Miracles for Rs 7.50
Wow!! This is phenomenal: Yeshasvini, a pioneering micro-insurance initiative, provides critical surgery coverage to rural poor in the state of Karnataka in India. It was launched by Narayana Hrudalaya, a private healthcare organization. Here's an article by Dr Devi Shetty, the head honcho of the trust, on innovations and knowledge capital.
What makes Yeshasvin so spectacularly successful? As always, the key is the right incentive structure and the economics. They got everything right : spreading risks on a massive scale, solving the problem of adverse selection by restricting coverage to large pre-existing groups rather than allowing voluntary individual participation, identifying excess service capacity and introducing supply-side competition by making hospitals bid for contracts to drive down costs through a market mechanism for standardized products, and restricting the coverage to only the most critical and life-threatening surgeries based on very sensible actuarial analysis. It's no big surprise that the whole enterprise is self-sustained and running in surplus. In just a couple of years, this has grown to serve 2.5 million rural poor. All of this for less than $2 per person per year!!
Perhaps there are a few lessons in here for policy-makers in healthcare systems around the world.