Results and Cross-Cutting Issues
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Table 3.8 India: Average Central and State Government Spending per Beneficiary per Admission, 2009–10 (Rs.) Scheme Central government ESIS CGHSc RSBYd State government Rajiv Aarogyasri (AP) Yeshasvini (KA) Vajpayee. Arogyashri (KA) Kalaignar (TN) Private insurancef
Per beneficiary
Per hospitalizationa
359 5,333 180
28,599b 25,000 4,100
171 183 200e 148 1,250
28,000 8,240 60,000e 33,720 19,637
Source: Authors’ estimates based on claims data from the respective schemes. a. This is not adjusted for case-mix and is a blind average. b. Based on an estimated 60 percent of total medical expenditure being for inpatient treatment. c. Sample data, 2009. d. Estimate based on Rs. 540 average premium per family and three covered members per card. Cost per hospitalization does not include enrolment or administration costs. e. Estimates are based on performance of the scheme in the first half of 2010–11. The VA scheme did not have any expenditure in 2009–10. f. IRDA sample data.
CGHS which significantly exceeds all other schemes including private insurers. A number of factors contribute to the high costs of this scheme. CGHS is a comprehensive, rich cover with no overall cap and with no cost-sharing provisions. Almost one-third of its members belongs to a retired age group and probably has higher health needs than younger groups. The scheme also experiences high expenditure on its outpatient infrastructure and consumables, including branded drugs. Finally, it caters to a population segment, central government civil servants, which is very influential in India’s socio-political context.42 In contrast, PHI per beneficiary costs less than a fourth as much as CGHS. This is understandable because private insurance policies cover inpatient treatment only, underwrite proposals at entry, and can reject the same. Private insurance has defined annual caps and contains a number of exclusions and cost-sharing provisions. These provisions help contain costs in a scenario otherwise affected by adverse selection, moral hazard, and an open-ended fee-for-service provider payment system.