Solutions For Micro Insurance

Social Entrepreneurs significantly contribute to the development of healthcare sector. They collaborate with public healthcare systems to extend their reach to marginalized communities; they improve resource allocation; create models catering to the needs of the poor; and they work to address socio-economic implications of illnesses. Social Entrepreneurs are critical in ensuring that healthcare, as it is defined in the Alma-Ata declaration, is affordable, accessible and acceptable for all. The Ashoka Fellowship in India brings together those people who are playing a transformative role in the country’s healthcare for the past 3 decades. 

In the coming year, Ashoka will be working with Fellows to identify opportunities in healthcare and facilitate collaborative initiatives by Fellows in India.  Some of the common challenges faced by  Fellows irrespective of the nature of their work, include malnutrition, lack of prevention, and access to information, scarce human resources, poor quality of delivery and poor insurance coverage. Towards the latter, Ashoka held a round table on micro insurance with Fellows from across the board. Fellows who attended were: Dr. Sudarshan, Prema Gopalan, Ashwin Naik and Dr. Vijay Singh who represented Dr. Devi Shetty. 

The private sector is becoming more and more engaged in addressing gaps in public healthcare delivery. It already accounts for 60% of outpatient and 40% of inpatient care. At the moment it is still significantly skewed towards catering to urban India. However, enterprises like Arvind Eye Care or Vaatsalya are successfully proving that there is a market in rural India for health care and there are models that work for this market. While presently over 750 million of Indian population are not covered by health insurance, there is a clear possibility for growth. 

Unfortunately, even subsidised insurance may not effectively mitigate economic shocks due to health issues among the poor. Insurance only covers in-patient care which becomes problematic as most of the expenditures are in out-patient care. To reduce the burden of healthcare expenses on the poor, health insurance coverage should be extended to outpatient care. This can be delivered through a network of general practitioners, clinics, and hospitals across the country. Additionally, the insurance products should be a complete package covering diagnostics, drugs and consultation, thereby, covering all the causes for out-patient care. 

Significant challenges faced by both government and private players involve a lack of infrastructure,  service providers and transparency, standards and regulations. On one hand, private hospitals capitalize on medical emergencies by recommending unnecessary tests and extending period of care. On the other, insurance providers suspect fraudulent claims and lack transparency in processing claims. Separately, on account of inefficiencies and corruption, Government subsidies often do not reach private clinics and insurance companies in a timely manner. Hospitals are economically incentivised to increase the bill of the patients, and the patients are not empowered to monitor the process. It would be in the interest of the insurance providers, the hospitals and the patients to have a more transparent and accountable system. Such a system can be achieved by creation of the centralized Third Party Administrator (TPA). The TPA will strengthen procedures for empanelment of the hospitals, devise transparent cost structures and create systems to reduce the possibility of fraud. 

Going forward the Fellows and Ashoka will explore each of these ideas as potential initiatives. We will be reaching out to more Fellows and other actors to explore this in more detail.  At the same time we will be holding series of consultations to identify opportunities seen by the Fellows. We would encourage the Fellows who are interested in leading or contributing to such initiatives to reach out to Ashoka India. 

(By Ira Snissar. Ira is a Venture Associate at Ashoka India)
 (This article is part of the February 2012 edition of FellowConnect. Please click here to read more articles from the edition)