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Financing for Health: Experiences from Tamil Nadu

Learn about the financing strategies and innovations in the healthcare system of Tamil Nadu, including schemes, providers, and efforts to protect from catastrophic expenses. Explore the challenges and recommendations for the health sector in Odisha.

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Financing for Health: Experiences from Tamil Nadu

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  1. Financing for Health: Experiences from Tamil Nadu Prof. Umakant Dash Dept. of Humanities & Social Sciences IIT Madras Innovations & best practices to address challenges: way forward for the health sector in Odisha; 20th September 2016

  2. Outline of the Presentation • Overview of Tamil Nadu (Odisha/TN/AI) • Salient features of the TN Health System: • Financing of healthcare in Tamil Nadu • Sources, Schemes/Agents; Providers, Services (IP,OP, Preventive care) • Provider-Purchaser Split to improve efficiency (TNMSC) • Mechanism to protect from Catastrophic Expenditure (CMCHIS) • Incentivizing to improve Utilization (MRMBS) • Medical Recruitment Board (MRB) • Recommendation • Expansion of fiscal space • Strategic Purchasing

  3. Profile of the State of Tamil Nadu • Tamil Nadu is the eleventh largest state in the country by area and the seventh largest by population (7.78cr). • It is one of the most urbanised states in the country; 48 per cent of the population live in urban areas. (Census of India 2011). • Tamil Nadu has traditionally boasted of good human development indicators and was ranked sixth by the Human Development Report 2011. • It ranks second on economic indicators. Its per capita net state domestic product (NSDP) was estimated at Rs128,366 in 2014–15 (2004–05 series, current prices).

  4. Health & Life Indicators Tamil Nadu is also one of the first States to achieve a low TFR of 1.7 which it has been maintaining consistently. Life Expectancy at Birth (2009-13) fifth highest in terms of life expectancy at birth (Kerala, J&K, Maharashtra and Punjab).

  5. Infant Mortality Rate Second Lowest next to Kerala

  6. Maternal Mortality Rate in TN Third lowest’ in terms of Maternal Mortality Ratio. TN’s demographic indicators have improved dramatically in the past few years, but there is a long way to go………..

  7. Health Factors (HRH, Infrastructure, Finance, HMIS) • Accountability & Efficiency: Governance, Inter sectoral convergence Economic Development Urbanization Industrialization • Health System Performance (IMR, MMR, U5 Mortality) • Socio-cultural factors: Education, Women empowerment

  8. Health Financing (State Government)

  9. Govt. Health Expenditure as % GSDP and Total Govt. Expenditure_ Tamil Nadu Sources: State Finances : A Study of Budgets; https://www.rbi.org.in

  10. Govt. Health Expenditure as % GSDP and Total Govt. Expenditure _Odisha Sources: State Finances : A Study of Budgets; https://www.rbi.org.in

  11. Health Expenditure by Financing Schemes in Tamil Nadu: 2013-14 Source: SHA Tamil Nadu database 2013-14

  12. Health Financing Agents in Tamil Nadu (Sources of Financing)-2013-14 Source: SHA Tamil Nadu database 2013-14

  13. Distribution of Health Expenditure by Financing Schemes in Tamil Nadu: 2013-14 Source: SHA Tamil Nadu database 2013-14

  14. Health Expenditure in Tamil Nadu by Healthcare Provider Source: SHA Tamil Nadu database 2013-14

  15. Current Expenditure on Healthcare by Functions: 2013-14

  16. Distribution of Health Expenditure in Tamil Nadu by Factors of Provision

  17. Functional Classification of the State Government’s Expenditure

  18. Providers of State Government’s Expenditure on Health in Tamil Nadu Source: SHA Tamil Nadu database 2013-14

  19. Factors of Provision of Health Expenditure of the State Government in Tamil Nadu

  20. Issues/Challenges in Health Financing • the financial burden it puts on households in terms of out-of-pocket spending (three quarters of the health care expenditure) • More than a million people fall into poverty each year as a result of this expenditure • While health insurance schemes (CMCHIS) focus on providing coverage for hospitalization, studies have shown that it is the outpatient care that leads to more impoverishment than inpatient care.

  21. Salient Features of TN System (Governance) • The Tamil Nadu Public Health Act (1939), which places health at the centre of development process, facilitated the effective devolution of resources between state and local governments • Acknowledges “Universal access” of an adequate level of care with equitable distribution as the objective. • Tamil Nadu’s health care system was carefully structured to provide primary, preventative, and curative health care within a reasonable distance of the population even in remote, rural areas. • There is a clear division of roles and functions across the directorates: • Directorate of Public Health Preventive Medicine (DPH): Primary and and Preventive care. ( 1751 primary health centres(PHC), 134 urban PHCs, 8706 health sub-centres, and 343 UPHC) • Directorates of Medical Education(DME): Tertiary and Super Specialty Care( 48 medical college hospitals, 1 multi super speciality hospital) • Directorates of medical and rural health services (DMS): Secondary Care (268 hospitals that provides secondary care as well as comprehensive emergency obstetrics and newborn care (CEmONC).

  22. Salient Features of the TN System (Innovations TNMSC_1995) • Tamil Nadu Medical Supplies Corporation (TNMSC): Tamil Nadu's unique model of providing free drugs within the public sector facilities. • TNMSC facilitates centralised procurement of drugs directly from manufacturers through a tender process. (Market Power and Cost advantage) • The delivery is based on a passbook system: each facility is entitled to a certain quantity of drugs, based on the patient loads and usage patterns of the previous year. (Efficient Use of Drugs) • TNMSC has instituted quality checks by external independent agenciesto ensure the quality of drugs. (high quality)

  23. Salient Features of the TN System (Innovations MRB_2012) • Medical Services Recruitment Board (MRB): in 2012 Tamil Nadu set up a separate Board to improve deployment of human resources for health. This medical service board is the first of its kind in India. • As on April 2016, Total 14761 (4908 Asst. Surgeon General; 563 Asst. Surgeon Speciality; 126 Dental Surgeon, 200 VHNs; 7243 Nurses) staff were recruited through MRB. • Sources: http://www.mrb.tn.gov.in/annual_reports/Annual_Report_MRB_2016.pdf

  24. Salient Features of the TN System (Incentives..) • Dr Muthulakshmi Reddy Maternity Benefit Scheme (MRMBS) was instituted in 1987 to assist poor pregnant women and lactating mothers financially during pregnancy and after childbirth. • The conditional cash benefit is disbursed in three installments, conditional to the woman having different components of antenatal care, an institutional delivery, and complete immunisationof the baby (Govt. of Tamil Nadu 2014). • The amount has been raised to Rs.12,000 per beneficiary since 2011. • On an average, 6 lakh women are getting benefits from the scheme. Total 34.57 lakh women got benefitted to the tune of Rs.3,239.62 crore. (Policy note 2016-17) • For the financial year 2016-2017, Rs.668 crore has been allocated for this programme.

  25. Salient Features of the TN System (Risk Protection_2009) • Chief Ministers Comprehensive Health Insurance Scheme (CMCHIS)(launched on January 11, 2012): • provides health coverage to informal workers and those families whose annual family income is less than Rs.72,000/, later extended to Srilankan Refuges, differently abled person families with no income ceiling • provides cashless medical and surgical treatments for 1,016 procedures, 23 diagnostic procedures and 113 follow-up procedures. 56 procedures can be treated only in the Govt. Hospitals. • 751 hospitals private as well as public hospitals are empanelled • Hospitalization is covered up to Rs.1,00,000/- per family per year on a floater basis (4 lakh coverage in a block year 4 years). • The transport charges up to a maximum of Rs.1000/- per year.

  26. Chief Ministers Comprehensive Health Insurance Scheme (CMCHIS) • Health camps should be conducted by all the empanelled hospitals on monthly basis Including Government Hospitals. • All Govt. Hospitals have a separate Insurance ward for the CMCHIS scheme (ward 500). [G.O(Ms).No.127, 10.04.2012] • Of the total reimbursement, 15%- is paid as incentive to the operating team (Doctors/staff nurses) 25% can be used for Infrastructure development. [G.O(Ms).No.127, 10.04.2012] Performance of the Scheme: • 1.58 crorehouseholds are enrolled and smart cards have been issued • In 2015-16, number of claims made under CMCHIS were 353,525, resulting in the utilization rate of 0.83%. • As on 11.09.2016, it has benefited 16,15,790 cases with a total value of Rs.3,339.16 cr. • Approximately 6.32 lakh beneficiaries have been treated in Government Hospitals at an Insurance coverage of Rs.1,158.66 crore.

  27. Share of Government and Private Hospitals in Claims – 2012-13 to 2015-16 providers face a true competition in the market.

  28. Way forward… • Expansion of the Fiscal Space • Strategic Purchasing of Healthcare Services • spending and absorption of allocated resources even while facing resource crunch. • human resource shortage, absenteeism, gaps in skill and capacity make it difficult to effectively channel and efficiently utilize government resources.

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