Modi Government’s cashless mediclaim policy ineffective: TISS study

Mumbai: A study conducted by the Tata Institute of Social Science (TISS) on government’s cashless mediclaim scheme found that a significantly higher proportion of persons from Below Poverty Line (BPL) families (88.23%) reported paying for diagnostics, medications, or consumables.


Furthermore, the study found that about a third of the beneficiaries experienced financial catastrophe if indirect expenditure is taken into consideration. This also implies that for the poor, ill-health has further deepened the existing poverty.

The TISS study was done to assess the extent to which Rajiv Gandhi Jeevandayee Arogya Yojana (RGJAY) protects the families from the out-of-pocket expenditure while availing the tertiary care from the RGJAY accredited facilities.

The study found that that despite being enrolled in RGJAY, more than three fifth (63%) of the beneficiaries still incurred OOP payments for services when admitted in the hospital. Under RGJAY, which was launched by the Government of Maharashtra in 2012, both BPL and Marginally Above Poverty Line (MAPL) families with annual income up to ?1,00,000 are entitled to receive tertiary care from accredited institutions.

The idea of subsidising the health insurance premiums under RGJAY was to overcome financial barriers to utilise tertiary care and provide financial risk protection to deprived households against health expenditure. The findings of the study indicate that the scheme has several design and implementational issues.

The study also found that BPL families experienced significantly greater financial burden due to OOP health payments than the APL families. This could possibly be attributed to the low level of awareness and empowerment among the people from BPL category.

A notable finding of the study was that the mean OOP spending in private hospitals was more than twice compared with public hospitals. Our analysis also shows that diagnostics and medications together accounted for almost 80% of the total OOP expenditure, stated the study.

Although there was relatively higher incidence of OOP payment for beneficiaries from certain specialities such as cardiology and nephrology, the results indicate that people had to incur OOP payments for treatment of majority of conditions “lack of information” as the reason for paying for services in public hospitals was highest (33%), followed by “unavailability of time to complete all the necessary paperwork” to avail of the services (19%).

According to the study, it was found that the reasons for incurring OOP expenditure in public set up was that the procedure was not covered under RGJAY and that they had been asked to pay for the services. Another reason for OOP expenditure was unavailability of the diagnostic tests or medicines in the empaneled hospital. The most predominant reasons cited for paying for services in private hospitals were “procedure was not covered under RGJAY,” followed by “lack of knowledge”.

“Government needs to keep a check on red tapism for successful implementation of such schemes. IT also needs to increase the service provider base and make realistic rules and regulations that will encourage more service providers to get on board,” said Dr Nikhil Datar, senior gynaecologist at Cloud Nine group of hospitals and health activist.

Key findings
Despite being enrolled in RGJAY, more than three fifths (63%) of the beneficiaries still incurred Out of pocket (OOP) payments for services when admitted in the hospital, and more worryingly, it was found that a significantly higher proportion of persons from Below Poverty Line (BPL) families (88.23%) reported paying for diagnostics, medications, or consumables

In the sample, 61% of the beneficiaries accessed services from private hospitals and 39% from public hospitals

In private hospitals, of those who availed services, 63% of them were orange ration card holders and only 37% were yellow ration card holders

We observed a reverse trend in public hospital wherein 53% of the beneficiaries were yellow ration card holders and 47% were orange ration card holders

Among the hospitalized cases, cardiac and cardiothoracic surgery and cardiology together accounted for 46% of the disease related cost burden

The OOP expenditure on diagnostics and medicines was quite substantial in absolute terms as well as a proportion of total OOP payments (39.2% and 38.7%, respectively)

For most BPL families, the cost incurred were catastrophic and resulted in further worsening of financial conditions; Factors that contributed to worsening of financial conditions included transport, food, travel and loss of daily wage

Most patients resorted to paying due to various factors like lack of time to do paperwork, unawareness of scheme, lack of cooperation from hospital staff or the procedure not being covered under the scheme