Health Insurance: Unnecessary procedures on the rise in government hospitals too: Report

Unnecessary procedures on hapless patients has become a menace not just in private hospitals but is also becoming rampant in government hospitals.

A World Bank report on health insurance commissioned by the health ministry says that new government-sponsored health insurance schemes like the country’s flagship Rashtriya Swastha Bima Yojana (RSBY) has found evidence of unnecessary care.

RSBY has found that certain hospitals perform many more hysterectomies than would be expected, or combine hysterectomies with simultaneous salpingo-oopharectomies (the removal of an ovary together with the fallopian tube) which entitles the facility to claim additional charges for one more treatment package.

There were similar claims for hernia combined with appendectomy to maximize revenues from the scheme.

Monitoring data from Aarogyasri – a health insurance scheme run by the government of Andhra Pradesh — also suggests that certain procedures like appendectomy, hysterectomy, laminectomy/discectomy and renal stone lithotripsy were experiencing provider induced demand.

“Insurance coverage is resulting in higher utilization among beneficiaries. Adverse selection does not appear to be a major problem for the new wave of government-sponsored health insurance schemes because most are free or at a negligible cost and often automatically cover all eligible beneficiaries. However, moral hazard and early signs of unnecessary care and substitution of inpatient for outpatient services are worrisome, and will require tough control measures,” the World Bank report said.

Anecdotal evidence also suggests that some schemes may induce overinvestment in tertiary care and expensive technologies (like CT scanners and cardiac catheterization units) at the expense of investments in ambulatory care, prevention and coordinated networks.

“Health care in India is inexpensive when compared with costs in countries in the Organization for Economic Cooperation and Development (OECD). Nevertheless, care is probably not inexpensive in relation to the income of the vast majority of its citizenry, but if insurance drives a hospital-based system, costs will escalate beyond what the country can afford,” the report added.

More Indians now have some form of health insurance. The country’s public financing for health care is less than 1% of the world’s total health expenditure, although it is home to over 16% of the world’s population.

Families meet almost 70% of their health expenses out of their own pockets, placing considerable financial burden on poor households, often pushing them deeper into poverty.

The Bank report, authored by Gerard La Forgia and Somil Nagpal, found that over the last five years, government-sponsored schemes have contributed to a significant increase in the population covered by health insurance in the country.

Over 300 million people, or more than 25% of India’s population, gained access to some form of health insurance by 2010, up from 55 million in 2003-04. More than 180 million of these were people below the poverty line.

Given these trends, the report projects that more than 630 million persons, or about half of the country’s population, can be covered with health insurance by 2015. By this time, spending through health insurance is also likely to reach 8.4% of total health spending, up from 6.4% in 2009-10, the study said.