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

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.
 FINO DRIVEN HEALTH are positively correlated. In a country
like India where 86 per cent of the total
MICROINSURANCE IN
labour force exists in unorganised sector
UNORGANISED SECTOR: and contributes to around 50 per cent to

CASE OF RASHTRIYA the national GDP (NCEUS

Report,2008), health of labour force
SWASTHYA BIMA YOJANA
becomes a vital area of investment for
1
Jatinder Handoo private and public sector stakeholders.
This becomes even more interesting
FINO is one of the primary when just around 2 per cent of the total
stakeholders involved in population of India is covered by health
conceptualizing and designing
biometric smart card based delivery insurance (Chandraseker
system for health insurance services in
Hemalatha, 2009) and public spending
India. Initially carried out as a pilot for
product design along with a leading on healthcare is just 0.9 percent of the
private sector GIC in Manipal,
Karnataka which was not implemented GDP2. In this context, it is in the larger
on field, the concept was later on interest of the economy to invest in the
employed in the delivery system of
RSBY . This paper takes an overview labour health and well being.
of the implementation part and
discusses how FINO has contributed Policy response to the issue, by the
in the whole process from design to
implementation part of the scheme. Government of India came in the year
2008 consequent of Government’s
1.0 HEALTH OF THE HEALTH IN INDIA commitment to the National common
minimum programme and the
A healthy labour force is fuel for GDP of
recommendations made by National
a country. In other words, health status
Commission for Enterprises in the
of both the financial and labour markets
unorganised sector (NCEUS), the

1
Jatinder Handoo is part of the business strategy
2
team at FINO based out at corporate office Navi Bali Vishal,2009
Mumbai.Due acknowledgement to Ms. Bela Arora – http://ibnlive.in.com/blogs/vishalbali/2516/53669/h
Management trainee @FINO for the research work ealthcare-sector-needs-urgent-reforms.html
carried out for the study.

Financial Information Network and Operations Ltd, Mumbai www.fino.co.in

2
Government launched one of the world’s technology and finally FINO contributed
largest mass health insurance schemes in consultations on behalf of the World
called Rashtriya Swasthiya Bima Yojna Bank to to the Ministry of Labour and
(RSBY) which is very different from its Employment (MoLE) Govt. of India (GoI)
predecessors and contemporaries in for the project on health
service delivery and
Insurance
implementation efficiency.
What makes the difference FINO not only unlocked Rs 4500 (RSBY). It is
crore potential micro insurance estimated
is the delivery and
market for health insurance
implementation model companies, it has also that round
based on biometric smart empowered poor to choose her 4% of BPL
health service provider and thus
card platform and role of population
created an incentive mechanism
implementing agencies like for health service providers to requires
FINO fintech offer quality health services in hospitalisation
India. every year
foundation(F^3).
and the cost
2.0 FINO’s RESEARCH & DEVELOPMENT:
per episode (at 1995-96 prices) was
UNLOCKING THE POTENTIAL OF HEALTH
INSURANCE IN UNORGANISED SECTOR estimated at Rs. 2,100 Ahuja,ICRIER
2004). Health insurance market in India
Initial research and development for the
is estimated to be around Rs 5000Cr
use of biometric smart card technology
which covers around 2 per cent of the
to deliver health insurance to poor was
country’s population at present3.
done by FINO team along with a leading
Biometric smartcard based delivery
private general insurance company as a
system spearheaded by F^F has
pilot at manipal (Karnataka state) but
brought a turnaround by unlocking the
the same was not implemented in the
business potential of around Rs 4500
field .Later on the concept was
presented to the World Bank. The bank
was convinced about the usability of the
3
Chandrasekhar .H,2009

Financial Information Network and Operations Ltd, Mumbai www.fino.co.in

3
Crore4 for health insurance companies Another indirect benefit of the efficient
and other stakeholders especially 37.5 delivery of the RSBY is the evolution of
crore BPL5 (100 per cent) members .It is the Public Health Delivery System
based on the premise If, instead of (PHDS). Public health delivery system in
directly bearing the cost of medical India is generally considered as being
treatment, government provides them implanted with low quality and poor
health insurance, the demand on service delivery. This pushes off
government funds may come down patients to private hospitals for
significantly as insurance helps in treatment which are usually quite
resource mobilisation from various expensive and this leads to greater out-
sources. In RSBY, Govt. pays an of-pocket expenses. This in turn leads to
average premium of Rs. 600 per BPL greater impoverishment and indebtness
house hold (family of five members) and for the poor. In India, 65% of poor get
in order to provide health coverage to into debt trap and 1% below the poverty
6.0 crore households over a period of line every year because of illness
five years (2008-2013) government will (NSSO, 2004). In RSBY both public and
need to finance Rs. 3600 Crores per private hospitals can be empanelled and
year6. Government even considers to public hospitals are given incentives to
extend RSBY to all households under treat beneficiaries as the money would
BPL. flow directly from an insurer to the public
hospital which they can use for their
own purpose like improving the
4
BPL population of India is around 37.5 Crore(2004- infrastructure and bringing in modern
05) according to the report of expert group headed
by Sh. Suresh Tendulkar, the planning commission of technology in the hospital. Thus, the
India. Assuming the premium paid by Govt is on an
average Rs 600/card for a family of five. The market design of RSBY scheme is also an
size crosses Rs 4500Cr . attempt to develop the entire ecosystem
55
BPL population (2004-05),as per Planning
commission of India. of health care of the country.
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.

Financial Information Network and Operations Ltd, Mumbai www.fino.co.in

4
3.0 FINO’s
’s CONTRIBUTION IN MAKING RSBY
DIFFERENT FROM PREVIOUS
GOVERNMENT SPONSORED HEALTH
INSURANCE PROGRAMMES:

FINO’s inputs for the use

se of biometric
smart card technology based delivery
apparatus and its contribution in
standardization of delivery platform
3.1 DESIGNING AND INITIAL ROLLOUT:
differentiates RSBY from its
In the design
gn phase, the
predecessors and
nd contemporaries. A
standardization was considered to be
beneficiary is given a pre loaded
the most challenging
nging task, considering
biometric smart card and Point
Point-of-Sales
the scale of the programme and the
(POS) machines installed are at the
number of players involved. By putting
network hospitals for carrying out
through the
he standardized platform - card
transactions, robust back end database
design, backend DBMS7, the data
is maintained for claim management,
maintenance format and the inter-
customerr service and for facilitating
operability of cards in network of
monitoring & evaluation
valuation (M&E) of the
8
hospitals across the country was made
scheme. While designing this scheme
possible.
lot of efforts were made to spell out in
detail the roles and responsibilities of
each of the stakeholder. FINO was 7
Database management systems.
8
involved in the RSBY programme righ
right Specifications
pecifications in card design, process flow, backend
platform, enrollment and card issuance, district
from its get-go
go stage and thus Kiosk and server specifications smart card layout,
RSBY card renewal specifications were deigned by
understands the programme dynamics FINO , that too in very short span of 3-4 3 months.
much better. 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

Financial Information Network and Operations Ltd, Mumbai www.fino.co.in

5
The technical specifications for this government to various insurance
project were designed in a very short companies. The card used for RSBY
span of 4 months. This in turn made is designed in such a manner that it
interoperability of cards feasible in the can be used as a multi application
network of hospitals across country. card i.e. the card is enough flexible to
FINO contributed in designing following add on other services like PDS,
initial components of the scheme. education vouchers or any other
scheme if introduced later on. The
• Process flow for RSBY,
• State level workshops were front end is designed for the
organized, enrollment process is such that it
• Enrollment & Card Issuance appears very simple and user friendly
specifications, but a robust back end is maintained
• Transaction system specifications for claim management, customer
• District kiosk and server service using which FINO provides
guidelines, services to insurance companies.
• 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.

Financial Information Network and Operations Ltd, Mumbai www.fino.co.in

6
3.2 IMPLEMENTATION: RESULTS FROM penetration of more than 95% (i.e.
( more
HARYANA
than 95% of villages were
re covered).
FINO fintech foundation was the first
among all service provide
providers in the The highest percentage is in Haryana as

country to start enrollment of compared to other service providers in

beneficiaries of RSBY in february 2008.

By May 31st 2009, it had completed the
Chart 1.1 Enrollment Percentage F^3
enrollment process in all 20 districts of
viz-a-viz
viz others
Haryana with more than 65% of 70 65%
beneficiaries linked with RSBY scheme. 60
Percentage Enrollment F
Success of such schemes depends 50
I
largely upon the level of penetration in 40 N
30 O
the rural pockets of the country i.e. the
20
number of villages where enrollment
10
process is carried out so that maximum
0
number beneficiaries could be brought Bihar Jharkhand Kerala Punjab Haryana
under the ambit of the scheme.
other states.

(The chart 1.1 is a comparison of BPL
families covered in various states wher
where
more than six districts are covered
under RSBY scheme started in 2008. In
Haryana, FINO has worked whereas
other
ther implementation partners
provided services in rest of the states)
As depicted in the chart 1.1 F^3 which
was the implementation partner
Haryana has brought the services to
more than 65% of beneficaries with a
3.3 MODUS OPERHANDI:: THE FINO STYLE
STY
There are multiple factors attributed to
FINO’s
NO’s high performance which has
now become the hall mark of FINO
handled projects. Not specifically in
have
Haryana but at other locations as
well.The pre-enrollment process is more
or less similar and involves RSBY
in
awareness creation, call for enrollments
by munadi (intimation) manager and
finally beneficiary enrollments. During
D

Financial Information Network and Operations Ltd, Mumbai www.fino.co.in

7
the pre-enrollment phase, awareness 4.0 Conclusion
programme is organized in the area In view of the gaps prevalent in previous
about the scheme and demonstration systems of delivering health insurance
about use of the card is carried out. schemes, FINO’s end to end service as
an implementation partner is
This is carried out two-three days prior
appreciated by stakeholders and
to the enrollment process, and
adopted by the Government of India to
enrollment team’s arrival in the village,
implement one of the largest mass
Generally ,the sarpanch of panchayat
health insurance programmes in the
is intimated about the programme and
world. The key is the use of bio-metric
local people are alerted through
cards a common panacea for common
announcements, pamphlets, door-to-
loopholes. By laying out this platform,
door canvassing, ‘munadi’-(traditional
the government is financing public
method of spreading news through
health both economically and
beating drum and announcing the
expeditiously. Also, this has established
news). On the day of enrollment FINO
a delivery channel which could
team visits the site early in the morning,
potentially be leveraged by the
(as most of the people are available in
Government to deliver more services
the morning), with their enrollment kits
like subsidy, education vouchers, PDS
that include laptops, web cameras,
etc in future. For the first time,
fingerprint grabbing device, on site
mammoth volume of data is being
printers and biometric smart cards and
stored which can be analyzed to deliver
generators to carry out enrollment and
very relevant information for the
issuance of the smart card on site.
government, insurance companies and
Finally, FINO’s experience of working in pharmaceutical companies etc.
the rural areas and understanding of The FINO designed technology platform
customer requirements helps to serve delivering health insurance helps
BOP segment of the society in a better insurance companies to obviate moral
way. hazards, thus making the product viable

Financial Information Network and Operations Ltd, Mumbai www.fino.co.in

8
for them. Moreover, at the same time Associates, B. F. (2006). Scoping on the
the use of card and the technology Payment of Social transfers through the
reduces the administrative hassles financial system. UK: Department of
involved by doing away with paper work International Development.
once and for all. This would eventually
Devadasan, N., Manoharan, S., Menon,
bring the cost down as it is scaled up.
N., Thekaekara, M., & Thekaekara, S.
The efficient implementation of the
(2004). ACCORD Communoty Healt
scheme has resulted in greater
Insurance: Increasing Acess to Health
convenience and empowerment of the
Care. Economic and Political Weekly ,
poor by providing them the choice of
3189-3194.
health service provider. The card is also
an instrument of identification for the Dror, D. M. (2006). Health Insurance for
BPL poor. Already the RSBY health the poor : Myths and Realities.
insurance scheme has made news in Economic and Political weekly , 4541-
the Wall Street and Business World 4544.
magazines. What remains to be seen is
Dror, D. M., Kuren, R., ost, A.,
how many countries would emulate this
ErrikaBinnendijk, Vellakal, s., & Dannis,
unique service model.
M. (2006, December 4). Health
insurance benefit packages priortized by
References
low-income clients in India : Three
Ahuja, R., & Jutting, J. (January 2004). criterias to estimate effectiveness of
Are the poor too poor to demand Health choice. Social Science and Medicine ,
Insurance? New delhi: Indian Council for pp. 884-896.
research on International Economic
Gumber, A., & Arora, G. A. (2006).
relations.
Health Insurance :still a long way to go.
Ahuja Rajeev(2004),Health Insurance Securing the insecure : a symposium on
for Poor in India,ICRIER. extending social security to unprotected
workers.

Financial Information Network and Operations Ltd, Mumbai www.fino.co.in

9
Johnson, D. (2008). Case Study on the
Use of Smart Cards to Deliver
Government Benefits in Andra Pradesh,
India. Chennai: Centre for Microfinance.

Khan, D. I. Health Ecosystem :

Achieving Impact in Community Health
with Public Private Partnership. Centre
for Insurance and risk Management,
Institute for Financial Management and
Research.

Mishra, R., Chatterjee, R., & Rao, S.

(2003). Changing the Indian Health
System : Current Issues, Future
Directions. New Delhi: Oxford University
Press.

NCEUS Task force (2008) Contribution of

the unorganized sector to GDP Report of
the Sub Committee of a NCEUS

Peters, D. H., yazbeck, A. S., Sharma,

R. R., H.pritchett, L., & Wagstaff, A.
(2002). Better Health system for India's
Poor:Findings, Analysis and Options.
Washington DC: world bank.

(2009). Presentation on Information and

Health Care : A Randomized
Experiment in India. iiG
workshop,Oxford university;LSE.

Financial Information Network and Operations Ltd, Mumbai www.fino.co.in

10
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.

Financial Information Network and Operations Ltd, Mumbai www.fino.co.in

11