Shorenstein APARC is pleased to share that Radhika Jain, our 2019-22 Asia Health Policy Postdoctoral Fellow, is the recipient of the inaugural Adam Wagstaff Award for Outstanding Research on the Economics of Healthcare Financing and Delivery in Low- and middle-Income Countries. Hosted by the International Health Economics Association (iHEA), the award recognizes Jain’s excellent paper, "Private Hospital Behavior Under Government Health Insurance in India." She received the award on July 13 at a special session of the iHEA 2021 Congress.
Jain is a health economist working on public health policy in India. Her research focuses on the role of the private sector in the country’s health system, frictions in health care markets, socioeconomic and gender inequality, and health policy design. Her award-winning paper provides the first large-scale evidence on the behavior of private hospitals within public health insurance programs in India. In a major policy shift away from direct public provision of health care, the Indian government has been expanding health insurance programs that contract private hospitals for service delivery and pay them at fixed rates for services. Until now, however, there has been little empirical evidence on the behavior of private hospitals within these programs.
Earlier this year, Jain presented the results of her study as part of the Asia Health Policy Program’s 2020-21 colloquium series, "Health, Medicine, and Longevity: Exploring Public and Private Roles.” Watch the conversation here:
For her research, Jain used over 1.6 million insurance claims, 20,000 patient surveys, and a policy-induced natural experiment that changed hospital reimbursement rates. Her study reveals that private hospitals in India engage in coding manipulation to increase revenues at government expense and charge patients out-of-pocket for care against program rules. As a result, almost half of all patients pay for care that should be free, and these payments constitute a 35% markup over the price the government pays. The charges decrease if reimbursement rates increase, but hospitals capture approximately half the increased reimbursements.
Jain's findings indicate that hospitals exploit market frictions and poor program enforcement to capture a substantial share of the public subsidy as profit. “In contexts of weak oversight,” she writes, “profit-motivated private agents systematically flout program rules to increase their revenues at considerable expense to the government and patients.”
She also finds, however, that hospital non-compliance partially compensates for prices set too low to meet the participation constraints of agents. Reimbursement rates, says Jain, are a significant policy lever that drives agent behavior, and simply increasing monitoring without appropriate price-setting may increase compliance but decrease service provision.
Jain’s research shows that market structure — a factor rarely taken into account in social policy design in lower-income contexts — can affect the extent to which public subsidies benefit citizens. Her findings provide broader insights into contracting the private sector for delivering health and other social services in settings with limited institutional capacity for monitoring and optimal price-setting.
On our podcast, Jain discusses her efforts to develop measures that improve how health systems serve vulnerable populations and her collaborative research with Stanford development economist Pascaline Dupas on how India's COVID-19 lockdown affected access to non-COVID-related health care and outcomes. Listen here:
The Adam Wagstaff Award honors the legacy of the late Adam Wagstaff, who was a research manager in the Development Research Group of the World Bank and former president of iHEA, and celebrates his lifelong commitment to improving healthcare financing and delivery and promoting equity in low- and middle-income countries. The award also contributes to iHEA’s efforts to promote excellence in health economics globally and advance internationalization through greater inclusion of low- and middle-income country researchers.
Congratulations, Dr. Jain, on this well-deserved honor!