Research Article: Impact of Publicly Financed Health Insurance Schemes on Healthcare Utilization and Financial Risk Protection in India: A Systematic Review

Date Published: February 2, 2017

Publisher: Public Library of Science

Author(s): Shankar Prinja, Akashdeep Singh Chauhan, Anup Karan, Gunjeet Kaur, Rajesh Kumar, Cheng-Yi Xia.


Several publicly financed health insurance schemes have been launched in India with the aim of providing universalizing health coverage (UHC). In this paper, we report the impact of publicly financed health insurance schemes on health service utilization, out-of-pocket (OOP) expenditure, financial risk protection and health status. Empirical research studies focussing on the impact or evaluation of publicly financed health insurance schemes in India were searched on PubMed, Google scholar, Ovid, Scopus, Embase and relevant websites. The studies were selected based on two stage screening PRISMA guidelines in which two researchers independently assessed the suitability and quality of the studies. The studies included in the review were divided into two groups i.e., with and without a comparison group. To assess the impact on utilization, OOP expenditure and health indicators, only the studies with a comparison group were reviewed. Out of 1265 articles screened after initial search, 43 studies were found eligible and reviewed in full text, finally yielding 14 studies which had a comparator group in their evaluation design. All the studies (n-7) focussing on utilization showed a positive effect in terms of increase in the consumption of health services with introduction of health insurance. About 70% studies (n-5) studies with a strong design and assessing financial risk protection showed no impact in reduction of OOP expenditures, while remaining 30% of evaluations (n-2), which particularly evaluated state sponsored health insurance schemes, reported a decline in OOP expenditure among the enrolled households. One study which evaluated impact on health outcome showed reduction in mortality among enrolled as compared to non-enrolled households, from conditions covered by the insurance scheme. While utilization of healthcare did improve among those enrolled in the scheme, there is no clear evidence yet to suggest that these have resulted in reduced OOP expenditures or higher financial risk protection.

Partial Text

Achieving Universal Health Coverage (UHC) is a major policy goal in health sector globally. [1, 2] Despite the acceptance of UHC at policy level in India, around three-quarters of healthcare spending is borne by households. [3] The recent National Sample Survey (NSS) report reveals that only 12% of the urban and 13% of the rural population is under any kind of health protection coverage. [4] Not surprisingly, nearly 26% of the total health spending by rural households is sourced from either borrowings or selling of assets. [4] Further, OOP spending pushes approximately 3.5% to 6.2% of the India’s population below the poverty line every year. [5–7]

A total of 1265 articles were identified from databases (n = 1244), websites (n = 18) and bibliographic search (n = 3) as shown in Fig 1. After removing duplicates, the remaining 814 articles were screened by applying inclusion criteria to the titles and abstracts. A total of 671 articles were excluded in the 1st stage screening and 143 studies were identified as eligible for 2nd screening. Full text papers of these 143 studies were reviewed. Ultimately, 43 articles were found eligible for this systematic review. Out of this, 14 studies had a comparison group [24–37] and the remaining 29 were without a comparison group [38–66].

Historically, the health system in India has had a maternal and child health (MCH) centric approach, both in financing and delivery of health services. [68] Low public spending on health care shifted the burden of seeking care on households by paying out of pocket expenditures. [9] This led to either a barrier in accessing health services, or catastrophic outcomes for those who sought care. [4, 5, 7] Further, low capacity of public health system has resulted in rapid development of private health care delivery system, as well as a push towards various demand-side financing mechanisms. [69, 70] The recent policy thrust on UHC has shifted attention towards a broader focus on health system to meet all the needed preventive as well as curative health care needs of the population.

Given the current policy directions for universal health care, publicly financed health insurance schemes are likely to stay. Hence there is a need to design the schemes and implement safeguards so that the benefits of the risk pooling can be maximized. Firstly, benefits of these demand-side financing mechanisms will be not reaped unless the basic health care infrastructure for delivery of primary health services is strong. This primary health care infrastructure will be necessary to provide basic health services, besides serving as gatekeeping for specialist services. Examples from Thailand, United Kingdom and Mexico substantiate this claim. [79] Secondly, the public sector needs to be strengthened and incentivized to compete for provision of services. This will generate much needed extra revenue for the public health system, which can in turn be used to strengthen provision of health services. The public sector has demonstrated that it can provide universal access for health care services, which are delivered efficiently and utilized equitably, the only condition being that enough resources are spent. Various interventions for improving access to maternal health care services and institutional delivery in public sector illustrates this point. [80–82] Thirdly, there is a need to invest in systems to monitor and evaluate implementation of health insurance schemes. This is also essential in view of large private sector presence, which has perverse incentives to induce demand; and the intermediary purchaser/ insurer, who has perverse incentive to reduce utilization through cream-skimming. Overall, publicly financed health insurance schemes are not the panacea to achieve UHC in India. Instead, these schemes need to be aligned with proper strengthening of the public sector for provision of comprehensive primary health care. Secondly, presence of health insurance schemes could be used as an opportunity to reform the tenets of the health sector which are beyond the routine regulatory frameworks.