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Transcript of FINO Working Model
Disclaimer: The views expressed in the paper are purely author’s personal and Financial Information
Network and Operations Ltd or FINO Fintech Foundation do not necessarily subscribe to the same.
2010
[ FINO WORKING
PAPER 1310]
The paper highlights importance of technology in
public service delivery. It discusses the role of FINO
and biometric smart card technology in the delivery
of Rashtriya Swasthya Bima Yojana across various
states in India
Financial Information Network and Operations Ltd, Mumbai www.fino.co.in
2
FINO DRIVEN HEALTH
MICROINSURANCE IN
UNORGANISED SECTOR:
CASE OF RASHTRIYA
SWASTHYA BIMA YOJANA
Jatinder Handoo1
1.0 HEALTH OF THE HEALTH IN INDIA
A healthy labour force is fuel for GDP of
a country. In other words, health status
of both the financial and labour markets
1 Jatinder Handoo is part of the business strategy
team at FINO based out at corporate office Navi
Mumbai.Due acknowledgement to Ms. Bela Arora –
Management trainee @FINO for the research work
carried out for the study.
are positively correlated. In a country
like India where 86 per cent of the total
labour force exists in unorganised sector
and contributes to around 50 per cent to
the national GDP (NCEUS
Report,2008), health of labour force
becomes a vital area of investment for
private and public sector stakeholders.
This becomes even more interesting
when just around 2 per cent of the total
population of India is covered by health
insurance (Chandraseker
Hemalatha, 2009) and public spending
on healthcare is just 0.9 percent of the
GDP2. In this context, it is in the larger
interest of the economy to invest in the
labour health and well being.
Policy response to the issue, by the
Government of India came in the year
2008 consequent of Government’s
commitment to the National common
minimum programme and the
recommendations made by National
Commission for Enterprises in the
unorganised sector (NCEUS), the
2 Bali Vishal,2009
http://ibnlive.in.com/blogs/vishalbali/2516/53669/h
ealthcare-sector-needs-urgent-reforms.html
FINO is one of the primary
stakeholders involved in
conceptualizing and designing
biometric smart card based delivery
system for health insurance services in
India. Initially carried out as a pilot for
product design along with a leading
private sector GIC in Manipal,
Karnataka which was not implemented
on field, the concept was later on
employed in the delivery system of
RSBY . This paper takes an overview
of the implementation part and
discusses how FINO has contributed
in the whole process from design to
implementation part of the scheme.
Financial Information Network and Operations Ltd, Mumbai www.fino.co.in
3
Government launched one of the world’s
largest mass health insurance schemes
called Rashtriya Swasthiya Bima Yojna
(RSBY) which is very different from its
predecessors and contemporaries in
service delivery and
implementation efficiency.
What makes the difference
is the delivery and
implementation model
based on biometric smart
card platform and role of
implementing agencies like
FINO fintech
foundation(F^3).
2.0 FINO’s RESEARCH & DEVELOPMENT:
UNLOCKING THE POTENTIAL OF HEALTH
INSURANCE IN UNORGANISED SECTOR
Initial research and development for the
use of biometric smart card technology
to deliver health insurance to poor was
done by FINO team along with a leading
private general insurance company as a
pilot at manipal (Karnataka state) but
the same was not implemented in the
field .Later on the concept was
presented to the World Bank. The bank
was convinced about the usability of the
technology and finally FINO contributed
in consultations on behalf of the World
Bank to to the Ministry of Labour and
Employment (MoLE) Govt. of India (GoI)
for the project on health
Insurance
(RSBY). It is
estimated
that round
4% of BPL
population
requires
hospitalisation
every year
and the cost
per episode (at 1995-96 prices) was
estimated at Rs. 2,100 Ahuja,ICRIER
2004). Health insurance market in India
is estimated to be around Rs 5000Cr
which covers around 2 per cent of the
country’s population at present3.
Biometric smartcard based delivery
system spearheaded by F^F has
brought a turnaround by unlocking the
business potential of around Rs 4500
3 Chandrasekhar .H,2009
FINO not only unlocked Rs 4500
crore potential micro insurance
market for health insurance
companies, it has also
empowered poor to choose her
health service provider and thus
created an incentive mechanism
for health service providers to
offer quality health services in
India.
Financial Information Network and Operations Ltd, Mumbai www.fino.co.in
4
Crore4 for health insurance companies
and other stakeholders especially 37.5
crore BPL5 (100 per cent) members .It is
based on the premise If, instead of
directly bearing the cost of medical
treatment, government provides them
health insurance, the demand on
government funds may come down
significantly as insurance helps in
resource mobilisation from various
sources. In RSBY, Govt. pays an
average premium of Rs. 600 per BPL
house hold (family of five members) and
in order to provide health coverage to
6.0 crore households over a period of
five years (2008-2013) government will
need to finance Rs. 3600 Crores per
year6. Government even considers to
extend RSBY to all households under
BPL.
4 BPL population of India is around 37.5 Crore(2004-
05) according to the report of expert group headed
by Sh. Suresh Tendulkar, the planning commission of
India. Assuming the premium paid by Govt is on an
average Rs 600/card for a family of five. The market
size crosses Rs 4500Cr . 55
BPL population (2004-05),as per Planning
commission of India. 6 6 Crore House Holds (assuming 1 HH is a unit of 5
members). 5 * 60 crore= 3000Crore
Also INR 30 *6 crore = 1,80 Crore is mobilized
through people as registration fee per year.
Another indirect benefit of the efficient
delivery of the RSBY is the evolution of
the Public Health Delivery System
(PHDS). Public health delivery system in
India is generally considered as being
implanted with low quality and poor
service delivery. This pushes off
patients to private hospitals for
treatment which are usually quite
expensive and this leads to greater out-
of-pocket expenses. This in turn leads to
greater impoverishment and indebtness
for the poor. In India, 65% of poor get
into debt trap and 1% below the poverty
line every year because of illness
(NSSO, 2004). In RSBY both public and
private hospitals can be empanelled and
public hospitals are given incentives to
treat beneficiaries as the money would
flow directly from an insurer to the public
hospital which they can use for their
own purpose like improving the
infrastructure and bringing in modern
technology in the hospital. Thus, the
design of RSBY scheme is also an
attempt to develop the entire ecosystem
of health care of the country.
Financial Information Network and Operations Ltd, Mumbai
3.0 FINO’s CONTRIBUTION IN MAKING RSBY
DIFFERENT FROM PREVIOUS
GOVERNMENT SPONSORED HEALTH
INSURANCE PROGRAMMES:
FINO’s inputs for the use of
smart card technology based delivery
apparatus and its contribution in
standardization of delivery
differentiates RSBY from its
predecessors and contemporaries. A
beneficiary is given a pre loaded
biometric smart card and Point
(POS) machines installed are at
network hospitals for carrying out
transactions, robust back end
is maintained for claim management,
customer service and for facilitating
monitoring & evaluation (M&E)
scheme. While designing this scheme
lot of efforts were made to spell out in
detail the roles and responsibilities of
each of the stakeholder. FINO was
involved in the RSBY programme righ
from its get-go stage and thus
understands the programme dynamics
much better.
Financial Information Network and Operations Ltd, Mumbai www.fino.co.in
’s CONTRIBUTION IN MAKING RSBY
HEALTH
se of biometric
based delivery
contribution in
delivery platform
from its
nd contemporaries. A
pre loaded
Point-of-Sales
(POS) machines installed are at the
hospitals for carrying out
back end database
for claim management,
r service and for facilitating
valuation (M&E) of the
While designing this scheme
to spell out in
detail the roles and responsibilities of
each of the stakeholder. FINO was
involved in the RSBY programme right
go stage and thus
understands the programme dynamics
3.1 DESIGNING AND INITIAL
In the design phase, the
standardization was considered to be
the most challenging task, considering
the scale of the programme and the
number of players involved. By
through the standardized platform
design, backend DBMS
maintenance format and
operability of cards in network of
hospitals across the country
possible.
7 Database management systems.
8 Specifications in card design, process flow, backend
platform, enrollment and card issuance, district
Kiosk and server specifications smart card layout,
RSBY card renewal specifications were deigned by
FINO , that too in very short span of 3
That is why it became operationalised in 4 months
after the launch of the scheme. Also, FINO
conducted state level and district level workshops to
explain the programme. Moreover, for early rollout
of the scheme FINO had provided the enrollment
5
DESIGNING AND INITIAL ROLLOUT:
gn phase, the
standardization was considered to be
nging task, considering
of the programme and the
number of players involved. By putting
he standardized platform - card
design, backend DBMS7, the data
and the inter-
operability of cards in network of
hospitals across the country8 was made
Database management systems.
pecifications in card design, process flow, backend
platform, enrollment and card issuance, district
Kiosk and server specifications smart card layout,
RSBY card renewal specifications were deigned by
that too in very short span of 3-4 months.
is why it became operationalised in 4 months
after the launch of the scheme. Also, FINO
conducted state level and district level workshops to
explain the programme. Moreover, for early rollout
of the scheme FINO had provided the enrollment
Financial Information Network and Operations Ltd, Mumbai www.fino.co.in
6
The technical specifications for this
project were designed in a very short
span of 4 months. This in turn made
interoperability of cards feasible in the
network of hospitals across country.
FINO contributed in designing following
initial components of the scheme.
• Process flow for RSBY,
• State level workshops were
organized,
• Enrollment & Card Issuance
specifications,
• Transaction system specifications
• District kiosk and server
guidelines,
• RSBY card renewal
specifications,
• Smart Card layout.
FINO’s technical application was the
first one to get certification from
Standardization, Quality and
Technical Certification (SQTC). In
order to expedite the RSBY scheme
considering the huge target, initial
enrollment software was provided by
software to the Government of India that is then
provided to other vendors.
government to various insurance
companies. The card used for RSBY
is designed in such a manner that it
can be used as a multi application
card i.e. the card is enough flexible to
add on other services like PDS,
education vouchers or any other
scheme if introduced later on. The
front end is designed for the
enrollment process is such that it
appears very simple and user friendly
but a robust back end is maintained
for claim management, customer
service using which FINO provides
services to insurance companies.
Financial Information Network and Operations Ltd, Mumbai
3.2 IMPLEMENTATION: RESULTS FROM
HARYANA
FINO fintech foundation was
among all service provide
country to start enrollment of
beneficiaries of RSBY in february
By May 31st 2009, it had completed the
enrollment process in all 20 districts of
Haryana with more than 65% of
beneficiaries linked with RSBY scheme.
Success of such schemes depends
largely upon the level of penetration in
the rural pockets of the country i.e. the
number of villages where enrollment
process is carried out so that
number beneficiaries could
under the ambit of the scheme.
(The chart 1.1 is a comparison of BPL
families covered in various states wher
more than six districts are covered
under RSBY scheme started in 2008. In
Haryana, FINO has worked whereas
other implementation partners have
provided services in rest of the states)
As depicted in the chart 1.1 F^3
was the implementation partner
Haryana has brought the services to
more than 65% of beneficaries
Financial Information Network and Operations Ltd, Mumbai www.fino.co.in
IMPLEMENTATION: RESULTS FROM
was the first
among all service providers in the
country to start enrollment of
RSBY in february 2008.
completed the
enrollment process in all 20 districts of
Haryana with more than 65% of
beneficiaries linked with RSBY scheme.
Success of such schemes depends
upon the level of penetration in
pockets of the country i.e. the
number of villages where enrollment
process is carried out so that maximum
be brought
under the ambit of the scheme.
is a comparison of BPL
families covered in various states where
more than six districts are covered
under RSBY scheme started in 2008. In
Haryana, FINO has worked whereas
ther implementation partners have
provided services in rest of the states)
As depicted in the chart 1.1 F^3 which
was the implementation partner in
has brought the services to
than 65% of beneficaries with a
penetration of more than 95% (
than 95% of villages were covered).
The highest percentage is
compared to other service providers in
other states.
3.3 MODUS OPERHANDI: THE FINO STY
There are multiple factors attributed to
FINO’s high performance which has
now become the hall mark of
handled projects. Not
Haryana but at other locations as
well.The pre-enrollment process
or less similar and involves
awareness creation, call for enrollments
by munadi (intimation)
finally beneficiary enrollments. D
0
10
20
30
40
50
60
70
Bihar Jharkhand Kerala
Pe
rce
nta
ge
En
roll
me
nt
Chart 1.1 Enrollment Percentage F^3
viz-a-viz others
7
penetration of more than 95% (i.e. more
re covered).
percentage is in Haryana as
to other service providers in
: THE FINO STYLE
factors attributed to
NO’s high performance which has
become the hall mark of FINO
Not specifically in
but at other locations as
process is more
involves RSBY
call for enrollments
by munadi (intimation) manager and
beneficiary enrollments. During
65%
Kerala Punjab Haryana
Chart 1.1 Enrollment Percentage F^3
viz others
F
I
N
O
Financial Information Network and Operations Ltd, Mumbai www.fino.co.in
8
the pre-enrollment phase, awareness
programme is organized in the area
about the scheme and demonstration
about use of the card is carried out.
This is carried out two-three days prior
to the enrollment process, and
enrollment team’s arrival in the village,
Generally ,the sarpanch of panchayat
is intimated about the programme and
local people are alerted through
announcements, pamphlets, door-to-
door canvassing, ‘munadi’-(traditional
method of spreading news through
beating drum and announcing the
news). On the day of enrollment FINO
team visits the site early in the morning,
(as most of the people are available in
the morning), with their enrollment kits
that include laptops, web cameras,
fingerprint grabbing device, on site
printers and biometric smart cards and
generators to carry out enrollment and
issuance of the smart card on site.
Finally, FINO’s experience of working in
the rural areas and understanding of
customer requirements helps to serve
BOP segment of the society in a better
way.
4.0 Conclusion
In view of the gaps prevalent in previous
systems of delivering health insurance
schemes, FINO’s end to end service as
an implementation partner is
appreciated by stakeholders and
adopted by the Government of India to
implement one of the largest mass
health insurance programmes in the
world. The key is the use of bio-metric
cards a common panacea for common
loopholes. By laying out this platform,
the government is financing public
health both economically and
expeditiously. Also, this has established
a delivery channel which could
potentially be leveraged by the
Government to deliver more services
like subsidy, education vouchers, PDS
etc in future. For the first time,
mammoth volume of data is being
stored which can be analyzed to deliver
very relevant information for the
government, insurance companies and
pharmaceutical companies etc.
The FINO designed technology platform
delivering health insurance helps
insurance companies to obviate moral
hazards, thus making the product viable
Financial Information Network and Operations Ltd, Mumbai www.fino.co.in
9
for them. Moreover, at the same time
the use of card and the technology
reduces the administrative hassles
involved by doing away with paper work
once and for all. This would eventually
bring the cost down as it is scaled up.
The efficient implementation of the
scheme has resulted in greater
convenience and empowerment of the
poor by providing them the choice of
health service provider. The card is also
an instrument of identification for the
BPL poor. Already the RSBY health
insurance scheme has made news in
the Wall Street and Business World
magazines. What remains to be seen is
how many countries would emulate this
unique service model.
References
Ahuja, R., & Jutting, J. (January 2004).
Are the poor too poor to demand Health
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research on International Economic
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Ahuja Rajeev(2004),Health Insurance
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Devadasan, N., Manoharan, S., Menon,
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(2004). ACCORD Communoty Healt
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NCEUS Task force (2008) Contribution of the unorganized sector to GDP Report of the Sub Committee of a NCEUS
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11
Financial Information Network and Operations Ltd
Tarun Bharat, 38/39 Sector 30, Near Sanpada Railway Station, Sanpada (West),
Navi Mumbai-400705,Maharashtra ,India
www.fino.co.in
© FINO Fintech Foundation.