Study on Indian Government Health Insurance Scheme shows reduction in mortality among poor

A government programme to provide health insurance for catastrophic illness to households below the poverty line in Karnataka, lowered both mortality rates and out-of-pocket expenses for the residents, according to a recent evaluation published in the leading global health journal The BMJ. The programme is implemented by the Karnataka government with support from the World Bank Group.

An evaluation of the programme, the Vajpayee Arogyashree Scheme (VAS), funded by the World Bank Group and led by Neeraj Sood, Professor and Director of Research at the Schaeffer Center for Health Policy and Economics at the University of Southern California, found that:

• The risk of dying from conditions covered by the insurance dropped by 64 per cent for residents with the insurance.
• Out-of-pocket health expenditures for hospitalisations due to the covered conditions dropped by 60 per cent.
• Utilisation of healthcare facilities for the covered conditions may have risen.

“This World Bank study clearly shows how this programme benefits the health of the poor in Karnataka,” said UT Khader, State Minister of Health and Family Welfare. “It provides hospital care that the poor would have difficulty receiving without the help of the scheme.”

The free insurance covered specific high-impact medical conditions – such as heart disease and cancer – which poor residents often die from because they are unable to pay for the necessary expensive treatments. Some of the unique features of the VAS program includes free tertiary care at both private and public hospitals empaneled by VAS for below-the-poverty-line (BPL) families with little or no access to tertiary care; automatic enrollment of all BPL families with no annual premiums, user fees, or copayments; and health camps in rural areas by empanelled hospitals, which helped screen patients for tertiary care and transport them to hospitals in urban centres.

“The results of this study are important to India as it makes choices on how to make progress towards universal health coverage,” said Onno Ruhl, World Bank Group Country Director for India. “The programme shows how purchasing health services for the poorest can both improve health and provide protection from impoverishment due to out-of-pocket payments for healthcare.”

The evaluation included more than 82,000 households. Since the programme was phased, covering poor households in the northern part of Karnataka in the first phase before expanding to the rest of the state, the study compared the health outcomes of roughly 45,000 households from villages that were covered by the insurance to roughly 37,000 households from villages that were not covered by the programme.

“The study shows that public policy can play a strong role in reducing disparities in health due to socio-economic status. In villages without insurance, the poor had much higher mortality than the rich, but such disparities were completely eliminated in villages with insurance coverage,” said Sood.

“Rates of early death and illness from chronic conditions – such as heart disease and cancer – have increased dramatically in India in the past few decades, putting the poor at high risk of not having access to services they need and incurring payments for health care that push them deeper into poverty,” said Patrick Mullen, a World Bank Group senior health specialist and the manager of the evaluation.”

The study was funded by the World Bank Group’s Health Results Innovation Trust Fund, which supports innovative results-based financing strategies such as the health service purchasing done by this program. Sood’s coauthors were Eran Bendavid from Stanford University, Arnab Mukherji from the Indian Institute of Management in Bangalore, Zach Wagner from the University of California, Berkeley, and Patrick Mullen and Somil Nagpal from the World Bank Group.

EH News Bureau