The spread of affordable healthcare across communities is being linked to availability of customised insurance solutions for consumers. Vaatsalya Healthcare Solutions, a start-up company that operates a chain of low-cost hospitals across tier-II and III cities in Karnataka and Andhra Pradesh, has devised a microinsurance scheme for which they are seeking a grant from the Microinsurance Innovation facility, ILO, Switzerland. In a conversation with ET, V Renganathan, co-founder and vice-president (alliances) of Vaatsalya, explained why low-income consumers need a scheme that covers both hospital care as well as out patient consultation costs.
What are the main points that you are proposing in the microinsurance scheme?
Health insurance in India generally covers only in-patient hospitalisation. Any out-patient (OP) services such as doctor consultation, drugs, and diagnostics are not covered and they are all “out of pocket expenditure”. According to one study, the urban poor might be spending as much 2,400 a year on out-patient services.
So they can really benefit from OP coverage. Vaatsalya is proposing that when people buy insurance, they also get a fixed number of coupons that they can exchange for medical consultation. We will price the product around 600-700 with an insured sum of 30,000 for a family of 4-5.
What were the factors that influenced the design of this scheme ?
In the semi-urban and rural areas where Vaatsalya operates, very few people are insured (for healthcare). Microfinance institutions took a lead in designing and marketing health insurance, but they have not been highly successful because of the inability to get quality providers; cost of insurance marketing and servicing the insurance product; and also fraud.
We believe Vaatsalya can learn from these experiments to design a plan that meets the interests of all stakeholders including insurance companies.
What impact will this scheme have on improving access to healthcare for lowincome consumers?
Currently, people pay out of pocket. Hospitalisation requires thousands of rupees, which they usually borrow (probably at high rate of interest) or by selling their assets. If we could educate our customers about insurance and they pay the premiums regularly, then they will be protected.
We also should know that they have limited budgets, so the insurance must come with certain OP benefits, which will reduce the overall burden for the low-income groups.
What role do insurers play in rolling out low-budget health care facilities?
Insurers want low-budget healthcare but they are not building or helping to these facilities. However, there are examples of hospitals created to serve insurer’s clients, such as Kaiser-Permenante in USA. Insurers can collaborate with hospitals like Vaatsalya, which provide affordable healthcare, to create such an environment.
What is the status of your application for a grant?
We have just submitted an application for a grant to the Microinsurance Innovation facility, ILO, Switzerland. In order to be funded, the idea has to innovative; replicable by others; and at the same time economical to low income groups. Our scheme offers both in-patient and limited out-patient services for less than 2 a day for a family of 4-5 members.
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