Integrated Health care and Insurance

Integrated Health care and Insurance – A community model

Rajapandian.R & Sivarani.B*


Since independence, India has achieved a lot in terms of health improvement. But still the country is way behind in achieving health indicators when compared to many fast developing countries. In case of government health care system, the quality and access of services has always remained a major concern. The private health care market is growing rapidly and developed as forerunner in terms of creating accessibility and quality services in India. The private players are capturing the market innovatively which attract the clients towards them. However, with proliferation of different health care technologies and general price rise, the cost of health care has also become very expensive and unaffordable to large segments of population. The efforts of government are not enough to control the situation towards making health services affordable and setting policies towards that. Though the private health system is emerged as bigger one, they concentrated much on curative care rather than prevention and promotion programmes. Further the private health system tries to make use of every opportunity including moments of crisis. Hence the government and communities are exploring different health financing options to manage problems arising out of growing set of complexities of private sector growth, increasing cost of care and changing epidemiological pattern of diseases.

Health insurance is one of the mechanisms among that to pool health risks of the community towards reducing their out of pocket expenditure on health. In India, health risk is much greater when compared to western and American countries since the infectious diseases are much prevalent due to population at higher side and poor awareness on health aspects. At the same time, health insurance access is also very meager at less than 5 percent at national level. In this regard, the individual and society also have the responsibility to address the issue and solution has to evolve from grassroots.


Community health insurance programs are such solutions for addressing the issues of out of pocket health care expenses, wherein the personal expenditure is converted as social expenditure through pooling of risks by communities. The community health insurance program of DHAN Foundation involving integrated health care and health financing is one such initiative.

Genesis of DHAN Community Health Insurance

Kadamalai Kalanjia Vattara Sangam is one of women SHG federations promoted by DHAN Foundation in 1990s. Over 200 SHGs comprising of 3,500 member households of poor are part of the federation.

This federation is situated in Kadamalaigundu- Mayiladumparai Panchayat Union of Theni district, Tamil Nadu. This block is one of the remotest blocks in the district and has poor infrastructure facilities of roads and other modes of communication. The block is of hilly terrain with people living in scattered villages amidst thick forests. Dry farming is the major livelihood. Due to lack of adequate transport and communication, the access to government health care services is difficult and poor have to travel by different modes to reach Kadamalaigundu to get these services. Often the rural poor of this area resort to local quacks for their health care, resulting in complications leading to hospitalization at government hospital or private hospitals at the district head quarters, which are much far off.

A study conducted by the federation during 1998, revealed that the member families spend about 20 percent of their household income on health. Towards meeting the health expenditure they borrow from different sources and the SHG credit portfolio towards health expenditure itself accounted for 15 percent. Kadamalaigundu federation decided to address this and a primary care clinic was initiated by the federation during the year 2000 and the community health pilot commenced with about 3,000 poor families. It involved a health insurance cover of Rs.10,000 for a contribution of Rs.150 for a family of 5 including the wife, husband and children. The program involved reimbursement of 75 percent of hospitalization expenses at selected hospitals at Kadamalaigundu and Theni, where the services were provided at pre negotiated terms and prices through an MoU.

Growth of Mutual health programmes

On seeing the success and benefits of community health insurance pilot, similar programs were initiated in additional four federations of SHGs in the district. On learning this, National Insurance Company (NIC) designed a tailor made insurance product for DHAN Federations during 2006, which involved primary care services from federation clinics with 25 percent co payment and reimbursement of 75 percent of hospitalization expenses at the selected hospitals. There were inherent issues in getting hospitalization benefits at the private hospitals and this paved way for establishment of community hospitals at Theni and subsequently at Madurai and Salem. The program in collaboration with NIC was in operation till 2011, which resulted in enhanced health seeking behavior and health insurance awareness & access.

mm_0904_07_02 mm_0904_07_03

The community federation clinics and SUHAM hospitals are health care providers ensuring quality health care at affordable prices. Leveraging on these health care service institutions, the community health insurance evolved into a provider model of community health insurance. At present this program is implemented in Madurai and Salem districts of Tamil Nadu state. The details are as below:

  • Annual contribution is Rs.200 for the member families
  • Primary health care benefits: (Available only in community federation clinics and SUHAM hospitals)
    • Free primary care consultation including specialists consultation at federation clinics /SUHAM Hospitals without any restriction on number of visits
    • 12-30% cost discount on medicines
    • 20-25% cost discount on lab, x-ray and diagnosis
  • Exclusions: Nil
  • Hospitalization health care benefits:
    • Rs.15,000 per family per year, with a ceiling of per illness cover of Rs.7,500
    • Rs.5,000/- as maximum claim amount for caesarian deliveries
    • Rs.2,500/- as maximum claim amount for normal deliveries

The cover of per illness cover of `7,500 is subject to the following sub limits:

Experience of provider model of community health insurance

mm_0904_07_05 mm_0904_07_06

The program is found to be useful by the communities in accessing quality health care and affordable health insurance. The poor are able to access free consultations with specialists like cardiologists, neurologists, diabetologists and such other experts leading to improved health through early diagnosis and health management. The program during the period 2012 – 14 has accessed community health insurance to 73,217 poor households comprising of over 2.5 lakh persons. The contributions paid by communities were Rs.1.93 crores and benefits realized so far are Rs.1.67 crores.


Usually primary health care expenses were mostly out of pocket and this is one of the pioneering initiatives of community health insurance in meeting the cost of primary health care of poor apart from hospitalization care. Due to the existence of strong social capital and community run clinics and hospitals, the initiative is viable and sustainable.

Risk management includes the measures of risk avoidance, risk prevention and risk reduction apart from the risk financing / insurance. Thus it is more appropriate to practice the measures that would mitigate risks rather than mere risk financing. Taking this into cognizance, DHAN implements community health programs of HIV awareness, anemia control, Reproductive and Child Health, Water Sanitation and Hygiene, towards improving the health of communities, thus insulating poor from health risks. This also reduces the incidence of health risks.

Moreover the analysis of the health risks from the benefits data, aids in focused interventions to reduce identified health risks in specified areas.

*Rajapandian R, Chief Executive, SUHAM Hospital Trust
*Sivarani B, Programme Leader, DHAN Foundation

Leave a Reply

Your email address will not be published. Required fields are marked *

Time limit is exhausted. Please reload CAPTCHA.