More than health insurance for the poor
In our last post , we showed how illness in India causes financial hardship and leaves Indians—especially poor ones—with limited access to affordable good-quality health care that can actually make them better. In this post, we outline a novel government-sponsored health insurance program in the state of Andhra Pradesh (AP)—a program that has the potential not just to reduce financial impoverishment but also raise quality standards in hospital care.
a) “Actors”, and their rights and responsibilities
Initiated by the then chief minister of AP, the medical doctor YSR Reddy, the Rajiv Aarogyasri scheme started in 2007 and is targeted at the below-poverty line (BPL) population. The scheme focuses on life-saving procedures that aren’t covered elsewhere in India’s patchwork of health programs, for which treatment protocols are available, and for which specialist doctors and equipment are required. Currently 938 tertiary care procedures are covered. The scheme revolves around five key “actors”, one unique to Aarogyasri and all with interesting rights and responsibilities.
- Aarogyasri’s members now total about 70 million people and 85 percent of the AP population (AP pitches its poverty line quite high!). Not only do patients pay no copayments; they get free food while being treated, and cash for transportation home on discharge from hospital. Patients can go to any “empanelled” hospital they like—currently 241 private and 97 government hospitals. All patients are followed up for feedback on their experience with the treatment.
- “Aarogyamithras” are in effect “hand-holders” of Aarogyasri members. Over half of the 3,500 or so “mithras” work at help desks at public primary care centers, feeding members determined by the medical staff to be in need of inpatient care up to the hospital and checking the patient has their required follow-up medication when they return home. The remaining “mithras” work in “empanelled” hospitals, receiving the patient at the Aarogyasri reception desk upon arrival, taking the basic information and feeding it into electronic patient records, checking on her during her stay, ensuring she gets compensation for travel costs upon discharge.
- All hospitals—private and public—can apply to be “empanelled” to deliver care to Aarogyasri patients. Applicants have to provide a substantial amount of information and must satisfy a range of requirements. Only 40 percent of the 832 applicants are currently empanelled hospitals. Nearly 250 applications were rejected, and 95 have been delisted, de-empanelled, or suspended. The private sector far outnumbers the public sector: 80 percent of Aarogyasri admissions to date have been in private hospitals. Hospitals have to deliver the 938 procedures for free according to pre-agreed clinical guidelines. They are required to mount a “health camp” every week at a place chosen by the Trust and to provide everyone attending with a general health check and a screening for relevant health conditions; patients attending these camps account for 45 percent of Aarogyasri admissions. Hospitals must fulfill several other conditions too, including employing an Aarogyasri medical coordinator, providing medicines for use after discharge, providing a follow-up consultation, and making available to the Aarogyasri reception a computer, printer, scanner, digital camera, webcam and 2 mbps connectivity.
- The day-to-day running of the scheme is contracted out to a private insurance company, selected through a competitive tender. The insurer empanels hospitals under the supervision of the Trust, pre-authorizes care within 12 hours of the hospital requesting it (the Trust also signs off on the pre-authorization), verifies the care has been delivered, checks its quality, and then transmits payment to the hospital electronically within 10 days of the patient’s discharge. The insurer is also required to operate a telephone hotline 24 hours a day, 7 days a week, with a dedicated grievances department.
- Governance and supervision is done by the Aarogyasri Trust, whose board is chaired by the chief minister of the state with representatives from all relevant ministries such as finance, revenue department and health and family welfare. The Trust sets the rules of the scheme, supervises the insurer, and provides it with the sophisticated computer software the scheme has developed together with partners that include Oracle, IBM and Cisco. The huge ICT investment is seen as essential to minimizing fraud, improving accountability, and facilitating rapid pre-authorization and claims’ settlement (which has been one of the main issues with public private partnerships in other states in India).
b) Some incomplete answers from work to date
Aarogyasri is quite a heady mix of “active ingredients”, involving large numbers of people, and a large amount of spending on hardware and software. Has it made a difference to financial protection and health outcomes, and has it been worth the cost? How have the various “active ingredients” helped? What—if anything—needs changing?
Mitchell, Mahal and Bossert  undertook an early assessment of the financial protection afforded by Aarogyasri: they found higher out-of-pocket spending among Aarogyasri members than nonmembers, but the study is a simple comparison and doesn’t have confidence intervals around the point estimates (some cells are very small). Even if the scheme did cause significantly higher out-of-pocket payments, we don’t know why. Was it because the scheme raised payments per contact? It seems unlikely. If it did, it’s clearly not what was intended. Or was it because the scheme caused people to raise their utilization rates?
Rao and Shahrawat  have shown that the bulk (82%) of out-of-pocket spending in India is on medicines, and suggest that schemes like Aarogyasri will at best make only a small dent in out-of-pocket spending. Against this has to be set the fact that not all types of out-of-pocket spending have the same welfare consequences. Spending on medicines likely occurs continually and in a fairly predictable way. By contrast hospitalization is unpredictable, and spending associated with it seems more likely to lead people to dissave, borrow, and sell their assets—behaviors that were common before Aarogyasri, and which the program aims to have reduced.
c) More work needed
One potential benefit of Aarogyasri is that it reduces the uncertainty patients face about the cost of care. The scheme has fixed prices and hospitals are not allowed to charge patients for treatment or investigations; in fact, hospitals have been de-listed when this has occurred.
Improved quality and increased efficiency are two other key goals of the program. Before the program, the government had very limited information on infrastructure and resources in the private sector; it had even less information about the quality of care. The government is now assembling huge volumes of clinical data, including videos of angiograms and x-ray films. The IT platform used to collect these data is more sophisticated than those used by most insurance programs in high-income countries. Has this investment paid off in terms of better quality and increased efficiency?
The “$64,000 question”, of course, is whether whatever Aarogyasri has achieved could have (largely) been achieved at lower cost without one or more of its “active ingredients”. This is a question other states in India would love to know the answer to as well. The AP government is currently planning reforms for cost containment and to reduce the dependence on a single insurance company. This may prove an opportunity to establish the “returns” to the various active ingredients, but the government would need to make any changes in such a way as to permit a rigorous evaluation. Let’s hope it does so. The answer’s worth a lot more than $64,000!