Shivaji Rao, 35, observes the crowd in his office. He works in a network of rooms off a main hallway in the massive Narayana Hrudayalaya (NH) hospital in Bangalore. His job is to match the hospital’s many poor patients — who come to NH from hundreds of kilometres away — with a health insurance scheme that can cover their operations. He’s at the office past midnight, but there are always more people than he can handle.
“Some poor people sleep outside (my office),” he says.
The nine-year-old NH has 3,000 beds and one of the most comprehensive health insurance systems in India. The hospital takes commercial insurance, but it also accepts a host of innovative offerings known as community health insurance. These schemes charge a minimal premium, and cover a variety of operations. Most are financed at least partly through Karnataka state and cover people below the poverty line.
But NH also offers a third type of insurance, meant to cover those who don’t fall below the poverty line but still can’t afford in-patient surgeries that cost upwards of a lakh.
This scheme, called Yeshasvini, was introduced seven years ago by Devi Shetty, the doctor who founded NH.
India’s need for low-cost health insurance is staggering. Less than 25% of the country’s population is insured, and expensive lifestyle diseases are bankrupting India’s poor and middle classes. In any given year, nearly 3.3% of India’s population falls into poverty as a result of a medical emergency. Not all of these people were poor to begin with.
“India can be the first country to dissociate health care from affluence,” says Shetty, who came up with the idea for Yeshasvini. The scheme covers members of farming and dairy collectives. It currently has 519,817 members, out of a potential 2.5 million. Last year, the private Yeshasvini Trust paid for 66,749 surgeries at a total cost of R55 crore, of which R30 crore came from the state government.
But Yeshasvini also has its fair share of detractors. Like the hundreds of microinsurance schemes that have come up in India over the past few years, Yeshasvini falls outside the scope of the Insurance Regulatory and Development Authority, although that might change soon. Experts say hospitals manipulate the system.
Most importantly, many of the smaller private hospitals — the average private hospital is less than a tenth the size of NH — find the scheme just doesn’t pay enough to make it worthwhile.
When it was started, one of Yeshasvini’s goals was to increase the number of patients in private hospitals. Instead, the scheme has created a divide between Shetty and other private hospital chains.
Yeshasvini covers 1,600 surgeries. For each of these surgeries, the Trust pays a pre-determined price. The prices vary from R64,500 for open heart surgery to R6,000 for a hysterectomy, the most popular procedure.
But at a private hospital, an open heart operation costs more than R90,000, much of it in doctors’ fees.
As a result, many private hospitals perform very few or even no surgeries under the scheme. Of the 85 hospitals registered under Yeshasvini, NH and the government-run Jayadeva Institute of Cardiology perform the most surgeries.
“Doctors send patients here because they know we will not turn anyone away,” says Rao.
Other private hospitals turn to more problematic measures. N Devadasan, director of the Institute of Public Health in Bangalore, has studied micro health insurance for 20 years. In one study, he found private hospitals accepted micro health insurance but later presented patients with another bill, often for thousands of rupees, for medicines and incidentals.
“The private hospitals are compensating for the allegedly low rates,” he says.
The problem crops up in Yeshasvini as well as in the Andhra Pradesh government’s flagship Rajiv Arogyasri scheme, which covers more than 65 million people who live below the poverty line. Administrators ignore the problem, Devadasan says, because they don’t want to revise procedure prices.
There’s no question that Yeshasvini, erodes a hospital’s profit margins. About 20% of NH’s patients come through Yeshasvini, and another 40% come through other schemes that pay slightly more than Yeshasvini. Only 40% pay a price that provides the hospital with a profit.
“We are profitable, but we are not as profitable as we would be if we didn’t have this mission,” admits Shetty, who keeps costs low by asking surgeons to work longer shifts.
Asha Naik, who left a medical practice in the Gulf and came to work in hospital administration with Shetty, says doctors know what’s involved.
“Our doctors don’t earn as much as they might somewhere else,” she says. “But after a point, every surgeon’s goal is to perform more surgeries.”
Some hospitals choose not to participate, by either not opting into the scheme or by refusing to perform surgeries.
Vishal Bali, CEO of Fortis Hospitals in Bangalore, says Fortis chose not to participate in Yeshasvini because the price points were too low and the scheme had a reputation for not paying out on time.
“It might be a good thing for (Yeshasvini) to limit itself to government institutions,” he says.
The payment process involves a hospital, a third party and the Trust. Administrative snarls are not unheard of. “Sometimes, there are delays,” says Poovappa, CEO of the Yeshasvini co-operative Farmers Healthcare Trust. Still, he emphasises that bills are supposed to be cleared within 45 days.
Bids are currently out for a new third party administrator for the programme, he says, after which they might consider introducing electronic payments. The central government-mandated Employees State Insurance scheme uses an electronic payment system in many states, a method private hospitals have praised.
Bali says he might still be dubious.
Shetty is unforgiving of private hospitals’ unwillingness to treat beneficiaries. “Today all the private hospitals in the country, they have a strategy to attract rich people. They don’t want poor patients because they think poor patients spoil the atmosphere.”
AN ENDURING HOPE
If practiced properly, Yeshasvini has the potential to change the lives of millions.
“Our studies have shown that micro health insurance can increase access to health care even for the poorest of people,” says Devadasan, whose recent study, with tribals in Nilgiri, found that the insured were more than twice as likely to receive hospitalisation as those with no insurance.
For patients at NH, being insured is nothing short of a miracle.
Lingaraju, 24, earns R4,000 a month as an engineer’s assistant, and doesn’t fall below the poverty line. He qualifies for Yeshasvini through his local milk cooperative. When he was turned away from another private hospital, he took a train 300 kilometres to NH.
“I had a breathing problem,” he says. A thick purple scar bisects his chest, a mark of his recent operation. Like many NH patients, he waited several days for the surgery that he now hopes will change his life. “Without Yeshasvini, I don’t know what I would have done. I would have borrowed from a moneylender or sold my family land.”