Research Article: Role of insurance in determining utilization of healthcare and financial risk protection in India

Date Published: February 5, 2019

Publisher: Public Library of Science

Author(s): Shankar Prinja, Pankaj Bahuguna, Indrani Gupta, Samik Chowdhury, Mayur Trivedi, Sandra C. Buttigieg.


Universal health coverage has become a policy goal in most developing economies. We assess the association of health insurance (HI) schemes in general, and RSBY (National Health Insurance Scheme) in particular, on extent and pattern of healthcare utilization. Secondly, we assess the relationship of HI and RSBY on out-of-pocket (OOP) expenditures and financial risk protection (FRP).

A cross-sectional study was undertaken to interview 62335 individuals among 12,134 households in 8 districts of three states in India i.e. Gujarat, Haryana and Uttar Pradesh (UP). Data on socio-demographic characteristics, assets, education, occupation, consumption expenditure, illness in last 15 days or hospitalization during last 365 days, treatment sought and its OOP expenditure was collected. We computed catastrophic health expenditures (CHE) as indicator for FRP. Hospitalization rate, choice of care provider and CHE were regressed to assess their association with insurance status and type of insurance scheme, after adjusting for other covariates.

Mean OOP expenditures for outpatient care among insured and uninsured were INR 961 (USD 16) and INR 840 (USD 14); and INR 32573 (USD 543) and INR 24788 (USD 413) for an episode of hospitalization respectively. The prevalence of CHE for hospitalization was 28% and 26% among the insured and uninsured population respectively. No significant association was observed in multivariate analysis between hospitalization rate, choice of care provider or CHE with insurance status or RSBY in particular.

Health insurance in its present form does not seem to provide requisite improvement in access to care or financial risk protection.

Partial Text

Universal health coverage (UHC) has become an important stated policy goal in several developing countries [1]. UHC ensures that quality health services are accessible to all those in need, without any financial hardship. In India, aspiration of UHC has been envisaged at policy level as early as the Health Survey and Development Committee report in 1946 [2]. In 2012, a push was given through the High Level Expert Group Report, followed by its inclusion in the 12th Five Year Plan [3]. More recently, another impetus has been received as a result of its inclusion in the Sustainable Development Goals for Health [4].

Moving over the rhetoric for the need for UHC, several policy discourses in India currently focus on ‘how’ to achieve UHC [4]. The question of whether to go via the supply-side funded public sector route or using demand side financing mechanisms such as recently introduced publicly financed health insurance schemes becomes inevitable. In order to answer the latter, it is imperative to evaluate the existing schemes in terms of their impact on increasing access to healthcare utilization and providing financial risk protection to targeted groups. The extent of evidence so far, especially for financial risk protection, is inadequate. Moreover, the direction of findings is ambiguous.




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