“The moral test of a government is how it treats those who are in the dawn of life, the children; those who are in the twilight of life, the aged; and those in the shadows of life, the sick, the needy and the handicapped.”Hubert Humphrey, Former US Vice President Healthcare is an important responsibility of the state that has not been satisfactorily fulfilled in India. Seven in 10 Indians seek private healthcare when they fall sick. An even greater share have paid healthcare costs out-of-pocket.As of 2014, 86 percent of India’s rural population and 82 percent of the urban population were not covered under any health insurance scheme, as per the 71st National Sample Survey.In the case of every fourth household, this money comes from a lender, the same survey shows.The more serious or chronic the disease, the higher the financial burden, and the odds rise of a family falling into a debt spiral that pushes it into poverty.Seven percent of the population fell below the poverty line between 2004 and 2014 due to out-of-pocket health expenditures, according to a Brookings India study.Against this backdrop, the Bharatiya Janata Party government in Rajasthan rolled out the Bhamashah Swasthya Bima Yojana in December 2015, a government-subsidised health insurance scheme covering hospitalisation.The previous Congress government in the state had brought in the Mukhyamantri Nishulk Dawa Yojana and Mukhyamantri Nishulk Jaanch Yojana, providing free medicine and free diagnostics respectively, to outpatients visiting government hospitals.The Brookings study had also found that outpatient care — for chronic diseases or frequently occurring non-serious illnesses such as colds and coughs — accounts for 75 percent of the out-of-pocket expenditure on health.With Bhamashah covering hospital-based care, the hitherto missing link in the spectrum of health needs of the poor, would be covered from end-to-end.The scheme introduced two ceilings for hospital bills, Rs 3 lakh for life-threatening critical diseases and Rs 30,000 for general illnesses. This way, the new scheme would protect the poor who were seriously sick from catastrophic, impoverishing out-of-pocket expenses while imposing a check on the hospital tab for general diseases.Bhamashah’s wide reach and pro-women rollout were standout features. The scheme brought every poor family entitled to free ration under the National Food Security Act within its ambit.This translated to two-thirds of the state’s 6.9 crore population. In inviting the senior-most female member of every eligible family to get a Bhamashah card, the rollout aimed at empowering women, socially a vulnerable group. Reaching out to “the lady of the house”, to quote the government, was done to “empower her to be the decision-maker for the family”.The big question is, did the Rajasthan government’s vision of end-to-end health services pan out?Assessing The SchemesLet’s first assess the performance of the two older schemes — Mukhyamantri Nishulk Dawa Yojana and Mukhyamantri Nishulk Jaanch Yojana — aimed at facilitating outpatient care.The number of people accessing the government health infrastructure increased 80 percent between 2013 and 2016. A September 2017 presentation by the Rajasthan Medical Services Corporation attributed this jump to the free medicine scheme.Be that as it may, reports of medicine outages, inferior quality medicine supplies and irregularities in the procurement of medicine have raised questions on the efficacy of the free medicine scheme.Since the Dawa Yojana and Jaanch Yojana were only being implemented through government hospitals while most patients in India seek private healthcare, a year after the launch of Bhamashah, the Rajasthan government took a step to improve support for outpatient care availed in private hospitals.It clarified that hospitalisation bills raised under the scheme had to include any diagnostic expenses incurred by the patient in the seven days preceding admission, and medicine and other expenses that would arise in the fortnight after discharge.This was useful but somewhat unrealistic considering that sick patients would, in the first instance, most likely visit a clinic or health centre nearest to them, which might not have been Bhamashah-empanelled.There was also no mention of investigation expenses incurred prior to the seven days before admission to a Bhamashah-empanelled hospital, an expense likely to arise in the case of elective surgeries (surgeries that aren’t required immediately) since families tend to pick a convenient time for hospitalisation. Still, something is better than nothing.Moreover, some proof that Bhamashah has offered benefits for people across the state can be had from the fact that close to nine in 10 villages filed at least one claim, IndiaSpend reported in June 2018.Since filing a claim pre-supposes that the beneficiary reached an empanelled hospital, clearly, the scheme has succeeded in bringing sufficient health centres on board within people’s reach.As of October 2018, Bhamashah had 519 empanelled government hospitals and 893 private hospitals. Partially outsourcing the delivery of health services to the private sector was inevitable, but it brought its own challenges. Access To NetworkIn Rajasthan, the expansion of its health network during the 12th Five Year Plan (2012-17) was so significant that today the state has more health sub-centres, primary health centres and community health centres than the minimum recommended by the government for rural areas.But a clinic is of no use until it is manned by a qualified doctor. With 11 percent of the senior specialist posts and 37 percent of the junior specialist posts vacant in March 2018, people have had no choice but to visit private health centres.In private hospitals, the gain from treating patients is directly proportional to the size of the bill.It was essential that Bhamashah built sufficient checks and balances into the system to guard against over-utilisation and keep the cost of the scheme in check. To this end, hospitals were mandated to:Use Aadhaar-biometrics to identify beneficiaries, and if this was not possible, upload live photographs of patients.Ask beneficiaries to rate the service at the time of discharge.Additionally, private hospitals were disallowed from conducting 67 procedures such as a hysterectomy, which may have been recommended even where it was not wholly warranted.Checks were imposed on patients as well. To avail treatment under Bhamashah, families had to own and actively be using a ration card and seed their ration card with their Bhamashah card.The sick member had to have an Aadhaar card-enabling biometric identification on admission to the hospital, and this identification process had to go off without a hitch. If that sounds like a lot of conditions, it was. Where those stipulations were met, Bhamashah was a boon for patients.To some extent, patients’ proximity to a larger, better equipped empanelled hospital helped to ensure a good hospital experience.Activists held that illiterate patients found it hard to navigate the scheme, since not every empanelled hospital offered the entire array of treatment packages. The primary health system, which should have served, among other things, as a referral centre for secondary and tertiary healthcare providers, was not working as expected due to staff vacancies.Bhamashah’s greatest weakness has been its inability to guard against over-utilisation.Plugging The LeaksEver since Bhamashah was introduced, there were murmurs of irregularities in the billing process. Of patients being charged extra for diagnostics or medicine that should have been included in the bill, or being made to sign for more expensive procedures than what had actually been conducted.Earlier this year, investigators with the Rajasthan government’s insurance partner New India Assurance confirmed that fraud was indeed being perpetrated in a variety of ways. In one case reported in the Financial Express, three procedures were claimed to have been performed, entitling the hospital to be paid for three separate packages: a laparoscopic adhesiolysis for Rs 13,000, a fissurectomy for Rs 7,000 and a laparoscopic appendectomy for Rs 10,000. The patient said that no operations had been conducted.Some hospitals were treating more patients and raising more claims than they had beds for.Some hospitals didn’t have the necessary infrastructure to be eligible for empanelment.Some were bypassing the biometric verification of the beneficiary at the time of admission, which made it easy to raise fake claims.In a presentation made to the NITI Aayog, the insurer also corroborated the rumour that some hospitals were charging patients.Fraud would increase the claim ratio and cost of scheme but then so would genuine higher utilisation.Surge In ClaimsBhamashah has charted a rising ratio of claims to the premium received (technically, the claim ratio) and the premium per family since its inception in 2015. The doubling of the claim ratio between the first and the second year, 90 percent to 176 percent, necessitated the insurer to increase the premium payable per family from Rs 370 to Rs 1,263 for the scheme’s second phase, which started in December 2017. Still, there was no letup in the upward march of the claims ratio.In the ensuing nine months to September 2018, the claims per day increased 131 percent, from Rs 1.6 crore to Rs 3.7 crore, in turn pushing up the incurred claims ratio from 40.5 percent to 118.8 percent, the Financial Express reported.To be sure, attributing the higher claims completely to instances of fraud would be inaccurate too.Bhamashah has been an evolving scheme and plausible reasons exist to justify at least some part of the increase in claims. 311 new packages were introduced in December 2017 to treat serious conditions such as cancer, and the hospital network has continued to expand, as has awareness about and utilisation of the scheme. While only 167 private hospitals were empanelled with the government when the scheme got off the ground in December 2015, this number increased to 660 by February 2017, 707 by March 2018 and reached 893 in October 2018.What then of the fraud unearthed by the insurer?If the Bhamashah fraud-prevention mechanism had been designed better, wouldn’t the fake bills have been identified in the normal course of the scheme’s working? Who was responsible for the higher cost burden on the government to keep the scheme running?Matters came to a head in September this year when New India Assurance discontinued its participation in the scheme with immediate effect. Following this, the government agreed to a cleanup to weed out hospitals perpetrating fraud and to introduce surprise checks on hospitals.The transparent working of Bhamashah is in the interest of every stakeholder: the government, for keeping citizens happy and the costs in check; the insurer, for a continuing profitable business opportunity; and the people, the ones the scheme has been devised for in the first place.Are the people of Rajasthan satisfied with Bhamashah? We will know on 11 December.(Charu Bahri is an author and a freelance writer on business, health, social issues, and other subjects. The views expressed here are those of the author and do not necessarily represent the views of The Quint or its editorial team. This article was originally published on BloombergQuint) We'll get through this! Meanwhile, here's all you need to know about the Coronavirus outbreak to keep yourself safe, informed, and updated. The Quint is now available on Telegram & WhatsApp too, Click here to join.