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Jan 22 2011

Single payer health insurance system in India

There is a common misunderstanding that the single payer system of health insurance means that the government provides all the health services. That is not true. There are many systems of single payer in which doctors and hospitals are private. It is just that the multiplicity of for-profit health insurance firms that do not add anything of value but simply introduce a vast and expensive bureaucratic layer between doctor and patient would be eliminated.

This story from the public radio program Marketplace shows how even in the rural farming sector in India, introducing a single payer system called Yeshavini has resulted in a vast improvement in health care at very low cost.

[W]hile Congress, and the rest of the country, continue to argue over who’s helped and who’s hurt by health care reform, the world’s cheapest health insurance program can be found in India. It covers at least 4 million of that country’s poorest farmers with a fairly simple philosophy: More patients means lower costs.

About a third of all of the patients at [Dr. Devi] Shetty’s hospital are farmers from rural villages. They’re here because they have something called Yeshaswini insurance. It doesn’t cover routine doctors visits for, say, a cough or a cold, but the insurance does cover all surgical procedures. The farmer pays approximately three cents a month; the government puts in one and a half cents and farmers cooperatives operate the program.

That volume actually allows them to negotiate really good deals, lower costs of medical equipment and drugs. And the success rate for surgery at Shetty’s hospital is as good as hospitals in the U.S. at a fraction of the cost.

Typically, farmers have to sell their land, take out crippling loans or just not have surgery. That’s why Yeshaswini insurance is immensely popular. Farmers can choose from any one of 350 hospitals in the region.

Dr. Julius Punnen is a cardiac surgeon who helped set up the program. He says every day the hospital battles with private insurance companies to get reimbursed. But Yeshaswini is different. It was designed to provide treatment.

The private for-profit health insurance companies are a cancer on the health care system that must be eliminated.

4 comments

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  1. 1
    Jack Folsgood

    Your last statement Re: “The private for-profit health insurance companies are a cancer on the health care system that must be eliminated.”

    While I am open to the possibility that this is true, the fact is that these “private” companies came into being for a reason. The reason is that there was a market demand for them and while most of them have been compromised in some way or another by “profits”, they do in fact provide a valuable service to the people who use them.

    Another way to express your thoughts on the matter may be “government involvement in a person’s private choices, including health care, are a cancer upon the American people and must be eliminated”.

    In large part government does not solve problems, it creates them.

  2. 2
    Steve LaBonne

    No, Jack, they came into being as a result of a deliberate (and highly misguided) policy decision under the Nixon administration. No other developed country allows profit-making in provision of basic health insurance and care, and there’s a damn good reason for that.

    Can the idiotic anti-government rhetoric and start THINKING for yourself (and informing yourself) instead of mouthing empty slogans.

  3. 3
    Jessica M.

    Prof. Singham, this is the best summary of U.S. health care I’ve ever read:

    “[T]he multiplicity of for-profit health insurance firms…do not add anything of value but simply introduce a vast and expensive bureaucratic layer between doctor and patient”

    Unfortunately, in the U.S. this vast and expensive (and value-less) bureaucratic layer has become very powerful, manipulating both public policy and political opinion.

  4. 4
    Ed H

    In the US, “single payer” means government control and the end to health insurers. Lost jobs and less quality health care for many.

    I don’t think we’re ready for that.

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