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What is the value of outpatient health insurance?

Emerging Insight #:

  67
 

Date of Release:

  July 22, 2013
 

Subtopics:

  Business viability, Impact, Value-added services, Health
 

Source:

  A study on the impact of outpatient health microinsurance
 
 

In Emerging Insight 56, we argued that providing access to free or discounted outpatient services leads to lower use and cost of inpatient services, based on evidence from several schemes in India. The results from one of the schemes, CARE Foundation, were recently published in the Lancet, a leading medical journal.

In 2009, the CARE Foundation deployed community health workers (CHWs) in 50 villages to offer primary and preventive care consultations and sell health insurance for outpatient care. Insured households could visit the CHWs for up to 10 visits per family for free, while uninsured households had to pay a small fee of INR 12 (US$ 0.24) per visit. After screening patients, the CHWs used mobile phones to consult a doctor located in a remote hub location to prescribe an appropriate course of action, or if necessary to refer the patient to a doctor.

The study found that insured households had substantially more visits to the CHW and more referrals to doctors and hospitals. They, however, spent fewer days in a hospital bed, and incurred lower out-of-pocket expenses for hospitalization. Essentially, the insurance encouraged more frequent visits to the CHWs, leading to earlier diagnosis and treatment of illnesses; with more timely referrals to a hospital, the patient could get treated at an earlier stage and hence at a lower cost.

These findings are a powerful example of an insurance offer that can simultaneously enhance client value and improve viability. Providing affordable access to outpatient services can lower claims costs for inpatient health microinsurance schemes by promoting earlier, less intensive treatment seeking behavior.

To learn more about the study, see What is a health card worth? A randomised controlled trial of an outpatient health insurance product in rural India by Mahal, A; Krishnaswamy, K; Ruchismita, R; and Babu, G. The Lancet- 17 June 2013 (Vol. 381, Page S87)