HEALTH INSURANCE TO THE BASE OF THE PYRAMID

Rural Marketing

Health Insurance in India

6% of GDP is spent on health Govt. share 2% and rest 4% by individuals During 1980s general health insurance schemes were launched, mainly service rich and upper middle class population In 1999 insurance sector expanded to private sectors so as to reduce cost of health cover and increasing service quality Regulatory body: IRDA 14 private players, 5 public sector undertaking and 3 specialized companies

Market

Indian health industry revenue INR 51,250m in 2008 Growth rate 37% between 2002-08 5% of population was covered under insurance schemes Majority of rural population and informal sector were not covered

Anand and Kheda

Vidyanagar- Student population- 40,000 Institutions- NDDB, AMUL, IRMA, AAU, SP University Vithal Udyognagar- ELECON, Several Mid size engineering firms Nadiad industries unorganised workers

Health Facilities at Anand and Kheda

Several trust Hospitals - Emery, Jakariya, Santram, MahaGujarat specialized services mostly it caters to the need of respective communities Private Hospitals- provide specialized services - affordability issue - affluent members of society Government Hospitals Subcentres, PHC, CHC shortage of specialists health services substandard

Shree Krishna Hospital

One of the largest and best equipped hospital in Gujarat Started in 1981 with 136 beds New hospital with 550 beds constructed in 1990 Modern Health care facilities: ICU, trauma care center, CT scan and host of other facilities

Krupa Health Insurance Scheme

Created in 2003 Aimed at providing modern health facilities and BoP population It was with the intention to use the infrastructure better

Continued

Annual or Lifetime membership Insurance coverage varies from Rs 5000 to Rs 100000 Premium varied depending on coverage and age of subscriber Out patient services: free registration and discount on diagnostic & pharmacy services In-patient services Discount for students and others

Total Members
Total members
42994

32299

20121 14944 11611

2004-05

2005-06

2006-07

2007-08

2008-09

Profile of members
KAS member profile
Villagers Students Employees

8%

30%

62%

Members
Sum insured Rs 5000 Sum insured Rs 10000
6%1%

Others

93%

Distribution of KAS members

40 to 60 km
K membership 10.24 Population% 0.33 41286 people/PHC

20to 40 km
K membership 6.79 Population% 0.42 38462 people/PHC

<20km
K membership 82% Population% 1.93 47336 people/PHC

KAS members

Out-patients 13 % KAS members In-patients 14 % KAS members Majority of out patients- came from radius of 15 km Travel and other incidental expenses (patients and attendants) low enrollment from distant places

Product Characteristics

Unsought Product Target Customer: BOP population

4 As of Marketing

Appropriateness Accessibility Affordability Awareness

Issues

Long term viability of scheme Mainly dependent on donors contributions Increase in administrative expenses over the years How to the make the scheme self sustainable

Particulars Receipts Subscription fees Grants from donors Others Total receipts Payments Claims expenses Promotional expenses Administrative & other expenses Total payments Deficit in INR Deficit in % Per member subscription fee
Per member claims fee Per member claim fees if donor share is borne by members

2006-07
2224749 30100 34791 2289640 2296797 55600 234400 2586797 -297157 -11.49% 110.57 114.15 115.65

2007-08
3416710 101000 28392 3546102 3507840 58900 291907 3858647 -312545 -8.10% 105.78 108.61 111.73

2008-09
4528681 279118 19000 4826799 4977769 66000 475739 5519508 -692709 -12.55% 105.33 115.78 122.27

Particulars 3-18

Age Group 19-45 46-60 61-70 71-75 Total

No. of persons withSum insured Rs 5000 Premium per Annum per person in Rs

14044 19590 80 90

4492 135

1624 250

281 350

40031
399739 0

Weighted Average premium per member: Rs 99.85 for sum insured Rs 5000

No of persons with Sum insured Rs 10000 Premium per Annum per person in Rs

393 155.00

1348 178

466 265

122 490

13 96

2342 485377

Weighted Average premium per member: Rs 207.24 for sum insured Rs 10000

Way ahead

Increase in subscription fees for members with sum insured up to Rs 5000 Increase in subscription of members with sum insured Rs 10000 with in age group of 19-45 years Increasing subscription from industry and institution employees Differential rates of premium for different income categories

Continued

Discounts can be offered to members from distant areas Discontinuation schemes like life time membership and food grain subscription Promotional expenses on advertising can be cut down and more focus should on direct selling