Objectives To evaluate the effects of a government insurance program covering tertiary care for people below the poverty line in Karnataka, India, on out-of-pocket expenditures, hospital use, and mortality.Design Geographic regression discontinuity study.Setting 572 villages in Karnataka, India.Participants 31 476 households (22 796 below poverty line and 8680 above poverty line) in 300 villages where the scheme was implemented and 28 633 households (21 767 below poverty line and 6866 above poverty line) in 272 neighboring matched villages ineligible for the scheme.Intervention A government insurance program (Vajpayee Arogyashree scheme) that provided free tertiary care to households below the poverty line in about half of villages in Karnataka from February 2010 to August 2012.Main outcome measure Out-of-pocket expenditures, hospital use, and mortality.Results Among households below the poverty line, the mortality rate from conditions potentially responsive to services covered by the scheme (mostly cardiac conditions and cancer) was 0.32% in households eligible for the scheme compared with 0.90% among ineligible households just south of the eligibility border (difference of 0.58 percentage points, 95% confidence interval 0.40 to 0.75; P<0.001). We found no difference in mortality rates for households above the poverty line (households above the poverty line were not eligible for the scheme), with a mortality rate from conditions covered by the scheme of 0.56% in eligible villages compared with 0.55% in ineligible villages (difference of 0.01 percentage points, −0.03 to 0.03; P=0.95). Eligible households had significantly reduced out-of-pocket health expenditures for admissions to hospitals with tertiary care facilities likely to be covered by the scheme (64% reduction, 35% to 97%; P<0.001). There was no significant increase in use of covered services, although the point estimate of a 44.2% increase approached significance (−5.1% to 90.5%; P=0.059). Both reductions in out-of-pocket expenditures and potential increases in use might have contributed to the observed reductions in mortality.Conclusions Insuring poor households for efficacious but costly and underused health services significantly improves population health in India.

This paper estimates the impact of social health insurance on financial risk by utilizing data from a natural experiment created by the phased roll-out of a social health insurance program for the poor in India. We estimate the distributional impact of insurance on of out-of-pocket costs and incorporate these results with a stylized expected utility model to compute associated welfare effects. We adjust the standard model, accounting for conditions of developing countries by incorporating consumption floors, informal borrowing, and asset selling which allow us to separate the value of financial risk reduction from consumption smoothing and asset protection. Results show that insurance reduces out-of-pocket costs, particularly in higher quantiles of the distribution. We find reductions in the frequency and amount of money borrowed for health reasons. Finally, we find that the value of financial risk reduction outweighs total per household costs of the insurance program by two to five times.

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More than 50% of the world population was classified as urban for the first time in 2009 and is expected to reach around 69% in 2050. 1 The proportion of the urban population in the developing world is expected to increase from 45% to 66% during the same period. One of the immediate consequences of population pressure in urban spaces is the growth of slums or urban communities that are characterized by poor access to civic services, inadequate housing, and overcrowding.2 It has been estimated that slum populations would double before 2035 in the low-and middle-income countries. 3One of the main concerns regarding the growth of slum populations is that the living conditions of the slum dwellers could become a public health issue. The attention gained by the relation between poor health outcomes and living conditions is neither new nor restricted to the developing world. As early as the 19th century, the Public Health Acts of Britain aimed to improve water systems and sanitation facilities in slums.2 This was also true of other developed countries-notably, France and the United States-which attempted to regulate residential dwellings to contain the spread of disease among other things. Although the pace of urbanization in India historically has been slow, it is increasing rapidly. India's urban population grew by about 230 million between 1971 and 2008, and it is estimated that 250 million more will swell the urban population within the next 2 decades. 4 This urban growth has led to a population explosion in cities, and India boasts of 2 cities with a population of at least 10 million (Delhi and Mumbai). Literature from the developing world suggests that both communicable and noncommunicable diseases are a major concern for urban populations, particularly the slum populations. Already malnourished slum dwellers may experience additional stress because of overcrowding and poor living conditions and are more likely to have poor health outcomes. However, India-specific research findings paint a mixed picture. A study on urban slums in Maharashtra in 1999 indicated that women living in slums were more disadvantaged with respect to antenatal care than were women not living in slums. 5 This was reaffirmed by another study that compared the health status of poor populations in slums and in resettlement colonies in Delhi and Chennai and found that slum dwellers had worse health outcomes than those in resettlement colonies. rates of all illnesses, morbidity rates, incidence of hospitalization, and other health indicators as various proxies of health status. Our study examined the distribution of women's malnutrition in 8 cities across slum and nonslum populations. Malnutrition is a significant problem among Indian women. According to several studies that used the NFHS-3, only 52% of the women were within the normal weight range for a given height. 8,9 Following the World Health Organization, we defined malnutrition to include the dual burden of undernutrition and overnutrition. Until recently, attention has been exclusivel...

This project was funded by the Health Results Innovation Trust at the World Bank. The findings, interpretations, and conclusions expressed in this paper do not necessarily reflect the views of the Executive Directors of The World Bank, the governments they represent, or the National Bureau of Economic Research. The World Bank does not guarantee the accuracy of the data included in this work. NBER working papers are circulated for discussion and comment purposes. They have not been peer-reviewed or been subject to the review by the NBER Board of Directors that accompanies official NBER publications.