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This research report titled “Accessing medical benefits under ESI Scheme: A demand-side perspective” has been produced by the International Labour Organization, New Delhi (ILO), under the project “Technical support to ESIS for improving and expanding access to healthcare services in India – A transition to formality”.
The Employees State Insurance Scheme (ESIS) of India is one of the world's oldest and largest Social Health Insurance (SHI) schemes for formal sector employees. Currently, the ESIS covers 566 districts in 35 states and union territories. It covers approximately 34 million employees and 132 million beneficiaries. In-patient, out-patient, and preventive services are all included in its comprehensive benefits. Supporting maternity, sickness, disability, unemployment, and other social security cash benefits are among its other cash benefits.
Despite its impressive performance over the last 70 years, ESIS continues to have several flaws and gaps in its operation. The population coverage is lower than ESIS's potential. Service coverage is inadequate, resulting in the underutilization of facilities, limited access to facilities, and the absence of defined packages. Beneficiaries continue to spend out-of-pocket and receive far fewer cash benefits than they could, despite the expanded scope of cost coverage.
While the focus of these reports and evidence has largely confirmed the supply-side issues, evidence on the demand side is scarce. The evidence on the demand side comes from a small number of micro-studies, mostly at the district and industrial cluster levels that look at the barriers that beneficiaries face when trying to access ESI Scheme benefits. With evidence from four states across the country, this report attempts to provide a broader perspective. For the first time, this study provides solid and sufficient evidence about the scheme's current challenges, purely from the perspective of the beneficiaries.
One of the study's main goals was to conduct this exercise with employees, employers, healthcare providers, trade union representatives, and employers' associations. The field survey was conducted in four states: Tamil Nadu, Haryana, Rajasthan, and Jharkhand, using a two-stage stratified random sampling method. A total of 553 businesses with 3,339 employees, as well as healthcare providers and representatives, made up about 3,984 field samples. According to the findings of the field survey, there is a relatively higher level of awareness about the medical benefits that ESI provides (89%) among employees, albeit less on cash benefits (46%) and disability benefits (32%), although understanding is relatively greater among employees in Haryana (94%) than Jharkhand (75%). This could be explained by the respondents' socioeconomic and educational backgrounds. Given that four out of five sample respondents in Haryana were employees earning in the range of Rs. 10,000 and above, as well as the fact that over two-thirds of them had secondary education and/or were graduates, one could speculate that this could be a contributing factor in a higher level of awareness.
The ILO has developed the following theory of change for the ESI Scheme based on the current study and the diagnostics previously submitted to ESIC. The ILO emphasizes the four interconnected pillars of ESI transformation listed below:
Improvements in the supply of social health protection services,
Tracking, measuring and building upon such improvements,
Generating demand for ESI services at the ground level, and
Ensuring buy-in of stakeholders through participatory governance systems,
The report's recommendations are focused on achieving time-bound qualitative improvements in the ESIC's three key social health insurance functions: health financing (and strategic purchasing), health service provision, and governance. These recommendations offer a step-by-step transformation plan for addressing supply-side issues, with short, medium, and long-term objectives. Addressing the aforementioned issues on the demand side in conjunction with supply-side reforms can result in a long-term positive transformation of ESI performance. According to the findings of this study, ESIC should take a bottom-up approach to improving services. The same can be accomplished by gradually incorporating new information and evidence gathered in the Scheme's local implementation environments.
In the ESI Scheme, a weak primary healthcare system plays a significant role in overall lower service utilization and significant out-of-pocket expenditures, according to the current study. In the ESI reform agenda, primary healthcare providers should be given the highest priority.
According to the findings of this study, healthcare service provision in the Scheme should shift from a demand-based to a population-based approach. In other words, the ESI should strive to provide services to people who do not come to their facilities directly. Increased focus on preventive health programs that reach out to beneficiaries at their places of work and residence is one way to accomplish this.
The evidence in this study reflects beneficiaries' health-seeking behavior, as well as the awareness and attitudes of ESIS-registered insured persons and employers. The findings of this study highlight the disparities in beneficiaries' experiences and perceptions in four different implementation contexts in India. While ESIS beneficiaries value the comprehensive benefits package, particularly the medical benefits, the study finds that there is still room to improve service delivery effectiveness. Simultaneously, beneficiaries would benefit from a better understanding of their ESIS entitlements. The provision of primary healthcare services would be an important area of focus for increasing overall service utilization.
In comparison to other similar schemes in India, ESIS provides better financial protection. However, by increasing out-patient and in-patient healthcare service utilization at its facilities, it can make a much bigger contribution to India's goal of Universal Health Coverage. As the study suggests, one way to accomplish this is to track and improve beneficiary satisfaction levels.
In conclusion, the study highlights the importance of the ESIC tracking and utilizing beneficiary satisfaction parameters in order to advance its reform cycles, including on the supply side. The International Labour Organization (ILO) hopes that this study and its recommendations will contribute to ongoing efforts to strengthen the ESIS.
Excerpts from Accessing medical benefits under ESI Scheme A demand-side perspective, 2022. Download the document from the linked file below.