Paper

What is a Health Card Worth? An Evaluation of an Outpatient Health Insurance Product in Rural India

Examining the impact of out-patient health insurance cards on hospitalization
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This paper presents findings from a randomized controlled trial that evaluated the impact of an innovative health service model piloted by CARE Foundation (CARE) in 2009 in 50 villages of Yavatmal district in Maharashtra, India. The program aimed to improve the access of the rural poor to preventive and primary care services by employing trained Community Health Workers (CHWs) in each village. The CHWs were trained to screen patients and provide preventive and primary care in consultation with a doctor in a nearby town. Findings include:

  • People with the health insurance card had different outcomes compared to people who visited the CHWs without insurance;
  • Households assigned to the treatment group had substantially higher number of visits to the CHWs, and more referrals to the doctor and to hospitals;
  • Insurance only group spent fewer days on a hospital bed, and less out-of-pocket on hospitalization expenses.

The paper concludes that the insurance product incentivized frequent visits to the CHWs, leading to earlier identification of illnesses and more timely referrals to a hospital. Insurers and government agencies deploying hospitalization insurance schemes could benefit by bundling inpatient cover with outpatient insurance, as it could reduce claims ratios, improve financial viability, and enhance future enrollment rates.

About this Publication

By Mahal, A., Krishnaswamy, K., Ruchismita, R. & Babu, D. G.
Published