Private Hospital Behavior Under Government Insurance in India

Private Hospital Behavior Under Government Insurance in India

Thursday, February 25, 2021
4:00 PM - 5:30 PM

Via Zoom Webinar.

This event is part of the Asia Health Policy Program (AHPP) 2020-21 Colloquium series "Health, medicine, and longevity: Exploring public and private roles"

Over the last decade, India has rapidly expanded government health insurance programs that entitle low-income households to free hospital care.  In a major policy shift away from direct public provision of healthcare, these programs contract private hospitals for service delivery. This constitutes a sizeable public subsidy delivered through private agents, but there is relatively little evidence on how private hospitals perform. Using a unique dataset on 6 million insurance claims and 15,000 patient surveys, this talk will present several key insights on the behavior of private hospitals within a large government insurance program. 1) Private hospitals manipulate coding to increase their revenues at the government's expense. 2) They also charge patients out-of-pocket for care that is supposed to be free under program rules. 3) When the government increases hospital reimbursement rates, patient charges decrease substantially. 4) However, hospitals capture approximately half the increased subsidy and this is driven by less competitive markets. The results demonstrate that hospital reimbursement rates are a key policy lever shaping hospital behavior with implications for program outcomes. Improving program performance requires a combination of stronger hospital monitoring and attention to reimbursement rates; focusing on one without the other may reduce the efficiency of public spending or worsen patient welfare. Lastly, market structure, a factor rarely taken into consideration in health policy in India, may play a role in the extent to which public subsidies benefit patients.

Radhika Jain 4X4 022521
Radhika Jain is the Asia Health Policy Postdoctoral Fellow for 2019-2022 at the Walter H. Shorenstein Asia-Pacific Research Center (Shorenstein APARC).  Her research focuses on health care markets, the effectiveness of public health policy, and gender disparities in health.

She completed her doctorate in the Department of Global Health at Harvard University in 2019.  Her dissertation examined the extent to which government subsidies for health care under insurance are captured by private hospitals instead of being passed through to patients, and whether accountability measures can help patients claim their entitlements. Dr. Jain's research has been supported by grants from the Weiss Family Fund and the Jameel Poverty Action Lab (JPAL). She has worked on impact evaluations of health programs in India and on the implementation of HIV programs across several countries in sub-Saharan Africa. She also held a doctoral fellowship at the Center for Global Development.

At Shorenstein APARC, Radhika is starting new work on understanding the factors that contribute to poor female health outcomes and interventions to increase the effectiveness of public health insurance.