EXECUTIVE SUMMARY

One of the main objectives of a health system is to reduce the monetary cost of
accessing health services, thereby enabling individuals with substantial unmet needs to
access otherwise unaffordable care.

Health insurance protects households against the financial burden of illness, especially
large out-of-pocket (OOP) expenses resulting from catastrophic illnesses, while at the
same time raising additional resources for the public sector.

The purpose of this study is to analyze the health service utilization of those enrolled in
the Employees’ State Insurance Scheme (ESIS) and its role in protecting against
catastrophic health payments in a low-income country setting. The study uses primary
data collected through a semi structured questionnaire which sought detailed
information on healthcare utilization and spending and on other key individual and
household factors.

ESIS is not found to provide financial protection against the risk of catastrophic
payments, as the majority of the beneficiaries are seeking care outside the insurance
plan from private facilities at a relatively high personal cost. This under use of ESIS
services is due to; perceived low quality drugs, long waiting periods, impolite personnel,
long delays in reimbursement of money spent on treatment from covered providers, and
lack of or low interest of employers and low awareness of Employees’ State Insurance
(ESI) procedures.
 INTRODUCTION

An equitable health system must ensure that utilization conforms to need (impartiality in
delivery) and that payment conformsto the ability to pay (impartiality in financing). A
failure to separateutilization from payments will have a negative financial impact on the
poor who suffer from ill health. The poor lack financial resources to pay for health
services. Ill health, through the loss of productive labour, can also undermine their
ability to cope financially; thereby strengthening further the nexus between poverty and
poor health. Hence, the purpose of health financing is to use the appropriate funding
instruments to set the right financial incentives for providers, and to ensure that all
individuals have access to effective public health and affordable personal healthcare.

In recent years, India, like several other low-income countries, has established different
types of national health insurance scheme. The ESIS is one such scheme. One of its
main objectives is to reduce the monetary cost of accessing health services; thereby
enabling individuals with substantial unmet needs to access otherwise unaffordable
care. Health insurance also protects households against the financial burden of illness,
especially large OOP expenses resulting from catastrophic illnesses, while at the same
time raising additional resources for the public sector. This helps reduce or eliminate the
possibility that an individual will be unable to pay for such care, or will be impoverished
trying to do so. Catastrophic health payments have been found to be significant in both
rich and poor countries.

For example, results from a recent study of healthcare payments in India indicate that
around 70% of total health expenditure is made of OOP payments and around 30% of
households spend more than 10% of their income on health.

In Indonesia also, the rich are found to be at risk of experiencing catastrophic health
payments defined as exceeding 10% of income and in the United States certain
vulnerable groups are more affected by such payments than other groups. A recent
global review of household catastrophic health payments emphasized the role of health
insurance as a key instrument in reducing the risk of such payments. Given that one of
the key purposes of health insurance is to provide protection against particularly high
healthcare costs, this study aims to test this proposition empirically in a low-income
country setting. The health insurance is an important policy tool for providing financial
health protection is well grounded in both theory and experience.

The highly heterogeneous array of health financing arrangements justifies the

systematic analysis of individual cases to provide evidence on the practical effects of
health insurance programmes. Furthermore, access to the potential benefits of health
insurance may be curtailed if indirect financial and non-financial barriers (such as travel
and lodging expenses, lost income, and a lack of knowledge of what provider’s offer)
impede the insured from seeking care. Even when care is actually sought, the insured
may still face a wide range of hurdles before actually receiving health insurance
benefits.

Some of these hurdles include the tedious paperwork, the limited portability of the
insurance schemes, or the unwelcoming attitude of health staff towards insured
patients. Although much has been written on the barriers to access that prevent
individuals from seeking appropriate care, comparatively little is known about the factors
influencing the insured person's decision to access their insurance benefits when care is
actually sought.

This study was undertaken with the following objectives:

1. To analyze overall trends in utilization and number of beneficiaries of ESIS over a
period of time in Maharashtra;
2. To assess the effectiveness of the scheme as perceived by beneficiaries, and from
utilization level of ESI facilities, in Maharashtra; and
3. Analyze the development of ESI policy in the state and factors influencing its
implementation.
 SOCIAL SECURITY

India has a very basic social security system catering to a fairly small percentage of the
country’s workforce. Traditionally, Indians relied on their extended families for support in
the event of illness or other misfortunes. However, due to migration, urbanization, and
higher social mobility, family bonds are less tight and family units much smaller than
they used to be. So far, neither the state nor private insurance companies have quite
stepped up to fill this gap.

There are two major social security plans in India, the Employees’ Provident Fund
Organization (EPFO) and the Employees’ State Insurance Corporation (ESIC). The
EPFO runs a provident fund, also known as a pension scheme, and an insurance
scheme. All of these are supposed to grant EPFO members and their families’ benefits
for old age, disability, and support in case the primary breadwinner dies.

The ESIC, on the other hand, covers low-earning employees providing them with basic
healthcare and social security schemes. Originally aimed at factory workers, the
coverage is being gradually extended to include greater parts of the population, e.g.
employees in hospitals or educational institutions.

What is Social Security?

 any of the measures established by legislation to maintain individual or family
income or to provide income when some or all sources of income are disrupted
or terminated or when exceptionally heavy expenditures have to be incurred
(e.g., in bringing up children or paying for health care).

 social security may provide cash benefits to persons faced with sickness and
disability, unemployment, crop failure, loss of the marital partner, maternity,
responsibility for the care of young children, or retirement from work.
  Social security benefits may be provided in cash or kind for medical need,
rehabilitation, domestic help during illness at home, legal aid, or funeral expense.

 It acts as a facilitator – it helps people to plan their own future through insurance
and assistance.

History of Social security

 Germany was the first country to introduce Social security scheme (1883)

 each member of a particular trade (blacksmiths, painters, weavers etc) was

required to contribute at regular intervals;

 Money from this fund was used for food,lodging, hospital and feneral expenses of
aged and disabled members.

 In USA, Social Security Act came into existence in 1935. (years not important,
this is only fodder material for Essay.)