Bringing Free Health Services to Rural Populations

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Bringing Free Health Services to Rural Populations

India
Project Summary
Elevator Pitch

Concise Summary: Help us pitch this solution! Provide an explanation within 3-4 short sentences.

While social security is considered a basic right in developed countries, in India it is considered a luxury. The lack of a proper social security system in India spells disaster particularly for the most vulnerable sections of society including the poor and the disabled who have no financial security in case of illnesses, family deaths, or other unexpected events. Neither the State nor the civil sector has come up with an appropriate social security model that can replace it as a source of protection against the eventualities of the future. What social security schemes and instruments exist are income-linked and savings- based and hence designed for those with investable surplus. While social security is nothing new, OASiS is making it available for the first time to India?s most impoverished communities. Our innovative system capitalizes on the collective bargaining power of communities, and therefore provides financial security for individuals without the financial burdens that traditional social security models require (such as taxes or spending cuts). Indian communities negotiate agreements with essential service providers whereby in exchange for a large and regular client base vendors/providers offer a discount on their goods and services. The amount discounted feeds into a savings account and pays for premia on health and life insurance and other safety nets. The model thus enables the poor to utilize one of their greatest assets: the collective strength of community; and provides them with a (financially) painless mechanism to participate actively in protecting themselves against eventualities. Through regular, large-volume expenditures at the community level the Indian poor can grow a social security system that is sustainable, replicable, & all-inclusive. Our model is a complete social security system with social security numbers, recording, collecting, & distribution mechanisms for unemployment allowance, & retirement benefits linked with living standards.

About You
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Your idea
Focus of activity

Health Financing

Start Year

2003

Positioning in the mosaic of solutions
Main barrier addressed

High cost of providing quality health products and services

Main principle addressed

Design inclusive systems

If health services could be made available and Affordable for all, it would definitely improve their health seeking behaviour thus protecting them from health calamities.

Innovation
Description of health product/service offering:

While social security is considered a basic right in developed countries, in India it is considered a luxury. The lack of a proper social security system in India spells disaster particularly for the most vulnerable sections of society including the poor and the disabled who have no financial security in case of illnesses, family deaths, or other unexpected events. Neither the State nor the civil sector has come up with an appropriate social security model that can replace it as a source of protection against the eventualities of the future. What social security schemes and instruments exist are income-linked and savings- based and hence designed for those with investable surplus. While social security is nothing new, OASiS is making it available for the first time to India?s most impoverished communities. Our innovative system capitalizes on the collective bargaining power of communities, and therefore provides financial security for individuals without the financial burdens that traditional social security models require (such as taxes or spending cuts). Indian communities negotiate agreements with essential service providers whereby in exchange for a large and regular client base vendors/providers offer a discount on their goods and services. The amount discounted feeds into a savings account and pays for premia on health and life insurance and other safety nets. The model thus enables the poor to utilize one of their greatest assets: the collective strength of community; and provides them with a (financially) painless mechanism to participate actively in protecting themselves against eventualities. Through regular, large-volume expenditures at the community level the Indian poor can grow a social security system that is sustainable, replicable, & all-inclusive. Our model is a complete social security system with social security numbers, recording, collecting, & distribution mechanisms for unemployment allowance, & retirement benefits linked with living standards.

Description of innovation:

A medical emergency, long-term treatment, a routine surgical procedure ? any of these is sufficient to destroy a family as it inevitably means turning to moneylenders for funds, getting trapped into the debt cycle thereby ensuring that poverty becomes generational. In such a scenario, quality is not even an issue: the poor are not in a position to exercise any choice ? they take what they can afford. This makes them vulnerable to the corruption and inadequacy of the healthcare system and easy victims for quacks and unethical medical practitioners. With costs of healthcare rising everyday, health seeking behavior among the low income groups has witnessed a downward trend. All attempts of insurance and micro-insurance have been bugged with the biggest question ? Where will the premium come from? Health Insurance in India has been a failure and a loss making portfolio for Insurance companies because of poor spread and selectivity. While the Government health infrastructure has its own concerns and limitations, the Private health sector has restricted itself from moving into rural areas for the only fear that people there have poor paying capacities and do not pay in time. If everyone was covered by health insurance, the private health sector would have fearlessly moved into the rural sector to serve the 70% population of the country. Insurance companies would have been too happy to tap the huge untapped potential in the rural sector. ONLY IF SOMEONE ENSURED THE PREMIUM. My solution aims at answering that big IF which is the stumbling block to an array of health services waiting to rush to the rural sector. It capitalizes on the collective bargaining power of communities, and through that provides health insurances for individuals without requiring them to pay a penny for the premiums. The premiums are collected out of their existing daily expenditure through collective negotiation with selected service providers.

Operational model:

The model is composed of a number of interlinked measures that work together to empower a group to take charge of its social security. OASIS team members begin with the fundamental step of demystifying the concept of social security for the target group, unpacking the term and providing plenty of practical examples to establish how vital it is for every individual. Once the people are convinced of its importance, the next step is to help them realize that it is within their capacity to plan for their future, and that planning implies neither dependence on Government nor large financial burdens. Rather, planning under this system means drawing on the community?s strength as a collective to pressurize local vendors of regular services to give them fixed discounts in lieu of volume sales. OASIS has developed the technical infrastructure necessary for the model to work. At present OASIS provides all infrastructural facilities as well as carries out the actual implementation (from counseling the community, to guiding them in choosing and negotiating with vendors and service providers, to tracking the services availed by every family and collecting and depositing the discounts on their behalf. The model requires some financial support at the launch stage, but once it reaches a critical number it becomes self-sustaining.

Human resources:

The team comprises of Five people currently. Pradeep Ghosh (Ashoka Fellow) who heads the project is assisted by three paid volunteers in the field and one support staff in the office. Volunteers from the villages and slums are used for paid survey and planning with Self Help Group members and other people in the village. One stark factor here to note is that except Pradeep, all other staff is either from the village or the slums where the project is on. OASiS believes in using and developing the capacities of the beneficiaries to make the project functionally self- sustaining in the long run.

Key operational partnerships:

The project is in the initial phase. Discussions on partnerships are on with hospitals, Clinics, pathology labs, Doctors? groups, Insurance companies etc. Also partnerships are being tried with whole sellers and other businesses to establish Self Employed Groups in the villages under the social security system. Discussions are also on with a hospital and a Doctors? group about OPD services being provided through a micro-insurance mechanism.

Impact
Financial Sustainability:

<ul><li class="entry-label">Fees charged to clients?: <span class="entry-text">No</span></li><li class="entry-label">How do you assure affordability?: <span class="entry-text">Not upfront, but a fraction will be collected as administrative charge from the discounts collected based on their consumption. Since the beneficiaries do not have to pay anything upfront, the social security fund collection is purely out of their existing expenditure only without levying any taxes or extra charges.</span></li><li class="entry-label">Earned incomes as a percentage of operating costs: <span class="entry-text">80</span></li><li class="entry-label">Other funding sources: <span class="entry-text">The project is funded by NABARD under their Rural Innovation Grant. The model requires some financial support at the launch stage, but once it reaches a critical number it becomes self-sustaining. Administrative expenses (currently being borne by OASIS) get covered through commissions earned from the insurance companies, once the community reaches a critical number of beneficiaries. Thus, just as the operations of the model draw on the strength of numbers, its financial sustainability also draws on this fact: the larger the consumer group the quicker the critical number is attained and more the insurance commissions to meet administrative costs. The model is hence well suited for India?s large and growing population.</span></li><li class="entry-label">Strategy for long-term sustainability: <span class="entry-text">In time, OASiS expects to bring the government on board as his major partner. We realize that the government is the single agency who has the infrastructure and ability to take the model to national scale. The business model of the system has been developed in such a manner that once it acquires financial self-sustainability, it can be managed by the Village level committee. People from the village / community are taken to work with the project during the establishment and hand-holding period so that the system acquires functional and administrative self-sustainability too.</span></li></ul>

Current and Future Impact:

<ul><li class="entry-label">Total number of clients: <span class="entry-text">3,000 </span></li><li class="entry-label">Clients in the past year: <span class="entry-text">1000</span></li><li class="entry-label">Percentage of low-income clients: <span class="entry-text">90</span></li><li class="entry-label">Impact: <span class="entry-text">The project has already started having its impact on the communities and the local bodies. The beneficiaries have become aware of their social security need and how they can themselves build it without crying to the deaf ears of the government. OASiS is confident that once they demonstrate that the model can work in these severely underdeveloped, tribal areas, it will prove beyond all reasonable doubt that the model can work in other parts of the country too. </span></li><li class="entry-label">Overall "market": <span class="entry-text">The potential of the idea is such that although the project is at the startup stage, requests have already started pouring in from neighboring villages and districts. The Collector of the neighboring district has recently asked us to plan a similar project in 4 poorest villages in his district for which he shall garner resources. Requests are also pouring in from other NGOs who want to benefit the beneficiaries in their areas through lifelong social security. With about 50% of rural India reeling under the poverty line, the demand is definitely going to surge once it starts giving results. </span></li></ul>

Scaling up strategy:
Stage of the initiative:

<i>Start Up</i> stage.

Expansion plan:

In next three years the project intends to establish itself, remove all stumbling blocks and make the project self-sustaining. OASiS plans to expand the model into similar deprived areas in poorly developed states of the country. This would enable it to learn from various situations and develop a model code of implementation. OASiS is already compiling its experiences into a manual for further outreach. OASiS is also planning a healthy- living literacy campaign and sequence of health check-up camps to make the beneficiaries aware about their needs and changes required in their life-style.

Origin of the initiative:

In 1998 after putting in 13 years of work as an IT professional when I crossed over from the Corporate to the Social sector with a 2-year assignment with PLAN International. My brief was to set up the IT network for PLAN?s Asia operations. Characteristically, I pushed the boundaries of that brief, redefining the role of IT professionals in the social sector from being mere techies or data processors to persons who can bring in fundamental changes by transforming existing systems to make them more efficient. My work also involved traveling to UK and South Asian countries and gradually I was questioning as a layman, the underlying insecurity that is chronic to the poor majority of India, yet absent in developed countries. The answer, I concluded, lay in the fact that the latter had robust social security systems. From this study I finally came up the social security model.

Sustainability
Policy change:

Our initiative has been intentionally designed to be successful no matter what policy change happens or doesn't happen. We have already sought approval of the Madhya Pradesh Government for the model to be rolled out in one rural block and one urban area of the state. OASiS will be the implementing partner in the project. The recent policy changes offering free insurances to the poor en-masse have added to our initiative. With no premiums required for the poor to avail of such insurances, the social security collections add up to their deposits for old-age pension (all without saving a penny). We expect more policy changes encouraging expansion of private health sector into rural India. Some policy changes are definitely required on the Insurance front to encourage them to serve the rural poor.