Mission Mumbai Health

Micro Health Insurance:

with Micro Financing
Dr R D Lele
Hon. Chief Physician and Director of Nuclear Medicine,
Jaslok Hospital and Research Center, Mumbai
Lilavati Hospital and Research Center, Mumbai.
Emeritus Professor of Medicine (for Life) and
Ex Dean, Grant Medical College and Sir J.J hospital,
Mumbai.
Emeritus Professor, National Academy of Medical Sciences,
India.
Chairman Research Advisory Committee, Haffkine Institute
Current Scenario of Health Insurance in
India
 Employee State Insurance Act(1948)
 Mandatory social insurance scheme in formal sector.
 ESIS introduced in 1952.
 Benefit to 33.4 million workers with income less than Rs
6,500 per month, along with their families.
 Limit now raised to Rs. 15,000 pm
 136 Hospitals, 1443 dispensaries
 6542 M.O.s, 2988 GPs

GOVT EXPENDITURE IN HEALTH CARE

0.9% OF GDP
FAR LESS THAN WHO RECOMMENDATION – 5% OF
GDP
Current Scenario of Health Insurance
in India ( Contd….)
 CGHS introduced in 1954.
4.5 million beneficiaries
 Railways 8 million
 Defense 6.6 million
 Ex Servicemen 7.5 million
 Public Sector (Mining, Plantation) 4 million
 Other Public Sector Undertakings – 8 million

ESIS and CGHS cover 35 million

MEDICLAIM scheme of General Insurance
Corporation introduced in 1986.
Pays for in-patient services only
Does not cover MTP and tubectomy,
preventive care( immunisation against
HBV) or OPD
Group MEDICLAIM for organisations
available for age 5-80
children age between 3m – 5 years
Minimum Premium Rs 213 per annum for
Rs 15000
Highest Premium Rs 17156 for Rs 500,000
Health Insurance as an integral
component of HMO pre paid managed
care – urgent need for a paradigm shift.
by DR R D LELE
Key note address at The Asian Health
Insurance Congress,
September 1,2; 2004 at Taj Mahal
Hotel, Mumbai.
JAPI 2004 Dec. Vol 52, 947-950
UHI scheme for BPL families.
In 2003 Govt. of India introduced Universal Health
Scheme. All the four public sector non-life insurance
companies offer this scheme at a premium of Rs. 365 a
year from an individual or Rs. 548 for a family of 5.
government provides subsidy of Rs. 100 per BPL
family.
“HEALTH INSURANCE IN ITS PRESENT FORM HAS NO
FUTURE IN INDIA” –
Dr R D Lele, 2004 : Keynote address- Asian Health Insurance
Conference
2004- Claim Ratio 140%;180% for Group Health Insurance.
Private Health Insurance Companies lost Rs 273.83 crores in
2007-08, Rs 243.98 crores in 2008-09.
State owned New India, Oriental, National and United India
lost Rs 638.27 crores in 2007-08, Rs 1248.73 crores in 2008-
09.
High share of group health insurance – main cause of losses.

Raising premium rates and denying claims eg maternity

benefits –
Vicious circle with dissatisfaction to everyone.
PRIVATE HEALTH INSURANCE COVERS LESS THAN
15 MILLION PEOPLE
IRDA Act 1999 stipulated a specific percentage of
insurance business in rural and social sector (unorganized
sector, informal sector, economically vulnerable or
backward classes) in urban areas.
The 1 crore poor citizens of Mumbai-Thane-Navi Mumbai
fall in this category.
IRDA: 2005
Guidelines to promote Micro-insurance
= life micro-insurance products
= general micro-insurance products-health, accident
minimum Rs. 5000, max Rs. 30,000 cover.
Scope for LIC, SBI to collaborate in providing micro-
finance and micro-insurance for the poor citizens of
Mumbai, with the help of NGOs and self help groups.
Micro-insurance is the most effective instrument for the
poor. Micro-insurance can impower the groups and
through then help individual members.
Integration of MFI and MI is very critical success story-
SEWA- Ela Bhat- Ahmedabad India.
 When Health is Security
Ela Bhatt Times of India Jan. 24, 2012
Health Insurance has to be within the mandate
of microfinance institution (MFIs)
Deposit-linked life and health insurance
collaboration between MFIs and health sector
Income security and health security are two
sides of the same coin, especially for the poor
who are at the heart of MFIs.
SEWA Ahmedabad : Success story
 LIC-Jeevan Madhur – micro-insurance policy with a term of 5-15
years SA minimum Rs. 5000 maximum Rs. 30,000
TATA-AIG life: Nava Kalyan Yojana: 5 year
Samapoorn Bima Yojana- 15 years protection
Ayushman Yojana- single premium 10 year micro-insurance protection
plan.
Birla Sunlife: Bima Suraksha Super
Bima Dhan Sanchay
5, 10, 15 year policy tenure.
SBI Life Insurance: Grameen Shakti
IRDA Act 1999 stipulated a specific percentage of
insurance business in rural and social sector (unorganized
sector, informal sector, economicaly vulnerable or
backward classes) in urban areas.
The 1 crore poor citizens of Mumbai-Thane-Navi Mumbai
fall in this category.
CHARACTERSTICS OF UNORGANIZED
SECTOR WORK FORCE

 Poor
 Self-Employed
 Employers not identifiable
 Illiterate
 Migratory
 Lack of skills
New Pension System (NPS)
For self-employed profession and others in the unorganized
sector, to be part of Mission Mumbai Health.
Pension Fund Regulatory and Development Authority PFRDA-
for implementation of NPS.
Elderly population growing at 3.8% as against overall population
growth of 1.8%, hence the importance & urgency of extending
NPS to the vast urban unorganized poor sector, through
microfinance (MFI)and micro-insurance.
Successful MFIs
Grameen Bank (Bangla Desh)
Bank Rakyat (Indonesia)
Banco Sol (Bolivia)
Community –based banks (Latin America)
Rashtriya Swasthya Bima Yojana

Rs 30 per family per year from beneficiaries

75%Premium from Central Government
25% Premium from State Government
Both public and privete sector providers are eligible to
be part of the provider network
Acute Illness 61% of episodes
37% of costs

Chronic illness 17% of episodes

32% of costs

Hospitalization 11% of aggregate costs

SWASTHYA BIMA YOJANA
BENEFITS
Total sum insured of Rs 30,000 per BPL family on
a family floater basis
Pre-existing diseases to be covered
Coverage of health services related to
hospitalization and services of surgical nature
which can be provided on a day-care basis
Cashless coverage of all eligible health services.
Provision of Smart Card.
Provision of pre and post hospitalization expenses.
Transport allowance @ Rs.100 per visit upto
maximum of Rs 1000
Major Deficiency of RSBY
Covers only hospitalisation costs – 11% of
poor man’s illness expense
Does not cover cost of drugs (48%),
diagnostic tests(7%), and doctors’ fees(34%)
of illness expense.
No component of preventive care
Rajiv Gandhi Jeevandai Arogya Yojna
Over 20 million poor, alloted identity cards will walk
into any public or private empanelled hospital to get
treatment for 972 surgical procedures with free
medical treatment upto Rs. 1.5 lacs per annum.
Hospitals must keep 10% of their beds reserved for
this
Hospitals must adhere to the costs set up for surgery
Courts have order hospitals to keep 2% of their
revenue aside for subsidising poor patients with
income below Rs. 50000/- per year.
RGJAY now applicable to 16.24 lakh
beneficiaries (families earning less
than Rs. 1 lakh/ yr.) in Mumbai and its
suburbs.
Free Hospital treatment upto Rs. 1.5
lakhs for card holders 972 medical
procedures will be covered. So far 4.5
lakhs out of 16.24 lac beneficiaries
received health cards.
SMART CARD
My Recommendation to Government
Upgrade RSBY card to my Bronze card and
provide micro finance to BPL Indians.

The poor do not need charity.. they need

micro finance support.
Health of Urban Poor (HUP)
Supported by Govt. of India
Funded by USAID
Maternal and child Health (MCHN)
Post-partum Family Planning PPFP
Post-partum Intra-uterine contraceptive device.
Roel of ANMs, ASHAs, Mamtas PPIUCD
Emergency Contraceptive PiU utilization urban / rural.
Migration, poverty and Access to Health Care.
Current Experience in Health
Expenditure
 Share of Hospitalisation 11% of aggregate health care costs
 Share of Consultation 33%
 Share of Medicines 49%
 Share of Diagnostic test 7%

My HMO Pre Paid Care Project

 Covers consultations, diagnostic tests , medicines and
hospitalization
AND IN ADDITION PREVENTIVE CARE FOR ALL
 Involves trusted community representation in claim settlement
and benefits package design
 Increases transparency
 Reduces administrative costs and eliminates need for TPAs
Muhammad Yunus : Grameen Bank
Micro Finance: Innovation and Revolution
Social Business Enterprise to maximise benefits to
poor people without incurring losses, not to maximise
profits.
Social business is not charity to the poor but
“benevolent capitalism”, as against “greed capitalism”.
Micro financing and micro health insurance a success
story in Bangladesh.
For 60 Takas per year Bangladeshi woman gets Health
Insurance.
ELA BHATT:
SEWA Ahmedabad 1974
Providing micro finanace banking
services to poor women employed in
unorganised sector.
Microfinance in India is workable.
“Poor are bankable”
VIMO-SEWA successful micro insurance
scheme for the poor.
Micro Financing in India
ICICI Bank: 16 managers each oversees work of 6
co-ordinators.
10000 SH Groups – 200000 customers at BOP
Formation of SHG with 20 members in each group
– loan given to SHGs, not individual.
10000 SHGs with ICICI is an ecosystem.
Hindustan Liver Limited(HLL) with ShaktiAmmas
ITC with Sanchalaks in the E-Choupals.
Micro Finance Loans
Government: Rs 24,000 crores

NABARD (National Bank for Agricultural and

Rural Development)
SIDBI ( Small Industries Development Bank of India)
Rashtriya Mahik Kosh (RMK)
SHG Bank Linkage (SBL)
Joint Liability Approach
Non Government:

 Micro Finance Institutes(MFI s): Rs 11734 crores

 85% of MFIs are non profit, account for 25% of loans, serving
38% of borrowers
 Average Loans Rs 2500 – Rs 10000
38%> Rs 10000
 Total active borrowers - 2.26 crores
90% women, majority small scale self employed, only a few
daily labourers.
 Bharat Micro Finance Report: March 2009.
 7.66 crore micro finance accounts.
 Loans Rs 35900 crores.
Community Health Insurance Projects
(CHI) in India
NGO/CBO Membership based
 Large ( >1 million):
Yeshaswini – Bangalore
VimoSEWA - Ahmedabad
Arogya-Shree - AP
 Medium (about 50000)
Karuna Trust, ACCORD
 Small (5-20000)
KKVS
DHAN
 Hallo Foundation- Andur. Dr. Shashikant Ahankari
 Pilot Description – Rural Maharashtra
 Partnered with an NGO, working in ~1200 villages in rural Maharashtra on
women empowerment through various initiatives like SHG formation, livelihood
promotion, etc.
 Designed a comprehensive health scheme targeted at people in rural
Maharashtra
 Launched in 12 villages of Latur district in April 2009, followed by 40 villages of
Solapur in Oct 2009; and then another 80 in Osmanabad in January 2010
 Scheme launched and supported by marketing events in the villages
 NGO employed part time sales agents in each village and sales co-ordinators
to supervise them
 ~5,000 lives enrolled across ~120 villages
 Created a network of 20 health service providers across clinics, pharmacies,
labs, nursing homes and hospitals
 Managing network and claims processing on an ongoing basis to ensure
hassle free service
 Community health workers launched to provide health services at village level
 Pilot Description – Bangalore Slums
 Partnered with an NGO working for 3 years to form a collective of unorganised
sector workers (e.g. electricians, housemaids, drivers, plumbers)
 NGO had ~22,000 members across Bangalore
 Designed a comprehensive health scheme for members of NGO
 Launched the health scheme in slums of north-east Bangalore in July 2009
 Sales staff of the NGO promoted the scheme
 ~1000 lives enrolled till Jan 31, 2010
 Created a network of ~20 health service providers - clinics, pharmacies, labs,
nursing homes and tertiary hospitals - in Bangalore
 Managing network and claims processing on an ongoing basis to ensure
hassle free service
 Each admission and discharge facilitated by a network facilitator
CURRENT SCENARIO…
80% of Health care expenditure comes from private pockets – rich as well as poor

Out of pocket expenditure on health care..

Rural and urban poor:
OPD- Rs 144 per person per year
IPD- Rs 3202 per person per year
Illness is the common cause of indebtedness.
30 crore Indians living on less than a dollar a day.
Less than 5 percent of them have access to mirofinance.
Current Scenario in Dharavi
The poor in Dharavi pay 600 to 1000 percent
interest to local money lenders.
Vegetable vendors borrow at even 10% a day
A micro finance bank with access to this market
can do good business by offering credit at 25
percent.
Is this Excessive??
The BOP customer finds the cost of credit down
from 600% to 25% a boon.
Continued…
85 % of households in Dharavi own a TV set.
75% own a pressure cooker and blender.
56% own a gas stove.
 21% have telephone

Feasibility Study in Dharavi

Dr R D Lele, January 2006
1360 families surveyed
Continued…
Dharavi family spends on an average ( per year)
Rs 1116 for doctors fee: upto Rs 2500.
Rs 1753 for medicine: upto Rs 5000.
Rs 814 for medical tests: upto Rs 2000.
Major illness and hospitalisation makes them bankrupt
Majority agree to pay Rs 2500 as premium which gives:
Life Insurance to bread winners
Accidental cover and health insurance for the entire
family
Preventive and curative care by an assigned family
physician
C K Pralhad :
Fortune at the bottom of pyramid
“Stop thinking of the poor as a burden on society
requiring charity and subsidies to be permanently
doled out by state, and start recognising them as
resilient and creative entrepreneurs and value
conscious customers.”
Hindustan Times, 7 th April, 2010
 Salient Features of My Mission
 Financing and delivery of health care through per
capita pre-payment, so that the physician
organization has a budget for the care it will provide
and an incentive to use the resources wisely.

 Maintenance of continuous healing relationship of

the family physician (FP) with the voluntarily
enrolled population ( 1 FP for 500 – 1000 families ), to
provide promotive, preventive and curative care to
3000 to 6000 individuals for which the FP will be
handsomely remunerated ~ 1 lakh per month.
Physicians and multi-disciplinary specialist
teams can design and execute best care
processes, in a most cost-effective manner.

Hospital facilities, complex diagnostic

equipment and laboratory investigations can be
deployed on a regional basis where it can be
used with greatest efficiency and economy,
backed by insurance cover.
 Electronic patient record (EPR) which provides an
accurate and comprehensive picture of each patient.
EPR avoids unnecessary duplication of tests,
facilitates collaboration and coordination of care
among specialties, and allows monitoring of
compliance with the practice guidelines to ensure
high quality of care.

 Computerized prescription in the patient’s own

language, gives detailed instructions about how to
take the drugs and alerts for adverse reactions. It
eliminates medication errors and transforms the care
process.
 Over-use and mis-use of tests and procedures, so
common currently, is strongly discouraged while
early detection and prevention and early treatment
and chronic disease management are strongly
encouraged.

 There is great emphasis on patient education and

information.
Patients are encouraged to come in early and have
their symptoms checked so that any potential illness
can be treated sooner and at much less cost.
Emphasis on prevention reduces the need for
inpatient hospital care especially for Diabetes.
Hypertension, congestive Heart Failure and Asthma.

 The medical peer group, not an insurance company,

determines the clinical policies, which technologies
and procedures will be employed and covered under
the pre-payment, and health insurance .
 The medical peer group develop the drug formulary
themselves. The drug selection is based on its
therapeutic efficacy, safety and cost. Physicians have
the freedom to over-ride the formulary to prescribe
what they believe is medically necessary in a
particular case.

 This approach is most effective in cost control. In the

current fee-for service scenario of medical practice,
new single source patent protected drugs are
aggressively promoted by drug manufacturers with
little head-to head comparison with older, effective
and often less expensive drugs.

 HMOs use evidence-based approach to promote

drugs of choice.
Impact of preventive care of life
style illness will be measurable by
the drastic reduction in critical
illness claims which are a major
cause of losses made by health
insurance companies at present.
Time for paradigm shift.
 HMO managed care will not only ensure the
elimination of the widely prevalent gender
discrimination against females, it will actually put
major emphasis on the care of the mother and the
female child and adolescent girl eg nutrition,
menstrual hygiene, sanitary napkins, prevention of
iron deficiency, sex education and prevention of
STD / HIV, emergency contraception and family life
education, women’s reproductive health and
promotion of breast-feeding.

 Care of the pregnant women will ensure that no baby

is born with a birth weight less than 2.5 kg.
 Action Plan for city of Mumbai
Annual Income Annual Premium
Bronz Card 40000-100,000 Rs 2500
Silver Card Over 100,000 Rs 5000
Gold Card Over 200,000 Rs 7500
Platinum Card Over 500,000 Rs 10000

Micro Finance for Bronz Card holders

For bronz card holders

• Life Insurance for bread winner
• Accident cover and Health Insurance cover for entire family of five
• No exclusions
• Preventive and curative care by assigned family physician
 Unique features
Preventive dental care
Preventive mental care.
Accident Prevention
Blood Doner directory automated
with SMS
 Thyrocare Dr. A. Velumani Ph. D
an active partner in Mission Mumbai
Health, committed to provide all essential
laboratory tests at an affordable cost to the
poor citizens of Mumbai.
350 essential generic drugs provided at
low cost through bulk-buying
The benefit of low cost will be passed on
to patients.
Components of a health system
Consumer Financially Manage Consumer
adoption & self- provider support
awareness sustaining network services

Front line Healthcare

Financial
– CHWs Doctor Quality
structuring
and OMs Control

Basic Hospital /
Consumer Consumer
insurance Nursing
awareness data mgmt
risk mgmt Home

Prevention
Re- Diagnostic Cash flow
-promotive
insurance Lab mgmt
techniques

Feedback Tight Drugs and

Claims
on quality operationa Pharmacy
mgmt
of service l control mgmt
HMO tie up with……
 Life Insurance and Health Insurance Companies.
 Family Physicians and Specialists
 Laboratories and Diagnostic Centres.
 Drug Companies – bulk buying at discounted rates
 Nursing Homes and Hospitals

 Hospitals are urged to expand their roles as HMOs and provide pre paid preventive care
through assigned family physicians.
 Electronic Health Record for each member of family of
5-6.
 Computerised prescription for patients
HMO: Health Care Management: Preventive Care Through PCP
Curative Care
Drugs
Diagnostic Tests –
Hospitalisation and Rehabilitation
 Illustrative product / scheme design
Customer
•
30%+ reduction in total healthcare costs
• Access to quality healthcare (hospitals, nursing homes, doctors, drugs, labs)
benefits
• Protection from “health shocks”, both hospitalisation as well as OPD

•
Preventive health measures / education reducing disease incidence over time

1. Hospitalisation / Surgeries
Coverage • Cashless treatment at empanelled hospitals upto a limit of Rs 30,000

• Co-pay for every hospitalisation of Rs 50-200

• Few exclusions – HIV / AIDS, war, nuclear explosion

2. Outpatient care
• 1 free annual health checkup for entire family after 3 months of enrolment

• First aid and basic health services (e.g.BP measurement) from a community health

worker (CHW)
• Consultation at empanelled doctors at Rs 15 per visit (50% discount to market)

•
Quality, generic drugs at 30-50% discount to market rates
• Common diagnostic tests at 30-50% discount to market rates

3. Disease prevention and health improvement measures

•
Only family enrolment, no individual enrolment allowed
Pricing • Annual premium of Rs 850 for a family of 5

55
 Taiwan Model
 I visited Taiwan on 9- 13th May 2010 to see at first hand
the National Health Insurance of Taiwan working
successfully since 2004. All 23 million citizens of Taiwan
have universal health insurance. Each citizen has electronic
health record, computerised prescription and links to clinics
and hospitals.
 Taiwan Health Insurance is making losses since preventive
Health Care is not integrated with Health Insurance.
 Mumbai, Thane and New Bombay together have a
population of 23 million.
 We can do better than Taiwan in this respect by combining
preventive Health care with Health Insurance.
IRDA- comprehensive micro-
insurance guidelines incorporating
product, distribution, administration,
regulation, etc. to promote health
insurance among the poorer sections of
society.
Mission Mumbai Health will
implement the same objective.
 Future of Health Care in India
NGO partnership with State Governments is the
only way to provide Micro Insurance through
Micro Financing to the BPL (37 crore) and APL
(70 crore) Indians.
Todays Health care is only illness care.
Promotion of positive health and prevention of
illness are the primary aims of the physicians.
This message is known to India for over 5000
years. (Charaka and Sushruta)
AVIVA: example of corporate social
responsibility (CSR)
LIC-CSR activities:
20th October 2006- Golden Jubilee Foundation
 Relief of poverty or distress
 Advancement of education
 Medical relief
 Advancement of any other object of general public
utility.
For the 70 lakh poor citizens of Mumbai, micro finance
budget of Rs 15000 crores is required
At 25% interest, it is a viable social business venture.
MISSION MUMBAI HEALTH
IS NOT
MISSION IMPOSSIBLE
Impossible can easily be broken down into possibilities as a
cooperative effort involving :
 Jayant Banthia, Ex-Chief Secretary, Govt. of Maharashtra
 Municipal corporation of Greater Mumbai (Sitaram Kunte)
 Rotary club of Bombay
 SNEHA (Dr. Almeida Fernandes)
 Kevim Bhatnagar – Pension specialist
 Arogya Bharati