Ignite - Healthcare

KARTHIK R

“If we stop thinking of the poor as victims and start recognizing them as
value-conscious consumers, a whole new world of opportunity will
open up.”
-C.K. Prahlad
Premise
“When patients go to many of the primary health centers, they find no one there.
Sometimes, when they find someone, they will be referred to private doctors.
Also, the medical system in the public sector offers no diagnostics, even of basic
illnesses like malaria or TB. Patients are usually told to go to private
practitioners for testing. Sometimes the testing isn't very good and, in any case,
the economic cost could be ruinous.” Amartya Sen
as told to The Hindu (Jan 2005)

The price of healthcare in Rural India is two to three times the price in the cities

Poor accessibility increases transportation costs

Lack of primary health care facilities leads to worsening of existing condition

and increases cost of treatment

Almost half the “doctors” in villages don’t even have a medical degree

Rural people are willing to pay if we can provide quality products/services

and this includes healthcare
Hitherto: What has been
done
Yeshasvini Health Insurance Scheme
A self funding micro health insurance scheme started by Dr. Devi Shetty in
Karnataka. Farmers pay a monthly premium of Rs 5 for coverage

Very successful scheme providing health insurance to over 2.2 Million farmers
in Karnataka through a network of hospitals and government subsidy

Mobile Medics Healthcare

A venture by BITS Pilani Alumni which provided mobile clinics using vans in
villages of Rajasthan

Challenges during implementation because of inability to integrate backwards to

include hospitals and higher end medical care and recruit doctors
A New System
The proposed system involves a combination of hitherto mentioned schemes and
applying it to the context of Indian Rural Health System

A Primary Health Centre (PHC) will be setup, which is a small hospital equipped
with 4-6 beds and manned by a Medical Officer who will be on the payroll of the
organization. Such PHCs cater to around 8-10 villages.

The purpose of each PHC is to ensure medical coverage for all the villages under it.
For this purpose, every PHC is served by 2-3 ambulances called Mobile Medical
Centers (MMCs)

An MMC visits every village at least once a week and sets up a clinic for that day
providing medical attention to those who are a part of the scheme. Each MMC has
a qualified doctor. The doctors would either be volunteers from a network of NGOs
working on weekends or paid professionals for the organization.

In addition to visiting the villages once a week, the MMC can be used in
emergencies by dialing a hotline number. The MMC will then ferry the patient to
its PHC

Every 8-10 PHCs are connected to a Specialty Health Centre (SHC), which are
basically Private hospitals with capacity of over 30 beds and special facilities
including Surgeons, anesthetics, X-rays etc. These SHCs are not owned by the
organization unlike PHCs and MMCs. Instead these are a part of the network built
to provide specialized medical care in case of emergencies.
Proposed Model
 Proposed Model
VILLAGES

PRIMARY HEALTH CENTRE

VILLAGES

MOBILE MEDICAL CENTRE MOBILE MEDICAL CENTRE

SPECIALITY HEALTH CENTRE VILLAGES

(PRIVATE HOSPITAL)

PRIMARY HEALTH CENTRE

VILLAGES
Funding and Costs
Villagers pay an insurance premium each month, which varies between Rs 20 - Rs
50 depending on the population of the village and the ability to pay.

The insurance guarantees medical expense coverage for the entire family including
consultation, drugs and surgery

For families, a discount on the insurance premium can be given due to economies of
scale

The costs include

Buying vans for MMCs

Doctor’s salaries

Building of PHCs

Operational expenses and buying of equipment and drugs

To limit the costs from insurance claims from becoming exceptionally high and to pay
the Partner hospitals in case of very expensive treatments, a Reinsurance policy is
adopted, where the organization is insured against unforeseen raise in claims.
 Feasibility
From the Yeshasvini scheme, it was observed that of the 2.2 Million farmers only a few
thousand claimed the insurance. On an average, an operation costed Rs 10000

From the calculations shown we can conclude that every PHC can run profitably provided
the scale is achieved. That depends to a large extent on the implementation and quality of
healthcare provided.

With a village of 500 people, the SHC which serves 100 villages can make profit of Rs 0.3
Crores. (Assuming 3% claims)

The fixed costs of buying ambulances and building PHCs can be quickly recovered through
this estimate
Conclusion

A self funding healthcare scheme that addresses

the three problems plaguing the system of
healthcare in rural India

Accessibility

Affordability

Quality
If the misery of the poor be caused not by the
laws of nature, but by our institutions, great is
our sin.

Charles Darwin