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         Health Financing
The National Health Accounts in India presents data to the effect that 50% of national health expenditure, and 60% of household expenditure is towards primary care. However, most insurance products cater solely to hospitalization and secondary/tertiary care (16 out of 28 in 2005).Insurance premia constitute 1.5% of household expenditure on health, which means that a vastly untapped market for effective health financing exists. We need to understand deeply the use and potential applicability of social, private and community insurance in India. We also need to recognize that insurance is essentially a structure for high cost, low probability events, while credit/savings are better suited for low cost, likely events. Issues with designing an insurance product are complex. Some of them are deciding the extent of coverage, dealing with adverse selection and moral hazard, equitable design of the premium payment structure, reductions of admin costs, involvement with Third Party Administrators (TPAs) and gaining the crucial trust of the community to achieve high penetration. Different schemes have faced, and in some cases successfully dealt with some of these issues. The way out is to define very clearly the reason for providing insurance, which will allow us to answer many questions of coverage, involvement of community and trust, as well as administrative streamlining. Health financing at ICTPH is intended to be a critical part of a well functioning health-care delivery system. The idea is to structure a sustainable model which would deliver an unbeatable value proposition for primary as well as higher levels of care, while utilizing various providers such as SughaVazhvu and the local Primary Health Centre. One of the most important topics of interest is the use of innovative financing schemes such as the possible inclusion of credit/savings structures. These creative schemes will be subjected to rigorous modelling and validation, and will finally be tested for viability at our field site in collaboration with SughaVazhvu. |
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