mel421-yeshaswani

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PUBLIC-PRIVATE PARTNERSHIP IN THE PROVISION OFHEALTH CARE SERVICES TO THE POOR IN INDIA

Partnership with the burgeoning private sector has emerged as one of the avenues of healthsector reforms, in many parts of the World, in part resulting from resource constraints for

the public sector (Mitchell-Weaver and Manning 1992), and due to a wider belief that publicsector is endemically inefficient and unresponsive and that market mechanisms will ensure

cost effective, good quality services (WHO 2001; Bloom, Craig and Mitchell 2000).There is also a growing realisation that, given their respective strengths and weaknesses,neither the public sector alone nor the private sector alone would be at the best interest of

the health system. It is proposed that public and private sectors in health can potentially gain from one another (ADBI 2000). Yet another perspective to private sector partnership

advocates a reorientation in the role of public sector vis--vis financing and the delivery of services.

Fostering a collaborative relationship with the private sector for providing health services to thepoor and underserved sections of the population is particularly critical in the Indian context. Dueto the deficiencies in the public sector health systems, the poor in India are forced to seek services from the private sector, under immense economic duress. Over the years the privatehealth sector in India has grown remarkably. The private sector is not only the most unregulated

sector in India, but also the most potent and untapped sector. Various state governments in Indiaare experimenting partnerships with the private sector to reach the poor and underserved sectionsof the population. There are several challenges in collaborating with the private sector. Theoperational challenges include issues such as the motive of the partners, scope of services andobjectives of partnerships, benefits to the poor and under privileged from the partnership,facilitating or constraining conditions for partnership, appropriateness of one model of partnership over the other, quality of services under partnership, technical and managerialcapacity of the partners to manage a partnership, etc. Some of the policy issues relate to the risksand benefits of partnerships, institutional and legal framework, and the resource implications insuch partnerships. Evidence on these issues is scanty in India. Many of the operationallimitations of private partnerships are due to its nascent stage. The public sector must buildtechnical and managerial capacity of its own institutions to optimise the benefits accruing frompublic private partnership.

Estimates by NCAER (National Council of Applied Economic Research) show that 48%of the Indian households earn more than 90,000 (US$1,825.2) annually (or more than US$ 3PPP per person). According to NCAER, in 2009, of the 222 million households in India, the


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absolutely poor households (annual incomes below 45,000) accounted for only 15.6% of themor about 35 million (about 200 million Indians). Another 80 million households are in incomelevels of 45,000 90,000 per year. These numbers also are more or less in line with the latestWorld Bank estimates of the below -the-poverty- line households that may total about 100million (or about 456 million individuals) and are highly dependent on free health services fromthe public sector. Despite having a large network of health centres and hospitals, the publicsector health system is unable to deliver health care services at desirable levels of quality andefficiency due to several inherent deficiencies in the system. As a result the poor in India areforced to seek services from the private sector, often borrowing money, or selling their land,cattle and even children, to pay for the services. India has one of the highest levels of private-outof pocket- financing (to the tune of 87%) in the World (World Bank 2007). Out-of-pocketexpense at the point of service use is about 84.6% (Kulkarni 2003). Such modes of financingimpose debilitating effects on the poor. It is estimated that more than 40% of hospitalised peopleborrow money or sell assets to cover expenses, and 35% of hospitalised Indians fall below the

poverty line because of hospital expenses. Out of pocket medical costs alone may push 2.2% of the population below poverty line in one year (Selvaraju and Annigeri 2001; Mahal, et al 2002).The inequities in the health system are further aggravated by the fact that public spending onhealth has remained stagnant at around one percent of GDP (0.9%), against the global average of 5.5%. Even the public subsidy on health does not benefit the poor. The poorest 20% of population benefit only 10% of the public (state) subsidy on health care, while richest quintile(20%) benefit to the tune of 34% of the subsidies (Mahal, et al 2002).


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PRIVATE HEALTH SECTOR IN INDIA

Growth of private health sector in India has been rapid. There have been several reasons for suchgrowth: budgetary constraints leading to virtual stoppage of services in the public healthfacilities, government subsidies and tax incentives to the private investors setting up specialty

facilities, raising middle-income groups, and unfettered regulatory environment. Estimatesindicate that at independence the private sector in India had only eight per cent of health carefacilities (World Bank 2004) but today it is supposedly accounts for 93% of all hospitals, 64% of beds, 80-85% of doctors, 80% of outpatients and 57% of inpatients. In financial terms, by 2012,the health care market in India would be at Rs. 1,560 billions and it is expected to reach Rs.14Kbillion by 2022. Apart from providing clinical services, the private sector has also gaineddominant presence in all health submarkets, such as medical education and training, manufactureof medical technology and diagnostic instruments, and pharmaceuticals. Pervasiveness of theprivate sector portends both opportunities and challenges for the government.

In the absence of effective regulatory environment, the behavior of private health sector and itsconsequences is one of the most debated issues in India. Serious concerns have been expressedon several depraved practices of the private sector for pecuniary benefits. However, thoughprivate health sector is the most unregulated sector in India, it possesses immense untappedpotential. Although expensive, over-indulgent in clinical procedures and without qualitystandards or public disclosure of practices, the private sector is perceived to be more easilyaccessible, better managed, and more efficient than its public counterpart. It is assumed thatcollaboration with the private sector in the form of Public-Private Partnership (PPP) would

improve equity (by moderating the economic impact on the poor), efficiency, accountability,quality, and accessibility of the entire health system. There is also a realization that public andprivate sectors in health can potentially gain from one another in the form of resources,technology, knowledge and skills, cost efficiency and even their respective public image. It isalso presumed that since the private sector is grossly underutilized due to its rapid, unplannedgrowth partnerships may actually benefit the private sector.

Several policy and plan documents on health sector in India, such as the World Bank, NationalHealth Policy, National Commission on Macroeconomics in Health (NCMH) and Planning

Commission, strongly advocated harnessing the private sector s potential and counter its failures.Simultaneously, it also proposed organizational and institutional reforms to help public sectorimprove its efficiency and adopt best practices from the private sector. Several state governmentsin India have been exploring the option of involving private sector and creating partnerships withthem in order to meet the growing health care needs of the population.


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PUBLIC-PRIVATE PARTNERSHIP IN HEALTH

The term public and private can be defined in many ways (Wang 2000). However, ingeneral, public sector includes organizations or institutions that function under governmentbudgets financed by state revenue and are under dir ect or indirect state control. The privatesector, however, is less easy to characterise. They comprise those organizations and individualsworking outside the direct control of the state (Bennet 1991). Broadly, private sector includes allnon-state act ors, some explicitly seeking profits (for - profit ) and others operating on a non -

profit (not -for- profit ) basis. The former are conventionally called private enterprise ; the latter as non -governmental organizations (NGOs). In health sector, the dive rsity in the compositionof for - profit providers range from individual physicians, diagnostic centres, ambulanceoperators, pathology labs, pharmacy shops, blood banks, commercial contractors, polyclinics,nursing homes, hospitals of various capacities, etc. They may also include community serviceextension of industrial establishments, co-operative societies, community-based organizations,

religious and philanthropic trusts, professional associations, self-help groups, citizen forums andother types of non-state organizations. The not -for- profit sector is also highly heterogeneous, but is significantly less in proportion. Apart from the motive , characteristics of the privatesector also may vary depending on geographical location, nature of ownership and financing,system of medicine, and the scope of clinical services provided.

Public Private Partnerships in health care sector in India:

1. The Uttaranchal Mobile Hospital and Research Center (UMHRC)

It is three-way partnership among the Technology Information, Forecasting and AssessmentCouncil (TIFAC), the Government of Uttaranchal and the Birla Institute of Scientific Research(BISR). The motive behind the partnership was to provide health care and diagnostic facilities topoor and rural people at their doorstep in the difficult hilly terrains. TIFAC and the State Govt.shares the funds sanctioned to BISR on anequal basis.

2. PHCs in Gumballi and Sugganahalli, Karnataka Management of Primary Health Centers in Gumballi and Sugganahalli was contracted out by theGovernment of Karnataka to Karuna Trust in 1996 to serve the tribal community in the hillyareas. 90% of the cost is borne by the Govt. and 10% by the trust. Karuna Trust has full

responsibility for providing all personnel at the PHC and the Health Sub-centers within its jurisdiction; maintenance of all the assets at the PHC and addition of any assets if required at thePHC. The agency ensures adequate stocks of essential drugs at all times and supplies them freeof cost to the patients. No patient is charged for diagnosis, drugs, treatment or anything elseexcept in accordance with the Government policy. The staff salaries are shared between theGovt. and the Trust. Gumballi district is considered a model PHC covering the entire gamut of primary health care preventive, promotive, curative and rehabilitative


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3. Yeshasvini Health scheme in KarnatakaThe Yeshasvini Co- operative Farmer s Healthcare Scheme is a health insurance scheme targetedto benefit the poor. It was initiated by Narayana Hrudayalaya, superspecialty heart hospital in

Bangalore, and by the Department of Co-operatives of the Government of Karnataka. TheGovernment provides a quarter (Rs. 2.50) of the monthly premium paid by the members of theCooperative Societies, which is Rs.10 per month. The incentive of getting treatment in a privatehospital with the Government paying half of the premium attracts more members to the scheme.The cardholders could access free treatment in 160 hospitals located in all districts of the statefor any medical procedure costing upto Rs. 2 lakhs.

4. Arogya Raksha Scheme in Andhra PradeshThe Government of Andhra Pradesh has initiated the Arogya Raksha Scheme in collaborationwith the New India Assurance Company and with private clinics. It is an insurance scheme fullyfunded by the government. It provides hospitalization benefits and personal accident benefits tocitizens below the poverty line who undergo sterilization for family planning from governmenthealth institutions. The government paid an insurance premium of Rs. 75 per family to theinsurance company, with the expected enrollment of 200,000 acceptors in the first year.

5. Emergency Ambulance Services scheme in Tamil NaduThe Government of Tamil Nadu has initiated an Emergency Ambulance Services scheme inTheni district of Tamil Nadu in order to reduce the maternal mortality rate in its rural area. Themajor cause for the high MMR is an on-medical cause - the lack of adequate transport facilitiesto carry pregnant women to health institutions for childbirth, especially in the tribal areas. Thisscheme is part of the World Bank aided health system development project in Tamil Nadu. SevaNilayam has been selected as the potential non-governmental partner in the scheme. This schemeis self-supporting through the collection of user charges. The Government supports the schemeonly by supplying the vehicles.

6. Urban Slum Health Care Project, Andhra PradeshThe Urban Slum Health Care Project the Andhra Pradesh Ministry of Health and Family Welfarecontracts NGOs to manage health centers in the slums of Adilabad. The basic objectives of theproject are to increase the availability and utilization of health and family welfare services, tobuild an effective referral system, to implement national health programs, and to increase healthawareness and better health-seeking behaviour among slum dwellers, thus reducing morbidityand mortality among women and children. To serve 3 million people, the project has established192 Urban Health Centers. Five Mahila Aarogya Sanghams (Women s Wee -BeingAssociations) were formed under each UHC, and along with the self-help groups and ICDSworkers mobilize the community and adopt Behaviour Change Communication strategies. The


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NGOs are contracted to manage and maintain the UHCs, and based on their performance, theyare awarded with a UHC, or eliminated from the program

7. Rajiv Gandhi Super-specialty Hospital, Raichur, Karnataka

The Rajiv Gandhi Super-specialty Hospital in Raichur Karnataka is a joint venture of theGovernment of Karnataka and the Apollo hospitals Group, with financial support from OPEC(Organization of Petroleum Exporting Countries). The basic reason for establishing thepartnership was to give super-specialty health care at low cost to the people Below Poverty Line.The Govt. of Karnataka has provided the land, hospital building and staff quarters as well asroads, power, water and infrastructure. Apollo provided fully qualified, experienced andcompetent medical facilities for operating the hospital. The losses anticipated during the firstthree years of operation were reimbursed by the Govt. to the Apollo hospital. From the fourthyear, the hospital could get a 30% of the net profit generated. When no net profit occurred, theGovt paid a service charge (of no more than 3% of gross billing) to the Apollo Hospital. Apollois responsible for all medical, legal and statutory requirements. It pays all charges (water,telephone, electricity, power, sewage, sanitation) to the concerned authorities and is liable forpenal recovery charges in case of default in payment within the prescribed periods.

8. Community Health Insurance scheme in KarnatakaThe Karuna Trust in collaboration with the National Health Insurance Company and theGovernment of Karnataka has launched a community health insurance scheme in 2001. It coversthe Yelundur and Narasipuram Taluks. Underwritten by the UNDP, the Karuna Trust undertook the project to improve access to and utilization of health services, to prevent impoverishment of the rural poor due to hospitalization and health related issues, and to establish insurance coveragefor out-patient care by the people themselves. The scheme is fully subsidized for ScheduledCastes and Scheduled Tribes who are below the poverty line and partially subsidized for non-SC/ST BPL. Poor patients are identified by field workers and health workers who visit door-to-door to make people aware of the scheme. ANMs and health workers visiting a village collect itsinsurance premiums and deposit them in the bank.


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THE KARNATAKA YESHASVINI HEALTH INSURANCE SCHEMEFOR

RURAL FARMERS & PEASANTS

Yeshasvini Cooperative Farmers Health Care Trust is a charitable trust governing a healthinsurance scheme of the same name. The scheme was launched at the end of 2002 and becameoperational in June 2003. In October 2003, the Trust was officially registered as a charitabletrust.The Trust and its insurance scheme are based on the initiative of Dr. Devi Shetty, An expert incardiac surgeries and chairman of Narayana Hrudayalaya Hospital in Bangalore. He started atelemedicine programme in cooperation with Indian Space Research Organisation (IRSO).Through this programme, medical expertise is made accessible to people even in remote ruralareas of Karnataka. He spread sophisticated surgical methods in many rural areas by connectingdoctors and urban hospitals via satellite.

Lack of proper infrastructure was supposed to be the root of the insufficient medical treatmentmany people experienced. However, field studies conducted on behalf of the hospital revealedsomething different: a number of hospitals throughout Karnataka experienced poor utilizationrates, as low as 35%. This lead to the conclusion that it was not the improper healthinfrastructure, but insufficient financial means that hindered the poor people from curing theirhealth problems. To address the problem of low purchasing power, the idea of health insurancecovering critical surgeries evolved, and Dr. Shetty and his team developed the insurance modelof Yeshasvini. Mr. A. Ramaswamy I.A.S., then Principal Secretary in the Department of Cooperation, Governm ent of Karnataka, then gave concrete shape to Shetty s idea.Yeshasvini s goal is to provide quality health care all over the state of Karnataka at affordable

prices. The target group are relatively poor farmers organised in cooperative societies. Aninexpensive insurance policy, affordable even for low-income groups, is only possible if there isa sufficiently big risk pool. Farmers pay a relatively small annual premium that allows themaccess to high-quality treatment including critical operations. To get a sufficient number of members, some of the bigger cooperative federations like Karnataka Milk Federation, wereaddressed. Within the first seven months, 5,000 members underwent all different kinds of surgeries and 23,500 farmers or family members had ambulatory consultations without paying anextra fee. Starting with 1.6 million of members in the beginning, the scheme already had morethan 2 million members in 2004.


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ORGANIZATIONAL STRUCTURE

To describe the organizational structure of Yeshasvini Cooperative Farmers Health Scheme, it ishelpful to separate the full structure into four pillars:

1. The Trust2. The Third Party Administrator (TPA)3. The Govern ment s Cooperative Structure 4. The Cooperative Sector

1. The TrustYeshasvini Trust is the actual owner of its insurance scheme. It is registered as a charitabletrust and governed by a board of trustees. This board consists of six persons from the Departmentof Cooperation, who are board members by designation, the Director of the Karnataka HealthDepartment, and five nominated board members (mainly medical professionals). The board of

the trust governs the whole scheme and is responsible for its further development, final decisionon claims, reimbursing the claims, monitoring performance and listing new network hospitals.The TPA, Family Health Plan Limited (FHPL), representatives of the cooperative sector(federation level) and the network hospitals may attend the meetings as well (top line of thefigure).


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The distribution channel of work has proven to be extremely effective in reaching a hugemembership quickly. This is especially true because of the targets set by the Department of Cooperation. If secretaries react to these targets by enrolling members with pressure or makeenrolment compulsory, the long-term effectiveness is jeopardised, as there may be dissatisfactionamong clients. Following the subscription phase, an ID card for each client has to be issued.


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PREMIUM COLLECTION

All households enrolled in the scheme are in a business relationship with a cooperative society.By selling goods to the cooperative society, they generate a significant proportion of theirincome. This income is used to pay for the premium. The process of premium collection isintegrated in the members business relationship with their cooperative society. During thesubscription period, the secretary of the cooperative collects the premium from the member andissues a receipt. In case members cannot pay the amount in cash, it will be deducted from theincome they gain from selling goods to the cooperative society. At the end of the collectionprocess the secretary of the cooperative (physically) hands over the premium collected to theExtension Officer, an employee of the union to which the cooperative society belongs. Thepremium of members who did not pay in cash is debited on the cooperative societies account at

the union and deducted from payments to the society. The premium of all unions andcooperatives in a district are collected at a bank account of the office of the Deputy Registrar of Cooperative Societies who then places the money in Yeshasvini s bank account.


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CLAIM MANAGEMENT

In case of illness, an insured client needs to prove membership in a cooperative society beforeapproaching a network hospital. For this purpose, the client contacts the secretary of thecooperative society for a referral letter. This referral letter is usually counter-checked and signedby the deputy manager of the responsible union and the assistant registrar of cooperativesocieties, both located in the capital of the district. This documentation is especially important if the member falls ill when new ID-cards are being produced. Some request a letter from theDepartment for Cooperation to get faster admission. With this letter, the photo ID-card and thereceipt of having paid the last premium, the client chooses a network hospital for treatmentwhere he or she registers at a special counter or with a designated person.

The patient receives free OPD consultation and if necessary investigations

under reduced rates. These investigations are free if the patient is admitted for surgery. If thepatient needs to be admitted without surgery, he or she must pay for the hospitalization. In casesurgery is needed, pre- authorization is requested from the TPA. A photocopy of the member s IDcard, the receipt and the referral letter are sent along with the pre-authorization form filled by thetreating doctor. Receiving authorization from the TPA takes at least four to five days, andsometimes longer. Sometimes the documents submitted by the hospital are incomplete, whichdelays authorization further. Pre-authorizations for surgeries in emergencies ought to be givenwithin a day orally by the medical officer of FHPL; the documents should then be sent bycourier. If in emergency cases the request for authorization is pending, some hospitals charge thepatients and reimburse them after receiving authorization.

With the authorization obtained, the surgery is conducted free of costs for the patient. The ratefor the surgery is fixed. After discharge the hospital submits the claim documents to FHPL,including further photocopies of the Yeshasvini ID card and the receipt, the original referralletter from the cooperative society, the pre-authorization form issued by FHPL, the operatingnotes, the discharge summary, the final bill and investigation reports as well as prescriptions.FHPL then scrutinizes the documents and settles the claim. If documents are missing, thehospital is requested to provide them before claim processing can be finalized. Processed claimsare forwarded to the monthly meeting of the Board of the Trust for final approval. Afterapproval, the claim is paid to the hospital.Reimbursing claims can take about three months. It can take more than a month from submissionof the claim to FHPL, scrutinizing it, to finally presenting it at the monthly board meeting.Transfer of the money can take about a month as well. While this is no problem for large,financially solvent hospitals, it troubles some smaller, charitable ones.


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Claim Settlement Process

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