The document describes a health insurance scheme for waste pickers in Pune, Maharashtra, India. Key points: 1) The scheme provides basic hospitalization coverage up to Rs. 5000 for waste pickers registered with the Kagad Kach Patra Kashtkari Panchayat union. 2) The Pune Municipal Corporation pays the annual premium for over 5000 enrolled waste pickers. 3) Coverage and enrollment have increased over time. Claims are processed via reimbursement at any registered hospital in Pune.

1. MAHARASHTRA
KAGAD KACH PATRA KASHTKARI PANCHAYAT
(WASTE PICKERS’ UNION) HEALTH INSURANCE
SCHEME
CASE STUDY
Compiled by: Dr. Sayed Imtiaz Ahmed

2. CONTENTS
Acknowledgement 4
Executive Summary 5
I. The Scheme at a Glance 10
• Operational Mechanism 11
• Main characteristics 12
• Key Indicators 13
• Evolution Profile 14
• Development Plan 16
II. Description of the Scheme 19
• Introduction 20
• Flow of Cash and Information 29
• Development Perspective 30
III. Analysis 31
• Coverage 32
• Contribution 35
• Claims 37
• Administrative cost 54
IV. Conclusions and Recommendations 56
V. Stakeholder Speaks 70
List of Tables:
1.1. membership evolution 32
1.2. membership by Gender 33
1.3. membership by Age Group 34
2.1 Evolution of Contribution 35
2.2 Age wise total Premium Paid 36
3.1. Current Claims Incidence 37
3.2. Frequency of Claims 38
3.3. Claims Incidence by Gender 39
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3. 3.4. Claims Incidence by Age Group 39
3.5 Claims Amount Settled 41
3.6. Premium to Payout Trend 43
3.7. Disbursal per Claim 44
3.8. Claims Settlement 45
3.9. Claims Rejection Rate 46
3.11. Claims by Hospital 48
3.12. Claims Incidence by Specialty 49
3.13. Common Diseases Reported 51
3.14. Discrepancy in Cost Incurred for various diseases 52
3.15. Time Lag in Claim Settlement 52
3.16. Evolution of time lag in claim settlement 53
Annexure:
Annexure-I: About the Organisation 73
Annexure-II: History of the Scheme 76
Annexure-III: ILO Value Chain Analysis 78
Annexure-IV: Jan Arogya Bima Policy Prospectus 79
Annexure – V: Jan Arogya Bima Policy Claims Form 87
Annexure – VI: Pune Municipal Corporation Identity Card 89
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4. ACKNOWLEDGEMENT
I am thankful to Ms. Laxmi Narayan, Ms. Poornima Chikarmane and Ms. Shabana Diler
of the Kagad Kach Patra Kashtkari Panchayat, Pune for extending all support and
cooperation to me during the duration of the case study. Further I am grateful to Ms.
Poornima Chikarmane for helping me with the data analysis process and also providing
me with valuable insights in to the programme.
I am also grateful to all the officials and staff of Pune Municipal Corporation, New India
Assurance Company and provider hospitals for extending all possible support to me by
providing me information necessary for the case study.
Lastly I am grateful to all the grass root workers of Kagad Kach Patra Kashtkari
Panchayat, Pune and all the community members for their help in completing my study.
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5. EXECUTIVE SUMMARY
In 1989, the Department of Adult and Continuing Education of the SNDT Women’s
University in Pune started conducting classes with the children of waste pickers. Closer
interaction with this community provided the University, with a deeper understanding of
the risks and challenges that the waste pickers were exposed to. Gradually, a large
numbers of waste pickers came together and by 1993, with the support of SNDT
women’s University, were registered as a Trade Union, named Kagad Kach Patra
Kashtkari Panchayat (KKPKP). A continuous advocacy effort with the Municipality
bore fruit in the year 1996 when the Pune and Pimpri Chinchwad Municipal Corporation
formally recognized the Union and endorsed its members, recognizing their photo
identity card.
A Value Chain Analysis study, conducted in 2000, by a team of researcher of SNDT
Women’s University on behalf of the International Labour Organisation (ILO, revealed
that the waste pickers played a critical role in the Municipal’s work of garbage collection
and contribute substantively to lessening the work burden of the municipality. The study
also, quantified this profit to be approximately, Rs. 16 million. Using this evidence the
Union advocated with the Municipal Corporation to provide basic health services to the
waste pickers. Officially recognizing the efforts of the waste pickers, the Pune Municipal
Corporation (PMC) in 2003, decided to provide basic health insurance cover by paying
for the annual premium, thus becoming the “first municipality in the country to do so”.
The scheme has the following unique features:
• For the first time a vulnerable and neglected group of the society (the rag pickers)
made their voices heard and got it endorsed by a civic body which not only endorsed
their view officially by providing them identity card but also agreed to pay for the
entire annual premium for all the members for health insurance coverage
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6. • KKPKP acts not only as an intermediary between all stakeholders (on behalf of the
members) to ensure smooth functioning of the programme but also ensures that the
larger goals (of recognition of the efforts of the waste pickers by the government and
civic body, giving them a collective voice and ensuring provision of social security
measures to address their vulnerability) is not lost sight of and continuously pursued
• The scheme is a result of solidarity among the members of the Union (majority of
which are women) who, as a result of the scheme are socially and financially
empowered to meet their health eventualities at the same time
• All the registered hospitals within the Pune Municipal Corporation (nearly 150) act as
provider hospitals providing a satisfactory level of service, despite there being no
formal agreement with the PMC or the insurer
• Most of the members coming from lower socio-economic strata, access
neighbourhood/proximal smaller hospitals and nursing homes (less than 15 beds) as
these hospitals are closer to them (cutting down on transport related cost), the staffs
know them and also they can avail hospitalisation on a credit basis. Taking in to
consideration these facts, the insurer has agreed to waive off the criteria of minimum
requirement of 15 beds for a qualifying provider hospital
The scheme started off with an initial enrolment of 3707 members in 2003 to 5411
members in 2007; registering a growth of 145%.
While historically the claims pending ratio was low for the first time in 2006, the
programme saw a total of 40 claims pending which was due to internal problems like
high turn over of employee, frequent strikes and frequent transfer of staffs dealing with
the insurance scheme at New India Assurance Company.
Most of the claims were for hospitalisation due to communicable diseases much higher
than the natural average. This could be due to the unhealthy working condition which the
waste pickers face as part of their profession.
Another key issue is the fact that there is no formal agreement between the insurer and
providing hospitals. This allows for hiking of price for hospitalisation (e.g when hospitals
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7. are asked for bills for submission to insurer, they hike up the charges) and differential
charges for the same disease condition among other issues.
From a financial point of view, the payout to premium percentage is increasing slowly
with the present payout amount coming closer to the maximum sum insured. This is
because the total sum insured is clearly not sufficient to cover for the health needs of the
members.
Also, in its present arrangement, the programme does not allow for schematic or
programmatic modifications based on community feedback. However it is felt that the
insurer can run this beneficial programme for the most deprived community like the
waste pickers by internally cross subsidizing it with its other profitable portfolio in the
commercial arena.
Based on the analysis of the scheme and the context, the following recommendations are
made at various levels of operations:
PMC Level:
• To encourage and enhance community participation in the insurance scheme (as the
current design of the insurance scheme does not allow much scope for community
participation) in the following aspects:
o in bringing about better understanding of the product coverage and
exclusions,( Insurance Literacy)for the beneficiary
o To understand better client needs, their ability and willingness to pay as well
as specific product features.(Understanding Demand issues)
o To bring about better health awareness and improve the overall Health
Seeking Behaviour of the community (preventive and promotive health)
o Community participation will help in bringing down cost as they will then
have a better understanding of the processes
o It will also lead to faster claims processing as the members will submit the
requisite documents with the insurer
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8. o To give the community a stake in deciding the type of insurance cover they
want for themselves
• Capacity building and Education of the hospital network:
o Standardization of Treatment Protocol as well as cost of hospitalisation to be
approved and made mandatory for all the provider hospitals (as a regulation)
so that the quality of care improves and also the cost is brought down
o Education about the Health Insurance programme for the provider hospital so
that the claim settlement process is expedited (as requisite claim settlement
paper will be given out to the patients) and also will train them to be good
gatekeepers. This will control cost and make programme viable.
KKPKP Level:
• To design and implement a standardized MIS for all the stakeholders by customizing
and improving on the current MIS which is run by the organisation
• Efforts should be made to cover the remaining 10% rag pickers of the city who have
not been registered
• To take up a formal role of an agent by undergoing training as required under micro
insurance regulation so that it can act as an agent in the insurance scheme and can
receive agenting fee which will lessen the burdens of the cost of servicing the
insurance scheme
• Design and implement insurance literacy programme for all stakeholders which can
be paid by the insurer as it is going to bring about efficiency in the entire programme,
faster claim processing and settlement which should make business logic for the
insurer
• Rate negotiation with the hospital as well as advocating with the PMC for
standardization of treatment protocol and costs
• More emphasis on preventive and promotive health care in the form of health
education for the members for which the insurer can pay as it is going to bring down
claim load in future with improvement in health status of the community
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9. Insurer Level:
• To enter in to a formal MOU with KKPKP to act as an agent.
• to enter in to a formal MOU with fewer provider hospital (who can be selected
based on some quality parameters) for better efficiency and accountability rather than
all the hospitals in Pune which leads to huge disparity in the kind of care provided as
well as rates charged
• To introduce an electronic system of communication (either web based or in the form
of an electronic biometric health card) which will ensure speedy claim settlement and
also will bring about transparency in the system for all the stakeholders (KKPKP,
PMC,NIA and provider hospitals)
• Initiate insurance literacy programme (for the members and the hospitals) in
partnership with KKPKP and municipality which will not only bring about more
insurance awareness on the part of the members and hospitals but will also ensure less
claim rejection arising out of wrong submission of documents
• Bring about cashless model of insurance rather than reimbursement model like
Dharmasthala insurance programme in Karnataka where the NGO acts as an agent
this will reduce the load member for having to raise large sums of money in case of
health emergency which s/he borrow at usurious rates
• Standardization of operating procedure especially in the claims department
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10. I. THE SCHEME AT A GLANCE
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11. OPERATIONAL MECHANISMS
Type of Scheme: In House / Partner Agent Partner Agent
Type of Risk: Single Risk / Risk Package Single Risk (basic hospitalisation)
Type of Enrolment: Voluntary / Compulsory Compulsory
Insured Unit: Individual / Family Individual
Prem. Payment Mechanism: Up Front / Easy Payment Mechanism PMC pays all the premium
Subsidy to the Scheme: Direct / Indirect Direct
HEALTH:
Scope of Health Benefits: Limited / Broad Limited
Level of Health Benefits: Low / High Low
Tie-up with Health Facilities: Private / Public All registered hospital within Pune
Administration TPA / No TPA No TPA
Responsibility:
Additional Financial Benefit: Discount / No Discount
Access to Health Services: Free Access / Pre-Authorization Required Free Access
Co-Payment: Yes / No Yes
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12. Payment Modality: Cashless / Reimbursement Reimbursement
MAIN CHARACTERISTICS
Designation of the scheme: Kagad Kach Patra Kashtkari Panchayat (waste pickers’
union) Health Insurance Scheme
Starting date: 1st January 2003
Plan Term: 1 year
Insurance Year: January 1st – December 31st
Ownership: Pune Municipal Corporation
Management Responsibility: Informal responsibility voluntarily taken up by the waste
Pickers’ Union
Type of Insurance Scheme: partner Agent
Target Population: Members of Kagad Kach Patra Kashtkari Panchayat or the waste
pickers’ union.
Outreach: Pune Municipal Corporation jurisdiction area
Eligibility Condition: Open to all Members of Kagad Kach Patra Kashtkari Panchayat or
the waste pickers’ union from age group 18 to 70 years of age
Enrolment Modalities: Automatic
Premium Amount: Charged as per the standard rates of Jan Arogya Policy of New India
Assurance Company Limited
Benefits: Hospitalisation up to a maximum sum of Rs. 5000
Service Delivery: All registered Hospital within Pune Municipal Corporation jurisdiction
area
Type of Service delivery arrangement: Formal contract only between the insurer and
the Municipal Corporation. All other arrangements are informal and voluntary in nature.
Type of services: Reimbursement
Waiting Period: None
Co-payment: None
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13. Administration Responsibility: voluntarily taken up by Kagad Kach Patra Kashtkari
Panchayat without any financial return from the insurer.
KEY INDICATORS
Indicators 2007 2006 2005 2004 2003
Total no. of 5411 4725 4207 3348 3707
insured
Percentage of 71.1% 69.1%
women
Total 405520 363720 330680 254210 292140
contributions
from PMC
Overall - 73% 94% 107% 31%
premium to
claims amount
ratio
Disbursal per - 3408 3400 3200 3102
claim
Claims - 2.6% 2.4% 2.77% 1.05%
incidence rate
Claims - 87.3% - - 67.5%
incidence by
gender
Claim rejection - 5.5% 9.9% 8.6% 25%
rate
Amount - 0.61 0.67 0.50 0.72
received to
amount spent
ratio
Pending claims - 40 None None None
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14. Total - 25,000 25,000 25,000 25,000
administration
cost
EVOLUTION PROFILE
Evolution of Members
6000
5000
No. 4000
of Members
3000 Evolution of Members
2000
1000
0
2002 2003 2004 2005 2006 2007
Year
Age Wise Break up of Members
6000
5000
4000
66-70
No. of Members 3000
56-65
2000 46-55
Up to 45 years
1000
0
2003 2004 2005 2006 2007
Year
Evolution of Contribution by PMC
450000
400000
350000
Amount in Rs.
300000
250000 14
Amount (In Rs.)
200000
150000

15. Premium to Payout trend
400000
350000
300000
Amount (in Rs.)
250000
Premium Paid
200000
Claim amount received
150000
100000
50000
0
2003 2004 2005 2006
Year
Evolution of Claims settled
350000
300000
250000
Amount (Rs.)
200000
Claims settled
150000
100000
50000
0
Year I Year II Year III Year IV
Year
Disburasal per Claim vs maximum Sum Insured
6000
5000
Amount (In Rs.)
4000
Disbursal per claim (in Rs.)
3000
Maximum sum insured
2000
15
1000
0

16. DEVELOPMENT PLAN
1. Insurance Plan:
Objectives:
1.1:
Increase the overall coverage of the scheme in terms of membership.
Strategy:
The existing network of members and workers can be used to identify unregistered
members (at present 10% waste pickers in the city are not covered) who can be
encourage to join. The staff and members involved can be incentivised to venture to
newer slums and settlement areas of waste pickers.
1.2:
Encourage the introduction of family floater system
Strategy:
There is a need to explore the possibility of a product which will provide for the
health care needs of the entire family while at the same time taking care of the cost
and keeping it financially viable. This will systematically reduce the cost of premium
while at the same time increasing the coverage which will mean that high end care which is
typically expensive and unaffordable will be covered.
To bring about such a change in product at the official level, the issue can be taken up by
the trade union with the government. It can be argued that since the rag pickers are
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17. among the most vulnerable urban communities, a holistic cover needs to be provide
by the government as a social security measure for the worker as well as his family as
the members of the family of the waste pickers are as vulnerable and exposed to
various health risk as the members themselves. This can be provided as benefits to
the worker in the non formal sector. This cover needs to be holistic covering the
entire range of diseases and costs.
1.3:
Improve insurance literacy and health awareness
Strategy:
It can be discussed with the insurer that by providing insurance literacy programme,
efficiency and speed can be brought about in the system as the members will follow
prescribed procedure in claim submission and will submit correct documents. By
health awareness, the overall health seeking behaviour of the members will increase
which will help in preventing diseases due to knowledge regarding hygiene,
sanitation and nutrition thereby substantially bringing down claim load.
A suggested way of doing this will be to carry out a year long prospective study in the
community to study the health impact of these measures in areas where these
measures are administered vs. the area where these measures were not administered.
A similar study can be done to measure the impact of insurance literacy on the overall
efficiency of the system. These evidences can be used with the insurer so that it is
taken up on a formal basis.
1.4:
Try to clear backlog of pending claims and also an effort to systematically decrease in
the claim rejection to make the scheme more popular.
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18. Strategy:
An efficient MIS can be designed which makes communication faster, claim
settlement quicker and rejection fewer.
At present KKPKP has an existing MIS which needs to be customized so that it can
be made available online for use by all stakeholders thereby bringing in speed and
efficiency in the process.
1.5:
Make the scheme participative and process the product in a manner so that it incorporates
more community participations and feedback.
Strategy:
Member representatives can be Elected or selected from within the Union and subsequently
be given a short training programme by the insurer to impart them the nuances of insurance.
This will lead to empowerment of the members who will have more say in the operational
aspect of the scheme.
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19. II. DESCRIPTION OF THE SCHEME
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20. INTRODUCTION
The tragedy with India is that those who have the capacity to buy healthcare from the
market most often get healthcare without having to pay for it directly, and those who are
below the poverty line or living at subsistence levels are forced to make direct payments,
often with a heavy burden of debt, to access healthcare from the market. National data
reveals that 50 per cent of the bottom quintile sold assets or took loans to access hospital
care. Hence loans and sale of assets are estimated to contribute substantially to financing
healthcare. With less than 10% insurance penetration for health and in absence of any
official social security measure, the hardest hit are the poor and workers of unorganized
sector1 for whom each day of work loss not only translate in to a loss of wage for a day
but also means the associated financial burden spent on availing treatment.
In such a scenario the introduction of a social security measure for the poor and workers
of the unorganized sector not only becomes imperative but also an overriding concern for
a welfaristic state like India. The insurance scheme for the waste pickers of Pune is a step
in the right direction in this regard and can serve to act as the guiding light to a
comprehensive social security measure by the state for the workers of the unorganized
sector in the country. This will not only provides a social security measure to these
workers but also will acknowledge and appreciate the contribution that they have made to
the economy as also the country as a whole.
The scheme came in to being as an effort by the Waste Pickers’ Trade Union, Kagad
Kach Patra Kashtkari Panchayat. (For details on the organisation see Annexure-1). The
Trade Union did Value Chain Analysis study, conducted in 2000, on behalf of the
International Labour Organisation (ILO). This study revealed that the waste pickers
played a critical role in the Municipal’s work of garbage cleaning and contributes
substantively to lessening the work burden of the municipality. The study also, quantified
1
About 90% of the working population in India falls in the unorganized section according to Census of
India Data, 2001.
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21. this profit to be approximately, Rs. 16 million. The Trade Union argued that while the
financial benefits (savings in transportation costs) accrued to the municipalities, the costs
(health costs) of contributing to municipal solid waste management were borne entirely
by the waste-pickers labouring under abominable conditions of work leading to higher
levels of morbidity. The argument was substantiated by the findings of a studies
conducted by Chikarmane, Deshpande, Narayan in 2001 that showed that waste-pickers
suffered from occupation related musculo-skeletal problems, respiratory and gastro-
intestinal ailments. Scrap collectors, particularly women, tended to ignore minor illnesses
till they assumed dangerous proportions and became regular conditions. Using the
evidence of both the ILO study and the study conducted by Chikarmane, Deshpande and
Narayan, the Union advocated with the Municipal Corporation to provide basic health
services to the waste pickers. Officially recognizing the efforts of the waste pickers and
also the contribution that they make towards solid waste management, the Pune
Municipal Corporation (PMC) in 2003, decided to provide identity card (see Annexure-
VI) and basic health insurance cover by paying for the annual premium, thus becoming
the “first municipality in the country to do so”.
New India Assurance Company was chosen to be the insurer and the scheme that was
offered for insurance coverage was the Jan Arogya Policy. (For details on the scheme
please refer to Annexure-IV)
The scheme started off with an initial number of 3707 insured members to 5411 members
at present.
To start off with there was initial teething problem and hence rigidity on the part of the
insurer. Some issues included like the minimum bed requirement (fifteen beds) to qualify
as a provider hospital. As most of the waste pickers are poor, they prefer to go to smaller
nursing homes and hospitals which has less than the requisite bed number because of a
multiple facts like proximity of the hospital, treatment on credit, overall good rapport
with the doctor and staff. This was discussed with the insurer who has agreed to waive
off this requirement. Further pre-existing diseases were excluded and claims were
rejected on that basis in the beginning but an argument was put before the insurer by the
Trade Union that it was not a case of fraud as the waste pickers were never aware of this
fact nor was it ever been tested diagnostically prior to her/his hospitalisation at present.
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22. Gradually there has been a systematization of operations both at the insurer and the Trade
Union’s level. Systematic categorization of members in to various age groups, devising
of an efficient MIS, smoothening of the claim settlement processes, gradual insurance
awareness building among the members are some of the steps in the right direction.
An analysis of the claims shows that most of the diseases reported by the insured are
communicable diseases which again indicate the abominable and unhygienic condition
under which they work. However, the average claim amount shows that it is very close to
the maximum sum insured showing that the cover may not be adequate for the health
need of the members and there is a need to explore an alternative cover which caters to
the need of the members while keeping the product financially feasible for the insurer.
However another reason for average claim amount coming closer to the maximum sum
insured is because of the fact that most of the insured access private hospital where no
standardization of rate exists and also rates has not been negotiated with these hospitals
who charge differential rates to the insured for the same disease condition.
The case study was documented by Centre for Insurance and Risk Management on behalf
of the International Labour Organisation (ILO) as best practices in the sector for micro
health insurance in India. The study entailed informal meetings, formal interviews and
other form of interactions with all the stakeholders involved with the insurance
programme. While informal interaction was mostly done with the beneficiaries (the waste
pickers) to know about their overall perspectives and also to understand the context, the
interaction with the Trade Union, Insurer and the hospitals was more at a formal level to
understand management issues and operational issues. The case study tries to bring out
the uniqueness of the scheme, the rationale behind its genesis, the practical constraints
faced by each stake holders and also the needs and aspirations of the stakeholders
(especially the beneficiaries) as regards the scheme. The case study has also tried to
capture the overarching vision of the Trade Union of the waste pickers as regards making
their views heard to the government and civic authority and their constant endeavour to
lead their lives in dignity and self respect.
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23. MUNICIPAL
INSURER CORPORATION
WASTE PICKERS’ UNION
CLIENT PROVIDER
HOSPITAL
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24. The main functions of the waste pickers’ Union in the scheme are:
• As far as the role of the Union in the general day to day functioning of the scheme is
concerned, they are:
o Act as an intermediary, interface and channel of communication between
the Client, Municipal Corporation, Insurer and Provider Hospital
o Carry out the paper work for Enrolment, Claim Paper Processing and
Scrutiny of claim papers before submission to the insurer
o Act as the channel for disbursing the claims amount from the insurer to the
beneficiary
o Advocates on behalf of the client with the insurer in case of claim
rejection
o Does literacy programme to generate insurance literacy and positive health
seeking behaviour
o Maintenance of data base and MIS of the scheme
o Maintaining a time log to observe the delay in registration, claim
processing, disbursement and official delay so that efficiency can be
brought about
As far as the long term strategic goal of the Union is concerned it ensures that in the day
to day running of the scheme, the basic aim of advocacy for the right and dignity of the
waste pickers are not lost sight of. Hence it carries out the following functions along side
the routine work of running the scheme:
• To act as a platform for advocacy of the right of the waste pickers and ensure that
their cause is recognized by the government and civic authorities so that they can lead a
life of dignity
• To advance the argument of provision of social security measures (paid through user
fees or through subsidy) for the vulnerable category of people like the waste pickers and
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25. informal sector workers so that they have a ‘safety net’ mechanism which prevents them
from falling back in to the traps of poverty which should be the concern of not only the
government but also the private sector
Objectives:
• the main objective of providing a health insurance cover by the municipality
emerged from the fact that while the financial benefits (savings in transportation
costs) accrued to the municipalities, the costs (health costs) of contributing to
municipal solid waste management were borne entirely by the waste-pickers
labouring under abominable conditions of work leading to higher levels of
morbidity. Hence providing health insurance by the municipality will not only
take care of their health concern but also largely gain an official recognition from
the civic authorities (the Municipality in this case) as regards the contribution they
make to Solid Waste Management effort of the city as a whole.
Target Population:
The target population is rag pickers, scrap collectors and itinerant buyers. At present the
total number is 5411.
The Product:
The product is called the Jan Arogya Policy (JAP) of New India Assurance Company
(NIA). The type of enrolment is compulsory and the insured unit is an individual. The
period of cover is one year with the insurance year starting on 1st of January.
Eligibility Condition:
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26. The insurance plan is only open to members of the Kagad Kach Patra Kashtkari
Panchayat (waste pickers’ union), Pune. Age of the insured is from 18 years to 70 years.
There is no health check up required prior to enrolment.
Exclusions:
Refer to the exclusion criteria in the annexure of the Jan Arogya Policy document of the
New India Assurance Company.
Benefits:
It is a reimbursement of hospitalisation/domiciliary hospitalisation for illnesses/diseases
or injury sustained. The maximum ceiling amount that can be reimbursed is Rs. 5000.
Premium:
The entire premium amount is paid by Pune Municipal Corporation. The premium is
different for different age group (as specified by the New India Assurance Company
Limited).
Benefits Age group (Years) Contributions (in Rs).
Healthcare : 18 to 45 70
Up to Rs.5000 maximum 46-55 100
56-65 120
66-70 140
Service Delivery:
In the 1st year, the Pune Municipal Corporation issued a letter of request to all registered
hospital within the jurisdiction of Pune Municipal Corporation to cooperate in terms of
admitting patients and providing healthcare to the members of this scheme. As of now
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27. about 150 hospitals in Pune provide healthcare and hospitalisation to the members of the
union. There has been no written agreement or MOU with these hospitals. The only
criterion that PMC has is that the hospital should have a minimum of 15 beds to qualify
as a provider hospital. According the union, out of the 150 hospitals, about 20-30 are the
most frequented by the members. As of now there has been no rate negotiation with the
hospitals either by the PMC or NIA.
The Mechanism:
Most of the waste pickers in Pune have been registered by KKPKP (nearly 90%) and
PMC. All of them are provided with an identity card. The detailed MIS of the members
with card number and other details are present with the Municipal Corporation. An
update of new member is regularly provided by KKPKP to the PMC before 1st of January
every year. Based on this information, the premium in each age category is calculated by
KKPKP based on which the total amount is paid by PMC to New India Assurance
Company Limited.
When any of the members falls ill, he gets herself/himself admitted to any of the
registered hospital within Pune Municipal Corporation area limit.
All the expenses incurred during hospitalisation are paid for by the members. Then the
members approach KKPKP with the filled in claims form which contains various
information of the patient (see claims form of NIA in Annexure-V). A detailed statement
of cost is also given by the patient which shows break up of the total expenditure in to
various sub components. The patient submits the following documents in support of the
claim:
• Bills, receipt and discharge certificate from the hospitals/nursing home
• Prescription of doctors and bills for medicines
• Receipts for doctor, surgeons and specialists fee
All these details and documents are scrutinized by the office staff of KKPKP before
forwarding it to the NIA office for approval.
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28. The NIA claims department looks at the claims and scrutinize it for admissibility. On
satisfying itself with all informations and details, it releases the amount to KKPKP who
finally disburses it to the members.
Typically it takes about a period of 3 months from the time a claim gets submitted with
KKPKP and then move to the insurer to finally getting the amount disbursed to the
members which might go up to a maximum of 9 months.
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29. FLOW OF CASH AND INFORMATION
(3). PMC calculates total
premium and send it to NIA
INSURER
NIA PMC
(8). Scrutinised (2). Updated
document and registration MIS
claim form sent
sent
(9).
Release of KKPKP
money to
KKPKP (7). Informs
hospital about the
necessary
(1). Registered with document required
KKPKP as members
(10). Disburses cash to
client
(6). Submits claim form and
other documents for scrutiny
CLIENTS (4). Pays cash for hospitalisation PROVIDER
HOSPITAL
(5). Provide documents and information required for claim settlement
Flow of Information
Flow of Cash
29

30. Development Perspective
KKPKP has some developmental plans for the scheme in the years to come. These are:
• KKPKP is planning to come up with a separate cooperative of rag pickers who
will collect wastes from door step. In this scheme of things, a changed health
insurance is visualized to be provided by the cooperative. As shared by Ms. Laxmi
Narayan, under this scheme, KKPKP is planning out to do the following:
o To introduce a family floater scheme for the entire family on a cashless
basis by exploring alternate insurance scheme
o To increase the sum assured from Rs. 5000 to more
• Bring about efficiency within its own organisation and also the entire process.
• At present the organisation is maintaining time log to record the time taken for
carrying out various processes and trying to improve and reduce the time. It is
planning to streamline and institutionalize this process
• To improve outreach and communication with various stakeholders through
mobile and internet connectivity
• To increase insurance awareness of the provider hospital regarding the process of
claim settlement with help from the insurer
• To ensure more involvement and participation of the members in the process
through more insurance literacy
• To ensure a positive improvement in the health seeking behaviour of the
community
30

31. III. ANALYSIS
.
31

32. 1. COVERAGE
Coverage wise, the scheme is evaluated on the absolute as well as proportionate change
in the numbers of insured followed by the evolution of gender and age distribution within
the scheme.
1.1 Membership Evolution:
Year Numbers insured %ge change in absolute
numbers
(Year -0 ) 32 -
2002-2003*
(Year – I) 3707 199.27
2003-2004
(Year – II) 3348 -10.7
2004-2005
(Year – III) 4207 20.4
2005-2006
(Year- IV) 4725 29.14
(Year – V) 5411 12.6
*Individual insurance programme paid by members
Evolution of Mem ebers
6000
5000
4000
No. of Members
3000 Evolution of Mem ebers
2000
1000
0
2002 2003 2004 2005 2006 2007 32
Year

33. The first year of the scheme was a voluntary insurance programme in which the members
paid their own premium. Only 32 members enrolled as all members were not able to pay the
premium. The next year, the scheme was taken up by the PMC which paid for the premium
of all members which saw a sudden jump in the enrolled numbers by 199.27%.this was
typically because the members came to know that the entire premium will be paid by the
PMC. However in year II, there was a drop in membership by 10.7%. The reasons for this so
as in 1st year all rag pickers were enrolled irrespective of their membership status. However
in year II, the process was streamlined and the list was scrutinized for filtering out non-
members which explains the drop in membership. From then till now the scheme has seen a
consistent growth till date. (An overall average growth of 145% from year I)
1.2 Membership by Gender:
Gender Year-I year-II Year-III Year-IV Year-V
No. % No. % No. % No. % No. %
Male - - 1146 30.9 - - 1368 28.8 - -
Female - - 2562 69.1 - - 3367 71.1 - -
Year II Gender Break Up Year IV Gender Break Up
m ale male
2 8 .8 %
30.9%
fem ale f emal e
69.1% 71. 1%
33

34. Though the membership has shown an average growth of 145%, gender wise the majority of
the members are female (nearly 70% for the data available). As most of the insured are
female and also belong to socio-economically vulnerable category like the waste pickers,
hence providing a safety net product like health insurance to them stands justified and also
recognizes their contribution to the city by the civic authority.
1.2: Membership by Age Group:
Age group 2003 2004 2005 2006 2007
(according
to JAP of
NIA)
18 to 45 2866 2771 3266 3772 4656
years
46-55 518 452 579 736 564
56-65 275 123 326 215 177
66-70 48 2 36 2 14
Age Wise Break up of Members
6000
5000
4000
66-70
No. of Members 3000
56-65
46-55
2000 Up to 45 years
1000
0
2003 2004 2005 2006 2007
Year
34

35. From the above graph it is clear that over the years the largest chunk of membership has been
in the age group 18-45 years which is the economically productive age group. Also the fact
that they are women, make them vulnerable to exploitation-economic, sexual and in the
domestic space. It is seen that the number of rag picker in this age group has gone up from
2866 in 2003 to 4656 in 2007.
Coverage wise it is seen that there had been an average growth of 145% since the
introduction of the scheme. Most of the members are female and belong to the economically
productive age group of 18-45 years.
2. CONTRIBUTION
2.1. Evolution of Contribution:
Contribution to the premium is entirely made by the Pune Municipal Corporation at the
beginning of each year (1st of January). Here an evolution of contribution of the PMC over the
years as well as age break up of this premium in to various age categories is shown.
Year Amount (In Rs.) Percentage
increase/decrease
Year – I 292140 -
Year – II 254210 -12.9%
Year – III 330680 30%
Year – IV 363720 9.9%
Year – V 405520 11.4%
G.Total 1240750
Premium amount paid towards premium of the insured over a three year period came to a
total of Rs. 12.40 lakhs which has been paid till date by Pune Municipal Corporation for
this scheme. The evolution of contribution over the year’s shows a gradual percentage
35

36. decrease which indicates that though the amount may have increased in absolute number
but has not increased proportionately. The reason for this is because in the beginning of the
scheme age wise categorization was not done too strictly; hence the amount of premium
could have been more even for less aged members. Further, over the years the new
members joining the Union were mostly younger members, (as seen in the age wise break
up of members over the year in table- 1.3) decreasing the proportionate amount contributed
by PMC. (As in JAP, the premium is calculated in various age brackets)
2.2. Age wise total Premium Paid:
Age Group Amount paid (in Rs.)
2003 2004 2005 2006 Total
18- 45 years 200620 193970 228620 264040 887250
(71.5%)
46-55 51800 45200 57900 73600 228500
(10.5%)
56-65 33000 14760 39120 25800 112680 (9%)
66-70 6720 3348 4207 4725 12320(0.9%)
Of the total premium paid by the PMC, 71.5% is paid for the age group up to 45 years.
Incidentally, this age group has the highest number of claims which questions the
calculation of the insurer which says that old people (56-70 years category) are more risky
and hence premium charged to them should be more.(Which may be true from a life
insurance perspective).
Of the total 12.50 lakh premium paid by the PMC, it is seen that most of it (71.5%) goes
for the age group 18-45 years.
36

37. 3. CLAIMS ANALYSIS
The claim analysis looks at the evolution of claims in terms of gender and age break up of
claims, claims accepted and rejected. It also looks at the type of diseases predominant in
the insured and also what is the preferred healthcare facility of the members as well as the
cost incurred to avail these cares and the time delay in the claims getting reimbursed.
Overall through these analyses it tries to understand systemic inefficiency which needs to
be addressed to bring about better claim experience for both the insured and the insurer.
3.1 Current Claims Incidence:
2003 2004 2005 2006
No. of No. of %ge No. of No. of %ge No. of No. of %ge No. of No. of %ge
Members claims Members claims Members claims Members claims
3708 39 1.05 3352 93 2.77 4208 101 2.4 4735 125 2.6
%ge 138
change
1st year
%ge 8.6
change
1st year
%ge 23.7
change
1st year
It was seen that the claim shot up in 2004 by 138% in 2004. The reason being that typically
as there was no insurance awareness (on the part of the members) the claim went up
manifold. However in subsequent years, with increased insurance awareness and improved
method of communication with the insured as well as the insurer, the claim maintained a
stabilized trend.
37

38. 3.2. Frequency of Claims:
Frequency of Claim (from 2003-06) No. of Claimants
Single Claim 224 (88.8%)
2 claims 23 (9.1%)
3 claims 4 (1.5%)
4 claims 1 (0.39%)
It is seen that about 88.8% of the claims received from 2003-06 are one claim made by an
insured in a given year. This shows the increased insurance awareness that the members
have as a result of the effort of the Trade Union.
No. of Claimants
Single Claim
2 claims
3 claims
4 claims
This shows that although the frequency of claim per insured may not be high, yet the amount
claimed is more almost nearing the maximum sum insured.
38

39. 3.3 Claims Incidence by Gender:
Gender Claim
2003 2004 2005 2006
Male 13 N.A N.A 16
(32.5%) (12.6%)
Female 27 N.A N.A 110
(67.5%) (87.3%)
N.A: Not Available
In the year for which data are available, it is clearly seen that the majority of the claimants
are female.
In KKPKP most of the registered members are women. Being female exposes them to
various discrimination and harassment. They are not only subjected to sexual harassment
from perverts in the streets but also looked upon suspiciously by their husband as regards
their moral integrity. Being female also snatches away the bargaining power which they can
have with the scrap dealer. The formation of the Union in general and this scheme in
particular have helped give them a dignity in life and also a knowledge that they are not
alone in their struggle for existence and to eke out a living.
3.4. Claims Incidence by Age Group*:
age of 2003 2004 2005 2006 total
claimant
19 to 45 19 75 68 58 220
46-55 9 6 12 16 43
56-65 1 0 6 1 8
*Only Received Claims
39

40. Age wise break up of claims
80
70
60
50
No. of Claims 40 18 to 45
46-55
30
56-65
20
10
0
2003 2004 2005 2006
Year
It is seen that through the years, the maximum claim has come from the age group 18- 45
years. (Nearly 81.18%). This is so because majority of the rag pickers belong to this age
group which is also the economically productive age group.
Although 19-45 years pays the least premium but has the highest number of claims (81.18%).
This shows that unlike life insurance, age wise risk calculation of premium does not hold
good for health insurance. For community health insurance the health and disease profile of
the community, their average annual health expenditure, their paying capacities and preferred
healthcare provider are the data which is required apart from age which does not play a very
significant role.
40

41. 3.5. Claims Amount Settled:
Year I Year II Year III Year IV Total
Claims 89953 271995 309365 274362 945675
settled
(In Rs.)
Pending - - - 241910 241910
for
payment
(In Rs.)
From the data it is seen that the claim settled over the years has systematically gone up. One
of the reasons can be because of increased enrolment of members over the years. The other
reason can be because of lack of a strict gate keeping mechanism.
Evolution of Claims se ttled
350000
300000
250000
Amount (Rs.)
200000
Claim s settled
150000
100000
50000
0
Year I Year II Year III Year IV
3.6. Claims Payout: Year
41

42. Payout in Rs Claims
1-1000 20
1001-2000 41
2001-3000 56
3001-4000 55
4001-5000 112
Total 284
It has been observed in the scheme that the maximum payout has been in the range of
Rs.4001-Rs.5000 showing that the claim amount is close to the total sum insured. This shows
that the maximum sum assured is not adequate for the health needs of the insured. This also
explains the concern of the insurer about the unviability of the programme from a business
perspective. However it can be run as a social security measure for health coverage for the
poor and vulnerable section of the society like the waste pickers. There can be internal cross
subsidization from the other commercially profitable product of the insurer.
Claims for various Category
120
100
80
Claims
60 Claim s
40
20
0
1-1000 1001-2000 2001-3000 3001-4000 4001-5000
Claim Amount
42

43. 3.6: Premium to Payout Trend:
2003 2004 2005 2006 Total
Premium 292140 254210 330680 363720 1240750
Paid
Claim 89953 271995 309365 265862 937175
amount
disbursed
(Payout)
Payout to 31 107 94 73 76
premium
ratio (as a
percentage)
Except for 2003, where the claim disbursed (payout) to premium percentage was 31%, all
other years showed a high premium to payout percentage (an average of 76%) with the
maximum being 107% in 2004. Further in the year 2004 the payout (Rs.271995) was higher
than the premium paid (Rs. 254210). As is evident from the graph, the payout is hovering
closer to the premium paid from 2005 onwards. As also seen in table-3.6, where the
maximum number of claims is in the category of Rs4000-Rs. 5000. This is the reason why
the insurer is finding the programme financially not very lucrative.
Premium to Payout trend
400000
350000
300000
Amount (in Rs.)
250000
Premium Paid
200000
Claim amount received
150000
100000
50000
0
2003 2004 2005 2006
43
Year

44. However it also shows that the maximum sum insured is not sufficient for the members to meet
their health needs. Hence keeping these two opposing view point in mind, there is a need to
explore the possibility of an insurance product which makes it more comprehensive in terms of
meeting the health needs of the insured as well making it viable commercially from the insurer’s
perspective.
3.7. Disbursal per Claim:
2003 2004 2005 2006
Claim amount 89953 271995 309365 265862
received
No. of claims 29 85 91 78
cleared
Disbursal per 3102 3200 3400 3408
claim (in Rs.)
The disbursal per claim is around Rs. 3277.50 showing that it is closely approaching the
maximum cap of Rs. 5000 progressively over the years. This again shows that the maximum
sum insured is not sufficient to meet the basic hospitalisation expense of the members. It also
points to the fact that rates have not been negotiated with the hospital which leads to higher
medical bills. However for members (who were till now footing the entire bill which was
proving to be a huge financial burden) the scheme has come to them as the greatest boon. In
the words of Mangal Jagganath Gaikwad a member who lives in the Indira bashat near
Aundh.3 years ago she suffered from cholera and was admitted to Medi-point Hospital, D.P
Road in Pune. She incurred an expense of Rs. 5000 and got the whole amount reimbursed
within one year of submission of discharge paper, prescription and other document required
by the insurance company. “We feel that this cover is of great help to us and helps us
financially to meet our health costs which previously we were unable to meet”.
44

45. Disburasal per Claim vs maximum Sum Insured
6000
5000
Amount (In Rs.)
4000
Disbursal per claim (in Rs.)
3000
Maximum sum insured
2000
1000
0
2003 2004 2005 2006
Year
3.8. Claims Settlement- Amount Spent vs. Amount Received:
Year Average Amount Average Amount Amount received to spent
Spent (in Rs.) Received (in Rs.) ratio
2003 4287 3101.82 0.72
2004 6383 3199.94 0.50
2005 5009 3381 0.67
2006 5510 3388 0.61
The average ratio for amount received to amount spend is 0.62. However the average masks the
maximum amount which might go up to Rs.25, 000 for surgeries which is not provided by the
45

46. scheme. Hence there is a need for providing a larger cover than is currently provided by the
scheme which is not only comprehensive but also is financially viable.
Average Amount spent vs.Average Amount Received
7000
6000
5000
Amount (in Rs.)
Average Amount Spent (in Rs.)
4000
3000 Average Amount Received (in
Rs.)
2000
1000
0
2003 2004 2005 2006
Year
3.9. Claim Rejection Rate:
2003 2004 2005 2006
Claims 10 8 10 7
Rejected
Claims 30 85 91 79*
Accepted
Total claims 40 93 101 126
Rejection 25% 8.6% 9.9% 5.5%
Rate (%ge)
* 40 claims pending in 2006
Except for the 1st year, the claims rejection rate has been stable over the years. One of the
main reasons for rejection of claim is non-submission of requisite documents. Further claims
46

47. gets rejected in most cases when the claimed amount approaches the maximum sum insured
(Rs.5000)
Claims Accepted vs Claims Rejected
100
90
80
70
No.of Claims
60
Claims Rejected
50
Claims Accepted
40
30
20
10
0
2003 2004 2005 2006
Year
3.10: Pending claims:
In 2005 there were 2 pending claims (total amount not available) while in 2006 there
were 38 pending claims taking the total to 40 pending claims till date. Out of 2 claims in
2005, no reasons were cited for the pending claims while in 2006, out of 40 claims, (total
amount Rs. 2,58, 461) only reasons were given for 2 claims. Out of the reason given are
frequent transfer and turnover of employees which delays in the processing of claims.
47

48. 3.11. Claim by Hospital*:
Type of Number of Claims
Hospital 2003 2004 2005 2006 Total
Private 20 70 67 113 270 (82%)
Public trust 3 11 7 8 29 (8.8%)
Municipal 0 1 2 3 6 (1.8%)
State Govt. 7 10 4 3 24 (7.2%)
* Total claim during the period 360. The information available for 31 claims.
Total
1.80% 7.20%
8.80%
Private
Public trust
Municipal
State Govt.
82%
Most of the claimant access private hospital because of proximity issue, faith in the doctor,
flexibility in payment mechanism (hospitalisation and treatment is provided on a credit basis
which is repaid to the hospital on realisation of amount through reimbursement) and
perceived better quality of private provider. As expressed by the members, there is a popular
48

49. perception favouring private hospital seen to be providing a better quality care as compared
to government facility.
Alka Sidhgasate lives in Parwat Peta Basti in 132, dandekarpur in Pune. She had colitis 2
years back. She went to a nearby private hospital (Parween hospital). “In Parween hospital I
had detailed diagnosis, medication and stayed in the hospital for 8 days. I feel overall their
services were better than what is being provided in the government hospital though it is
expensive than that at the government hospital”
The next largest segment of the client goes to the public hospital. The reason being that it is
cheaper and also because the clients have to pay the money upfront. It is seen that most of the
accident cases go to the government hospital as it is a medico-legal matter and First
Information Report (FIR) for primary investigation needs to be filed as a legal requirement.
3.12. Claims Incidence by Specialty*:
Department Year
2003 2004 2005 2006 Total
Medicine 8 39 41 79 167
(52.35%)
Obs & Gyn 2 8 4 5 19
(5.95%)
Orthopedic 1 20 18 29 68
(21.3%)
Neurology 1 0 0 0 1
(0.31%)
Cardiology 1 2 0 2 5
(1.5%)
Casualty/Emergency 6 10 12 13 41
(12.8%)
Ophthalmology 1 1 0 6 8
(2.5%)
Surgery 5 2 2 1 10
(3.1%)
Total 25 82 77 135 319
49

50. * Total numbers of claims 319. Information not available for 41.
Most of the claims show a higher percentage of hits in the medicine ward. These cases were
mostly suffering from communicable diseases which could have resulted from their exposure
to organic garbage and other harmful wastes which is a breeding ground of germs and
pathogens. These diseases include gastroenteritis, cholera, typhoid, worm infestations,
diarrhea, dysentery and food poisoning. The next category of claims is from the orthopedic
ward indicating accident cases. These accidents are mostly due to the accidental falling in to
the waste bins, road traffic accident, and incident of domestic violence.
These informations explain the abominable and potentially hazardous condition that the
waste pickers are exposed to as part of their daily profession.
3% 3%
13% medicine
2%
Obs &Gyn
0%
Orthopedic
Neurology
cardiology
52% casualty
21% opthalmology
surgery
6%
50

51. 3.13: common diseases reported:
Diseases Year
2003 2004 2005 2006 Total
Anemia 2 1 3 1 7
Gastro enteritis 0 6 10 12 28
Enteric fever 0 0 3 8 11
Chicken gunya 0 0 0 4 4
Hysterectomy 0 2 1 2 5
Injury 3 2 1 3 9
G.Total 64
As seen in table 3.13, most of the diseases suffered by the insured are communicable diseases.
The total numbers of communicable diseases (gastroenteritis, enteric fever and chicken gunya)
are 43 in number (out of a total of 64) which is about 67.18% of the entire disease reported for
claim. This shows that there is a large burden of communicable disease which can be
controlled by basic preventive and promotive education (which can be funded by the insurer as
it will brings down the claim load) coupled with the insurance awareness programme.
35
30
Injury
25
Hysterectomy
20 Chicken gunya
15 Enteric fever
Gastro enteritis
10
Anemia
5
0
2003 2004 2005 2006
51

52. 3.14: Discrepancy in cost incurred for various diseases for 2005 and 2006:
Diseases Range of expenditure (Rs.)
2005 2006
Gastroenteritis 3000-11000 2000-8000
Fever 3000-8000 2000-7000
Typhoid fever 2000-3000 4000-7000
Hysterectomy 11000-12000 17000-19000
For the two year for which the analysis was done, it was seen that there is huge discrepancy in
cost of care for the same condition. For example for gastroenteritis, the cost incurred varies
from Rs. 3000 to Rs.11000. This is because there has been no cost negotiation with the
provider hospitals by the insurer and also due to lack of standardization of procedure and a
standard treatment protocol.
3.15. Time Lag in Claim Settlement:
Process Time Lag (Delay)
Minimum Maximum
From discharge of patient 1 month 3 months
to submitting claim paper
to KKPKP
From submission of 1 week 3 weeks
claims to KKPKP to the
submission by KKPKP to
the insurer
From submission of claim 2 months 6 months
to NIA to the client getting
reimbursed
52

53. From the above it is clear that the minimum time from the patient getting discharged to
ultimate reimbursement of claims takes from a minimum time of 3 moths to maximum of 9
months.
3.16: Evolution of time lag for claim settlement:
Year Average day taken from discharge to
claim settlement
2003 50
2004 62
2005 48
2006 68
The average time for claim settlement shows a sinusoidal pattern with one year showing a
rise and then fall in the subsequent year with a maximum average time of 68 days reported in
2006. The reason for this delay is more to do with internal problems within the insurer like
strike, frequent transfer and other administrative problems. The reason also lies to some
extent with the client for not submitting correct claim papers and also to a very little extent
lies with the organisation (KKPKP) for processing and sending it to the insurer.
average days taken
80
70
average days taken
60
50
40 average days taken
30
20
10
0
2003 2004 2005 2006
year
53

54. Overall the analysis of the claim shows that there has been a healthy payout ratio of 0.62
(amount spent to amount received) which augurs well for the members. The claim
rejection rate was initially high (25%) but has stabilized over the years. Most of the
members were seen to claim only once which indicates towards some insurance
awareness on their part which is due to the effort put in by the Union which imparts this
awareness during their group meeting.
Most of the diseases for which claim had come in are communicable diseases which
again points out to the fact that the waste pickers are constantly exposed to potentially
hazardous condition having adverse effect on their health.
The amount claimed is mostly in the range of Rs.4000-5000 showing that the scheme
may not be sufficient for the healthy requirements of the members and hence alternate
scheme needs to be looked at for providing a holistic coverage.
As in all other segments of the society, the popular perception of the waste pickers is on
the perceived better quality of private provider than the public provider. This leads to
higher claims amount as these private entities do not have any standardization of rates
and also by the fact that no rate negotiation has been carried out with them by the insurer.
The time between a claim getting submitted and approved ranges from 3 months to 9
months which is financially a burden on the poor household who get money through
borrowing from money lenders at high rate of interest or through credit from the provider
hospital. In the later case the faith of the provider hospital is eroded if there is late
payment which consequentially affects the subsequent visit by the member in which case
they may not be entertained by the hospitals.
4 ADMINISTRATION COST:
The administration cost incurred by KKPKP is Rs. 25, 000 per year for all the years. This
cost is recovered by levying an annual service charge of Rs.25 from the insured by
KKPKP.
54

55. If the administrative cost is calculated as a percentage of the premium collected for all the
years it would be as follows:
Total premium calculated for all the years (5 years) =Rs.12, 40, 750
Total administrative cost collected for all the years (5 years) = Rs.1, 25, 000
Administrative cost ratio = 1, 25,000/1240750 X 100% = 10.0746%
Any scheme with an administrative cost ratio of 10% overall is considered to be cost
effective one.
As per the recent IRDA regulation, 15% commission needs to be paid to the agent for the
services provided. As KKPKP is doing the entire job ob an agent, the insurer can
consider paying agenting fees to it (KKPKP).
55

56. IV. CONCLUSIONS AND
RECOMMENDATIONS
56

57. What started as a commendable effort by the department of Adult and continuing
Education of the SNDT Women’s’ University in Pune has come to be recognized as the
first effort where the Municipality has undertaken to provide health insurance to the
poorest and most vulnerable section of the society: the rag pickers.
The scheme is a very good example of evidence based advocacy which uses action based
research as its tool. This is also a good example in mass based movement where the
peoples’ support has made it possible in eliciting recognition and acknowledgement from
the civil authority of the effort put by the rag pickers for the general welfare of the
community.
Some of the unique features of the scheme are as follows:
• The scheme is unique in the sense that for the first time a vulnerable and neglected
group of the society (the rag pickers) made their voices heard and got it endorsed by
a civic body which not only endorsed their view officially by providing them
identity card but also agreed to pay for the entire annual premium for all the
members for health insurance coverage
• KKPKP not only acts as an intermediary between all stakeholders (on behalf of the
members) to ensure smooth functioning of the programme but also ensures that the
larger goals (of recognition of the efforts of the waste pickers by the government
and civic body, giving them a collective voice and ensuring that a social security
measures to address their risk) is not lost sight of and continuously pursued
• The scheme is a result of solidarity among the members of the Union (majority of
whom are women) who as a result of the scheme is treated with respect within the
household as well as the community and are financially empowered to meet their
health eventualities at the same time
• All the registered hospitals within the Pune Municipal Corporation (nearly 150) act
as provider hospitals providing a satisfactory level of service despite there being no
agreement of them with either the PMC or the insurer
57

58. • As most of the members come from lower socio-economic strata, they access
smaller hospitals and nursing homes (less than 15 beds) as these hospitals are closer
to them, the staffs know them and also they can avail hospitalisation on a credit
basis. Taking in to consideration these facts, the insurer has agreed to waive off the
criteria of minimum requirement of 15 beds to qualify as provider hospital
Over all the scheme has shown an impressive growth in the number of insured with 3707
insured in the first year of the scheme to a total of 5411 insured at the last count. Of the
total number of the insured, nearly 70% are female. The number of insured will grow in
the coming year with the Union planning to start a cooperative of waste pickers which
will help in door-to-door collection of garbage.
Most of those insured fall within the age category of 18-45 years which is the
economically productive age group. This age group accounts for the maximum premium
payout (71.5%) of the total premium paid by the PMC as also the maximum number of
the claims. It was seen that most of the claims were for hospitalisation arising out of
communicable diseases which explains the abominable condition in which these waste
picker’s work which is potentially unsafe for health.
Further an analysis of average payout for claims submitted shows that it is closely
approaching the maximum sum insured (Rs. 5000). This shows that the cover is not
adequate to meet the health needs of the members and a comprehensive policy needs to
be explored which takes care of the health needs as well as making the scheme
financially viable. One of the main reasons for higher cost of claim is because there has
not been any rate negotiation with the hospital by the insurer which charges varied rates
for a similar disease condition. Besides, government health institutions are not preferred
(which are relatively cheaper) by the members because of perceived poor quality,
bureaucracy and unfriendly behaviour of staffs.
One of the major concerns over the year has been the number of rejected and pending
claims. While the rejection rate has come down systematically over the years (25% in
year - I to 5.5% in 2006), in 2006 alone there were a total of 40 claims pending.
Overall the scheme has been successful from the perspective of providing a safety net for
meeting the health needs of the waste pickers. It has been a great learning experience for
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59. all the stakeholders who have faced the initial teething problem in the scheme to its
present state where it provides overall satisfactory coverage to the insured members.
There has been a gradual systematization of operations both at the insurer and the
Union’s level. over the years, systematic categorization of members in to various age
group, devising of an efficient MIS, smoothening of claims settlement process, gradual
insurance awareness building of the members and overall a sense of satisfaction and pride
on the part of the members in their quest for asserting self determination and leading a
life of dignity. This can be summed up in the words of one of the member, Shantabai
Vithal Choudhury from Kasiwadi, Bhawani Pet in Pune. She was traveling with 5 other
women members when she met with a terrible road accident. “I was the most injured
among the 5 women with cut injury in both legs and thighs. I was admitted to Sasoon
Hospital from where I was referred to Panchsheel hospital where I stayed for one and a
half months. My son spent Rs.40, 000 for the 1 and half month of my stay in the hospital.
I got Rs.5000 from the insurer for my expenses. Though it is not a great amount
compared to my total expenses yet it really made me feel happy at the fact that I am
covered by such a policy and also proud that it is as a result of my profession. I truly feel
that it is like an employee benefit scheme for people like me”.
LIMITATIONS AND SUGGESTIONS
Although the scheme it’s quite unique in its approach and also provides the much
needed financial security for the health risk of the unorganized sector workers like
waste pickers, yet it has some limitations which can be corrected to make the scheme
more popular and bring about operational efficiency. . These can be dealt at various
levels as follows:
I.PMC Level:
(1). Need for institutionalized Community Participation:
The present structure of the insurance scheme does not allow for much community
participation programmatically. As the entire premise of the programme was to
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60. provide compulsory health insurance cover to the members, programmatically it may
not be possible. However some element of community participation needs to be
integrated for the following favourable outcome which will ensure better functioning
of the scheme:
• in bringing about better understanding of the product coverage and exclusions,(
Insurance Literacy)
• To understand better client needs, their ability and willingness to pay as well as
specific product features.(Understanding Demand issues)
• To bring about better health awareness and improve the overall Health Seeking
Behaviour of the community
• Community participation will help in bringing down cost as they will then have a
better understanding of the processes
• To give the community a stake in deciding the type of insurance cover they want for
themselves
Suggestion:
The PMC can have a group of workers of KKPKP, and some elected or selected members
who will regularly interface with insurer, PMC, hospital and KKPKP. The time can be so
chosen that it does not interfere with their work hours
(2).Capacity building and Education of the hospital network:
• Standardization of Treatment Protocol as well as cost of hospitalisation to be
approved and made mandatory for all the provider hospitals (as a regulation) so that
the quality of care improves and also the cost is brought down (form the average
payout of Rs.3277.50 to less)
• Education about the Health Insurance programme for the provider hospital so that
the claim settlement process is expedited (as requisite claim settlement paper will
be given out to the patients) and also will train them to be good gatekeepers. This
will control cost and make programme viable.
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61. (3). Less utilisation of Municipal Hospital:
As the data shows, about 7.2% of the insured goes to Municipal hospital for health
care. The municipal hospital/dispensary can improve their quality of care so that more
and more insured goes to their health facility which will bring down cost of care and
make the scheme much more viable financially.
Suggestions:
An improvement in the quality of treatment provided in the municipal hospital can be
one suggestion to address this issue. Alternatively, municipal hospital should focus
intensively on primary care which not only decrease the diseases load in the
community, improve the overall health of the community but also act as an effective
gate keeping mechanism.
II. Insurer Level:
(1). No formal MOU with hospital and KKPKP:
For acting as the provider to the scheme, the insurer has no formal agreement with the
provider hospital. The PMC has requested informally to hospitals within Pune to
cooperate. As there is no formal agreement, it leads to unstandardised services meted
out and differential rates being charged (refer table-3.15). This is so because as there
is no formal MOU, there has been no rate negotiation with hospitals as well as
standardization of treatment protocol leading to cost escalation.
Similarly the insurer does not have a formal MOU with KKPKP, making it difficult
for KKPKP to act in the best interest of the client and with more authority while
dealing with hospitals and insurer.
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62. Suggestion:
The insurer could have a legal MoU with hospital and KKPKP. This will ensure that
rates can be negotiated and treatment protocol can be standardized for provider
hospitals for them to act as the paneled hospital. Alternately, as the members go to
various care provider according to their convenience, they can be given two options -
to go to paneled hospital or non-paneled hospital explaining them the benefit of going
to the panel hospital where the quality of care is better as well as the cost is low (as it
will be a negotiated cost).As far as KKPKP is concerned, it can act as an agent which
is allowed under micro insurance regulation. This will ensure that the client is
relieved of the financial contribution that s/he was making as annual insurance
servicing fee to KKPKP.
(2). Long claim settlement duration and pending claims:
There is a considerable time lag between the claims getting submitted to the final
disbursement. At any given time there is a backlog of 30-35 unsettled claims. The
claim is generally routed through KKPKP to the insurer and sometimes returns back
due to lack of proper document. The organisation again coveys these matter to the
members who get back to them with the necessary documents. These documents are
mostly receipts and bills from hospitals. The hospitals hike up the price when bills
and receipts are asked from them. Further there are other delays caused due to
internal administration problem, staff strikes, frequent transfer of staff and absences
within the insurance company.
As it is seen in the analysis (refer table-3.13), the time for claim settlement may range
from 3 months to 9 months. This is not conducive from the insured point of view who
might have taken loan at high interest rate which will translate to further debt to pay
off the interest amount of the loan.
This delay also acts adversely for the insured as most of them access hospitals or
nursing homes which give them services on credit with promise that as soon as
money is received from the insurer, they (members) would pay them back. When
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