Working with health insurance companies, Mukteshwari “Mukti” Bosco is establishing a comprehensive health education and health financing system that will enable the poor to access fair, cost-effective, high-quality medical treatment.
The New Idea
Mukti along with Nimish has designed a unique health insurance program that addresses the financial and health needs of India’s rural poor. In the process, she has created a rating system for hospitals and healthcare providers that will help them improve the services they provide.
Mukti’s organization, Healing Fields Foundation (HFF), provides administrative services for healthcare and health financing delivery; networking opportunities for healthcare providers, insurers, and government agencies; health management services; and training for partner citizen organizations (COs) on preventive, promotive, and curative aspects of healthcare. HFF specializes in providing fast and accurate claims administration services. In addition, the organization negotiates bulk rates and provides direct settlement payments to health providers, which means patients pay no upfront, out-of-pocket fees, which often prevents the poor from seeking treatment. Following cashless hospital admissions, patients receive personalized guidance through medical procedures through the facilitators, second opinions from an HFF panel of doctors, and post-treatment guidance. The model is flexible and cost-effective, and gives patients and healthcare providers a considerable amount of choice. HFF’s product, designed with HDFC, Parivar Suraksha Bima (Family Insurance Scheme), is designed especially for the rural sector, and is implemented in partnership with existing COs already familiar with the communities where they work.
Over 90 percent of India’s population lacks access to healthcare financing. The problem is particularly acute for people who live in villages or are impoverished. Of the many problems facing India’s poor, illness is the most expensive, accounting for the largest costs and the greatest loss of income. It often forces people to sell assets, take on debt, and even become indentured laborers. According to the World Bank, around a quarter of Indians who are hospitalized fall below the poverty line as a direct result of their medical expenses. For the poor, losing even a day’s wages while in the hospital can be devastating. As a result, many people do not seek healthcare when they are sick.
Because health insurance is so rare in India, and poverty so widespread, there is an enormous need for both healthcare access and financing. Government health services are designed to fill those rolls. At least on paper, India has one of the best public health systems in the world, beginning with village level health centers. However the system is antiquated, insufficient, and woefully underfunded; only 3 percent of India’s annual budget is allocated to healthcare.
Government health services fail clients in two key ways: Lack of quality, and lack of accountability. Despite the extensiveness of the network, many villagers still live quite far from the closest government health facility. When patients do get treatment, it is often of poor quality. Equipment at many government hospitals is defunct, so diagnostics are often done at paid centers. While medicines are supposed to be provided free of cost, the lack of adequate supplies forces poor patients to buy them at market rates, which they can ill afford. Corruption too is rampant. A study found that the average cost of visiting a public facility was 77 rupees, not much cheaper than visiting a private facility (Rs. 84). Since public facilities are supposed to be free, the only explanation is that doctors and nurses ask for bribes. In addition, there is a serious absenteeism problem among hospital staff, a problem shared by other developing countries.
For years, the poor were considered uninsurable, both because they face a barrage of risks and because they were considered to be unwilling or unable to pay for disasters in advance. But a recent report on micro health insurance shows that the poor are in fact willing to pay an average of Rs. 600 per year, or a little over 1 percent of their income, to buy insurance for their families. While insurance can certainly help the poor become more resilient, it can succeed only if products are designed for them. Insurance products can be tailored by linking premiums to cash flow, finding appropriate and efficient delivery channels, implementing effective controls, and setting premiums based on local costs and local mortality and morbidity rates. To date, downsized middle-class insurance products have not proven particularly effective. Low-income people are a different market and they need risk management products that work specifically for them.
Currently, there are around twenty-five micro health insurance schemes across India, mainly in rural areas. Most of these programs are run by microfinance institutions and insure between 5 and 10 million people. However, many microfinance institutions are overburdened, and lack the expertise to develop insurance programs that adequately address the needs of the poor. For example, one program in Karnataka covered only surgery, not routine medical care. Others require copayments, which can discourage participants from seeking medical care. The Insurance Regulatory Development Authority of India has begun to chalk out a roadmap for bringing health insurance to rural India. If the government aims to lessen poor people’s debt burden and to reduce poverty, then the insurance policy should cover the common illnesses for which people take loans. A special committee will look at creating public-private partnerships for micro health insurance, including designing products specifically for rural areas, creating strategies that encourage large-scale enrollment of rural populations in health insurance programs, and addressing the various obstacles to providing efficient care.
Healing Fields Health Insurance Scheme is a partnership between her HFF and HDFC ERGO General Insurance Company. Since last year, the plan has covered approximately 25,000 people in Andhra Pradesh state. Mukti launched her healthcare financing delivery project after conducting two years of research to understand the health needs and healthcare use patterns of people living in rural areas. After completing the survey, HFF drew up disease profiles for different areas and came up with a list of forty-three common conditions. It then determined what local hospitals charged to treat those conditions. This helped Mukti develop a Diagnostic Related Group (DRG) Model: A payment system based on the diagnosis of the patient, which proved to be a useful method to control healthcare costs. The provider is paid a fixed amount for a diagnosis regardless of the actual expenses incurred or length of stay. For easy processing, HFF network hospitals follow the DRG model at the time of a patient’s admission.
Unlike other insurance plans, HFF covers treatment whether or not it requires hospitalization. This insures that people with diarrhea or a fracture can seek treatment without losing wages, and saves money for both hospital and the insurer. The HFF plan also covers pregnancy and childbirth. It requires pregnant women to have four prenatal checkups, which both improves maternal and fetal health and minimizes risks for the insurer and the pregnant mother and child.
To prevent the poor from taking loans to meet healthcare expenditures and thereby increasing their poverty, Mukti uses a cashless system, rather than the more common reimbursement model. Members pay Rs. 285 a year for health insurance benefits of up to Rs. 20,000 for a family of five and Rs. 35 for accident insurance up to Rs. 25,000. In case of a hospitalization, patients have a copayment of up to 25 percent at the time of discharge. The stakeholders, insurer, CO partners, and the hospital work together to create a customized payment plan.
HFF has a three-fold mechanism for controlling false claims and unnecessary procedures. The first is an HFF-appointed facilitator who is trained in insurance procedures, dissemination of information on health, prevention, and treatments. Since most rural clients are illiterate and poor, a facilitator, stationed at each network hospital, helps patients secure admission to the hospital, obtain his/her medical history, and manage documentation and claims management. The facilitator also ensures the legitimacy of the insured members before extending the service by verifying identification and authorizing service. Equipped with a mobile phone, so that s/he can be contacted at any time, the facilitator also visits communities to provide health education and prevent policies from lapsing. The 25 percent copayment helps contain costs and discourages unnecessary care. Finally, the medical management team at Healing Fields provides second opinions, which provides a check against misdiagnoses and incorrect treatment. Mukti stresses preventative care to keep claims low. HFF has come up with a rating scale for private hospitals (since policy holders prefer private healthcare providers), based on criteria like hygiene, the qualifications of doctors and nurses, prices, and equipment, thus ensuring that providers meet certain minimum standards before they become part of her network. HFF also organizes workshops for participating hospitals, COs, and insurers to increase communication between these groups.
Mukti constantly innovates on the products HFF offers. For example, she has introduced a wage compensation package that defrays the cost of hospitalization beyond three days. Those in remote tribal areas can buy insurance covering the cost of travel to healthcare facilities. There is a policy for the girl child as well, aimed at covering educational needs, marriage, and accidents. She plans to introduce policies designed to meet the needs of the physically challenged and mentally ill soon.
According to Mukti, in areas where HFF has penetrated considerably, people take out fewer microcredit loans for healthcare. The renewal rate of policies has also climbed to 72 percent. Through all of this, HFF constantly monitors community health patterns—too many similar cases signal the beginning of epidemics—and passes the information on to health departments, government agencies, and hospitals.
Mukti grew up around medical professionals. Her father was an eye doctor and her mother a community health nurse. As a child she accompanied them to eye camps in remote villages where she remembers being showered with affection by the villagers.
In 1965, Mukti’s parents decided to move to Tamil Nadu because the political situation in the state of Andhra Pradesh where they were living was deteriorating. Her father set up a clinic in Ranipet, near Vellore, a small town best known for its medical hospital. Her mother joined the Christian Medical College (CMC) as a community health nurse.
Mukti studied occupational therapy at CMC. During her student years, she spent a lot of time in villages sharing medical information with the underprivileged. During her internship period, she was stationed at a short-staffed mental health department where she promoted a community rehabilitation approach. She felt that reaching out to families of patients, employers and co-workers was essential, and it was equally important to spread awareness in the workplace of the patients. She began holding training programs for businesses in and around Vellore, and introduced internship programs for patients who had recovered.
She continued these efforts in Bangalore, where she worked for the Spastics Society of India, one of India’s leading disability organizations. She encouraged companies to hire patients as trainees and created a customized support program to help them settle into their work environment. The Spastics Society soon institutionalized her program by setting up a formal job development center. In 1991, Mukti organized a Spastics Society retreat for forty adult professionals and twenty-five children, all with varying degrees of disability. At first her colleagues were apprehensive, but after the initial period of awkwardness, it was clear that both groups would return enriched by the experience. To this day, the Spastics Society continues to hold annual retreats.
In 1997, Mukti completed her Masters in Health Management and began to crystallize her vision for improving healthcare and insurance for the poor. She started working in the sector in 1999.
Mukti lives in Hyderabad with her husband and two children.