The Economic Impact of Government Sponsored Health Insurance Schemes on a Tertiary Care Multispeciality Hospital in South India

Abstract

The number of people registered with health insurance schemes has increased from 161.2
million(2011-12) to 335 million(2016-17), which is two-fold in just 5 years.1 As per the forecasts
regarding the increase in healthcare insurance market in India, it is evident that the hospitals have to
face the management of patient costs through the insurance schemes in large numbers as the number
of claims will increase eventually. With the present condition of schemes reimbursing the claims with
a huge time lag of about 3-4 months, the hospital have to carry the burden of opportunity costs lost
on these claims.2 This indicates the responsibility hospital administration should have to face the ever
increasing claims and manage them without incurring loss. This study was intended to do a cost analysis
between surgical procedures performed under two categories, Aarogyasri Health Insurance Scheme, A
Government Sponsored Health Insurance Scheme in the state of Andhra Pradesh and Cash category,
where patients do not hold any insurance policy and pay by cash all the hospital expenses. On the basis
of revenue generated the top 15 procedures under Insurance scheme are determined and costing is done
using Activity Based Micro Costing method. Costing is done for the determined 15 procedures under
both the categories of payment modes. The results are compared to evaluate the economic impact of the
health insurance scheme on hospital.