Inequities in Financing, Coverage and Utilization of Health Care by the Informal Sector Workers in India

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1 Inequities in Financing, Coverage and Utilization of Health Care by the Informal Sector Workers in India Charu C. Garg, International Consultant and Visiting Professor, Institute for Human Development, Delhi, India Rahul Reddy and Tushar Mokashi National Health System Resource Center, Delhi, India Approaches to Universal Health Coverage and Occupational Health and Safety for the Informal Workforce in Developing Countries Public Private Partnership Forum, Institute of Medicine Washington DC, July 29-30, 2014

2 Outline Background Initiatives to cover healthcare for workers Successes, challenges and lessons learnt Population coverage Depth of services covered Financial burden of healthcare on informal workers including state and district level evidence Public Private partnerships Coverage and Utilisation Conclusion Way forward 2

3 Background Size of informal workforce Almost 83% of 487m workers in 2012 in firms with less than 10 workers and another 9-10% as contractual, casual laborers in the formal sector Primary industries Agriculture, Construction, Shops and Establishments, Beedi and Cigar manufacturing, Waste management, Eating Places, transport and Home based Workers Major occupational health problems Injuries due to accidents, chronic respiratory / lung diseases (asthma, COPD, pneumoconiosis, silicosis), musculo-skeletal disorders (such as low back pain), skin diseases (contact dermatitis), noise induced hearing loss, poisonings especially due to pesticides, lung cancer, leukemia, certain infectious, parasitic, and mental diseases. 3

4 Financing and delivery mechanisms to cover the formal workers Scheme Eligibility criteria Coverage Financing Benefit Package Service Delivery Implemented By Employees of firms with more than 10 employees earning upto Rs a State Gov pay 1/8th of the exp with a annual ceiling of 72 million Rs per Insured individuals. Employee % of Wage; 18 million Employer % of wage. OP and IP services inclusive of Own network of dispansaries and ESIS corporation, Employee State month. Retired and household Retired employees annual medicines and diagnostics for all hospitals/ contracts state Insurance Disabled Employees. units premium- Rs.120. diseases. No coverage limit. with Private hospitals governments Central Households of Central Government OP and IP services for all diseases inclusive of medicines and Own network of dispansaries and Government Employees and 3 million Budgetary allocations. Small diagnostics. No coverage limit. AYUSH contracts with Private Central Health Scheme Retired Employees individuals contribution from employees and Dental services are covered. hospitals government Ministry of out patient and hospitalization for all Own network of Defence Health Scheme Households of Defense Employees NA NA dseases inclisve of medicines and diagnostics dispansaries and hospitals Central Government Ministry of Railways Health Scheme State Government Reimbursements Rajiv Aarogyasri for State Government Emplyees Households of Railway Employees. Avg. family size 4. Retiree (family of 2) Households of State Government Employees NA Households of all employees and pensioners Private Voluntary Health Insurance Any individual Public Voluntary Health Insurance Any individual 6.4 million individuals in 2010 NA 20 million individuals 35 million individuals NiL 1384 crores in 2010, per capita spending per beneficiary was about Rs.2160 Reimbursement of medical bills 60% From Budget allocations. 40% by the employee / pensioner contributio of About Rs.120 per Household Individual and family premiums depending on the package of services, age of and preexisting conditions. OP and hospitalization for all diseases. Preventive care, Homeopathy, Dental services OP and hospitalization for all diseases Nil Secondary and Tertiary hospitalized coverage amount of Rs.2 Lakhs for a family on floater basis for about 1000 medical and surgical procedures Hospitalized care for all diseases covered up to specific capped coverage amount according to the premium paid Own network of dispansaries and hospitals/ contracts with Private hospitals Empanelled Public and Private Hospitals in the State Empanelled Private Hospitals Hospitalized care for all diseases covered upto specific capped amount Empanelled Private according to the premium paid Hospitals Central and State governments State governments Rajiv Aarogyasri Trust, Private and Public Hospitals Third Party Administrators and Private Hospitals Third Party Adm and Private 4 Hospitals

5 Schemes to cover the formal workers health Key points Financing mainly by government and employers, small premiums from employees For government employees - CGHS, State government schemes, schemes for employees of railways, and defense. Mostly central and state government financed. Very low premiums from individuals.(rs = ~$1-8) ESIS: greater than 10 workers in a factory with <Rs.25000/month ($420). Financing- State Gov - 1/8th of the expenditure with annual ceiling of Rs ($25) per Insured, Employee- 1.75% of Wage; Employer % of wage. Retd employees Rs.120 ($2) annually Employee based insurance programs- reimbursements, lump sum payments, employers own facilities, private and public voluntary insurance schemes. Comprehensive benefit package includes prevention, promotion, outpatient, inpatient services medicines and diagnostics. Delivery - Own facilities, public facilities and empanelled private facilities 5

6 Financing and delivery mechanisms to cover informal workers Scheme Rashtriya Swasthya Bima Yojana (RSBY) Rajiv Aarogyasri Yeshasvini State/ year started 400 districts across 27 states Andhra Pradesh (2007) Karnataka (2003) RSBY - -CHIS, Kerala CM s - CHIS Tamil Nadu (2011) Households Covered/ premiums 37m BPL households and recently informal workers 75: 25 center State; Rs. 30 Pa per beneficiary Annual Coverage per household Rs.30,000 for a family of 5, plus annual transport limit Rs delivery - Hospitals empanelled 11,000 30% are Public 23m Household s annual income below Rs Rs. 2 lakhs (family 529 defined by BPL card ) 85% state) 20% are Public 3 m Household of a Farmer s Cooperative 40-60% of reimbursements by state gov + Rs. 200/enrolled 1.6 m Household member of 25 workers welfare board S =75: 25 center State; Rs. 30 Pa per beneficiary 13.5 m households earning less than Rs % budgetary allocations Rs. 2 lakhs per member paying contribution Secondary and tertiary & discounted medicines Rs. 2 lakhs (family defined by BPL card ) Rs per family (defined in BPL card),rs buffer NA about 40 diagnostic facilities Reimbursed Implementin in the last g Authority one year(no.) Approx 11 lakhs Approx 4 lakhs NA NA MOLE + State Nodal Agency + Insurer Rajiv Aarogyasri Trust Yeshasvini Coop Farmers Healthcare Trust +TPA State Government + Insurer State Government + Insurer States also have variations of RSBY covering both BPL and informal worker Himachal, Maharashtra, Meghalaya. Ministry of Textile scheme for informal textile workers, weavers, etc. 6

7 Schemes to cover the informal workers health: Key points Financing RSBY schemes - Center: States - 75:25 and Rs. 30 annually per beneficiary. Higher individual premiums in non RSBY Rs. 200 in Yeshaswini. Rajiv Aarogyasri (AP), Vajpayee Aarogyasri (Karnataka), CM s Comprehensive Health Insurance scheme CHIS (TN), Rajiv Gandhi Jeevandayi Aarogya Yojana (Maharashtra), informal textile workers 100% financed by government Benefit Package Mostly tertiary hospitalization and maternity with limits on cash disbursed per unit/year/ procedure. Annual inpatient benefits of Rs. 30, ,000 ($ ) per family, (Yeshasvini and Arogyashri also cover secondary care), No outpatient coverage, cover transport-$20/year(also screening in Arogyashri) Both govt. hospitals and empanelled private hospitals (>7m hospitalizations) CBHI - 32 schemes under community health insurance (e.g. SEWA ) run by communities, by hospitals, MFI, NGOs). Less than 1% of population covered and mostly funded by the communities themselves. (Source : Centre for Health Market Innovations) 7

8 Are we moving towards universal coverage Expenditure/investment and policies for workers' health What do people pay? which interventions are provided? Source WHO, 2010, World Health report who is covered? 8

9 Success Increased Population Coverage 55 million people in , to 75 million in 2007 to about 370 million in 2014 (almost 1/4 th of the population) Formal worker coverage for ESI and CGHS increased from about 50 million in 2007 to roughly around 75 million in 2014; Both formal and informal coverage of voluntary private health insurance increased from 24 million in 2007 to about 70 million in 2014; the biggest increase came from four schemes - national level RSBY and state specific schemes in Tamil Nadu, Karnataka and Andhra Pradesh to cover roughly 250 million, or over one-fifth of India s population mainly covering poor and some informal workers population. Poverty link to increased coverage Huge increases in certain states Andhra Pradesh, Tamil Nadu and Karnataka covering 80%, 70% and 82% of total population respectively Almost 2/3 rd increase (180 million) in the population below the poverty line. 9

10 Challenge Limited service coverage Formal sector - OP coverage in public clinics, IP coverage in public hospitals and some empanelled private hospitals. Still large OOPs for medicine, diagnostics and using better known private facilities for both IP and OP care. VHI - Coverage mostly for chronic diseases and hospitalization with limits on cash disbursed per unit (family or individual) covered per year and per procedure. Excludes preexisting conditions for certain initial years RSBY gives annual inpatient benefits of Rs. 30,000 on a floater basis for a family of five, without any conditions on pre-existing diseases and also covers maternity care besides chronic diseases and inpatient care. No OP care, limited medicines, and diagnostics RSBY plus, CMK, and RAC additionally cover tertiary care procedures, transport expenses and post hospitalization medical expenses up to a insurance coverage of Rs.100, ,000 per family. Some limited OP coverage and discounted medicines in Yeshaswini. 10

11 Limited financial protection for informal sector workers Percentage of Total Formal and Informal Employment by Usual Status in (Rural + Urban) Areas (15-64 years), , India Employment Status Self Employed Regular Casual All Formal waged and salaried Informal Non-Agriculture Informal Agriculture Total Self Employed regular workers Casual Workers Poor and Vulnerable Middle and Higher Income 11

12 Limited Financial Protection- state evidence Andhra Pradesh- Aarogyasri: recorded slower growth in out-of-pocket payments for inpatient care (in total and per admission). Still more than half (58.5%) of the beneficiaries in the study incurred OOP. The median OOP was Rs 3600 (~US$ 72) (Rao M et al 2011). 432,802 hospitalizations were reimbursed in and Per capita reimbursement in was Rs.27,425. Yet for hospitalization episode, patients spent Rs. 16,000 on average (~ $US 300) (Bergkvist S et al 2014) In Gujarat - 85% of the hospitalised RSBY beneficiaries paid OOP. The median OOP payment was an additional % of the actual package rates (Sheshadri et al 2012). GIZ study (2012) 3 states Bihar, Uttarakhand and Karnataka- showed most enrolled people spent less than Rs. 10,000 per hospitalisation as compared to average Rs. 17,000 by non enrolees. Karnataka Yeshaswi RSBY ni Arogyash ri Pop Coverage 25% 52% 5% Awareness 77% 91% 8% Contribution of the scheme* (%) * Proportion of expenditure reimbursed by the scheme to total expenditure incurred on health episodes) D Rajasekhar, R Manjula, A comparative study of the health insurance schemes in Karnataka,

13 District level Evidence from Shimla, Himachal Pradesh Background and Household characteristics S.no Characteristics and Institutional Preparedness All India Shimla % HH using Firewood as major source of energy for cooking Total Population 1.2 bn 8.1 mn 2 4 Percentage of urban population (%) Number of sub-centres (per 100,000 population) % HH with no toilet facility in the house % HH categorized as SC/ ST or OBC Number of health care facilities (per 100,000 population 5 12 % HH with a Below Poverty Line card Doctors per 100,000 population Public hospital beds per 100,000 population Insurance coverage (RSBY) % of enrolled households to eligible households % of Number of hospitalization to total enrolment Average amount reimbursed per household % literate individuals % Females % Males % Household head Formal Sector Informal Sector 13

14 Financial Burden on Households Quintile 1 Quintile 2 Quintile 3 Quintile Quintile 4 5 Informal (106740) Formal (47182) % of households that incur OOPE % of Households facing Catastrophic health expenditure Annual OOPE Per person suffering with a chronic illness (in $) 4 OOPE Per outpatient visit ($) 5 OOPE Per hospitalization in the last 365 days ($) Informal Sector Formal Sector 39.9% 28.3% 13.8% 6.5% Source Based on district level data compiled by NHSRC. 14

15 Increased Coverage but Limited Utilization: Demand and Supply constraints CRD one of the top occupational hazards 1.1 m die every year and 24 million suffered from COPD in Causes - smoking, chemicals and gases, cooking fuels like kerosene, nitrogen dioxide in poorly ventilated kitchens, sulphur dioxide, cadmium from industrial exposure; silica dust etc. Demand side Lack of awareness, delay in treatment seeking, stigma, presentation in terminal stages, high cost of treatment and opportunity costs for workers (Hosp account for 84% of direct costs associated with COPD Salvi, 2011). High costs of rehab, and non availability of treatment options in rural and remote areas also led to poor demand. Supply side lack of service availability, no direct interventions for screening, or risk assessments at workplace; lack of diagnosis or misdiagnosis at first point of contact due to lack of trained staff, diseases masked by other diseases, not linked to specific occupational pathogens, lack of counselling on primary prevention. Need early detection through better awareness and knowledge among patients and physicians, better trained staff using right equipment (e.g spirometer); mechanisms for covering treatment through work health insurance; promotive and rehabilitative services and life style modifications. Source: Garg et. al

16 Public-private partnerships for financing and provision Mixed bag Financing Partnerships- By central government and state governments mainly. Small individual/ family premiums for informal workers. Corporate financing limited to few formal organized sector workers. IRDA plays important role. Schemes run by private third party administrator, society or a trust, who is the purchaser. Incentive based on Per family enrolled. Costs of hospitalization packages (30% lower than market) and discounted medicines are negotiated. Provision partnerships Both public, empanelled private and NGOs. Mostly for inpatient care. Incentives again based on treatments per person. But increases supply induced demand. 16

17 Sustainability of insurance schemes for informal workers Commitment to increase GHE/GDP by from 1.2% to 2.5%. Only 1.5% of GDP is required to cover all persons under RSBY kind of scheme including outpatient care (La Forgia and Nagpal, 2012). Sound foundation for public private partnerships exists, incl. incentives and Smart card. But needs to be better regulated both in terms of quality and reducing supply induced demand. Coordination between different social security plans being piloted, is a positive step forward. Better information and knowledge about schemes will lead to increased coverage. Facilitating factors Government objective to reduce high OOPS, impoverishment and catastrophic payments Utilization of Improved IT system through smart card- paperless and cashless insurance system 17

18 Conclusions 1. The GOI RSBY and related state variations have improved coverage substantially to cover about a quarter of India s population during last five years and also reduced OOPE. 2. Depth of coverage and financial protection is still very low - large out of pocket expenditures persist. Even for hospitalizations, financing is really low as shown by RSBY data for states. Still households are getting impoverished and facing catastrophic payments. Need financial coverage to cover OP care, medicines and diagnostics for informal workers, even when not hospitalized. 3. Coverage will improve utilization for informal workers when demand improves by raising awareness and removing stigma through education about occupational diseases and their risks among workers. Supply side factors such as Risk assessments at workplace, Early screening and detection; and better trained doctors at first point of contact are required. M-health innovation can be tried for the former. 18

19 Way Forward - 1 For informal workers, it is extremely important to identify their needs in terms of Population characteristics and disease pattern for specific geographic location Take active measures to improve depth of services such as Primary and secondary prevention for early screening and diagnosis, and referrals Coverage for chronic diseases for informal workers, including medicines, diagnostics and consultation. And improved coverage for hospitalizations, medications and diagnostics so as to reduce no. of households facing catastrophic expenditures Cost of these activities need to be computed for government to include it in their benefit package 19

20 Way Forward - 2 More research and evidence is required to show the productivity and GDP loss due to poor health of informal workers. The cost benefit of early screening and diagnosis of informal workers to prevent them from reaching terminal stages and preventing huge health care costs on both the health systems and individuals Use Smart card technology for monitoring and evaluation Corporate sector should play a role in health care of informal workers that they use as contractual staff or those informal workers which directly provide services to them. This however, needs to be researched further in Indian context. 20

21 Thank you 21