ILO Logo

Proximity and access to outpatient care may lead to fewer inpatient claims for insurers

Emerging Insight #:


Date of Release:

  March 12, 2013


  Business viability, Improving value, Value-added services, Health


  A study on value-added services in health microinsurance

Empirical data from several schemes in India, highlighted in a new study on value-added services which complement health microinsurance, suggest that providing access to free or discounted outpatient (OP) services leads to lower use and cost of inpatient (IP) services.

For example, Swayam Shikshan Prayog, found proximity to lower cost outpatient clinics to be associated with lower hospitalization rates, leading to fewer claims for the insurer. Villages with a clinic had hospitalization rates about 50 per cent lower than villages where a clinic was more than 2 km away. The same association was found in Karnataka, comparing the experience of HDFC Ergo-Biocon in offering free outpatient services with that of Yeshasvini, where the significantly greater proximity of the HDFC Ergo outpatient facilities to members’ villages was associated with lower hospitalization rates.

Likewise, research conducted by the Centre for Insurance and Risk Management (CIRM) on the experience of the government-sponsored Rashtriya Swasthya Bima Yojana health insurance scheme found that greater use by members of public health clinics for free OP care reduced IP claims incidence by a third (admission rates fell from three per cent to two per cent).

Finally, evidence from research by CIRM on CARE Foundation’s OP product revealed that hospitalization expenses decreased by INR 570 for insured households (reflecting an average of 0.5 fewer days per year in the hospital).

These findings suggest that value-added services that increase access to OP services could yield significant business value for IP health microinsurance schemes. Two ways that insurers can increase access to OP services are through provision of medical advice via in-person consultations or call centres for remote or “virtual” access, or through discounts to existing local healthcare services made available to clients. Microinsurance Paper 19: Value-added services in health microinsurance showcases various schemes that provide these services.