The Indian government will bear the treatment costs of the poor under a new health insurance scheme. Using a smart card embedded with 11 types of software, patients can now afford the services of private or government hospitals through cashless and paperless transactions.
Nearly 65 per cent of India’s poor get into debt and one per cent fall below the poverty line each year because of illness, according to National Sample Survey Organisation (NSSO). Health insurance can lighten the medical cost but only six per cent of India’s workers have it. Free public hospitals are not an option as two out of five doctors are absent, and there is a 50 per cent chance of receiving the wrong treatment.
This state of affairs is set to change dramatically with Rashtriya Swasthya Bima Yojana (RSBY), a visionary national health insurance scheme, which provides US$620 in patient health benefits at a premium of US$12.40, which the government pays if you are poor.
A patient can choose from almost 1,000 private or government hospitals. States can choose from 18 public or private insurance companies. Insurers have the incentive to recruit the poor as they earn premiums by doing so.
This scheme gives the poor the choice of exiting a bad hospital, hence creating a more competitive environment for hospitals.
The insured carry a smart card with a photo and fingerprints of the family. This card will make cashless and paperless transactions for the 725 pre-agreed medical procedures. The card contains a value of US$620 and it tracks daily hospital expenses with money deducted automatically after each procedure has been performed. There will not be a need for pre-approval or reimbursement as these smart cards are designed to prevent fraud with 11 unique types of embedded software.
So far 500,000 cards have been issued in six months covering 2.5 million people.
If all goes according to plan, 300 million people—or one-third of India—will be covered in five years at an annual cost of US$928 million.
Smart cards can also carry data on payments for rations (PDS) or earnings from employment schemes (National Rural Employment Guarantee Scheme) and can expose corruption very quickly.
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