6. Interrogating the PPP Model in Health-Care Insurance

With the introduction of Rashtriya Swasthya Bima Yojana (RSBY) in April 2008, India has pioneered a public-private partnership model to provide health insurance to the poor. RSBY has several stakeholders – the central government, the state governments, the insurance companies, the public/private health-care providers and the below poverty line (BPL) families – who will all benefit from the new scheme. It is the first government social sector scheme to embrace a business model of profit. National Health Accounts data (2010) reveal that the government sector (centre, state and local) together accounted for only 20 % of all health expenditures, and 78 % took the form of out-of-pocket payments – one of the highest percentages in the world. This new scheme is essentially meant for the Indian workforce (about 300 million) in the informal sector who do not have any kind of access to health protection benefits. Despite severe initial challenges, RSBY is today considered a successful public/private partnership model in terms of outreach and sustainability and may well become a precursor to other schemes in the social sector. This chapter investigates the major causes of low coverage of health insurance and the major determinants of accessing effective health insurance in India. Related issues pertaining to reforms in health sector administration and financing are also discussed.