cards creatively, sometimes as bail when arrested on suspicion and sometimes as surety when they did not have enough capital for immediate payment while buying scrap. In , Pune Municipal Corporation institutionalized the scheme for medical insurance for the waste pickers. In addition the union has proposed that scrap dealers create a fund for scrap collectors, by withholding a percentage of the price they pay to scrap collectors. This fund can be used to pay benefits like pension and provident fund to the collectors. 74

75 The union fought for violence against women, child labour, school enrolment, child marriage and domestic violence and was credited in its efforts. Mobilising around political issues has taken the form of voter education where candidates conduct question-answer sessions by visiting the slums. The union also has some core principles such as adherence to honesty, integrity, accountability, equality, secularism, democratic participation and non-violence. The union s attention to detail and intensive record keeping has generated extensive longitudinal data that primarily informs the activities and programmes of the organisation, formulation of strategy and advocacy and substantiates claim on state and societal institutions. The activities of KKPKP usually comprise redressing individual grievances, developing institutional mechanisms for social security, creating platforms for social and cultural renewal, market interventions in scrap trade and advocacy and lobbying for legislative protection. The futuristic efforts to promote organisation of waste pickers in other cities have met with varying degrees of success. The union is hoping to carry out its mission elsewhere and thus create awareness amongst the urban dwellers that the rag pickers have the right to everything that others have and which till recently they were denied. The genesis of the waste picker s Union, its journey till now and the impact that it has made to empower the neglected section of society and provide them a life of dignity is an example to be replicated in other geographies in the country. A major part of the neglected section of the society is the workers in the informal economy who make a considerable contribution to the economy of the country, yet remains faceless and voiceless. His /her efforts are not recognised by the government and s/he does not have a social security mechanism which will take care of him/her during old age or in time of need. Hence effort should be made to: Identify such workers in the country at the government level, To recognise their work formally and Provide for them a social security measure similar to the Employee State Insurance Scheme (ESIS) or provide alternate scheme customised to their need. 75

76 ANNEXURE-II HISTORY OF THE SCHEME: In 1989, the Department of Adult and Continuing Education of the SNDT Women s University in Pune started conducting classes with the children of waste pickers, Closer interaction with this community, provided the University, with a deeper understanding of the risks and challenges that the waste pickers were exposed to. Gradually, a large numbers of waste pickers came together and by 1993, with the support of SNDT, were registered as a Trade Union, named Kagad Kach Patra Kashtkari Panchayat (KKPKP). A continuous advocacy effort with the Municipality bore fruit in the year 1996 when the Pune and Pimpri Chinchwad Municipal Corporation formally recognized the Union and endorsed its members, by recognizing their photo identity card. A Value Chain Analysis study, conducted in 2000, by a group of researchers from SNDT Women s university on behalf of the International Labour Organisation (ILO), revealed that the waste pickers played a critical role in the Municipal s work of garbage cleaning and contributes substantively to lessening the work burden of the municipality. The study also, quantified this profit to be approximately, Rs. 16 million (for details of the study see Annexure-3) It was also observed by KKPKP that the waste pickers faced various problems like harassment by the local police, complaint from common citizens about them being thief, exploitation by the scrap dealers and also money lenders and harassment by their husbands who doubted their fidelity and physically abused them. The most acute problems that the KKPKP found facing the waste pickers was their health related problems (because of the type of unhygienic and hazardous environment that the waste pickers were typically exposed to as part of their regular vocation) which not only snatched their daily livelihood but also forced them to fall in to the trap of poverty due to huge health costs. The KKPKP argued that while the financial benefits (savings in transportation costs) accrued to the municipalities, the costs (health costs) of contributing to municipal solid waste 76

77 management were borne entirely by the waste-pickers labouring under abominable conditions of work leading to higher levels of morbidity. The argument was substantiated by the findings of a studies conducted by Chikarmane, Deshpande, Narayan in 2001 that showed that waste-pickers suffered from occupation related musculo-skeletal problems, respiratory and gastro-intestinal ailments. Scrap collectors, particularly women, tended to ignore minor illnesses till they assumed dangerous proportions and became regular conditions. Using the evidence of both the ILO study and the study conducted by Chikarmane, Deshpande and Narayan, the Union advocated with the Municipal Corporation to provide basic health services to the waste pickers. Officially recognizing the efforts of the waste pickers and also the contribution that they make towards solid waste management, the Pune Municipal Corporation (PMC) in 2003, decided to provide basic health insurance cover by paying for the annual premium, thus becoming the first municipality in the country to do so. Initially quotations were invited from various general insurance companies for acting as the insurer for the scheme. Based on the quotation and expression of interest, The New India Assurance Company was selected to be the official insurer for the members of the Waste Pickers Union, Pune. Till date the insurance scheme has been five years in to operations and has a total member base of 5411 members. 77

78 ANNEXURE-III ILO Value Chain Analysis Study: The study revealed that collectively, scrap collectors salvage 144 tonnes of recyclable scrap prior to its transportation, thereby saving the Pune and Pimpri Chinchwad Municipal Corporations the sum of Rs (Rs.16 million) per annum in transportation costs alone. By implication each waste-picker contributes Rs.246 worth of unpaid labour per month to the municipality. Each waste-picker and itinerant buyer, average earnings of Rs.60 and 75 per day, respectively. At conservative estimates this amounts to Rs per day, in the primary transaction that takes place between the scrap collector and the local retail scrap store. Further value addition takes place as the scrap is sorted, graded and traded. The annual contribution of the scrap trade to the total income generated in Pune is Rs (Rs.185 million). The environmental benefits that are derived from the work done by waste-pickers would be difficult to quantify in economic terms. (Source: Chikarmane, Deshpande, Narayan, 2001) 78

79 ANNEXURE-IV 79

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89 ANNEXURE-VI 89

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