Indian Government Steps Up with Health Insurance

A New Delhi official has said that India's state-run workers insurance agency is planning to establish 11 medical colleges and upgrade existing hospitals in the next five years.

The Employee's State Insurance Corporation (ESIC) provides health insurance to over 10 million workers in the organised sector and has a corpus of Rs17,000 crore.

ESIC also plans to offer health cover to unorganised sector labourers through the government's Rashtriva Swasthya Bima Yojana (RSBY) programme. However, this proposal must be tabled with Parliament before it goes ahead.

A step in the right health direction but will it help? If parliament does approve ESIC's plan, it will make a significant improvement in the corporation's primary function, which now involves providing health insurance to workers employed in factories using electricity that hires at least 20 people, and in industrial units that do not use power and employ at least 10 workers.

It is thought that at present, 94% of employed workers have little or no access to health insurance and other social benefits.

Therefore, ESIC wants to enter into an agreement with the Union government to roll out RSBY, through which a worker and their family can be insured for up to Rs30,000 a year and get medical aid.

Several private and public insurance companies have linked up to take RSBY to villages, small towns and industrial clusters, funding of which will be contributed by the state governments and the Union.

However, some have said that ESIC's effort will only achieve limited success in providing adequate service to workers in the unorganised sector.

Ravi S. Srivastava, member of the national commission for enterprises in the unorganised sector said: "This will not address the segment we have been talking about, which is 91% of the unorganized workforce, who are either agriculture workers, or those who find employment in units that employ less than 10 people."

Each medical college the ESIC plans to set up will cost between RS400 and Rs600 crore. Each of these will be equipped with 300 beds and will save 25-acre campus, said B.C Bhardwaj, ESIC's insurance commissioner.

Alarmingly, India has a shortage of medical practitioners at only six doctors per 10,000 people, compared with the global average of 15. ESIC will set up its first medical college in Himachal Pradesh.

Health insurance troubles Although the good news is that health insurance under the ESIC scheme has increased, with 2 million workers purchasing health cover in 2008, the bad news is, accessing quality services has proven to be difficult, because many hospitals run in a state of disrepair.

A majority of the hospitals, which have an average of six doctors each, were set up during the textile boom from Mumbai to Kanpur, but they are now plagued by low occupancy and poor amenities due to closure of these mills and shifting of commercial establishments to newer locations.

"Many ESIC hospitals are not well-equipped and patients often have to be shifted to government hospitals where they are not treated on a par and get caught in bureaucracy," said Rajendra Mamgain, managing editor of TheIndian Society of Labour Economics.

ESIC's general director said that change is possible in India, but for the medical students who want to make that change,they will have to pay their own fees.

He said that ESIC's biggest advantage is their infrastructure to support the programme: 610 cash-benefits outlets, 50 regional centres, 2,000 clinics and 144 hospitals.

Only time will tell if India can produce a satisfactory health policy regime, but at least, for the time being it is great start.