X Accessing medical benefits

under ESI Scheme

A demand-side perspective
X Accessing medical benefits
under ESI Scheme
A demand-side perspective
Copyright © International Labour Organization 2022
First published 2022

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Preface

The Employees’ State Insurance Scheme (ESIS) provides social security and social health protection
coverage to nearly 10 per cent of India’s population, mostly from households of formal sector workers. It
is further poised to cover millions of new beneficiaries from the informal sector as envisaged in the Code
on Social Security 2020. Moreover, as medical benefits form the major focus of the ESIS, it is bound to play
a crucial role in India’s recovery from the COVID-19 pandemic and its path to Universal Health Coverage
(UHC). With more than seven decades of experience in providing social security with statutory backing
and a tripartite governance system, the ESIS is uniquely placed to rise to this challenge. At the core of this
challenge lies translating legal coverage into effective coverage. In other words, the Employees' State
Insurance Corporation (ESIC) must guarantee quality service delivery to every entitled person.
Despite a number of measures taken to improve service delivery, the ESIS persists with low rates of
utilization of its medical benefits, and simultaneously high unspent financial reserves. Most existing
analysis has attempted to identify supply side issues hampering utilization of ESIS services. The ILO has
contributed to such analysis through its project “Technical support to ESIS for improving and expanding
access to healthcare services in India – A transition to formality”. As part of this project, based on inputs
from organizations of employers and workers, the ILO has carried out the present study titled, “Accessing
medical benefits under ESI Scheme: A demand-side perspective” in 2020-21. The present study brings
together comprehensive primary evidence from four states of India supplemented by an analysis of
relevant secondary data, to identify obstacles and incentives faced by beneficiaries in accessing ESIS
services.
The evidence in this study captures the health-seeking behaviour of beneficiaries, as well as awareness
and attitude of the insured persons and employers registered with the ESIS. The findings of this study
underscore differential experiences and perceptions of beneficiaries in diverse implementation context
of four states of India. The study highlights that while the ESIS beneficiaries appreciate the extensive
benefit package, especially the medical benefits, there is still substantial scope of strengthening the
effectiveness of the service delivery. At the same time, the beneficiaries themselves would gain from
stronger awareness of their entitlements under ESIS. An important area of focus for increasing overall
service utilization would be the provision of primary healthcare services. ESIS offers better financial
protection than other similar schemes in India. However, it can contribute in a much larger way to India’s
goal of Universal Health Coverage by increasing out-patient and in-patient healthcare service utilization
at its facilities. One way to do this, as the study indicates, would be to actively track and improve the
levels of beneficiary satisfaction.
Based on its findings, the study has developed a theory of change with specific recommendations for
strengthening ESIS performance in service delivery and utilization. In sum, the study emphasises the
need for the ESIC to track and utilize beneficiary satisfaction parameters in advancing its reform cycles,
including on the supply side. The ILO hopes that this study and its recommendations will enrich the
ongoing efforts for strengthening the ESIS. The ILO will continue to work with the ESI Corporation of
India and its tripartite constituents to improve the health outcomes for the workers and their families. A
robust social health protection system in the ESIS would be critical for a human-centred recovery from
the COVID-19 pandemic in India.

Dagmar Walter
Director, ILO DWT/CO–New Delhi
Acknowledgements

This research report titled “Accessing medical benefits under ESI Scheme: A demand-side perspective”
has been produced by the International Labour Organization, New Delhi (ILO), under the project
“Technical support to ESIS for improving and expanding access to healthcare services in India – A
transition to formality”, supported by the Bill and Melinda Gates Foundation. The report was developed
in collaboration with the Public Health Foundation of India (PHFI) and Ecorys India Private Limited. It has
been authored by Sakthivel Selvaraj+, Anup Karan+, Chetana Chaudhuri+, Suhaib Hussain+, Rajna Mishra+
and Vaibhav Raaj*.
The report has been reviewed by Indranil Mukhopadhyay (O P Jindal Global University), Mariko Ouchi
(Senior Technical Specialist on Social Protection, ILO) and Nina Siegert (Chief Technical Advisor, ILO). The
authors would like to thank Florence Bonnet, Labour Market and Informal Economy Specialist, ILO for her
methodological inputs. The authors are grateful to the Employees’ State Insurance Corporation (ESIC) of
India for their support. The report has immensely benefitted from the insights and feedback from ILO
constituents representing the workers and employers of India.

1+
Public Health Foundation of India
2*
International Labour Organization
Executive Summary

Historically, the Employees State Insurance Scheme (ESIS1) has been

among the largest social protection schemes for formal sector
workers in India.

The Employees State to underutilization of its facilities, weak access

to facilities, and unavailability of defined
Insurance Scheme packages. Given its wider scope of cost coverage,
beneficiaries continue to spend out-of-pocket
India’s Employees State Insurance Scheme and receive far fewer cash benefits than their
(ESIS) is one of the oldest and the largest Social potential. In the past, the government's audit
Health Insurance (SHI) schemes for formal sector reports, parliamentary committees, and other
workers worldwide. Currently, the ESIS covers peer-reviewed articles have pointed to systemic
35 states and union territories spanning 566 weakness and poor performance of the system.
districts. It covers about 34 million employees, While the focus of these reports and evidence
with a beneficiary population of 132 million. has largely corroborated the issues around the
Its comprehensive benefits include in-patient/ supply side, evidence is scarce on the demand
out-patient and preventive services. Its other side. The evidence on the demand side that
social security cash benefits include supporting exists is from a small number of micro-studies,
maternity, sickness, disability, unemployment, mostly at district and industrial cluster levels,
and so on. ESIS is implemented in non-seasonal regarding the obstacles faced by the beneficiaries
units that employ ten or more persons in factories in accessing the ESI Scheme benefits. This
and other service sectors including shops, hotels, report tries to provide a wider perspective
restaurants, cinemas, and so on. The monthly with evidence from four states of the country.
income of the employees eligible to avail scheme
benefits should be ≤ Rs. 21,000. Contributions are
made by the employers, the employees and the
state governments. The ESIC operates its own
hospitals and dispensaries, besides purchasing ESIS covers 35 states
curative care from private health facilities for and union territories
hospitalization and out-patient services through
the empanelled IMPs (Insurance Medical
with about 34 million
Practitioners). employees, with a
beneficiary population
A necessary demand-side of 132 million. Its
perspective comprehensive benefits
include in-patient/
Despite having impressive performance over
the last 70 years, several weaknesses and out-patient and
gaps still persist in the functioning of ESIS. The preventive services.
population coverage is lesser than the potential
ESIS holds. The service coverage is poor leading
It seeks to analyse the following: population. With about 31 million employees
registered in 2018-2019, they accounted for about
► Beneficiaries’ knowledge, attitude and
91 per cent of the total 34.02 million workers in
awareness levels in relation to ESIC
the formal employment category. This shows
entitlements;
appreciable coverage by the ESI under the formal
► Employers’ knowledge, attitude and awareness employment category in the formal sector. Nearly
about ESIS; half of the workers who can potentially be included
under the ESI are denied benefit due to their not
► Identify and suggest potential solutions that
meeting the inclusion criteria in the definition
can be used to design services, deepen service
of workers. Presumably, such an employment
coverage and improve ESIS performance.
is largely linked to the contractual work that is
provided directly by the employer or provided
Methodology of the study through a contractor.

This research seeks to achieve the above objectives

by employing a mixed-method approach with a Limited awareness of the
two-stage stratified random sampling method. entitlements: insured persons
The supply-side dimensions were analysed by
compiling and assessing the ESIS performance Several insights emerge from the field-level
for the past decade. This analysis was done analysis of data. The survey findings reveal a higher
by organising its evidence base from publicly level of awareness among employees in relation to
available data: (a) ESIC annual reports; (b) ESIC’s medical benefits (89 per cent) than on cash
National level sample surveys including Periodic (46 per cent) and disability benefits (32 per cent).
Labour Force Survey (PLFS) 2017-2018 and Health Studies also showed that understanding about
Surveys of 2017-2018. The demand-side evidence the medical benefits is relatively greater among
was gathered based on field level survey from four employees in Haryana (94 per cent) than in
Indian states of Tamil Nadu, Rajasthan, Haryana Jharkhand (75 per cent). This could plausibly
and Jharkhand. It employed tools to cover both be due to the varying socio-economic and
quantitative and qualitative data from the field. educational status of the respondents. Although
The quantitative data were collected from 3,339 enrolment is mandatory for employees, the
employees and 553 employers across these four proportion of enrolment of households in the
states. The qualitative data through Key-Informant ESI scheme includes its insured persons (IPs)
Interviews (KIIs) were obtained from ESIC officials, (85 per cent), while this share drops to 78 per
trade union leaders, employers’ associations, and cent after excluding the employees. Thus, over
healthcare providers. one in five household members did not enrol in
the scheme, whereas over three fourths of the
households and employees had ESIC cards.
Key findings
Limited awareness of
Limitations of rapidly
entitlements: employers
expanding legal coverage
In terms of employers’ knowledge, a sizeable
The quantitative evidence from secondary data
share of them is aware of employees’ medical
highlights several achievements and weaknesses
benefits (92 per cent), followed by cash benefits
of the ESIS in terms of its performance. The
(62 per cent), medical aid (57 per cent), disability
evidence shows rapid and significant growth,
benefits (41 per cent), and far less on funeral
signalling a five-fold rise in the number of
expenses (20 per cent) and unemployment
enterprises (from 0.22 million in 1999-2000 to 1.03
benefits (14 per cent). Prior to reforms initiated
million during 2018-2019) with a corresponding
in 2020 whereby the registration process was
rise in the number of employees covered from
made simple, employers were often faced with
7.86 million to 31.17 million. Against three per cent
several challenges. Nearly one of two employers
of the total population covered in 1999-2000, ESIS
reported a lengthy process of insurance number
currently covers approximately one tenth of India’s
generation, whereas 41 per cent of the employers
surveyed indicated the difficulties surrounding was accounted for by private non-empanelled
the biometric enrolment process for obtaining facilities.
an ID card. The survey further highlighted that
30 per cent of employer respondents appear to
face challenges in the online registration process,
Improving in-patient utilization
while 28 per cent of them reported having and weak out-patient utilization
faced the challenge of submitting documents,
In respect of the performance of healthcare
including the quantum and processing of
utilization, the rate of hospitalization enhanced
documents required. Expectedly, only about half
significantly from 1.3 per cent in 1999-2000 to
of employers were aware of grievance redressal
2.8 per cent in 2017-2018. Thus, utilization rates
mechanisms, and an equal number of them had
reflect similar levels recorded in national sample
used telephonic mode in the past as a mechanism
surveys. Outpatient utilization rate per 1,000
to reach out to the authorities. Barely one in
beneficiaries, dropped significantly from 609 to 208
three employers were cognizant about Suvidha
for the same period due to inadequacy in facility
Samagam, while inspections from ESIC officials
expansion. Similarly, the rate of investigations
were reported by one fourth of the employers as
(diagnostics) per 1,000 beneficiaries also dropped
a mechanism for grievance redressal.
substantially from 37 to 15 for the referred period.
The survey findings in respect of the hospitalization
Variable health-seeking episodes revealed that 62/1,000 beneficiaries
behaviour among beneficiaries sought treatment, with significant variation
among states: Tamil Nadu (104/1,000 persons),
Healthcare utilization patterns showed that Rajasthan (28/1,000 persons), Haryana (67/1,000
one in five persons reported at least one illness persons), and Jharkhand (49/1,000 persons).
in the past 15 days with females reporting a The survey reported a slightly higher rate of
slightly higher rate of illness than males, with hospitalization episodes, indicating a higher level
considerable variation in illness reporting of hospitalization when ESIC, empanelled and non-
across states. Over half of the sick individuals empanelled hospitalization were considered. In
sought treatment. Yet, the average among respect to the type of facilities chosen, one in three
the four states hides significant differentials hospitalizations occurred in an ESI hospital: (i)
in treatment-seeking as 94 per cent of about 15 per cent hospitalization in a government
beneficiaries in Tamil Nadu sought care against hospital; (ii) barely 5 per cent of the hospitalizations
10 per cent in Jharkhand. The share of beneficiaries occurred in a private empanelled facility; (iii) the
seeking treatment in Haryana and Rajasthan rest nearly half of the hospitalization episodes
was 60 per cent and 38 per cent, respectively. were treated in private hospitals that were not
Substantial differences in utilization of health care empanelled. Since some of the ESIC hospitals
across states highlight variations in treatment- were designated for COVID-19 care, it is highly
seeking behaviour, suggesting the availability or unlikely that the beneficiaries would have sought
lack of healthcare facilities. Although 82 per cent treatment in the ESIC hospitals.
of beneficiaries did not seek care due to the illness
not being considered serious enough, about
7 per cent of the beneficiaries did not seek
Lower yet significant out-of-pocket
treatment due to the lack of nearby health expenditure by beneficiaries
facilities. Also, 8 per cent of beneficiaries forewent
Despite generous medical and cash benefits,
treatment owing to unsatisfactory health service
ESI beneficiaries appear to incur costs, though
provision. The gross underreporting suggested
relatively far less than other insurance schemes.
by the field survey could be due to the COVID-19
The average expenditure incurred by households
pandemic, and associated restrictions, placed
covered by the ESI scheme was Rs. 38,668 annually,
during the field survey period. Patients were
while CGHS beneficiaries paid out Rs. 50,470.
under the influence of fear and stigmatization.
On the contrary, households covered by private
This forced them to not report even if they faced
health insurance schemes paid nearly double the
simple ailments of fever, cold, cough, and so on.
expenditure than that incurred by ESI beneficiary
Yet, barely one in four OP visits were sought in
households.
ESIC dispensaries/hospitals and a similar share
A relatively lower level of households’ out-of- beneficiaries Rs. 1,021 as against Rs. 157
pocket (OOP) expenditure could be because when beneficiaries sought treatment in ESI
households may be accessing secondary-level dispensaries. Even in a private empanelled facility,
nursing homes or other less expensive facilities. beneficiaries ended up paying a relatively high
A large share of this spending could potentially OOP at Rs. 842. Notwithstanding the treatment
be used for buying medicines, diagnostics and and cost associated, the pattern observed
consultations. The field survey further reveals here corroborates the evidence presented in
an episode of treatment for hospitalization, the previous section. It highlights that ESIS
the mean spending works out to Rs. 23,834, beneficiaries were less prone to incurring
but with significant variation depending upon catastrophic spending than those covered by the
which facilities beneficiaries choose from. government-funded health insurance schemes
Beneficiaries ended up paying barely Rs. 2,426 or even the private health insurance schemes.
for an episode of in-patient service at ESIC facility The evidence indicates that medicines’ shortage
as against Rs. 34, 372 when beneficiaries sought remains a major issue in ESIC hospitals. The non-
treatment from the private non-empanelled availability of the comprehensive diagnostics
hospital. On the other hand, even though only services is yet another critical factor accounting
7 per cent of ESI beneficiaries sought treatment for OOP incurred by the beneficiaries. As far as
in a private empanelled hospital, yet they were the child delivery services are concerned, one
forced to pay Rs. 13,409, about 5 times than out of three child deliveries occurred in ESIC
when they sought care in ESI facilities. The field facilities, similar to the numbers in private non-
evidence suggests that a considerable share empanelled hospitals. About 10 per cent each was
of beneficiaries seek treatment in private non- accounted for by the public hospitals and private
empanelled hospitals and by doing so were empanelled ones. This implies a significant gap
exposed to a serious level of OOP spending. in the provision of the child delivery services
Similarly, per episode out-patient treatment within ESIC or empanelled facilities.
in private non-empanelled facilities costed
Low beneficiary satisfaction ESI healthcare service utilisation. Improving
with ESI services primary healthcare provision should be accorded
the highest priority in the ESI reforms agenda. The
The study showed that only 50 per cent of the ESI should engage with more state governments,
employees were satisfied with the information to expand the IMP system for better availability
provided by ESI regarding cost, treatment and of primary healthcare services. Moreover, there
reimbursement. In respect of the availability of is a need to move away from a demand-based
staff/medicines, about 61 per cent of respondents approach to a population-based approach. This
remained satisfied and two in three patients would entail expanding services beyond those
appear to have been satisfied with the quality of who directly approach ESI facilities. One way
services provided in ESIC hospitals. In respect to of doing this would be to increase focus on the
dissatisfaction levels, the field findings painted preventive health programmes that reach out to
a grim picture of the hospital behaviour as only beneficiaries in their places of work and living;
47 per cent of hospitalization cases were Third, there is an urgent need to improve financial
considered satisfactory. It implies that an adequate risk protection measures for the ESI beneficiaries.
room exists to improve behaviour as over half This can be achieved by improving the efficiency
of such hospitalization events turned out to be of existing facilities, providing additional services
unsatisfactory. In 52 per cent of hospitalization over the above what is being provided, and
cases, beneficiaries wanted to visit again for perhaps recruiting specialists, doctors, nurses
treatment. and other healthcare workers, besides avoiding
shortages and stock-outs of drugs and diagnostic
Survey results identified several reasons for
facilities. Fourth, periodic beneficiary satisfaction
dissatisfaction:
surveys should be considered as a device to track
► Respondents were not aware of the benefits the effectiveness of all reform measures discussed
available for the beneficiaries (17 per cent), here. Such surveys should also take into account
the internal diversity of the beneficiary base as
► Partial coverage of payment (13 per cent),
well as the varying implementation environments
► Technical problems (11 per cent), across different regions. Ideally, such a survey
should generate periodic performance matrices
► The problem in claim settlement (10 per cent),
for different implementing actors, within the ESI
and
system. In the similar vein, this study has developed
► Unavailability of medicines/equipment (9 per a model composite index of ESI performance of
cent) and so on. different states. The findings from this index have
Moreover, 6 per cent and 5 per cent of the been revealed in the anomalous performance of
respondents complained about non-cooperation states like Maharashtra and Tamil Nadu.
from the employers and non-submission of funds The ESIC may consider further developing this
from the employer, respectively. Analysis of the index as per their specific needs for an annual
reasons for dissatisfaction in non-empanelled public ranking of states by their performance
private hospitals shows that the major reasons in delivering ESI services. Finally, generating
are partial coverage of payment, problems in additional evidence for ESI transformation is called
claim settlement, and lack of awareness about the for here. This may include further research on the
benefits of ESI. demand side including determinants of health-
The comprehensive set of evidence presented seeking behaviour of ESI beneficiaries; mapping
here based on field-level data, available secondary of wider stakeholder ecosystem at the state
data, and feedback from the social partners point level; understanding local healthcare provision
to the imperative of addressing each of the issues landscape; assessment of non-empanelled
identified from the supply and demand side. First, providers’ capacity and willingness to empanel
the imperative of an outcome-focused awareness with the ESI Scheme; and review of the functioning
strategy is critical at this stage. This mission of tripartite governance structures at various
would have a two-fold purpose – outreach to the levels in the states. The evidence and information
beneficiaries beyond their workplaces and training thus generated can be systematically utilized
of both the beneficiaries and the concerned ESI in developing more responsive reforms with
staff in improved access and delivery systems. measurable impact on local level utilization of ESI
Second, there is a need for significantly improving health services.
Contents

Preface 05
Acknowledgements 07
Executive summary 09
List of figures 16
List of tables 17
List of boxes 18
Abbreviations 19

X Chapter 1: Background, objectives and sample design 20

1.1. Background 20
1.2. Key objectives 20
1.3. Methodology 22
1.3.1. Selection of states for ESI beneficiary survey 22
1.3.2. Sample size 24
1.3.3. Sampling design 26
1.3.4. Data collection methods 26
1.3.5 Factoring in the impact of COVID-19 27
1.4. Characteristics of the samples 29
1.4.1. Employees (insured persons) 29
1.4.2. Employers (enterprises) 32
1.4.3. Employee households’ income and consumption expenditure 35
1.4.4. Enterprises’ registration status by the types of registration 35
1.4.5. Distribution of enterprises’ turnover across employment size by states 36

X Chapter 2: Role and performance of Employee State Health Insurance Scheme

in India, 1999-00 to 2018-19 38

2.1. Introduction 38
2.2. Breadth of coverage by ESI 39
2.3. Depth of coverage by ESI 43
2.4. Cost coverage by ESI 48
2.5. How strategic is ESIC purchasing? 53
2.6. Key observations 59
2.7. Preparing for next steps 60

X Chapter 3: Key findings from the field survey among beneficiaries 62

3.1. Introduction 62
3.2. Awareness and knowledge about different aspects of ESI 63
3.2.1. Awareness and knowledge about ESI benefits 63
3.2.2. Knowledge and awareness involving enrolment
and registration 66
3.2.3. Enrolment pattern and scheme coverage among beneficiaries 68
3.2.4. Knowledge about employer and employee contribution 69
3.2.5. Awareness and knowledge levels underlying grievance
redressal mechanisms 71
 3.3. Healthcare utilization pattern among ESI beneficiaries 72
3.3.1. Reporting of illness of beneficiaries 72
3.3.2. Treatment pattern of out-patient care visits 74
3.3.3. Treatment pattern for hospitalization episodes 77
3.4. Financial risk protection measures 79
3.4.1. Workday and wage loss due to hospitalization 81
3.5. Maternity, child delivery, and OOP payments 82
3.6. COVID-19 and its associated knowledge, compensation from ESI 83
3.7. Occupational hazards and safety measures faced by employees 83
3.7.1. Levels of health risks faced by employees, including types of health risks 85
3.7.2. Employers’ awareness about occupational hazards 87
3.7.3. Treatment sought for occupational hazards
by the type of health facilities used and states 89
3.7.4. Measures taken by employers to prevent work site accidents 91
3.7.5. Enterprises facing accidents and type of support received 94
3.8. Satisfaction levels of employers/employees 95
3.8.1. Patient satisfaction level relating to health care 95
3.8.2. Dissatisfaction levels and reasons for dissatisfaction 99
3.9. Summing up 100

X Chapter 4: Key findings and recommendations 105

4.1. Key synthesis from secondary evidence 105

4.2. Key findings from the field survey 106
4.3. A theory of change for the ESI Scheme 111
4.3.1. Poor health-seeking behaviour depressing demand 112
4.3.2. Local competition to ESI services 112
4.3.3. Weak local oversight and stakeholder ownership 112
4.4. Recommendations 113
4.4.1. Outcome-focused awareness strategy 113
4.4.2. Improving ESI healthcare service utilization 114
4.4.3. Improving financial risk protection of ESI beneficiaries 114
4.4.4. Improving overall beneficiary satisfaction 114
4.4.5. Generating evidence for ESI transformation 115

X Bibliography 116

X Annexures 118

Table 1: Values of indicators used for estimating index 118

Table 2: Index values of indicators and average composite index 119
Table 3: Values of indicators used for estimating composite index 120

X Endnotes 121
List of Figures

1.1 Classification of states based on the composite index 24

2.1 Average number of employees/beneficiaries per employer 40
2.2 India’s current employment structure, 2018-2019 41
2.3 ESI and formal employment, 2017-2018 42
2.4 Number of hospitals, beds and rate of hospitalization,
1999-2000 to 2018-2019 44
2.5 Rates of hospitalization and number of beds 45
2.6 Bed occupancy in select ESI hospitals, 2017-2018 46
2.7 Rate of OP visits and number of dispensaries 47
2.8 Number of employees covered and their contribution,
1999-2000 to 2018-2019 48
2.9 Rate of hospitalization and expenditure per beneficiary 49
2.10 Rate of out-patient visits and expenditure per beneficiary 50
2.11 Average expenditure for hospitalization and loss of income, 2017-2018 51
2.12 Percentage of households incurring catastrophic spending
for hospitalization and healthcare, 2017-2018 51
2.13 Households catastrophic expenditure for hospitalization and average
expenditure per ESI households, 2017-2018 52
2.14 Households catastrophic expenditure for healthcare and average
expenditure per ESI households, 2017-2018 53
2.15 Package rates under different insurance schemes for hospitalization 55
2.16 How efficient are medicines procurement by ESI, 2019-2020 58
3.1 Employees’ awareness about medical, cash and disability
benefits (figures in per cent to total) 64
3.2 Employers’ awareness about registration and enrolment 66
3.3 Difficulties faced by employers in enrolment and registration 67
3.4 Challenges faced by employers in making payment contribution 70
3.5 Persons suffering from illness for the past 15 days and
treatment sought 73
3.6 Challenges in seeking and the reasons for not seeking healthcare 73
3.7 Rates of healthcare utilization by out-patient and in-patient visits 74
3.8 Utilization of out-patient healthcare by types of facilities across states 76
3.9 Utilization of hospitalisation by types of facilities across states 78
3.10 Levels of OOP expenditure among beneficiaries including utilisation for
hospitalisation and out-patient visits 80
3.11 Average work day lost and wage loss due to hospitalisation 81
3.12 Utilization pattern of child delivery and OOP expenses 82
3.13 Mean wage loss and compensation against COVID-19 84
3.14 Health risk due to occupation and knowledge about health
and safety risks of jobs 86
3.15 Awareness about work place hazards (% of employers aware
about the presence of occupational hazard in the workplace) 88
3.16 Distribution of health hazards 89
3.17 Percentage distribution of healthcare sought for the
occupational hazards and type of institution 90
3.18 Types of cards used for occupational health treatment 90
3.19 Accidents in last five years and measures taken for preventing
the occupational hazard 92
3.20 Measures taken for preventing occupational hazards,
by enterprises types 93
3.21 Percentage of enterprises submitted an accident report
and received support (any) from ESI 94
3.22 Types of benefit received from ESI for reporting an accident 95
3.23 Share of employees reporting various types of ESI
hospital satisfaction 96
3.24 Conditions of ESI facilities in in-patients' opinion (treated
in ESI hospitals) 97
3.25 Positive aspects of ESI scheme in employer’s and employee’s opinion 98
3.26 Reasons of dissatisfaction for hospitalization episodes treated in
ESI hospitals 99
3.27 Reasons of dissatisfaction for hospitalization episodes treated in
private empanelled 100
4.1 Theory of change for the ESI scheme 111
List of Tables

1.1 Number of employers and insured family units covered

and sample selected for the survey 23
1.2 Number of healthcare providers and sample selected 25
1.3 Sample distribution by states across employers, employees, providers,
unions/associations, officials in the four select states 26
1.4 Distribution of employee sample by sector of employment 29
1.5 Distribution of employee sample by employee size class 30
1.6 Gender and age distribution of employee sample 30
1.7 Gender and age distribution of employee households by states 31
1.8 Percentage distribution of individuals by their education status 31
1.9 Distribution of employee households by religion and caste 32
1.10 Percentage distribution of enterprises by ownership and
sector as reported by an employer 33
1.11 Distribution of enterprises by employment size 33
1.12 Percentage distribution of enterprises by employment
size and gender of employers 33
1.13 State-wise distribution of enterprises sector-wise 34
1.14 Percentage distribution of enterprises by major industry
sectors across states 34
1.15 Average employee household income and average per person
consumption expenditure across states 35
1.16 Percentage of enterprises registered under various acts 37
1.17 Percentage distribution of enterprises by the time of
registration with ESI across states 37
1.18 Average yearly turnover for different employment size class across
states in INR (crores) 37
2.1 Number of benefit packages, their description and providers in ESI vs
other comparable health insurance schemes 54
2.2 Number, value of referrals and total medical benefits, 2017-2018 56
2.3 Composite index of performance of ESI in States 59
3.1 Percentage of employees facing different types of health hazards 87
3.2 Experience of IP patient in ESI-empanelled private hospitals 98
List of Boxes

1 A weak linkage in the level of formalization and ESI coverage 43

2 Strategic purchasing in ESIC: a note 57
Abbreviations

CSO Central Statistics Office

CGHS Central Government Health Scheme

DIC District Industries Centre

EPFO Employees' Provident Fund Organisation

ESIC Employees' State Insurance Corporation

ESIS Employees' State Insurance Scheme

FGD Focused Group Discussions

GST Goods and Services Tax

IP Insured Person

IMP Insured Medical Practitioner

IDI In-depth interview

KII Key-informant interview

NSSO National Sample Survey Office

OOP Out-of-Pocket

PAC Public Accounts Committee

TNMSC Tamil Nadu Medical Services Corporation

PLFS Periodic Labour Force Survey

PHFI Public Health Foundation of India

PCNL Percutaneous nephrolithotomy

PMJAY Pradhan Mantri Jan Arogya Yojana

RMSC Rajasthan Medical Services Corporation

RSBY Rashtriya Swasthya Bima Yojana

SHI Social Health Insurance

TAT Turn Around Time

VAT Value-added Tax

20 Accessing medical benefits under ESI scheme: A demand-side perspective
Background, objectives and sample design

1. Background, objectives and sample design

Historically, the Employees' State Insurance Scheme (ESIS1) has

been among the largest social protection schemes for formal sector
workers in India.

1.1. Background character but largely confined to formal sector

enterprises. One defining characteristic of ESI is
In its comprehensive gamut of social security its comprehensiveness and all-inclusive benefits
benefits, medical benefits occupy a place of by way of not only providing care for in-patient/
prominence given the level of expenditure and out-patient and preventive services but also
the depth of coverage. With this, the ESI Scheme other social security cash benefits (such as,
performs the role of a typical social health maternity, sickness, disability, unemployment,
insurance scheme. Resources are mobilized and so on)2. Out of the total 566 notified districts
from employers and employees with limited (381 fully implemented districts and 185 partially
contributions received from state governments. implemented districts, leaving 156 districts as non-
Currently, for every insured employee, the implemented districts), ESIC hospitals are present
employer and employee contribute 3.25 per cent in about 150 districts, while the beneficiaries are
and 0.75 per cent, respectively, of the employee’s also entitled to access hospital care from other
wage. The ESI Scheme covers 35 states and empanelled hospitals. With respect to out-patient
union territories spanning 566 districts. The and preventive care, services are provided through
scheme is applicable to non-seasonal units approximately 10,000 medical units (consisting
engaging 10 or more employees in factories of ESI dispensaries and IMPs). As the healthcare
besides covering shops, hotels, restaurants, service provider network of the ESI evolves to cater
cinemas, transport undertakings, newspaper to a rapidly growing beneficiary population spread
units, insurance and non-banking financial across India, at present, the facilities remain
establishments, and so on. Employees eligible for unevenly distributed across districts.
social security coverage are those earning Rs≤.
21,000 per month. However, employees earning With the above features, the ESI Scheme remains
Rs. <137/- a day as daily wages are exempted from one of the largest actors in the Universal Health
payment of such contributions. The income level Coverage (UHC) agenda for India. The present
for eligibility of persons with disability for availing study is an effort to understand the ground-
ESIC Benefits is Rs. 25,000. level challenges in increasing utilization of ESI
healthcare services, for the scheme to fully realise
According to the ESIC’s annual report 2019-2020, its potential.
the scheme approximately covers >34 million
employees spread across 1.2 million employers, w
ith a total beneficiary population of more than 132 1.2. Key objectives
million (including insured persons (IPs) and their
The overall objectives of this study are:
families). The ESIC operates its own hospitals and
dispensaries, besides purchasing curative care ► To assess the health-seeking behaviour,
from private health facilities for hospitalization needs and perceived challenges of current
and out-patient services through the empanelled beneficiaries (workers and economic units)
IMPs (Insurance Medical Practitioners). The regarding their ESI health care insurance,
risk-pooling underlying ESI is large, national in access to services in ESIC’s own and empanelled
healthcare service providers;
 Accessing medical
Accessing benefits
medical under
benefits ESIESI
under scheme: AA
scheme:
Background,
demand-side
demand-sideperspective
objectives
Background, objectivesand
perspective
andsample
sample design
design 21

► To assess the beneficiaries’ (workers’ and ► The beneficiaries’ level of information

employers’) knowledge about ESI benefits about their health insurance benefits and
and, in general, benefits of a health insurance entitlements;
coverage; and
► The beneficiaries’ level of satisfaction with ESI
► To identify and suggest potential solutions services, particularly related to health care
that can be used to design services, which coverage; and
would deepen service coverage and facilitate
► The beneficiaries’ attitudes towards ESI
beneficiaries, employers, and healthcare
facilities as compared to other public and
providers underlying ESI health insurance
private healthcare service provision facilities.
schemes.
For the ESI-affiliated employers, the study
Overall, the present study would map the
examines:
perspectives of the current beneficiaries of the ESI
Scheme on various aspects of their participation ► The level of information employers have about
and entitlements in the Scheme. ESI benefits and entitlements;

For the insured persons (workers), the study ► Their experience with ESI and their perception
examines the following: of the quality of services provided; and

► The beneficiaries’ perception of ESI health ► Their behaviour and motivation to enrol their
insurance, their expectations and behaviour workers into ESI.
relating to healthcare service utilization;

1
ESI and ESIS have been interchangeably used throughout this report to refer to the ESI Scheme in general.
2
The full list of ESI benefits can be seen on the ESIC website: https://www.esic.nic.in/information-benefits
22 Accessing medical benefits under ESI scheme: A demand-side perspective
Background, objectives and sample design

The current study has also gathered some The study was complemented by an analysis of
supplementary information from other existing national survey data, such as PLFS 2017-
stakeholders of the ESI system. 2018 and 2018-2019) and health surveys conducted
by the National Sample Survey Office (NSSO),
For selected ESI healthcare service providers, the
latest Economic Census data, besides assessing
study attempts to understand their perception
ESI scheme details. The analysis from secondary
regarding the performance of the ESI in
data complements the findings of the field-based
implementing social health insurance.
survey. Evidence from the secondary analysis is
In realizing the above objectives, the study has outlined in Chapter 2, while Chapter 3 highlights
additionally focused on illustrating the diversity key evidence emerging from the field survey.
of needs, experience and outcomes for female
insured persons and family members.
1.3.1. Selection of states for
In conclusion, this study recommends
ESI beneficiary survey
improvement in the quality and utilization of ESI
services for its diverse beneficiary base. The study carried out a broad ranking of the
states by assessing several indicators of the ESI’s
1.3. Methodology functioning in respective states, and combining
them in regional groupings. It is important to note
The study employed a mixed-methods approach that this composite index may not represent the
for obtaining both quantitative and qualitative full performance matrix of the states in the ESI
data from stakeholders in the four states, focused scheme. In order to have such a performance
on existing ESI-insured workers and their families, ranking a more detailed assessment and
ESI-affiliated employers and healthcare providers. organization of relevant variables with suitable
The quantitative data were generated through weightages where necessary, would be required.
a large-scale survey of employers and workers The purpose of the present composite index is
registered in the ESI Scheme. Qualitative data simply to achieve a broad categorization of states
were generated using Key Informant Interviews to be selected for this study.
(KIIs) with other stakeholders including healthcare
The selected indicators represent five different
providers (both in ESIC’s own and empanelled
dimensions of the ESI’s functions in different
facilities), trade union representatives, and
states. These dimensions are: (i) level of
employer associations’ representatives.
participation of economic units of the state in ESI;
(ii) beneficiary coverage; (iii) health infrastructure
available for ESI beneficiaries; (iv) utilization rates
of health care by the ESI beneficiaries; and (v)
This study attempts per capita expenditure on beneficiaries by the

to understand their ESIC. In four such dimensions, two representative

indicators were selected, while the fifth included
perception regarding one indicator. The indicators used for preparing a
the performance of the composite index for each state are as follows:

ESI in implementing ► Level of the participation of the economic

units of a state in ESI
social health insurance.
● Percentage of ESI-registered employers
among total non-agricultural enterprises
● Number of employees per ESI-registered
We adopted a two-stage stratified random employer
sampling method. The first stage was the selection
of states, as outlined in the next section. The second ► Beneficiary coverage
stage involved the selection of ESI-registered ● Number of beneficiaries per employer
employers (enterprises) and insured persons
(employees) associated with those enterprises. ● Number of beneficiaries per IP
This is further described in Section 1.3.2.
 Accessing medical benefits under ESI scheme: A demand-side perspective
Background, objectives and sample design 23

► Health infrastructure Scaled value (S) of indicators = (Xi-Mn)*100/

(Mx-Mn)= ………………………………… (1)
● Number of hospitals (ESIC and empanelled)
per 100,000 beneficiary population The composite index = (∑Si /n) .....................…….. (2)
● Number of dispensaries (ESIC and Where ‘Xi’ denotes the value of any indicator for any
empanelled) per 100,000 beneficiary state; Mn is the minimum value of any particular
population indicator across states; Mx is the maximum value
of the particular indicator across states, and ‘n’
► Utilization rates
indicates the number of indicators. The index
● Hospitalization rate value of each indicator along with the average
composite index for each state is given in Table 1.1
● Outpatient visit rate
given below. Finally, all the 23 major states were
► Expenditure ranked in descending order based on the value of
● Per capita expenditure the composite index and were classified into four
major groups. The index value from the high to low
The values of the indicators for 23 major states indices represents the states with the strongest
are presented in Table 1.1 These indicators to the weakest intensity of the ESI’s functioning3
were obtained for the year 2017-2018 from the in respective states. The threshold values for
Annual Report of ESI. The union territories were classifying the states based on index measures into
grouped with the neighbouring major states and groups have been taken to represent a generally
all the North-East Indian states were merged declining gradient of ‘intensity’ across states. For
with Assam. The five sets of indicators were used instance, Group I includes states having an Index
to construct a simple (unweighted) index for value of ≥40. Group II includes states having index
different states. The values for each state and value between 30 and 40. Group III states have
each indicator were standardized (scaled) using index values <30. Figure 1.1 below presents a list of
variance method formulas (1) and (2) as given states in the four groups along with the estimated
follows: composite indices.

X Table 1.1. Number of employers and insured family units covered and sample selected
for the survey

States Number of Number of Sample number of Sample number

employers IPs covered employers selected of IPs selected

Jharkhand 17 796 3 78 250 38 193

Haryana 1 32 878 48 21 000 150 1 013
Tamil Nadu 1 15 193 42 72 920 173 1 000
Rajasthan 1 48 258 45 94 170 192 1 133
All-India 10 33 730 3 43 31 300 553 3 339
4 States Total (Numbers) 4 14 125 1 40 66 340 553 3 339
Percent Share (4 States) 40 41 0.13 0.02

Source: Number of employers and IPs units are from ESIC Annual Report 2017-18

3
The ‘intensity of the ESI’s functioning’ is meant to represent the general level of activities and presence of ESI infrastructure and
services in a particular state. It is not meant as an indicator of ESI performance at the state level.
4
The sampling exercise is based largely on ESIC data from 2017-2018 annual report as it was carried out in early 2020, when newer
data had not been released.
24 Accessing medical benefits under ESI scheme: A demand-side perspective
Background, objectives and sample design

X Figure 1.1. Classification of states based on the composite index

Sample selection – Level 1

Composite ESIS Performance Index of States

Kerala 64.54
Punjab 45.76
Uttarakhand 44.29
Haryana 42.36
Madhya Pradesh 41.76
Delhi 38.19
Goa 38.14
Himachal Pradesh 38.10
Jammu & Kashmir 37.11
Rajasthan 34.98
Karnataka 34.95
Tamil Nadu 34.94
Gujarat 33.54
Front-Runners States
Telangana 31.31
Uttar Pradesh Runners-up States 30.90
West Bengal 30.17
Andhra Pradesh Aspirant States 30.05
Assam & North East 28.85
Jharkhand 28.53
Chhattisgarh 27.54
Odisha 27.40
Bihar 26.38
Maharashtra 19.22

0 10 20 30 40 50 60 70

Source: Based on data from ESIC Annual Report 2017-2018

States selected for the survey and employer associations. The number of the
employers enrolled in the ESI scheme during 2017-
In selecting the states from the composite index,
20184 is reported to be approximately 10.33 lakhs.
the criteria of regional distribution were also given
The number of IPs/family units covered under
due consideration. Haryana was selected from
the scheme is approximately 3.43 crores across
Group I representing a northern state. From the
25 states covering about 441 districts fully and 85
middle range category involving Group II, Tamil
districts partially.
Nadu and Rajasthan were selected as medium
performers, representing a southern and a In respect of the four states studied, namely
western state, respectively. Besides, the survey Jharkhand, Haryana, Tamil Nadu and Rajasthan,
covered one poor-performing state. For reasons the total number of enterprises enrolled under
of feasibility, Jharkhand was chosen to represent the scheme was about 4.14 lakhs out of 10.33
an eastern state from Group III. lakhs, constituting approximately 40 per cent
of all employers in the scheme (Table 1.1). They
employed approximately about 1.40 crores out
1.3.2. Sample size of 3.43 crores, accounting for nearly 41 per cent,
The universe for sample selection from states, including beneficiary family units during 2017-
is ESI scheme participants, that is enterprises 2018. From this universe, we picked a sample
registered with the ESI scheme and their workers from each state for the survey among employers
enrolled as insured persons (IPs). Additional and employees. The total number of employers
respondents include healthcare providers (i.e., ESI selected for all four states was approximately 553
hospitals, dispensaries, empanelled hospitals, and and the respective workers’ sample was six times
insured medical practitioners (IMPs), trade unions more at 3,339 insured persons (workers).
 Accessing medical benefits under ESI scheme: A demand-side perspective
Background, objectives and sample design 25

X Table 1.2. Number of healthcare providers and samples selected

States Number of Number of Number of ESIC Number of

districts fully ESIC hospitals dispensaries and IMPs and
implemented and samples samples samples

24 3 21 0
Jharkhand
(2) (1) (4) (0)

22 7 76 0
Haryana
(3) (3) (13) (0)

14 13 216 0
Tamil Nadu
(3) (3) (30) (0)

22 13 64 501
Rajasthan
(4) (3) (11) (10)

All-India 441 151 1500 980

85 36 402 526
4 States Total (Numbers)
(12) (10) (58) (13)

19 21 27 54
Per cent Share (4 States)
(15) (5) (14) (1.3)

Source: ESIC (2018), ESI Annual Report, 2018

Note: Figures in parentheses denote samples drawn and surveyed

The total number of samples for each state of samples collected with 192 employers and
worked out to approximately 0.13 per cent of total 1,133 employees. The distribution by percentage
employers equally, while the number of sample of samples is Jharkhand (5 per cent), Haryana
employees to be selected was six times the (32 per cent), Tamil Nadu (27 per cent) and
employers. This sample is considered reasonable Rajasthan (35 per cent). The number of employers
and robust. Since this survey is primarily about and in-patients were found relatively larger
beneficiaries’ awareness, a larger sample among in Rajasthan, than in Tamil Nadu, followed by
workers (employees/households) was planned. Haryana and Jharkhand, so the proportionate
The samples for each state were statistically allocation of samples was accordingly decided
significant justifying a reasonable degree of which yielded a sample structure wherein the
blowing up samples to represent the universe. number of enterprises and workers were highest
The sample size considered here was expected in Rajasthan, followed by Tamil Nadu, Haryana
to be representative as it meets the minimum and Jharkhand. Within each state, samples
threshold of samples required to represent were allocated proportionately according to
the entire universe. The number of samples the sectoral composition of enterprises. Having
collected is therefore relatively larger than the selected enterprises, a random number of 3–4
minimum threshold required. The sample size is workers (depending upon the size of workers in an
determined by using a robust sample calculator establishment) was identified for interviews. Each
at a 95 per cent confidence interval and a 5 per enterprise selected was first interviewed (owner or
cent margin of errors. The sample survey units manager), followed by the randomly selected ESI-
for Jharkhand were the least (38 enterprises, enrolled workers in that enterprise.
180 workers), followed by Tamil Nadu and
Table 1.2 above outlines provider survey samples
Haryana. Rajasthan had the maximum number
selected from four states.
26 Accessing medical benefits under ESI scheme: A demand-side perspective
Background, objectives and sample design

X Table 1.3. Sample distribution by states across employers, employees, providers, unions/
associations, officials in the four select States

Unions/ District/ ESIC

States Employers Employees Providers Total
association (IDIs) officials

Jharkhand 38 193 5 1 1 238

Haryana 150 1 013 16 1 2 1 182

Tamil Nadu 173 1 000 33 2 4 1 212

Rajasthan 192 1 133 24 1 2 1 352

Sum 553 3 339 78 5 9 3 984

The number of the districts surveyed involving 1.3.4. Data collection methods
the employers and the employees along with
the providers, are spread across eight districts in
four states. The number of the sample hospitals 1.3.4.1. Quantitative data: collected
surveyed was approximately 10, while 58 ESIC using a pre-coded survey tool
dispensaries and 13 IMPs were selected for the
Beneficiaries (employee-level) questions
survey. Notably, although the IMP sample should
be larger given that there are an estimated 980 The survey documented the family profile,
IMPs across the country, in two sample states awareness about health insurance, healthcare
there were no IMPs. Therefore, the sample needs, healthcare utilization patterns, the health-
selection remained limited to two states for IMP related financial burden on households, and so on.
selection. The recall period was one year for hospitalization
episodes and 15-days for out-patient visits for
insured persons or their family members. In specific,
1.3.3. Sampling design data/information was obtained from beneficiaries
Using the estimates of a total number of the about different features of the ESI scheme, the
enterprises and the workers at a disaggregated medical benefits they offers, the challenges they
level, size class of the employment and industrial face in terms of access to care, utilization and
sectors, a two-stage stratified random sampling additional out-of-pocket (OOP) expenses they
process was utilized to arrive at an adequate incur, if any. Household-related information
sample size to be representative at the state was also obtained directly from the insured
levels. The total number of each size class of persons. Unlike other national surveys where the
enterprises and its workers were selected from household head is the respondent, this survey
the ESIC database. Since the universe is clearly design was intended to capture respondents who
defined and the identification of sample units are are not necessarily the heads of their households,
known, a two-stage stratified sampling was taken but one of them (or the sole) earning members
up. The enterprises' lists for each sampled district of the household. In this study, information was
were obtained from the ESIC. The enterprises’ list collected on all the members of the household,
consisted of sectoral distribution of enterprises who were dependent on the respondent worker,
as well as the size class (number of employees). staying with the worker or staying elsewhere.
The employers were identified based on a It included people who are currently away but
random sampling approach wherein every fourth have lived with the respondent for more than half
enterprise was selected and interviews conducted of the previous year and those who died during
until the maximum sample size was reached for the previous year. Overall, it included information
each state. About 3–4 workers (depending upon on all the household members the respondent
the size class of enterprises) associated with considered to be in his/her family and who were
these enterprises were chosen for interviews. dependent on him/her so that the utilization of the
 Accessing medical benefits under ESI scheme: A demand-side perspective
Background, objectives and sample design 27

ESI scheme can be captured. With this approach,

the study does include information and analysis of
migrant workers’ experience with the ESI Scheme. Healthcare providers
However, given the wider focus of the study, are a critical link in
migrants in ESI Scheme do not form a core area
of analysis. health care access
Enterprises (employer-level) questions and utilization for ESI
The study collected information related to the
beneficiaries. Currently
number of workers, wages and salary structure, ESI covers four health
size of business (annual turnover), provision of
social security of workers, and so on. Specifically,
care facilities.
information about the employer’s awareness,
attitude and knowledge in relation to ESI scheme
benefits was collected. bias, all of which are described in brief in the
Health care providers context of COVID-19 pandemic scenarios.

Healthcare providers are a critical link in healthcare Selection bias: The survey was planned to be a
access and utilization for ESI beneficiaries. multi-stage stratified random sampling technique
Quantitative information/data were extracted with states and enterprises along with employees
from healthcare providers about the services they chosen for interviews. Although district-level ESI
offer, gaps in the provision of services, supply-side authorities provided a list of enterprises and
challenges they face, payment, and other problems employees enrolled in the scheme, many missing/
they encounter in dealing with ESIC (especially the non-available contacts at the address mentioned
empanelled ones). The current study covered four were to be replaced by alternate contacts. Even
categories of healthcare facilities: ESI Hospitals, though the alternate units were identified based
ESI dispensaries, empanelled private hospitals, on the unit list, several replacements had to
and IMPs. be made to ensure the collection of adequate
samples. For instance, the restrictions on the
movement of people even within a district led
1.3.4.2. Qualitative data collection to a situation where replacement units were
As far as the qualitative data are concerned, we chosen based on purposive sampling. Thus, due
used In-Depth Interviews (IDIs). IDIs were carried to missing ‘units’ as per the list, the snowballing
out among several stakeholders, and in specific technique was adopted. This was more so when
among local trade unions representing workers surveys were conducted in a restricted area,
and associations representing enterprises. The where one unit within a vicinity of a sub-regional
IDIs were also carried out among a few district- area was picked along with an existing unit as
level ESI officials who maintained records of listed in the master list provided by ESIC.
enterprises, ESI officials in districts, and other Besides, healthcare providers’ interviews, and
stakeholders. KIIs plus Focused Group discussions (FGDs) were
originally planned. As strict instructions were in
place by authorities and also due to stringent
1.3.5. Factoring in the impact
ethical rules specified by the Public Health
of COVID-19 pandemic Foundation of India (PHFI) institutional Board
mandates, no FGDs were conducted. All the
Potential influence of the pandemic FGDs were converted into IDIs with stakeholders
on survey methods and analysis including trade union leaders, enterprise
associations’ chiefs, ESIC functionaries, and so
Survey bias : It is often the cause for overestimation on. Facility-level interviews which were planned
or underestimation of the underlying indicators, in initial phases had to be dropped, especially
even if well-developed tools and survey strategies those facilities that were converted into COVID-19
are put in place. Certain survey biases can be facilities and were replaced by non-COVID-19
identified: selection bias, response bias and recall facilities.
28 Accessing medical benefits under ESI scheme: A demand-side perspective
Background, objectives and sample design

Response bias: Self-reports of a respondent (in Recall bias: Recall bias is frequently cited as a
this case, ESIC beneficiaries who responded for major reason for underestimation/overestimation
himself/herself and also for the households that of indicators being investigated even in normal
he or she represented) reporting about ill-health circumstances. Due to the short window period of
and health-seeking behaviour involving treatment interviews due to COVID-19 restrictions, the recall
facilities were difficult to collect. For instance, errors could not be extensively probed. While
the type of facilities visited/hospitalized for out- assessments relating to awareness, knowledge,
patient (OP) and in-patient (IP) patients were ‘not and satisfaction levels of beneficiaries, may not
known’ in 40 per cent and 33 per cent of cases be subject to severe recall bias, reporting of illness
reported, respectively. While such a scenario is and healthcare utilization levels of beneficiaries do
not ruled out even in normal circumstances, but get influenced by recall bias.
in a pandemic, that involved stringent norms and
regulations in conducting interviews, the time Potential influence of the
limit of interviewees is often weighed in seeking pandemic on field plan
responses. Constant and long-term exposure
of the interviewer and interviewee to COVID-19 The pandemic had a major impact on the
related risks were key reasons for shortening implementation of the project beginning with
interview time. recruitment, training, re-training, field visits, and
conducting interviews with the respondents. After
But one of the key themes of the survey, healthcare
initial project kick-off meetings when the first set
utilization pattern, involving assessment of self-
of recruitments were completed, few field staff
reported out-patient and in-patient utilization of
had to leave fearing COVID-19 impact as they were
healthcare facilities might have been influenced by
supposed to go to the field. Even when lockdown
demand- and supply-side reasons. The pandemic
restrictions were removed nationally, many states
has shaped both demand-side behaviours such as
including the four study states continued to
stigma and fear of reporting and the supply-side
impose restrictions on movement. This affected
factors of disruption in the normal functioning
the smooth training of field staff. Although
of hospitals/clinics and isolating COVID-19 only
initially, one training was to be conducted in each
hospital/health facilities. This has implications
state. Due to the evolving situation, we had to
for reporting of both IP and OP visits. The stigma
move Jharkhand and Haryana field staff training
and fear of reporting fear, cough, cold and other
to Jaipur, Rajasthan; whereas for Tamil Nadu,
symptoms associated with COVID-19 had made
one set of training was imparted. A new set of
people nervous and circumspect about reporting
recruitment of the field staff had to be made
of such events, leading to a gross undercount of
in Tamil Nadu halfway into the survey because
OP visits in particular, as reported in the survey.
many of the original team members suffered ill-
The Survey in three states, namely Haryana,
health. Eventually, the second round of training
Jharkhand and Rajasthan, before was carried out
was imparted to train the new set of field staff.
during the COVID-19 peak period in mid-2020
This forced the field team to conduct purposive
resulting in such gross underestimation yielding
sampling followed by snowballing techniques to
biased estimates.
reach the intended beneficiaries. Enterprises were
Moreover, in Tamil Nadu, although the Survey was not only hesitant to allow the field surveyors but
carried out during the receding pandemic period when allowed, had laid restrictions in terms of the
of the first wave (late 2020), the survey period period of the survey, thus shortening the survey
coincided with the monsoon and post-monsoon time. Due to constant exposure, in some cases
phases. Such phases of monsoon are fairly well even employees were reluctant to endure a longer
associated with high rates of common illnesses, interview time, forcing field staff to compromise
such as fever, cold, cough, and other common on the number of responses, leading to poor
ailments. The Survey had thrown relatively higher quality of data captured.
OP rates in Tamil Nadu than in the other states.
One of the key challenges faced by the field
However, the in-patient incident rates remained
team was with respect to the data gathered from
less influenced by the pandemic in all the four
healthcare providers. Field staff were often faced
states that were surveyed.
with the prospect of contracting the virus in
 Accessing medical benefits under ESI scheme: A demand-side perspective
Background, objectives and sample design 29

healthcare facilities, as hospitals and clinics were 1.4. Characteristics

engaged in treating patients. Most of the bigger
ESIC hospitals were turned into COVID-19 only
of the samples
hospitals. Therefore, the field staff had to reassess
the healthcare provider list and revise the original 1.4.1. Employees (insured persons)
schedules of the planned visit to a particular ESIC
facility. Hence, finally, the team dropped the idea The total sample for the survey consisted of 3,339
of collecting information from COVID-19 treating employees spread across four states of Jharkhand,
facilities, whether ESIC or empanelled hospitals. Haryana, Rajasthan and Tamil Nadu. Two districts
from each state were chosen.
Originally, the idea was to conduct FGDs with
communities and healthcare workers besides trade The manufacturing sector followed by the
union leaders. Given the COVID-19 protocol and Wholesale Retail and Transport Accommodation
restrictions imposed by the authorities and also to sectors contributed to almost half of the sample,
comply with Institutional Ethics protocol, FGDs had each contributing to >10 per cent. Across the
to be dropped. The FGDs were replaced by In IDIs states, the manufacturing sector accounted for the
with ESIC officials, trade union representatives, highest contributor except for Jharkhand, where
and employers’ association representatives. the wholesale and retail sector remains the largest
contributor to the sample. The detailed sector-
wise distribution across states is given in Table 1.4.
► A note on institutional ethics approval
As an institutional requirement, the PHFI obtained
1.4.1.1. Sample distribution of
institutional Ethics Committee approval to conduct
employees by employee size class
this study. The study team obtained an exemption
from full review from the institutional ethics board The samples were distributed by employee size
of the PHFI since the research did not involve the class, with enterprises having >100 employees with
clinical involvement of a patient. The exemption the maximum percentage of 22 per cent followed
was provided based on the understanding that by the enterprises having 11 to 20 employees
respondents’ identities would be kept confidential (19 per cent). Smaller enterprises with <10
during the reporting and in the write up of the employees constituted 10 per cent of the sample.
analysis. The majority of the Jharkhand employees in
the sample belonged to enterprises with <10
employees. Also, <5 per cent of employees were

X Table 1.4. Distribution of employee samples by the sector of employment

Sectors of state
Sectors of
employment
Jharkhand Haryana Rajasthan Tamil Nadu Total

Manufacturing 23 (12%) 786 (78%) 446 (39%) 419 (42%) 1674 (50%)

Construction 21 (11%) 37 (4%) 59 (5%) 51 (5%) 168 (5%)

Wholesale and Retail 54 (28%) 19 (2%) 237 (21%) 85 (9%) 395 (12%)

Transportation and
34 (18%) 57 (6%) 154 (14%) 84 (8%) 329 (10%)
Accommodation

Education and Health 42 (22%) 64 (6%) 141 (12%) 61 (6%) 308 (9%)

Others 19 (10%) 50 (5%) 96 (8%) 300 (30%) 465 (14%)

Total 193 (100%) 1 013 (100%) 1 133 (100%) 1 000 (100%) 3 339 (100%)
30 Accessing medical benefits under ESI scheme: A demand-side perspective
Background, objectives and sample design

from enterprises with >100 employees. Further, to 50 years (17 per cent). Notably, 81 per cent of
the majority of Haryana employees belonged the employees were males and 19 per cent were
to enterprises with >100 employees with almost females. Our sample captured a relatively higher
55 per cent of the employees in Haryana from share of females as against 13 per cent enrolled
enterprises with >50 employees. The samples in ESI. In terms of age group distribution, 73 per
from Rajasthan and Tamil Nadu showed a similar cent of the males were in the 21-40 years age
distribution to the overall sample. group. Also, 68 per cent of the females belong
to the age group of 21 to 40 years. Across the
1.4.1.2. Sample distribution of states, for both Rajasthan and Haryana, females
employees by gender and age constituted <15 per cent of the sample while
for states of Jharkhand and Tamil Nadu the
Over one in every two of the employees surveyed percentage of females was around 30 per cent.
was in the age group of 21 to 30 years followed Table 1.6 shows the detailed percentage.
by 31 to 40 years age group (27 per cent) and 41

X Table 1.5. Distribution of employee sample by employee size class

Employee size class Jharkhand Haryana Rajasthan Tamil Nadu Total

0-10 54 (28%) 61 (6%) 120 (11%) 115 (12%) 350 (10%)

11-20 34 (18%) 134 (13%) 218 (19%) 250 (25%) 636 (19%)

21-30 37 (19%) 171 (17%) 182 (16%) 169 (17%) 559 (17%)

31-50 22 (11%) 99 (10%) 204 (18%) 177 (18%) 502 (15%)

51-100 38 (20%) 197 (19%) 177 (16%) 153 (15%) 565 (17%)

more than 100 8 (4%) 351 (35%) 232 (20%) 136 (14%) 727 (22%)

Total 193 (100%) 1 013 (100%) 1 133 (100%) 1 000 (100%) 3 339 (100%)

X Table 1.6. Gender and age distribution of employee sample

Age group (years) Male Female Total

18 to 20 44 (2%) 28 (4%) 72 (2%)

21 to 30 1 275 (47%) 255 (40%) 1 530 (46%)

31 to 40 711 (26%) 174 (28%) 885 (27%)

41 to 50 445 (16%) 110 (17%) 555 (17%)

51 to 60 160 (6%) 21 (3%) 181 (5%)

61 to 70 14 (1%) 3 (0%) 17 (1%)

above 70 2 (0%) 0 (0%) 2 (0%)

Total 2 709 (100%) 630 (100%) 3 339 (100%)

 Accessing medical benefits under ESI scheme: A demand-side perspective
Background, objectives and sample design 31

1.4.1.3. Sample characteristics is reported to be relatively higher than the census

of beneficiary households figures suggested for Tamil Nadu.

The average household size in our sample As far as educational qualifications are concerned,
households was 3.18. Overall, 46 per cent of the the surveyed households reported a literacy rate
household members were females with slight of 90.61 per cent with the majority share of the
variations across states. Haryana with 43 per persons having education up to higher secondary
cent reported the least percentage of females level (42.8 per cent) followed by primary level
among household members while Tamil Nadu (21.32 per cent) and graduate and above (20.48
reported the highest percentage at 49 per cent. per cent). Analysis of the state-wise distribution
Almost three in four of the employee household of samples revealed that Haryana reported
members were aged between 15-59 years, the highest literacy rate amongst employee
followed by age groups 5 to 14 years (11 per cent). households (94 per cent) but almost one fourth
Only 7 per cent of the household members were of these have primary education levels. Jharkhand
in the age group of ≥60 years, clearly reflecting reported a literacy level of 93 per cent with only
the national average of the elderly population. 12 per cent at graduate-level and above. Both
The age distribution across the states, except Rajasthan and Tamil Nadu reported >10 per cent
for Tamil Nadu is almost the same. In Tamil of illiteracy levels among households. Amongst
Nadu, >16 per cent of the employee household the educated, Rajasthan reported the highest
members were aged >60 years. This age group percentage of graduate household members
(Table 1.8).

X Table 1.7. Gender and age distribution of employee households by states

State Females (%) Age group (%)

60 and
0-4 05-14 15-29 30-59 Total
above

Jharkhand 45.17 2.8 4.98 37.69 52.02 2.49 100

Haryana 43.08 4.02 8.84 41.11 44.43 1.59 100

Rajasthan 45.86 5.3 13.07 34.39 43.18 4.06 100

Tamil Nadu 48.8 2.7 9.43 23.65 47.95 16.27 100

Overall 45.95 4.1 10.57 33.18 45.23 6.91 100

X Table 1.8. Percentage distribution of individuals by their education statuses

State Illiterate (%) Educated

Primary Higher Diploma Graduate and Overall

(%) Secondary (%) (%) above (%) (%)

Jharkhand 6.54 14.64 60.75 5.61 12.46 93.46

Haryana 5.83 21.79 43.55 10.35 18.48 94.17

Rajasthan 10.03 23.07 40.08 2.99 23.83 89.97

Tamil Nadu 12.13 19.32 44.86 5.91 17.77 87.86

Overall 9.38 21.32 43.17 5.92 20.2 90.61

32 Accessing medical benefits under ESI scheme: A demand-side perspective
Background, objectives and sample design

X Table 1.9. Distribution of employee households by religion and caste

State Social group (%) Religion (%)

General SC/ST OBC Others Total Hindu Minority Total

Jharkhand 43.01 48.7 7.77 0.52 100 80.31 19.69 100

Haryana 48.77 25.67 25.47 0.1 100 96.25 3.75 100

Rajasthan 36.19 52.07 11.65 0.09 100 95.15 4.85 100

Tamil Nadu 50.1 23.2 19.9 6.8 100 86.6 13.4 100

Overall 44.56 35.22 18.09 2.13 100 92.06 7.94 100

With respect to the distribution of samples by As far as enterprise size is concerned, the majority
religion and caste, overall, 18 per cent of the of the samples (55 per cent) comprised small
households belonged to Other Backward Classes enterprises (< 10 employees). About 19 per cent
(OBC), about 35 per cent belonged to Scheduled of the sample was from bigger enterprises (>50
Caste (SC) or Scheduled Tribe (ST), and >44 per employees). Across states, Haryana reported
cent to General category (Table 1.9). In Jharkhand, the least percentage of enterprises with <10
8 per cent of the households belonged to OBC, employees and the highest percentage amongst
about 49 per cent to SC or ST, and 43 per cent to the sampled states for enterprises with >100
General category. In Haryana, 25 per cent of the employees. Almost two thirds of the enterprises
households belonged to OBC, about 25 per cent to in the states except Haryana had enterprises with
SC or ST, and 49 per cent to the General category. < 20 employees. (Table 1.11). The majority of the
In Rajasthan, >11 per cent of the households employers are Males (93.5 per cent) with only 6.5
belonged to OBC, about 52 per cent to SC or ST, per cent of employers being females. State-wise,
and 36 per cent to General category. Tamil Nadu reported the highest percentage of
female employers (11 per cent) whereas Haryana
In Tamil Nadu, almost 20 per cent of the households
reported the least percentage (3 per cent) of
belonged to OBC, about 23 per cent to SC or ST,
female-headed enterprises. (Table 1.12)
and 50 per cent to the General category.
In respect to sample distribution of enterprises
by broad industrial sectors, the manufacturing
1.4.2. Enterprises (employers) sector contributed to half of the sample followed
The total employer sample consisted of 553 by the wholesale/retail sector and transport/
employers with the largest share of enterprises accommodation sector (14 per cent and 13 per
from Rajasthan (35 per cent) followed by Tamil cent, respectively) (Table 1.13). Across states,
Nadu (31 per cent), Haryana (27 per cent) and Jharkhand has a more equitable distribution
Jharkhand (7 per cent). In terms of ownership for various sectors whereas in other states,
status, over two in three of the enterprises sampled like Haryana manufacturing constitutes almost
were proprietary in nature, with an additional 17 two thirds of the sample. For the sub-sector
per cent of the enterprises in partnership mode distribution, retail trade enterprises constituted
and another 12 per cent belonging to public or around 9 per cent of the sample, followed by hotels
private limited companies. Haryana reported the and restaurants (8 per cent), rubber and plastic
highest percentage of proprietary enterprises and products (6 per cent). The detailed distribution for
the least percentage for public or private limited various sub-sectors across states is given in Table
companies. Further, in Rajasthan, 62 per cent of 1.14. It shows the representation of enterprise
the proprietary ownership amongst its enterprises samples across all major industry sectors. Overall,
and highest percentage for public or private a reasonable share of major sub-sectors of the
limited companies. More than 99 per cent of the industry is present in the sample making it a well
sample belonged to the urban sector whereas the representative sample across sectors.
rest was from the rural sector.
 Accessing medical benefits under ESI scheme: A demand-side perspective
Background, objectives and sample design 33

X Table 1.10. Percentage distribution of enterprises by ownership and sector as

reported by the employer

State Types of ownership Sector

Cooperatives/ Public/
trust/other private Employers’
Proprietary Partnership Rural Urban
non-profit limited household
organizations company

Jharkhand 73.68 5.26 2.63 10.53 7.89 0.00 100.00

Haryana 83.33 12.67 1.33 2.67 0.00 0.00 100.00

Rajasthan 61.98 16.15 3.65 18.23 0.00 0.52 99.48

Tamil
60.12 24.28 2.89 12.14 0.00 1.73 98.27
Nadu

Overall 67.99 17.00 2.71 11.57 0.54 0.72 99.28

X Table 1.11. Distribution of enterprises by employment size

States Employment size class

0-10 11-20 21-30 31-50 51-100 >100 Total

Jharkhand 22 7 4 1 3 1 38

Haryana 26 20 19 15 32 38 150

Rajasthan 139 11 10 6 6 20 192

Tamil Nadu 116 26 12 3 8 8 173

Total 303 64 45 25 49 67 553

X Table 1.12. Percentage distribution of enterprises by employment size and gender of employers

States Employment size class Employer's gender

0-10 11-20 21-30 31-50 51-100 >100 Male Female

Jharkhand 57.89 18.42 10.53 2.63 7.89 2.63 92.11 7.89

Haryana 17.33 13.33 12.67 10.00 21.33 25.33 97.33 2.67

Rajasthan 72.40 5.73 5.21 3.13 3.13 10.42 94.79 5.21

Tamil Nadu 67.05 15.03 6.94 1.73 4.62 4.62 89.02 10.98

Total 54.79 11.57 8.14 4.52 8.86 12.12 93.49 6.51

34 Accessing medical benefits under ESI scheme: A demand-side perspective
Background, objectives and sample design

X Table 1.13. State-wise distribution of enterprises sector wise

State Manufacturing Construct Wholesale Transport Education Others Total

Jharkhand 5 4 9 8 7 5 38

Haryana 103 5 13 15 6 8 150

Rajasthan 74 14 33 33 21 17 192

Tamil Nadu 100 5 23 18 10 17 173

Total 282 28 78 74 44 47 553

X Table 1.14. Percentage distribution of enterprises by major industry sectors across states

Industry sector Jharkhand Haryana Rajasthan Tamil Nadu Total

Retail trade 18.42 3.33 10.42 10.4 9.04

Hotels and restaurants 5.26 6.00 14.06 2.31 7.59

Rubber and plastics products 2.63 2.67 13.02 2.89 6.33

Other manufacturing 0.00 10.00 2.60 6.36 5.61

Fabricated metal products 2.63 13.33 3.13 1.16 5.24

Food and beverage services 15.79 3.33 2.60 7.51 5.24

Education 2.63 2.00 8.85 4.05 5.06

Construction of buildings 10.53 3.33 5.73 1.73 4.16

Textiles 0.00 7.33 2.60 3.47 3.98

Leather and related products 2.63 1.33 6.77 2.89 3.80

Wearing apparel 0.00 1.33 5.21 4.62 3.62

Food products 0.00 2.00 1.04 8.09 3.44

Wholesale trade, except motor

0.00 9.33 0.52 1.73 3.25
vehicles

Electrical equipment 0.00 3.33 5.73 1.16 3.25

Human health activities 0.00 5.33 1.56 2.31 2.71

Other transport equipment 13.16 2.00 2.08 1.73 2.71

Wholesale and retail trade of motor

2.63 8.00 0.00 0.58 2.53
vehicles

Pharmaceutical and so on 5.26 2.00 1.04 1.73 1.81

Computer, electronic 0.00 2.00 0.52 2.31 1.45

Machinery and equipment 0.00 2.00 0.52 1.73 1.27

Others 18.42 10.00 11.98 19.65 14.29

Missing 0.00 0.00 0.00 11.56 3.62

Total 100 100 100 100 100

 Accessing medical benefits under ESI scheme: A demand-side perspective
Background, objectives and sample design 35

1.4.3. Employee households’ is often considered unreliable and inconsistent

income and consumption as underreporting is frequently resorted by
households. However, the larger problem with
expenditure data collection is the seasonal nature of such
income, especially in the informal sector. In India,
As far as household income and the consumption
with nearly half of the workers being involved in
expenditure patterns are concerned, the sample
the agricultural and allied sectors, income data
showed that the average household income
capture was abandoned by the NSSO replacing it
across all four states was estimated at Rs. 16,599
with consumption data. This is often considered
and the per-person consumption expenditure
a more reliable indicator. The consumption
was at Rs. 5,376. Jharkhand reported the least
expenditure reported from the present survey
average household income (Rs. 14,307). Contrarily,
and NSSO is not significantly different. Moreover,
Rajasthan reported the least consumption
since income figures reported from this survey
expenditure per person (Rs. 3,967). Tamil Nadu
are solely from a formal population group,
reported the highest household income as well
seasonality in reporting income may not be a
as highest per person consumption expenditure
key influence. Hence, income data could be more
among the states (Table 1.15), reflecting the mean
reliable and unbiased.
income and consumption expenditure as reported
by the Central Statistics Office (CSO) and National
Sample Survey Office (NSSO). 1.4.4. Enterprises’ registration
Importantly, the respondents in this study are status by the types of registration
wage/salary earners (working in a formal setting).
Therefore, they are expected to have a higher It may be further observed that nearly two in
income as compared to the average population, three enterprises reported having registered
which includes the formal and informal sector, under Factories Act, Shop and Establishments
as well as the self-employed and unemployed Act, Employees' Provident Fund Organisation
population. We had collected self-reported total (EPFO), and other excise tax/ value-added tax
household consumption expenditure and income (VAT) act. Almost 56 per cent of the enterprises
data of the household. National household reported their registration under the District
surveys (such as NSSO) normally collect Industries Centre (DIC) whereas > 90 per cent
information about the consumption expenditure of the enterprises reported their registration for
of the households, rather than household income. Income tax and Goods and Services Tax (GST)
Obtaining data about income from households acts. Variations were found across states for

X Table 1.15. Average employee household income and average per person consumption
expenditure across states

Average per capita Average per person Average per person

State household income consumption consumption expenditure
(INR) expenditure (INR) from NSSO 2017-18 (INR)

Jharkhand 11382 (10237 - 12527) 5922 (5277 - 6567) 3928 (3632 - 4225)

Haryana 8551 (8088 - 9013) 5258 (4994 - 5522) 4374 (4074 - 4674)

Rajasthan 5375 (5159 - 5591) 3967 (3796 - 4138) 3852 (3707 - 3999)

Tamil Nadu 9324 (8937 - 9710) 7159 (6838 - 7479) 4197 (4087- 4307)

Overall 7825 (7608 - 8041) 5376 (5229 - 5523) 4161 (4123 - 4199)

Note: The figures in the parenthesis show a 95% confidence interval

36 Accessing medical benefits under ESI scheme: A demand-side perspective
Background, objectives and sample design

registrations under different acts (Table 1.16). Jharkhand, followed by 11 per cent in Haryana,
In Jharkhand, only 34 per cent of the enterprises 2 per cent in Rajasthan and 5 per cent in Tamil
reported their registration under the Factories Act Nadu had registered themselves in 2020. About
whereas two thirds of the enterprises reported 84 per cent of the enterprises sampled in Haryana
that they were registered under Shop and had registered before 2009, followed by 66 per
Establishments act, DIC, and excise tax/ VAT acts. cent in Rajasthan, 47 per cent in Jharkhand, and 43
Less than 45 per cent reported registration under per cent in Tamil Nadu. Around 52 per cent of the
EPFO and almost 90 per cent for GST. Around 97 sampled enterprises in Tamil Nadu had registered
per cent reported registration under income tax under ESI in the previous decade, followed by 37
and 78 per cent under ESI. In Haryana, >80 per cent per cent in Jharkhand, 32 per cent in Rajasthan,
reported their registration under the Factories Act, and only 55 per cent in Haryana.
shop and establishments act, and EPFO while >90
per cent for ESI and Excise tax/VAT. Almost 100
per cent of enterprises reported registration for
1.4.5. Distribution of
Income tax and GST; only 56 per cent reported enterprises’ turnover across
their registration under DIC. In Rajasthan, >50 employment size by states
per cent of enterprises reported their registration
under the Factories Act, Shop and Establishments Distribution of average turnover of enterprises
act, EPFO, DIC, and Excise Tax/ VAT acts whereas according to employment size class and states
>90 per cent for ESI, Income tax and GST. In Tamil revealed many variations across states (Table
Nadu, <50 per cent of enterprises reported their 1.18). Overall average figures of turnover were
registration under the Factories Act and Shop and low among the three states of Haryana, Rajasthan
Establishments Act while >50 per cent reported and Tamil Nadu whereas figures for Jharkhand
for DIC and Excise tax/VAT Acts. Almost two thirds were exceptionally high, probably due to the
reported registration under EPFO whereas >85 less and highly skewed sample size distribution
per cent reported ESI registration. Over 90 per in Jharkhand. Enterprises with <10 employees
cent of enterprises reported GST and Income tax reported an average turnover of 3.6 crores in the
registrations. previous financial year. Across states, Haryana'
enterprises reported the least average turnover
Regarding the year of registration, we divided
(0.8 crores) among the states whereas Rajasthan'
the period into three categories – before 2009,
enterprises reported the largest average turnover.
2010 to 2019, and 2020. Overall, around 6 per
In enterprises with 11 to 20 employees, the average
cent of the enterprises sampled had registered
turnover reported was 1.7 crores, less than the
themselves under ESI in 2020 whereas almost
enterprises having ≤10 employees. Rajasthan and
two thirds of the enterprises had registered
Tamil Nadu enterprises, reported, abnormally low
before 2009 with another 31 per cent during
turnover of < 0.5 crores in the previous financial
the period of 2010-2019 (Table 1.17). State-
year whereas Jharkhand enterprises reported
wise, around 15 per cent of the enterprises in
an average turnover of >10 crores. Among the
enterprises with 21-30 employees, the average
turnover figure reported was 5.1 crores with the
states like Rajasthan and Tamil Nadu reporting an
Distribution of average average turnover of around 1 crore and Jharkhand
turnover of enterprises enterprises of >20 crores. In enterprises with 31-50
employees, the average turnover figure reported
according to was 4.5 crores with Haryana and Tamil Nadu
employment size class reporting exceptionally low figures of average

and states revealed turnover and Jharkhand the highest at 35 crores.

Similarly, among enterprises with > 50 employees,
many variations across the average turnover figures reported were 8.2
states. and 26.4 crores, respectively. Jharkhand once again
reported high average turnover as compared to
the other three states.
 Accessing medical benefits under ESI scheme: A demand-side perspective
Background, objectives and sample design 37

X Table 1.16. Percentage of enterprises registered under various acts

Shop and
Factories Income Excise
State Establishments EPFO ESI DIC GST
act tax tax/VAT
act

Jharkhand 34.21 65.79 44.74 78.38 63.16 97.37 89.47 64.86

Haryana 87.16 87.16 83.89 97.30 55.7 100 99.33 91.33

Rajasthan 59.16 57.89 55.21 97.91 55.50 93.62 94.74 52.08

Tamil
43.35 48.55 64.74 85.55 54.91 91.86 93.06 58.38
Nadu

Total 60.00 63.39 65.22 92.53 55.90 95.07 95.10 65.58

X Table 1.17. Percentage distribution of enterprises by the time of registration with

ESI across states

Year since
Jharkhand Haryana Rajasthan Tamil Nadu Total
enrolled in ESI

before 2009 47.37 84.00 66.15 43.35 62.57

2010 to 2019 36.84 4.67 32.29 52.02 31.28

2020 15.79 11.33 1.56 4.62 6.15

Total 100 100 100 100 100

X Table 1.18. Average yearly turnover for different employment size classes across
states in INR (crores)

Employment size
Jharkhand Haryana Rajasthan Tamil Nadu Overall
class

0-10 1.6 0.8 4.6 3.6 3.6

11-20 10.2 1.1 0.1 0.4 1.7

21-30 20.1 4.9 1.7 1.0 5.1

31-50 35.0 1.8 5.3 0.2 4.5

51-100 57.5 1.7 3.5 4.4 8.2

>100 250.0 23.6 16.1 19.9 26.4

38 Accessing medical benefits under ESI scheme: A demand-side perspective
Role and performance of Employee State Health Insurance scheme in India, 1999-00 to 2018-19

2. Role and performance of employee state health

insurance scheme in India, 1999-00 to 2018-19

A large and sustained informality in India’s workforce is a matter

of concern not only for job insecurity but also due to the absence of
social security benefits.

2.1. Introduction ► What is the extent of the under-coverage of the

ESI scheme among formal sector employees?
Designing policies and programmes towards a
secure job and social benefits has meant that ► How effective is the coverage against nominal
several initiatives were taken to reduce informality coverage of intended beneficiaries?
in the recent past in India. Chief among them are ► What share of the formal and the informal
employment guarantee programmes Mahatma employees can be potentially brought under
Gandhi National Rural Employment Guarantee Act ESI?
(MNREGA) and health insurance schemes (such as
► How comprehensive are the health benefits
Rashtriya Swasthya Bima Yojana (RSBY) in 2007,
provided to its beneficiaries?
which was converted into Pradhan Mantri Jan
Arogya Yojana (PMJAY) later in 2018). Recognizing ► Did the health facilities and the services
the importance of an existing scheme like ESI accelerate corresponding to a rise in population
and the larger role, it can play in enlarging health coverage?
benefits to its population, the governments have
► Did primary and secondary care services
been intervening in this segment, to not only
accelerate commensurately with the expansion
enlarge the coverage of the population but also
in tertiary care services?
attempt to improve its functioning. Nevertheless,
several questions remain unaddressed and ► What is the extent of financial protection
require deep investigation. provided by the ESI Scheme?
This analytical exercise draws on a conceptual ► How well are the benefits able to mitigate
framework involving Universal Health Coverage catastrophic health expenditure and related
(WHO, 2010). It will unravel several themes in this impoverishment?
chapter involving broadly the breadth of coverage
► Do the current purchasing mechanisms ensure
(employee/beneficiary population), depth of
efficient returns on investments?
coverage (benefit/service coverage) and the cost of
coverage (financial risk protection to employees/ ► How well and rapidly can the ESI scheme be
beneficiaries), besides the dimension around integrated into a national UHC framework?
strategic purchasing. Thus, we aim to address
The above-described analytical framework is
a few policy and programme questions that are
examined with an equity perspective involving
directly related to ESI functioning. Some of these
state-level variations. Other equity stratifiers
questions were identified based on the literature
such as gender, age, economic sectors and
review of available audit reports (Comptroller
regions/states are also being investigated. This is
and Audit General of India, 2013), parliamentary
complemented by taking recourse to time-series
committee reports (Public Accounts Committee
data of 20 years (2000-2019) to facilitate inter-
2007-2008, 48th Report; Standing Committee on
temporal comparisons and performance. Various
Labour 2017-2018, 39th Report, Lok Sabha), peer-
databases and documents are used to investigate
reviewed publications, and so on.
 Role
Role and
Accessing
performance
medical
Accessing
and performance
benefits
medical
of Employee
of Employee State
State
under
benefits under
Health
Health
ESIESI
scheme:
Insurance
Insurance
AA
scheme:
scheme
scheme
demand-side
inin
demand-sideperspective
India,1999-00
India,
perspective
1999-00to
to2018-19
2018-19 39

the policy questions, including the following but undertakings, newspaper establishments,
not limited to: (i) ESIC Annual Reports; (ii) NSSO educational and medical institutions. Such an
Periodic Labour Force Surveys (PLFS, 2017-2018 extension was an outcome of tertiary sector
and 2018-2019 along with Employment Rounds growth, which currently contributes to over half
of 2011-2012); and (iii) NSSO Social Consumption of India’s national income and over a third of the
Round conducted during 2017-2018. employment.
For a large part of the period that ESI has been
2.2. The breadth of functional, the coverage was rather restricted
coverage by ESI even among the eligible population due to
limiting criteria used, such as restricting coverage
India’s oldest social security scheme, the ESI, to an area where there was a large presence
owes its origin to the Employees’ State Insurance of insured persons or industrial units were
Act, 19485 (ESI Act). The ESI Act mandates operating (industrial clusters). Further, the State
establishments employing 10 or more employees governments responsible for setting up and
and those earning less than Rs. 21,000 to be administering medical facilities, have an uneven
covered under the Act. Although originally the record in strengthening the service delivery
Act envisaged employees in industrial factories over the years. Currently, ESI is operational in
to be provided with the social security measures, 35 states and union territories, whereas the
several State governments in the past have Scheme is fully implemented in 325 districts, 93
enlarged the scope of coverage to include shops, district headquarters and 83 districts, it is partially
hotels, restaurants, cinemas, road motor transport implemented.

5
The authors are aware that the Scheme may see potential transformations in its role and performance owing to the provisions of
the Code on Social Security, 2020. However, this report mainly deals with the functioning of the ESI Scheme until 2019-2020. Hence it
does not include a discussion on the Code and its potential implications. Such a discussion can be found in another report of the ILO
authored by Prof. Ravi Srivastava titled, "ESIC in the Social Security Code 2020 and Establishing a Social Protection Floor in India (2021)".
40 Accessing medical benefits under ESI scheme: A demand-side perspective
Role and performance of Employee State Health Insurance scheme in India, 1999-00 to 2018-19

Even with the mandatory registration of the Correspondingly, the number of employees
economic units in notified areas, employers covered under the scheme accelerated steeply
report insufficient incentives, for registering their from 7.86 million to 31.17 million during the
establishments with the ESI. Possible reasons corresponding period. Consequently, the average
for the cases of evasion include larger issues of number of the employees per establishment has
enforcement of labour laws, perceived low returns declined gradually from nearly 35 in 1999-2000 to
on contributions in terms of availability and approximately 26 in 2018-2019 (Figure 2.1). Since
quality of services, and challenges in compliance family members are eligible for availing of health
procedures. Further, within the complex and benefits, the beneficiary base equally expanded
diverse organization of industrial relations in from 33.37 million to 137.30 million during the
different sectors, employers have also been study period. The average number of beneficiaries
found to be underreporting the number of per insured person (including employees) works
eligible employees. Nonetheless, ESIC has taken out to approximately 4.4, reflecting a larger
steps in recent years, to mitigate this problem beneficiary base. In terms of total beneficiaries, ESI
through computerized inspection systems, eligible beneficiaries account for about a one tenth
digitized registration, enrolment and compliance of the total population in 2018-2019 as against
procedures and increased supply of healthcare 3 per cent of the population in 1999-2000. The
services, through empanelled facilities in newly share of women workers in respect of total insured
covered regions. persons remained low in the range of 12-17 per
cent during the last twenty years, in sharp contrast
As with the rapid growth of the Indian economy,
to a relatively higher share of female employment
the last two decades witnessed significant
proportions among regular/wage salaried (21 per
growth of enterprises registered under ESI. The
cent in 2017-2018 as per the 75th NSSO Round).
growth was over five times from 0.22 million
in 1999-2000 to 1.03 million during 2018-2019.

X Figure 2.1. Average number of employees/beneficiaries per employer

160

140

120
Average number of employees/
beneficiaries per employer

100
Mean Number of
Beneficiaries per Employer
80

60
Mean Number of
40 Employees per Employer

20

0
2000-01

2001-02

2002-03

2003-04

2004-05

2005-06

2006-07

2007-08

2008-09

2009-10

2010-11

2011-12

2012-13

2013-14

2014-15

2015-16

2016-17

2017-18

2018-19
1999-00

Source: Authors’ estimates from ESI annual reports, respective years

 Accessing medical benefits under ESI scheme: A demand-side perspective
Role and performance of Employee State Health Insurance scheme in India, 1999-00 to 2018-19 41

Notwithstanding the larger beneficiary base, Predictably, ESI does well in the category of
a core point of interest has been for the ESI to formal employment in the formal sector. With
cover most segments of formal employees, and about 31 million employees registered under
subsequently reach out to informal employees. the scheme in 2018-2019, it accounted for about
While this is certainly a long-standing vision 91 per cent of the total 34.02 million workers
of employment policies in India, the emerging in this category. It is plausible that some of the
evidence, however, points towards the under- ESI coverage may fall into formal employment
coverage of ESI even of those in the formal sector. in the informal sector or informal employment
Arguably, this throws up the question of how well in the formal sector. By extension of this logic,
ESI is directed towards facing up the challenge likely the share of ESI in the category of formal
of informality in employment. Conversely, employment in the formal sector is <91 per cent.
this can be examined in four dimensions: Consequently, if we were to assume that the
(i) informal employment in the informal sector; potential for ESI coverage extends to categories
(ii) formal employment in the informal sector; (ii), (ii) and (iii) as defined above, the scope of
(iii) informal employment in the formal sector; coverage will be >60 million workers, leading to
and iv) formal employment in the formal sector. a deficit of nearly half of those who are currently
In India’s workforce of 472 million during 2018- covered. Thus, nearly half of the workers who
2019, informal employment in the informal can potentially be included under the ESI,
sector accounted for the bulk of the workforce remain uncovered under the current eligibility
at about 87.19 per cent, followed by formal criteria and levels of compliance by employers.
employment in the formal sector at about Particularly, the current income ceiling of Rs.
7.21 per cent, while formal employment in the 21,000 per month, can be considered as a driver
informal sector and informal employment in the for lower coverage.
formal sector accounted for 2.85 per cent and
2.75 per cent, respectively (Figure 2.2).

X Figure 2.2. India’s current employment structure, 2018-2019

500 34
13 (2.21%) 472
411 13 (2.75%)
450 (2.85%)
(87.19%)
400
Employment in Millions

350

300

250

200

150

100

50

0
Informal Emp. in Formal Emp. in Informal Emp. Formal Emp. in Total
informal sector informal sector in formal sector formal sector employment

Source: Authors’ estimate from National Sample Survey Organisation (2019), Periodic Labour Force Survey 2018-19,
Ministry of Statistics and Programme Implementation, Government of India
42 Accessing medical benefits under ESI scheme: A demand-side perspective
Role and performance of Employee State Health Insurance scheme in India, 1999-00 to 2018-19

In the formal sector jobs involving informal accounting services, architecture and engineering
employment, close to about 13 million workers services, advertising and market research, and so
can be considered. About 88 per cent of these on) and administrative support activities (such
categories of workers are concentrated in utilities as, renting & leasing activities, placement agencies,
(electricity, gas, water supply, and so on), public travel agencies, private security agencies, and so
administration, education and health sectors. on).
Presumably, such employment is largely linked to
State-level evidence about formality in the
the contractual work that is provided directly by
employment can provide insights into whether
the employer or provided through a contractor.
ESI coverage is guaranteed by being in formal
Although in principle, employers/contractors were
employment. The scatter plot in the accompanying
mandated to provide cover, clearly the above
Figure 2.3 provides a vital clue about the
evidence demonstrates the lack of coverage. One
emerging relationship between ESI coverage
other factor that hinders coverage expansion is
and formal employment. By combining insured
that the accountability of registering workers lies
persons (percentage) as reported in ESIS annual
with employers and not with ESIC.
reports and PLFS 2017-2018 survey, we gain an
Similarly, as evident from 2017-2018 PLFS, another understanding of the current coverage of ESI
set of workers involving informal sector but who vis-à-vis formal employment, as captured by the
possess formal employment (about 13 million) PLFS survey. The Y-axis captured the dimension
are also the ones who seem to be denied the of formal employment as a share of total
healthcare benefit through the ESI route. They employment (formality), while the X-axis captured
are largely concentrated in information and the share of those insured by ESIC as a percentage
communication, finance & insurance, personal, of total formal employment (formal employees in
scientific & technical activities (such as legal and both formal and informal sectors).

X Figure 2.3. ESI and formal employment, 2017-2018

20 Punjab

18
Formal emploment as % to total employment

Bihar Himachal
Pradesh Uttarakhand
16

Tamil Nadu
14
Chattisgarh

12 TOTAL

Jammu & Kashmir Gujarat

10

Andhra Odisha Uttar

8 pradesh Pradesh Haryana
West Goa
Bengal
Maharashtra
6 Telangana
NE States Jharkhand Delhi

4 Madhya Kerala
Pradesh Karnataka
Rajasthan
2
20 40 60 80 100 120 140 160 180 200 220

Percentage insured to formal employment in formal & informal sector

Source: Authors’ estimate from National Sample Survey Organisation (2019), Periodic Labour Force Survey 2018-19,
Ministry of Statistics and Programme Implementation, Government of India
 Accessing medical benefits under ESI scheme: A demand-side perspective
Role and performance of Employee State Health Insurance scheme in India, 1999-00 to 2018-19 43

2.3. Depth of coverage by ESI Alongside, when ESI's own facilities are unavailable
owing to the lack of the presence of facilities
Since its inception, the defined benefits under or the beneficiaries are limited in numbers in a
ESI have continued to deepen from preventive, locality, they are being provided with the option
promotive, curative care and rehabilitative services of choosing empanelled IMP clinics and private
underlying medical, maternity, disability and hospitals. The IMPs function as primary care
funeral support. From providing medical services, providers involving a private doctor with the
the scheme from its inception started to provide clinic that includes a consultation room and a
cash benefits during illness, funeral and disability. dispensary. Under this arrangement, each IMP
However, the scheme extended its health benefits covers about 2,000 IP family units. The ESIC pays
outside its health facilities, by empanelling IMPs an IMP a capitation payment amounting to Rs.
and private hospitals. 500 per insured person annually, which includes
Comprehensive curative services are provided consultation, basic laboratory services, and cost
by the ESI and other empanelled healthcare of medicines. The IMP system is in operation in
facilities. These include cashless and free primary, about nine states with a larger number of them
secondary and tertiary care services involving functional in Maharashtra alone and some in West
out-patient, diagnostics, drugs and in-patient Bengal. On the other hand, in respect of tertiary
care facilities. Besides allopathy, the services care services, the demand for these services is met
include AYUSH care. The ESI facilities range from through private empanelled hospitals, with tie-
dispensaries (1,489), annexes (42), to diagnostic up across the country in over 1,000 hospitals. The
centres, hospitals (159) and medical colleges packages include consultation, diagnostic services,
(6). During 2017-2018, about 28,174 beds were surgeries, specialist services and medicines. These
available in ESIC facilities, with about 24,859 beds tie-up services are provided as packages and their
in ESI hospitals, 520 in annexes, and about 2,795 rates are linked to Central Government Health
are available in government hospitals. Scheme (CGHS) package rates.

X Box 1. A weak linkage in the level of formalization and ESI coverage

State-level evidence about formality in employment can provide insights into whether ESI
coverage is guaranteed by being in formal employment. States such as Uttarakhand and
Punjab which enjoy high formal employment in total employment are also the ones that have
ESI coverage significantly high of over 100 per cent (percentage of ESI coverage to formal
employment in the formal and informal sector). However, it is equally plausible that states with
the highest formality in employment, such as Bihar, Himachal Pradesh and Chhattisgarh have
continued to underperform in ESI coverage (18 per cent, 43 per cent and 39 per cent). On the
other end of the spectrum are outliers including Delhi and Haryana with 7 per cent and 9 per
cent formal employment, respectively, and yet could achieve tremendous ESI coverage (166 per
cent and 223 per cent), respectively. The ESIC coverage in these states is relatively far higher as
compared to formal employment estimates. Since ESIC is expected to cover those in the formal
sector, a significantly higher coverage highlights more than its potential to cover by ESIC. This
is potentially plausible due to ESIC coverage of those formal employees even in the informal
sector. Given that the informal sector employs both formal and informal workers, it was able to
provide coverage to the latter. This has deepened the coverage phenomenally.
44 Accessing medical benefits under ESI scheme: A demand-side perspective
Role and performance of Employee State Health Insurance scheme in India, 1999-00 to 2018-19

X Figure 2.4. Number of hospitals beds and rate of hospitalization, 1999-2,000 to 2018-2019

45.0

40.0
Rate of
Hospitalisation
35.0
per 1 000
Beneficiaries
Average number of employees/

30.0
beneficiaries per employer

25.0

20.0
No. of Beds per 10 000
15.0 Beneficiary

10.0
No. of Hospitals Per
5.0 10 000 Beneficiary

0.0
2000-01

2001-02

2002-03

2003-04

2004-05

2005-06

2006-07

2007-08

2008-09

2009-10

2010-11

2011-12

2012-13

2013-14

2014-15

2015-16

2016-17

2017-18

2018-19
1999-00

Source: Authors’ estimates from ESI annual reports, respective years

The utilization of health services and the other tie-ups with private empanelled hospitals/beds
benefits offered by the ESI can serve as an and (iii) expansion in capacity utilization of beds in
indicator to assess its performance. Some of the hospitals.
indicators examined here include number and
It may be observed that the number of ESIC
rates of hospitalization, rates of out-patient visits,
hospitals has enhanced from 136 in 1999-2000
rates of investigations, and so on. Along with
to about 159 in 2018-2019 with a corresponding
the rise in beneficiary base, it is expected that
number of beds in the ESIC facilities accelerated
the services provided are likely to increase. For
from 22,947 to about 28,174. Notwithstanding
the period between 1999-2000 to 2018-2019, the
a gradual expansion in ESIC hospitals and a
number of cases admitted in hospitals increased
relatively modest augmentation of bed capacity,
from 0.42 million to approximately 3.89 million.
given the ever-expanding beneficiary base, the
While one would expect an absolute increase in the
number of beds per 10,000 beneficiaries declined
hospitalization, due to the expansion in coverage
significantly from 7.9 to 2.1 during this period.
of the employees, the rate of hospitalization
Furthermore, the number of hospitals per 10,000
enhanced significantly from 1.3 per cent to 2.8
beneficiaries also dropped from 0.04 to 0.01.
per cent for the period under consideration (28
Ideally, at a broader level, if health needs were to
per 1,000 beneficiaries), see Figure 2.4. During
be considered, identifying norms and comparing
2017-2018, the NSSO results also revealed
them with available services against shortage, is
the number of hospitalization cases per 1,000
expected to provide a clue to the level of shortages.
persons annually to be 29, reflecting similar rates
During 1999-2000, the bed requirement as per
of in-patient utilization. Such an acceleration in
norms was 34,404 while a combined bed strength
hospitalization can presumably be expected due
of only 26,390 was available (ESI benchmark for
to three factors: (i) rise in the number of ESIC own
hospitals and beds; (ii) increase in the number of
 Accessing medical benefits under ESI scheme: A demand-side perspective
Role and performance of Employee State Health Insurance scheme in India, 1999-00 to 2018-19 45

X Figure 2.5. Rates of hospitalization and number of beds

Rate of hospitalization (per 1 000 beneficiaries)

100 Kerala

80 Jammu & Kashmir Punjab

Madhya Pradesh

60

Rajasthan
40 Himachal
Tamil Nadu Pradesh TOTAL
Andhra
Pradesh Karnataka
20 Haryana Delhi
Goa Maharashtra Gujarat West Bengal
Jharkhand
Bihar Uttar Pradesh
0 Odisha

0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5 5.0
Numbers of Beds per 10 000 beneficiaries

Source: Authors’ estimates from ESI annual reports, respective years

establishing a 100-bed new hospital is 25,000 beneficiaries, signifying gross underutilization of

insured persons, that is 250 insured persons per bed capacity.
bed). As against this, during 2018-2019, as per
Although a significant shortage of beds was
the norms, the bed strength was supposed to be
reported, the question of whether bed capacity was
1,41,520 beds but only 28,174 were available in ESIC
utilised to the maximum requires investigation.
facilities6, with about 24,859 beds in ESI hospitals.
In the absence of state-wise or national-level
Thus, the shortage of beds during 2018-2019
indicators of bed capacity utilization, we present
was about 1,13,346 as against only 8,014 during
utilization patterns in the top 58 hospitals, ranked
1999-2000.
by the number of hospital visits. The Public
The issue of the bed capacity is even more Accounts Committee (PAC) of the Parliament in
revealing at the State level (Figure 2.5). While 2006-2007 noted deficient management resulting
states such as Kerala and Madhya Pradesh have in underutilisation of bed capacity. It noted “that
relatively better bed capacity (3 and 2.5 beds per there were many hospitals that had less than 50
10,000 beneficiaries, respectively) and could cope per cent bed occupancy on account of shortage
up with high rates of hospitalization per 1,000 of medical/paramedical staff including specialists,
beneficiaries (108 and 80 per 1,000 beneficiaries, lack of back facilities like drinking water in some
respectively). But Jammu & Kashmir and Punjab hospitals, closure of factories, accessibility of
with high rates of hospitalization suffer from a low other hospitals and other local factors”. Six years
bed ratio per 10,000 beneficiaries. West Bengal later, the CAG audit in 2012-2013, brought out
appears to be an outlier with a relatively larger the continuing neglect of low performance in
bed capacity (4.75 beds per 10,000 beneficiaries) bed occupancy, stating that “two out of three
with lower rates of hospitalization at 18 per 1,000 hospitals with more than 500 beds were having

6
Here ESIC facilities refer to hospitals directly run by the ESIC whereas ESI hospitals/facilities refer to those run by concerned state
governments.
46 Accessing medical benefits under ESI scheme: A demand-side perspective
Role and performance of Employee State Health Insurance scheme in India, 1999-00 to 2018-19

bed-occupancy less than 60 per cent. Similarly, are reported to have performed exceedingly well
6 out of 19 hospitals with 250-500 beds, 33 out (over 80 per cent bed occupancy). The key factors
of 58 hospitals with 100-250 beds and 43 out contributing to poor performance are the lack of
of 60 hospitals with <100 beds were under- trained medical personnel including specialists,
utilised, that is operated with < 60 per cent bed poor physical access to facilities owing to distance
occupancy. About 35 per cent of the hospitals had factor, and so on.
bed occupancy levels of < 40 per cent and were
Primary healthcare provision in the ESI scheme
thus underutilized. ESIC stated (May 2014) that
is currently provided by a network of nearly 1,500
the reason for low occupancy was the shortage
dispensaries and annexes, about 9,000 Insurance
of manpower and the quality of health services
Medical Officers (IMOs) and Insurance Medical
being rendered.”
Practitioners (IMPs) along with hospitals catering
A relative comparison of the bed occupancy to out-patient visits. However, the number of
across facilities that have differential bed capacity these facilities, remained stagnant or has even
reveals varied performance. Of the 58 hospitals declined in the last 20 years despite a five-fold
(about one third of ESIC hospitals) analysed, rise in beneficiary base. During 1999-2000, there
14 per cent performed the worst in terms of were 1,443 dispensaries and about 9,530 IMOs/
bed occupancy highlighting the need for a IMPs existed. Consequently, the number of
complete overhaul of the capacity utilization (see dispensaries per 10,000 beneficiaries fell sharply
Figure 2.6). During 2017-2018, the average bed from 0.43 in 1999-2000 to 0.11 during 2018-2019.
occupancy for the ESI hospitals was about 52 Similarly, during the same period, the number
per cent, wherein ESIC hospitals (68 per cent) of IMOs/IMPs declined considerably from 2.86
exceeded performance over ESI hospitals (41 to 0.68 per 10,000 beneficiaries indicating a
per cent). Over one fourths of all hospitals are significant deficiency in the expansion of primary
placed in the category of lower performers (20- care facilities. Resultantly, the corresponding
50 per cent bed occupancy), while about one in rate of out-patient visits per 1,000 beneficiaries
a third of them are moderately better (50-80 per dropped from 609 to 208, a sharp drop that could
cent bed occupancy) and close to about one third be explained by inadequacy in facility expansion.

X Figure 2.6. Bed occupancy in select ESI hospitals, 2017-2018

Bed occupancy in select ESIS hospitals, 2017-2018

Bed occupancy Hospitals

Rate of bed occupancy in Percent share of ESIC
per cent hospitals with bed occupancy

Greater Than 80% 31%

33%

20-50% 22%

Less than 20% 14%

Source: Authors’ estimates from ESI annual reports, respective years

 Accessing medical benefits under ESI scheme: A demand-side perspective
Role and performance of Employee State Health Insurance scheme in India, 1999-00 to 2018-19 47

The role of IMOs/IMPs is largely concentrated in were much closer (245 per 1,000 population) to
two states, accounting for 87 per cent of the total ESI utilization. On a relative basis, ESI appears
980 in India. Maharashtra had about 501 IMPs and to march ahead of population-level utilization
West Bengal approximately 356 IMPs during 2017- but on an inter-temporal basis, the utilization
2018, suggesting that primary care in other states has witnessed a gradual decline, pointing to the
is dependent on ESIC dispensaries alone. Similarly, need for expanding primary care facilities at the
the rate of investigations (diagnostics) per 1,000 catchment area of beneficiaries. This is further
beneficiaries also went down substantially corroborated by the ESI data at the state level
from 37 to 15. Notwithstanding the continuous suggesting states such as Bihar, Odisha, and
decline over the years in out-patient care visits Jharkhand are struggling to cope with a relatively
underlying ESI beneficiaries, a comparison with lower number of dispensaries that were to serve
the National Sample Survey (NSS) of 2017-2018 10,000 beneficiaries (Figure 2.7). The availability
reveals that overall population-level out-patient of the dispensaries is relatively low in states, such
visits were about 75 per 1,000 population as as Delhi and Haryana, where the highest rate
against ESI’s 208 per 1,000 beneficiaries, over of OP visits have been recorded. Maharashtra
two and half times higher than the population presents itself on the other end of the spectrum
level utilization of out-patient care services in where the number of dispensaries served per
India. Further, it may be observed that at the 10,000 beneficiaries is higher and yet with the
population level reported by NSS, the elderly lowest rate of OP visits per 1,000 beneficiaries.
population were observed to utilize a similar rate However, it is highlighted that out-patient
of out-patient visits at the all-India level (277 per visits happen at both dispensaries level and ESI
1,000 population for 60+ ages, 328 per 1,000 for hospitals, perhaps a much larger number in the
70+ ages) while Kerala’s population level OP visits latter than in the former.

X Figure 2.7. Rate of OP visits and the number of dispensaries

700
Kerala
Rate of OP visits (per 1 000 beneficiaries)

600

500

400 Tamil Nadu

West Bengal
300 Madhya Rajasthan
Pradesh Andhra Pradesh
Delhi
Gujarat
200 TOTAL Punjab
Uttar Pradesh
Goa Odisha
100 Haryana
Jharkhand
Maharashtra Jammu & Kashmir
Karnataka Bihar
0
Himachal Pradesh

0.02 0.04 0.06 0.08 0.10 0.12 0.14 0.16 0.18 0.20 0.22 0.24 0.26 0.28 0.30 0.32 0.34

Number of dispensaries services (per 1 00 000 beneficiaries)

Source: Authors’ estimates from ESI annual reports, respective years

48 Accessing medical benefits under ESI scheme: A demand-side perspective
Role and performance of Employee State Health Insurance scheme in India, 1999-00 to 2018-19

2.4. Cost coverage by ESI During 2018-2019, the scheme mobilized Rs.
25,077 crores as against Rs. 1,577 crores in 1999-
ESI scheme is a comprehensive social health 2000, a 15-fold rise in nominal terms (Figure 2.8).
insurance programme with the resources largely Consequently, the average premium contribution
mobilized from the employees and the employers per employee accelerated four-fold from Rs. 1,600
themselves, along with the supplementary in 1999-2000 to Rs. 6,703 in 2018-2019, although
income from the state governments since its the actual rise would have been less significant.
inception. Over the years, the cumulative surplus Figure 2.8 further illustrates continuous revision in
is also contributing by way of significant interest wage limits and the resulting spike in contributions
earnings, adding to the ever-increasing cash flow from employees and employers. Since 1999-2000,
and surplus accumulation. Since the contingent the wage rates were revised five times, with limits
liabilities by way of meeting potential future pay- enhanced from Rs. 6,500 per month in 1997, to Rs.
outs for retirees when the workforce matures may 7,500 per month in 2004, to Rs. 10,000 per month
add far more retiree beneficiaries, it is important in 2006, to Rs. 15,000 per month in 2010, to Rs.
to accumulate surplus The other key factor 21,000 per month in 2017.
contributing to huge surplus, is the recent rise in
The share of the employee and the employer
the worker base of the scheme with an increase in
contribution to the total income of the ESI scheme
wage limit from Rs. 15,000 to Rs. 21,000, pushing
accounts for the bulk 83 per cent. Another key
up revenue mobilization efforts of the scheme.
contribution was made by interest income
Notwithstanding robust revenue base that the
(16 per cent) and the rest by way of rent, and so on.
scheme could mop up, ESIC faces the uphill task
And this share remained nearly constant over the
of providing adequate, quality services to its
last 20 years. One of the positive developments in
rapidly expanding beneficiary base. The growing
recent years has been the continuous rise in the
mismatch between accumulating surplus on the
share of expenditure on benefits as a percentage
one hand and low delivery rates of benefits on the
of total expenditure, which increased from
other, requires deeper investigation.

X Figure 2.8. Number of employees covered and their contribution, 1999-2000 to 2018-2019 31,179
30,236
29,321
No. of employees covered (in thousands)

30K 30K
20,900

25K 25K
18,921

Contribution (crores)
17,955
17,412
16,505
16,349
15,428

20K 20K
13,896

20,077
12,569
11,181

15K 15K
9,239
8,401
1,258 7,862
1,255 7,754

1,689 7,570
1,381 7,082

13,662
1,302 7,000
1,250 7,159

10K 10K
11,456
10,867
3,896

9,633
3,699
3,268
2,453

8,111
1,934

7,070

5K 5K
2010-11 5,749

0K 0K
2000-01
2001-02
2002-03
2003-04
2004-05
2005-06
2006-07
2007-08
2008-09
2009-10

2011-12
2012-13
2013-14
2014-15
2015-16
2016-17
2017-18
2018-19
1999-00

Contribution (crores)
Number of employees covered ( in thousands )

Source: Authors’ estimates from ESI annual reports, respective years

 Accessing medical benefits under ESI scheme: A demand-side perspective
Role and performance of Employee State Health Insurance scheme in India, 1999-00 to 2018-19 49

81 per cent in 1999-00 to about 88 per cent in

2018-19, reflecting several efforts in improving
the uptake of services. As a result, out of total ESI
Kerala, one of the
expenditure, medical benefits accounted for the leading states with
largest share (79 per cent) followed by cash benefits
(8 per cent). It may also be observed that the
highest spending per
proportion of medical benefits to cash benefits has beneficiary, is placed
undergone considerable change over the last two so high due to a higher
decades, from 2:1 during the early 2000s to about
9:1 in 2018-19, mirroring a relative improvement rate of hospitalization
in medical service provision. Additionally, it may and out-patient visits.
also be noted that administrative expenses, now
account for just one tenth of total expenditure,
which declined significantly from about 17 per
cent two decades ago, reflecting continuing efforts the national average with Delhi’s expenditure
in improving service provision accompanied by a nearly three times that of the national average.
reduction in administrative expenses. Although not a perfect link, there appears to be
a reasonable degree of correlation between rate
On average, the per beneficiary expenditure of hospitalization/rate of out-patient utilization to
underlying ESI worked out to about Rs. 1,161 average expenditure per beneficiary (Figures 2.9
annually during 2018-2019, with medical and and 2.10). For instance, Kerala, one of the leading
cash benefits amounting to Rs. 921 and Rs. 98, states with highest spending per beneficiary, is
respectively, per annum. However, the national placed so high due to a higher rate of hospitalization
average often hides significant variation that exist and out-patient visits. Similarly, Delhi and West
across Indian states. Several states including Delhi, Bengal’s per capita beneficiary spending, is among
Kerala, Telangana and West Bengal, are among the top states whose out-patient visits are equally
the leading states with higher mean spending high although not its hospitalization rates.
per beneficiary. They have more than double

X Figure 2.9. Rate of hospitalization and expenditure per beneficiary

Rate of hospitalization (per 1 000 beneficiaries)

Kerala
100
Jammu & Kashmir Madhya Punjab
80 Pradesh

60
Rajasthan

40 TOTAL
Himachal Pradesh
Tamil Nadu
Haryana Andhra pradesh Delhi
20 Goa Karnataka
UP West Bengal
Maharashtra Odisha Jharkhand
0 Bihar Gujarat

0 100 200 300 400 500 600 700 800 900 1000 1100 1200 1300 1400 1500
Expenditure per beneficiary (in rupees)

Source: Authors’ estimates from ESI annual reports, respective years

50 Accessing medical benefits under ESI scheme: A demand-side perspective
Role and performance of Employee State Health Insurance scheme in India, 1999-00 to 2018-19

X Figure 2.10. Rate of out-patient visits and expenditure per beneficiary

700
Rate of OP visits (per 1000 beneficiaries)

Kerala

600

500

400
Tamil Nadu
Andhra
Pradesh West Bengal
300 Rajasthan Madhya
Pradesh
Gujarat Punjab
200 TOTAL Delhi
Odisha Goa
Haryana Jharkhand
100 Uttar Pradesh
Maharashtra
karnataka
Bihar
0 Jammu & Kashmir Himachal Pradesh

0 100 200 300 400 500 600 700 800 900 1000 1100 1200 1300 1400 1500
Expenditure per beneficiary (in rupees)

Source: Authors’ estimates from ESI annual reports, respective years

The shallowness of the health insurance coverage could be potentially used up for buying medicines,
is often reflected in the magnitude of households’ diagnostics and consultations.
expenditure, over and above the cost covered
One of the key intended objectives of health
by the scheme per se. OOP expenditure by
insurance programmes is to provide financial
households is common even after they are
risk protection to households. Besides lowering
covered by insurance schemes. Despite generous
households’ OOP expenditure, financial risk
medical and cash benefits, ESI beneficiaries
protection is expected to bring down the level
appear to be incurring costs but lesser than other
of catastrophe and impoverishment among
insurance schemes. As per the NSSO 2017-2018
households. Emerging evidence from the
data, the average OOP expenditure incurred by
national sample survey of 2017-18 clearly reveals
households covered by ESI scheme, ended up
the relative performance of several insurance
spending about Rs. 38,668 annually, while CGHS
beneficiaries paid out Rs. 50,470 and households
covered by private health insurance paid nearly
double the expenditure incurred by ESI beneficiary
households (Figure 2.11). Those who are covered Out-of-pocket (OOP)
either by tax-funded insurance schemes (such expenditure by
as RSBY or state government funded schemes)
or not covered (accessing public facilities) spend households is common
in the range of Rs. 22,231 – 24,167. A relatively even after they are
lower level of households’ OOP expenditure
could presumably be because households may
covered by insurance
be accessing secondary level nursing homes schemes.
or other less expensive facilities. It is equally
possible that the large share of this spending
 Accessing medical benefits under ESI scheme: A demand-side perspective
Role and performance of Employee State Health Insurance scheme in India, 1999-00 to 2018-19 51

X Figure 2.11. Average expenditure for hospitalization and loss of income, 2017-2018

Average expenditure for hospitalisation & loss of income

Expenditure per household

Loss of income
Average hospitalization Mean loss of income due to
expenditure per households hospitalisation

Rs. 22,231 Govt. Sponsored Health Insurance Schemes (RSBY) Rs.2,973

Rs. 73,613 Private Health Insurance Schemes Rs. 9461

Rs. 24,167 Not Covered by Any Insurance Schemes Rs. 2,839

Rs. 50,470 Govt./PSU Employer Funded (CGHS) Rs. 6,510

Rs. 38,668 Formal Employment Coverage (ESIS) Rs. 4,865

Source: Authors’ estimate from national sample survey organisation (2018), survey of social consumption-
health, 2017-18, Ministry of Statistics and Programme Implementation, Government of India

X Figure 2.12. Percentage of households incurring catastrophic spending for hospitalization

and health Care, 2017-2018

Households incurring catastrophic spending for hospitalization

Percent of Households

Hospitalisation Health Care

% Households Incurring % Households Incurring Catastrophic
Catastrophic Spending for IP Care Spending for Health Care

4.69% Govt. Sponsored Health Insurance Schemes (RSBY) 18%

4.41% Private Health Insurance Schemes 17%

4.29% Not Covered by Any Insurance Schemes 15%

3.56% Govt./PSU Employer Funded (CGHS) 14%

2.49% Formal Employment Coverage (ESIS) 12%

Source: Authors’ estimate from National Sample Survey Organisation (2018), Survey of Social Consumption-
Health, 2017-18, Ministry of Statistics and Programme Implementation, Government of India.
52 Accessing medical benefits under ESI scheme: A demand-side perspective
Role and performance of Employee State Health Insurance scheme in India, 1999-00 to 2018-19

X Figure 2.13. Households’ catastrophic expenditure for hospitalization and average expenditure per ESI
households, 2017-2018

14
Percentage households incurring catastrophic

Jharkhand
spending for IP among ESIS beneficiaries

12
Odisha Madhya Pradesh
10
Kerala

8
Himachal Pradesh

6
Uttar
Telangana Pradesh
4 Haryana Uttranchal
Karnataka
Andhra pradesh
Punjab
2 Gujarat Delhi
Rajasthan West Bengal Chattisgarh
Assam Maharastra
Tamil Nadu
0 Bihar Goa
Jammu & Kashmir

0K 5K 10K 15K 20K 25K 30K 35K 40K 45K 50K 55K 60K 65K
Mean IP expenditure per ESIS household

Source: Authors’ estimates from National Sample Survey 2017-18, NSSO.

schemes including ESI to that of households the link between those households that incur
not covered by any schemes. Assuming a 10 per huge spending and average expenditure
cent threshold of healthcare spending to overall incurred during a hospitalisation episode. No
households’ expenditure per annum, about clear pattern emerges from state level analysis
15 per cent of households are reported to be of households incurring catastrophic spending
incurring catastrophic expenditure during 2017- due to hospitalization. Average expenditure
2018. During the same period, a relatively lesser for the hospitalization per ESI households are
share of households covered by ESI (12 per cent) reportedly lower in states such as Bihar, Jammu
were suffering from catastrophic health spending. & Kashmir, Assam, and so on which also reported
This is far more evident among hospitalization a relatively lower percentage of households
episodes where ESI insured reported only half incurring catastrophe (Figure 2.13). At higher level
of catastrophic payments compared to other of mean expenditure for hospitalization, states
insurance programmes. Counterintuitively, it may such as Punjab, Uttar Pradesh and Uttaranchal are
be observed that private health insurance whose reporting a higher share of households incurring
focus is largely providing in-patient treatment catastrophic expenditure. Some of the outlier
with a far higher premium and benefits, had states such as Jharkhand, Odisha, Madhya Pradesh
reported nearly a two-percentage point higher and so on have moderate mean expenditure but
catastrophy than ESI. What is even more striking reported a higher level of catastrophic payments by
is the percentage of households, incurring loss of households, which requires further investigation.
income due to in-patient treatment. About 5 per
On the other hand, a relatively clear pattern
cent of households covered under ESI recorded
emerges from overall healthcare utilization and
loss of income compared to nearly double
the catastrophe associated with it. At the lower
among households not covered by any insurance
end of the spectrum are states such as Jammu
programme.
and Kashmir, Bihar, Assam and so on whose
A further analysis involving NSSO health survey average households’ spending is not only lower
of 2017-2018, presented in Figure 2.13 highlights but also the lowest catastrophic spending by
 Accessing medical benefits under ESI scheme: A demand-side perspective
Role and performance of Employee State Health Insurance scheme in India, 1999-00 to 2018-19 53

X Figure 2.14. Households catastrophic expenditure for healthcare and average expenditure per
ESI households, 2017-2018
Percentage households incurring catastrophic
spending for IP among other households

Kerala
10

8
Himachal
Pradesh Maharashtra
6 Odisha Andhra Pradesh
Uttar Pradesh
Karnataka TOTAL Haryana
4 Jammu Madhya
Rajasthan Telangana Punjab
& Pradesh Goa Chattisgarh
TN Jharkhand
Kashmir
Bihar Gujarat Delhi
2
Assam Uttaranchal

10K 12K 14K 16K 18K 20K 22K 24K 26K 28K 30K 32K 34K 36K 38K 40K 42K
Mean IP expenditure per other households

Source: Authors’ estimates from NSSO, 2017-18

households (Figure 2.14). At the higher end of and purchasing functions were carried out by
average expenditure for health care, several ESIC, with its own dispensaries and hospitals. In
states such as UP, Maharashtra, Telangana, recent times, it has enlarged its scope of coverage
Haryana, and so on have reported a larger level to provide beneficiaries with the benefit of out-
of households incurring catastrophic payments. patient and in-patient services. Given the paucity
Kerala predictably is an outlier while Punjab with of primary care providers and tertiary care
the highest level of mean spending reported a facilities in the areas where beneficiaries live,
moderate level of catastrophe. empanelled ambulatory care providers (IMP) and
private hospitals fill the potential gap that exists in
ESIC provision. In view of the lack of tertiary care
2.5. How strategic is facilities, ESIC has been procuring services from
ESIC purchasing? private empanelled hospitals. Table 2.1 highlights
several insurance schemes, including CGHS, ESIS,
Strategic purchasing denotes a process by which PMJAY and private health insurance. The benefits
a purchaser (government or an autonomous package description, the number of benefits
agency) procures health services using pooled packages, the number of healthcare facilities
funds, in order to provide them to a defined along with criteria for selection of empanelled
population (population covered by the scheme). providers are provided in Table 2.1. While PMJAY
Strategic purchasing facilitates institutions by and private health insurance, largely confine their
promoting efficiency, effectiveness, equity, benefits to only in-patient treatment coverage,
and quality of healthcare delivered. While the benefit packages purchased remain limited.
purchasing can be passive or strategic depending But ESIS provides much larger benefits from
upon the functions and goals of a purchaser. preventive to promotive to curative care, besides
Three sets of principles underscore strategic covering other costs of insured persons and their
purchasing decisions: (i) which type of services beneficiaries. Although the number of healthcare
or interventions be purchased? (ii) how are these providers empanelled as part of PMJAY and other
services procured? and (iii) from which providers schemes appear larger, and yet even if limited
the services are purchased? A large part of ESI compared to other schemes for hospitalization
service provisions was integrated for a long time benefit, the scope of benefits and therefore the
since its inception wherein the healthcare provider number of providers is much larger under ESIC.
54 Accessing medical benefits under ESI scheme: A demand-side perspective
Role and performance of Employee State Health Insurance scheme in India, 1999-00 to 2018-19

X Table 2.1. Number of benefit packages, their description and providers in ESI vs other
comparable health insurance schemes

Number Number of
Benefit Technical criteria for
of benefit healthcare
Schemes package selecting empanelled
packages providers
description providers
purchased empanelled

1.Empanelled hospitals
must be accredited by NABH
(National Accreditation Board
OPD including
for Hospitals & Health Care
medicines, IP,
The scheme Providers)
investigations
covered through
at ESIC/govt. 2. Aggregate bed capacity
151 own hospitals
& empanelled of hospitals empanelled for
and 42 annexes, 1
hospitals, secondary/tertiary care services
489 dispensaries,
reimbursement Over 1 900 should be such that up to 10
ESI in addition to 7 828
of expenses, packages times of the daily average need
Insurance Medical
RMNCH, AYUSH of that specialty is catered to.
Officers and 950
Facilities; Cash
Insurance Medical 3. Secondary care empanelled
benefits for
Practitioners hospitals are mandated to
maternity,
(IMPs) have 100 beds (25 beds in some
illness, disability
states with specialty services in
and funeral
addition to 24 hours emergency
services along with laboratory &
radiology services)

OPD including
medicines, IP, About 1 389
investigations empanelled
at government hospitals;
& empanelled Over 1 900
CGHS Over 214
hospitals, packages
empanelled
reimbursement
diagnostics centres
of expenses,
RMNCH, AYUSH
facilities

Mandatory requirement of at
least 10 IP beds
2. Round-the-clock availability
(or on-call) of Surgeon and
Only IP 1 394 packages anesthetists, obstetrician,
admissions pediatricians;
(some packages About 23 512
PMJAY in Govt. and
are reserved for hospitals 3. Round-the-clock availability of
empanelled
private hospitals govt.) support systems & ambulance
facilities
4. Emergency services 24X7 by
technically qualified staff and
functional Operation Theatre

Mostly IP
Private admissions
Health in private
Insurance empanelled
hospitals

Source: Authors' mapping from respective schemes

 Accessing medical benefits under ESI scheme: A demand-side perspective
Role and performance of Employee State Health Insurance scheme in India, 1999-00 to 2018-19 55

One of the key purchasing functions is how services or longer stay in hospitals. Such case-
payments are made by the purchaser to based payments facilitate purchasers to fix
providers. This is critical to ensure that resources the amount to be paid per case irrespective of
are optimally utilised, bring in efficiency in variation in services or procedures provided. A
resource use and distribute funds equitably. More package rate normally includes room charges,
importantly, payment mechanisms must provide professional fees, drugs and consumables,
an incentive structure that reasonably contributes diagnostics, and so on. This is superior to the fee-
to providers’ services ensuring that irrational and for-service mechanism that is often charged by
unnecessary services, procedures and dispensing private providers from patients who do not have
are avoided. ESI employs a retrospective payment insurance coverage. The accompanying Figure
mechanism through ‘package rates’ to reimburse 2.15 highlights the price difference that exists in
private healthcare providers for the provision of different settings with a comparison of package
hospitalization services. Payment mechanisms rates between ESI and PMJAY in Delhi; ESI and
and pricing of packages are critical from the Medanta Hospital (private tertiary care hospital
viewpoint of the purchaser (ESI) while purchasing in Gurgaon, NCR Delhi), all comparable costs as in
services from providers, thereby shaping the Delhi. It may also be observed that ESI has linked
latter's behaviour. A close-ended package rates packages and its rates those of CGHS. The rates
often facilitate the purchaser to prevent cost for Medanta Hospital specified in the table only
escalation and help contain cost by removing capture the shared bed price while single, deluxe
incentives for hospitals to provide unnecessary and suites vary in cost by 3–4 times.

X Figure 2.15. Package rates under different insurance schemes for hospitalization

Ureteroscopy + stone
removal with... Series 2-24 Series 1-55
Cholecystectomy
(Without exploration...) -51 -43

Pcnl percutaneous
(Nephrolithotomy...) -16 -54

Haemodialysis per sitting -65 -7

Salpingo – oopherectomy (Hysterectomy) -1 7
Head injury requiring
facio–maxillary... -53 13
Tympanoplasty -45 23

Coronary artery bypass surgery (Cabg) -35 24

Hernioplasty – inguinal (Groin Hernia...) -46 34

Caesarean delivery -51 41

Laparoscopic appendecctomy -20 88

Radical treatment with photons 96 4

Ptca with double stent (Medicated...) -45 -128

Total hip replacement (Cementless) -53 -145

Cataract surgery (Phaco emulsificaion...) -52 -165

Total knee replacement (Revision) -33 -322

PRICE DIFFERENCE IN PERCENTAGE (BETWEEN ESIC VS PMJAY AND ESIC VS PRIVATE HOSPITAL)

Source: Estimate from respective schemes – ESIC, PMJAY and private hospital packages.
56 Accessing medical benefits under ESI scheme: A demand-side perspective
Role and performance of Employee State Health Insurance scheme in India, 1999-00 to 2018-19

X Table 2.2. Number value of referrals, and total medical benefits, 2017-2018

Value of Value of medical % Share of

Number of
States referrals care benefit referrals to total
referrals
(crores) (crores) medical benefits*

Andhra Pradesh 25 071 37.49 279.93 13.39

Assam 0.00 36.45 95.14 38.31

Bihar 1002 14.30 43.91 32.57

Chhattisgarh 1593 13.18 63.60 20.72

Delhi 61 070 156.30 1 061.96 14.72

Gujarat 25 568 47.01 297.74 15.79

Goa 0.00 0.08 42.58 0.19

Haryana 38 340 79.5 356.98 22.27

Himachal Pradesh 3 752 2.96 67.88 4.36

Jammu & Kashmir 3 955 3.06 24.88 12.30

Jharkhand 3 127 17.45 83.72 20.84

Karnataka 26 526 141.88 677.88 20.93

Kerala 21 212 90.15 432.47 20.85

Madhya Pradesh 5 344 26.49 190.06 13.94

Maharashtra 9 669 97.72 387.79 25.20

Orissa 7 316 38.15 110.87 34.41

Punjab 13 859 62.61 283.48 22.09

Rajasthan 13,143 23.39 224.26 10.43

Tamil Nadu 9 811 38.11 672.66 5.67

Uttar Pradesh 25 800 37.26 348.38 10.70

Uttarakhand 4 474 16.30 103.52 15.75

West Bengal 38 540 76.35 617.08 12.37

Telangana 15 601 68.31 632.49 10.80

Others 548 1.81 77.76 2.33

TOTAL 3 55 321 1 125.31 7 177.02 15.68

Source: Authors’ estimates from data provided by ESI, Delhi for respective years
* Total medical benefits include cash benefits.
 Accessing medical benefits under ESI scheme: A demand-side perspective
Role and performance of Employee State Health Insurance scheme in India, 1999-00 to 2018-19 57

X Box 2. Strategic purchasing in ESIC: a note

Strategic purchasing of services, especially those relating to hospitalization services from

empanelled private hospitals appear to account for a major chunk in recent years. The number of
referrals to empanelled hospitals, the value of referrals along the value of total medical benefits
are provided in Figure 2.16. It can be observed that the total medical benefits include cash benefits
besides out-patient and in-patient care expenditure. If we were to simply estimate the share of
referrals to empanelled hospitals from ESIC in value terms with total medical benefits, it accounted
for over 15 per cent (Table 2.2). It is highly likely that the actual share will be relatively far higher if
we were to consider only total hospitalization benefits as the denominator. In the absence of such
data, it reveals that in several states such as Bihar, Assam and Odisha, the share is already much
higher at nearly a third of the total medical benefits, indicating the larger role played by referrals in
empanelled hospitals. This reinforces the fact that ESIC hospitals were largely focussed on secondary
care while tertiary care services had to be referred to private hospitals. Moreover, it also highlights
the unavailability of services in a large part of the districts (just about 150 hospitals in districts out of
over 742 districts). And even in those 151 hospitals, not all secondary services were available due to
the absence of specialists. These are also the states where the rate of hospitalization is significantly
far less (in Bihar and Odisha the rate of hospitalization is 4 and 8 per 1,000 beneficiaries against
26 at the national level). The number of beds available in ESI hospitals in these states is far fewer
facilities (0.54 and 1.34 beds per 10,000 beneficiaries in Bihar and Odisha, respectively), reflecting
poor access and therefore the need for accessing empanelled hospitals. Drug Procurement by ESI:
How efficient?

The packages are identified based on high-value or purchaser unlike an individual, it can reap the
high-volume transactions underlying PMJAY and advantage of economies of scale with a relatively
other government-funded insurance schemes. better-negotiating power, something a household
Considerable price disparity exists between is unable to achieve. Moreover, households end
package rates offered in different schemes. up paying fee-for-service payments in a private
Predictably, for most packages, PMJAY pays hospital, while ESI pays up an agreed package fee,
the least while ESI packages attract reasonably preventing unnecessary and inappropriate care.
competitive rates. For two cardiac procedures,
Reaping monopsony power combined with large
namely, PTCA with stents and CABG (coronary
economies of scale, government procurement
artery bypass grafting), ESI offers a nearly
agencies often find the best prices while
double rate. For CABG, the most expensive of all
purchasing medicines, a well-established practice
packages listed, is nearly Rs. 30,000 more than the
in some Indian states. A well-functioning drug
PMJAY rates, while the rates offered in a top-end
procurement agency, such as Tamil Nadu Medical
Tertiary Care Hospital in Gurugram are over Rs.
Services Corporation (TNMSC), Rajasthan Medical
80,000. While for some procedures, such as and
Services Corporation (RMSC), among others has
in place of, hysterectomy the rates are similar,
reported in the past to obtain the best medicines
but for a large number of packages, the rates
prices. They are modelled on pooled procurement
fixed by ESI are relatively higher in the range of
system wherein funds from different agencies
13-322 per cent compared to those offered under
within the States (health & family welfare
PMJAY. The rates for certain procedures such as
department, medical education department,
cholecystostomy, stone removal, percutaneous
animal husbandry department, police department,
nephrolithotomy (PCNL), and so on. ESI has
and so on) are pooled together to procure
obtained a relatively better deal by way of lower
medicines by an independent agency. Similarly, the
rates. On the other hand, relatively higher rates
ESI prepares and updates an essential medicines
are observed in a Private Tertiary Care Hospital
list, which is utilized for obtaining a rate contract.
(Gurugram) with a price ranging from 20 – 65 per
This rate is used to procure generic drugs from the
cent, indicating several factors. Since ESI is a large
manufacturers for the supply to various medical
58 Accessing medical benefits under ESI scheme: A demand-side perspective
Role and performance of Employee State Health Insurance scheme in India, 1999-00 to 2018-19

X Figure 2.16. How efficient are medicines procurement by ESI, 2019-20

Ceftriaxone inj 1g powder

Amoxicillin cap 250 mg
Ranitidine tab 150 mg
Ciprofloxacin tab 500 mg
Diclofenac INJ 25 mg
Metformin tab 500 mg
Fluconazole tab 150 mg
Atenolol tab 50 mg
Omeprazole cap 20 mg
Losartan tab 50 mg

-200 -100 0 100 200 300 400 500 600 700

ESIS Price vs TNMSC/RMSC Price ESIS Price vs Market Price

Source: Authors’ estimates from respective schemes – ESI, TNMSC, RMSC medicines price list.

institutions under the ESIC. One core indicator to ESIC exchequer. Moreover, it is also observed
often employed to examine the efficiency of the that despite central rate contracts, local purchase
procurement models is its price for each drug. by ESIC facilities continues to play a significant
For a common basket of medicines, we analyzed part, which hampers it from achieving the desired
prices obtained by ESI, with a relative comparison level of economies of scale. Local purchase is
to TNMSC/RMSC prices while also attempting to often allowed when certain essential medicines
compare the same with private market prices. are not part of the ESIC rate contracts and other
The common basket of the medicines, is identified specialty drugs that are not part of ESIC rate
here which are generics in nature (branded contracts. Of the overall allocation to medicines,
generics in the case of private market prices), such local purchases by institutions are allowed
whose dosage, strength and unit (pack size) are to the extent of about 15-20 per cent. A statutory
uniquely comparable. audit carried out by Comptroller and Auditor
General (CAG) in 2013 suggested that medical
Predictably, prices obtained by the RMSC in the
institutions are often found bypassing central rate
range of 27-68 per cent for the common basket
contracts and procuring from local purchase from
of key medicines. While, on the other hand,
compared to market prices, ESIC has certainly
managed to discover a relatively better price,
with a price difference ranging from 100 ̶ 657
per cent. Although ESIC has managed to achieve The ESI prepares and
a better result with competitive prices that it can
obtain from the manufacturers/suppliers, the
updates an essential
comparable evidence demonstrates that it is yet to medicines list, which is
achieve the potentially ideal price. Therefore, the utilized for obtaining a
need to benchmark ESIC prices of key medicines
to TNMSC/RMSC is critical to saving additional
rate contract.
funds that can run into several crores of rupees
 Accessing medical benefits under ESI scheme: A demand-side perspective
Role and performance of Employee State Health Insurance scheme in India, 1999-00 to 2018-19 59

X Table 2.3. Composite index of performance of ESI in States

Front-Runners Runners-up Aspirants

Composite Composite Composite

States States States
index index index

Kerala + Assam & NE

64.54 Delhi 38.19 28.85
(Lakshadweep) States

Punjab 45.76 Goa 38.14 Jharkhand 28.53

Uttarakhand 44.29 Himachal Pradesh 38.10 Chhattisgarh 27.57

Haryana 42.36 Jammu & Kashmir 37.11 Odisha 27.40

Madhya Pradesh 41.76 Rajasthan 34.98 Bihar 26.38

Karnataka 34.95 Maharashtra 19.22

Tamil Nadu 34.94

Gujarat + (DNH) 33.54

Telangana 31.31

Uttar Pradesh 30.90

West Bengal 30.17

Andhra Pradesh 30.05

Source: Authors’ estimate based on ESI data for 2017-18

empanelled local chemists, forgoing significant 2.6. Key observations

savings that could have been achieved. One other
perception, which appears dominant, among end- Evidence from the last two decades of the ESI
users and prescribers of the ESIC facility is the performance shows rapid and significant growth,
quality of medicines prescribed and dispensed. reflecting a five-fold rise in the number of
Presently, the ESIC follows a procedure of picking enterprises from 0.22 million in 1999-2000 to 1.03
10 per cent of samples to be sent to empanelled million during 2018-2019 with a corresponding
laboratories for quality testing. Such procedures increase in the number of employees covered
are still lackadaisical compared to a relatively from 7.86 million to 31.17 million. As a result,
robust method of picking samples from each ESI eligible beneficiaries now account for about
batch of supplies for quality testing, as was done a tenth of the total population in 2018-2019 as
by TNMSC/RMSC. The prescribers and end-users against three per cent of the population in 1999-
must be assured that the drugs for supply in the 2000. However, the share of women workers in
ESIC health facilities are of good quality and meet respect of total insured persons remained low in
the global standard without compromising the the range of 12-17 per cent during the last twenty
safety and efficacy of the drugs supplied.
60 Accessing medical benefits under ESI scheme: A demand-side perspective
Role and performance of Employee State Health Insurance scheme in India, 1999-00 to 2018-19

years, in sharp contrast to a relatively higher

share of female employment proportions among
regular/wage salaried (21 per cent in 2017-18
Lack of health infra
as per 75th NSSO Round). With about 31 million structure availability
employees registered under the scheme in 2018-
19, it accounted for about 91 per cent of the total
hospitals, out-patient
34.02 million workers in the formal employment facilities, diagnostic
category, implying ESI does reasonably well in facilities, and so on
the category of formal employment in the formal
sector. Whereas, nearly half of the workers appears to be one
who can potentially be included under the ESI of the key factors
are denied benefit due purely to the definition
of workers. Presumably, such employment is
hindering access.
largely linked to contractual work that is provided
directly by the employer or provided through a
contractor. State-level evidence about formality
in employment can provide insights into whether schemes. The average expenditure incurred by
ESI coverage is guaranteed by being in formal the households covered by the ESI scheme ended
employment. States such as Uttarakhand and up spending about Rs. 38,668 annually, while
Punjab which enjoy high formal employment the CGHS beneficiaries paid out Rs. 50,470 and
in total employment are also the ones that households covered by private health insurance
have ESI coverage significantly high of over 100 paid nearly double the expenditure incurred by
per cent (percentage of ESI coverage to formal ESI beneficiary households. A relatively lower
employment in the formal and informal sectors). level of the households’ OOP expenditure could
However, it is equally plausible that states with presumably be because households may be
the highest formality in employment, such as accessing secondary-level nursing homes or other
Bihar, Himachal Pradesh and Chhattisgarh, have less expensive facilities. It is equally possible that
continued to underperform in ESI coverage (18 the large share of this spending could be potentially
per cent, 43 per cent, and 39 per cent). On the used up for buying medicines, diagnostics and
other end of the spectrum are outliers including consultations. Correspondingly, a relatively lesser
Delhi and Haryana, with 7 per cent and 9 per share of households covered by ESI (12 per cent)
cent formal employment and yet could achieve were suffering from health spending catastrophe,
tremendous ESI coverage (166 per cent and 223 which is only half of catastrophic payments
per cent). compared to other insurance programmes.
In respect to the performance of healthcare Moreover, emerging evidence also indicates that
utilization, the rate of hospitalization enhanced about 5 per cent of households covered under
significantly from 1.3 per cent to 2.8 per cent for ESI recorded a loss of income compared to nearly
the period under consideration, with utilization double among households not covered by any
rates reflecting similar levels recorded in national insurance programme.
sample surveys. In respect to out-patient
utilization rates, per 1 000 beneficiaries dropped 2.7. Preparing for next steps
from 609 to 208, a sharp drop that could be
explained by inadequacy in facility expansion, Overwhelming evidence above points to
and similarly, the rate of the investigations potentially large scope for enlarging the coverage
(diagnostics) per 1000 beneficiaries also of enterprises and employees and bringing them
went down substantially from 37 to 15. The into ESI’s fold. Given the large surplus that ESIC
shallowness of the health insurance coverage is has managed to accumulate in the past, resource
often reflected in the magnitude of households’ availability is far less a factor than making available
expenditure, over and above the cost covered by health facilities and services and deepening
the scheme per se. Despite generous medical coverage benefits. Lack of health infrastructure
and cash benefits, ESI beneficiaries appear to be availability – hospitals, out-patient facilities,
incurring costs, but far less than other insurance diagnostic facilities, and so on appears to be one
 Accessing medical benefits under ESI scheme: A demand-side perspective
Role and performance of Employee State Health Insurance scheme in India, 1999-00 to 2018-19 61

of the key factors hindering access. Even after in this section and the one highlighted in the next
contracting with the private sector – in-patient section is expected to facilitate in formulating
and out-patient visits – utilization of healthcare a design and implementation plan that can
facilities has been far short of the potential. reconfigure the current ESI scheme.
Purchasing of healthcare services is still found to
be fragmented and sub-optimal, raising serious
questions about efficiency, effectiveness and
quality of services provided. In order to investigate Purchasing of health
the reasons and factors that hinder coverage,
lack of facilities, underutilization of services, and
care services is
so on there is a need for eliciting the current still found to be
knowledge, behaviour and utilization pattern of
the ESI scheme from its stakeholders. While the
fragmented and
questions of ‘what’ and ‘how’ were addressed in sub-optimal, raising
this chapter from a supply-side perspective, the serious questions
next chapter attempts to address the question
of ‘why’ and reasons for the existing gap in the about efficiency,
system, largely through the demand side. The next effectiveness and
section highlights key findings from the survey of
several ESI constituencies including employees,
quality of services
employers, health facilities, trade unions, provided.
community, and so on. The evidence presented
62 Accessing medical benefits under ESI scheme: A demand-side perspective
Key findings from the field survey among beneficiaries

3. Key findings from the field survey among

beneficiaries
The ESI is the oldest and the largest scheme covering over 133 million
people in the formal sector until 2018-19. Its benefit packages perhaps go
beyond the healthcare realm, by providing other social security benefits.

3.1. Introduction (c) Knowledge about employer and employee

contribution; and
Notwithstanding the breadth and depth
(d) Awareness and knowledge levels underlying
of its coverage in the nearly 70 years of its
grievance redressal mechanisms
existence, several problems pose a challenge to
improvements and uptake of the scheme among 2. Healthcare Utilization Pattern among ESI
its beneficiaries. The previous chapter identified Beneficiaries
those challenges with evidence drawn from (a) Reporting of illness by beneficiaries
available literature, scheme database, available
(b) Treatment pattern of out-patient care
national surveys conducted by NSSO involving
visits
PLFS and health surveys. This chapter provides key
highlights emerging from the field survey of four (c) Treatment pattern of in-patient episodes;
states, conducted among employees, employers, 3. Financial Risk Protection Measures
providers, other stakeholders such as trade
(a) Maternit y, child deliver y and OOP
union leaders, and enterprise associations. While
payments
previous reviews of the scheme were conducted
based on data from the supply side including the (b) Workday and wage loss due to
previous chapter, analysis of demand-side issues, hospitalization
especially from the beneficiaries’ angle has largely 4. COVID-19 and its Associated Knowledge
been missing till now. This piece of research
(a) Compensation of wage loss to employees
attempts to fill this gap that has been due for a
due to COVID-19
long time. The research design, including sample
size, its distribution among employees, employers, 5. Occupational Hazard and Safety Measures
healthcare providers, trade union representatives, faced by Employees
association representatives, and so on are (a) Levels of health risks faced by employees,
outlined in Chapter 1 of this report. The analysis including types of health risks
that follows is purely from the field data, both
(b) Employers’ knowledge about occupational
quantitative data and qualitative interviews from
hazards
various stakeholders. The survey investigated
several questions and responses elicited from (c) Treatment sought for occupational
different constituencies. These are organized in hazards – by type of health facilities used
and states
the following themes:
(d) Measures taken by employers to prevent
1. Awareness, knowledge and attitude of
work site accidents
stakeholders underlying ESI benefits:
6. Satisfaction levels of employers/employees
(a) Knowledge and awareness involving
enrolment and registration (a) Patient satisfaction levels for healthcare
(b) Enrolment pattern and scheme coverage
among beneficiaries
 Accessing medical
Accessing benefits
medical under
benefits
Key Key
ESIESI
under
findings
findings
scheme:
from
scheme:
from
thethe
AAdemand-side
field
field
demand-sideperspective
surveyamong
survey
perspective
amongbeneficiaries
beneficiaries 63

3.2. Awareness and knowledge representatives, enterprises associations, and so

on. Inadequate literacy among one constituency
about different aspects of ESI can hamper enrolment and uptake of scheme
benefits. For instance, even if employees are
3.2.1. Awareness and aware of the benefits and if employers have
less knowledge, delays in enrolment or denial of
knowledge about ESI benefits specific benefits may occur.
Health insurance literacy remains a central And what do the survey findings reveal? The
tool to coverage and its uptake. This is more so survey results show that awareness about medical
underscoring voluntary health insurance schemes, benefits that ESI offers is much higher (89 per
such as government-funded health insurance cent) among employees, but far less on cash
(PMJAY), private health insurance and community- (46 per cent) and disability benefits (32 per cent)
based health insurance. However, in a mandatory (Figure 3.1). No clear pattern emerges across states
health insurance plan like the ESI, since every in terms of awareness about different benefits.
beneficiary is covered, awareness levels about its The study further confirms that the understanding
enrolment may appear less significant. Despite this is relatively greater among employees in Haryana
seemingly logical conclusion, evidence emerging (94 per cent) but in Jharkhand, only three in four
from this survey points to the contrary. Awareness employees know about the medical benefits. A
levels are critical at every stage – from enrolment higher level of awareness could be attributed
in the scheme, creating ID and receiving cards by to the socio-economic and educational status
employees and its dependents, understanding of the respondents. Since four in five sample
the benefits, the types of benefits available, respondents were employees receiving a relatively
location of facilities, utilization of facilities, and so higher salary in the range of Rs. 10,000 and
on. Knowledge and awareness are vital not only above, besides the fact that over two in three of
among beneficiaries but also among other key them possessed secondary level education and/
stakeholders, including employers, trade union or a graduate, one could conjecture that this may
64 Accessing medical benefits under ESI scheme: A demand-side perspective
Key findings from the field survey among beneficiaries

perhaps be the contributing factor in a higher

level of awareness. Although awareness levels
among beneficiaries are relatively higher in the Investigating the
ESI scheme, available literature suggests that association between
the tax-funded voluntary scheme such as RSBY,
appear to have performed even worst. A study of
socio-economic and
RSBY in Maharashtra suggested that just about 30 education correlates
per cent of eligible beneficiaries were aware of the
scheme benefits. It implies that social exclusion
to health insurance
plays a negative role where the socio-economic awareness.
and educational background of the households
contribute to awareness levels. Confirming this
trend even in an urban setting in Delhi, a recent
study of RSBY highlighted that just about 19 the challenges of putting to use the membership
per cent of households studied were aware of benefits, in terms of how and where to obtain
health insurance, with substantial variation in treatment offered by the scheme. Investigating the
their knowledge among various socio-economic association between socio-economic and education
groups, as barely 9 per cent of recent migrants correlates to health insurance awareness. Another
compared to settled-migrants (21 per cent) had study conducted in Bangalore, India, suggested
knowledge about health insurance. However, in that these correlates are critical in the uptake of
Karnataka in 2011, 85 per cent of the respondents health insurance. Another study dealing with the
in a survey confirmed their awareness level about voluntary Community Based Health Insurance
RSBY and over two third of the eligible population scheme underscored the success of awareness
were enroled in the RSBY scheme. But the findings campaigns among the treatment groups. This
from the survey in Karnataka also highlighted occurred since as against control groups, the

X Figure 3.1. Employees’ awareness about medical, cash and disability benefits (figures in per cent to total)

Haryana, 28
All States, 32
Disability
Benefits Rajasthan, 22
Jharkhand, 21
Tamil Nadu, 50

Haryana, 24
All States, 46
Cash
Rajasthan, 48
Benefits
Jharkhand, 49
Tamil Nadu, 66

Haryana, 94
All States, 89
Medical Rajasthan, 91
Benefits
Jharkhand, 75
Tamil Nadu, 86
 Accessing medical benefits under ESI scheme: A demand-side perspective
Key findings from the field survey among beneficiaries 65

insurance understanding of the beneficiaries the interviews conducted among ESI officials, it
among treatment groups increased substantially emerges that for employees working in industries
than those who were not exposed to awareness and establishments, outreach awareness programs
campaigns. The study concludes that enhancing are regularly carried out for employers, employees
awareness levels among the beneficiaries prior and trade union leaders at workplaces. Regular
to the enrolment was a critical contributing factor meetings, seminars and interactive workshops
in accelerating knowledge, about the insurance are organized at the construction sites and branch
and its uptake. Conversely, mounting Information offices. Pamphlet distribution and advertisement
and Education Campaign (IEC), alone is unlikely to at leading newspapers about ESI benefits are
result in the higher enrolment as another study another mode of communication utilised in Tamil
dealing with RSBY revealed. Nadu. In Haryana, all officials mentioned that
in order to create awareness about the scheme
To assess the awareness level of the employees
and for wide circulation and implementation
about the benefits available under the
“numerous seminars/workshops were organized
programme, the employees were asked about
at Hisar, Sohna, Jharli, Bahadurgarh, and so on at
their knowledge about different benefits (like
regular intervals.
cash benefits, medical benefits, disability benefits,
funeral expenses, unemployment benefits, and so According to one of the trade union leaders
on) provided under the ESIS programme. In terms from Tamil Nadu, “There is not much exposure
of cash benefits, employees in Tamil Nadu (66 per regarding the scheme among the employees. As
cent) appear to know more about cash benefits we have a union, only those companies who have
than Haryana employees (24 per cent). Whereas, at least 30 eligible persons come under the ESI
employees’ awareness about ESI scheme scheme. In one such company, we have generated
benefits increases with the size of the enterprises. awareness by organizing camps and even forced
Employers’ knowledge about the benefits the employees to get the benefits of the scheme
employees receives also reflect a similar pattern, such as maternity services, accidents, and so on.
wherein a sizeable share of the former is aware of For companies in industrial areas, ESI conducts
medical benefits (92 per cent), followed by cash meetings and medical camps for awareness
benefits (62 per cent), medical aid (57 per cent), generation”. According to an enterprise association
disability benefits (41 per cent) and far less on member from Tamil Nadu, “No efforts are being
funeral expenses (20 per cent) and unemployment made by ESI for creating awareness among
benefits (14 per cent) (Figure 3.1). No significant employees about the scheme and its benefits,
differentials existed across industrial sectors, in the department only comes in terms of making
terms of employers’ knowledge of medical and employees follow the rules. Further, ESI should
cash benefits. The larger base of beneficiaries, circulate printed materials about the scheme and
unlike other insurance schemes, is another its benefits, through the associations so that they
unique feature of ESI. In it, the benefits accrue to could circulate it to the employees and employees
dependents of the enroled employee. Over two- should be asked to update their records once in a
thirds of the employers identified employees’ year”.
spouses, parents and children as beneficiaries.
In Haryana, as per a trade union leader, details about
Nearly 18 per cent of employers reported that all
the ESI are informed to the members of the union.
members of the employee are provided benefits,
These members are also sensitized during the
about 11 per cent did not know the benefits
Committee Meetings and GATE meetings. Besides,
provided to employees’ families. A majority (71 per
information is also provided through different
cent) of these enterprises, where employers do not
committees of ESI like Hospital committee, the
have awareness about the coverage of employee
Local Committee, and Suvidha Samagam. One of
household members is small. The number of
the trade union leaders from Jharkhand mentioned
employees is less than 10. In order to understand
lack of awareness as one of the main reasons as
the perceptions and knowledge among various
to why benefits do not reach the beneficiaries and
stakeholders and their involvement, interviews
why they prefer private facilities to ESI. According
among ESI officials, trade union leaders and
to him, “Awareness is very important to make ESI
employers’ associations were conducted. As per
more efficient. Employees should at least know
66 Accessing medical benefits under ESI scheme: A demand-side perspective
Key findings from the field survey among beneficiaries

X Figure 3.2. Employers’ awareness about registration and enrolment

43.94
63.47
Total
68.72
89.87

38.73
50.87
Tamil Nadu 61.85
75.73

44.27
59.9
Rajasthan
56.77
96.88

42.67
76
Haryana
94
97.34

71.05
89.47
Jharkhand
60.53
89.47

Owners/Managers eligible for coverage Aware about Salary Eligibility of Employees for Enrolment
Mandatory for employer to register under ESIS Aware about Registration Procedure

about the available resources the government 3.2.2. Knowledge and

has.” He further mentioned, “Digitalization is a awareness involving
very good system but employees are not aware
of the process. Facilitators should be appointed enrolment and registration
to assist the enrolment process in each city. NGOs
Prior to the reforms initiated in 2020, whereby the
should come forward and should take initiative
registration process was made simple, employers
for the same. There are many employees like
were often faced with several challenges. They
delivery boys and so on, who do not have any idea
relate to enrolment, registration of the units and
regarding this. So, the process needs to be made
their employees in the ESI ranges from insurance
easy and awareness generation camps should be
number generation, IT-related online registration
organized”.
& biometric enrolment to documentation-related
issues. In order to register a new IP, as a pre-
 Accessing medical benefits under ESI scheme: A demand-side perspective
Key findings from the field survey among beneficiaries 67

X Figure 3.3. Difficulties faced by employers in enrolment and registration

Difficulty in online registration Difficulty in submitting

process (%) documents (%)

Yes 30%
Yes 28%

No 70% No 72%

Lengthy ESIS Insurance Difficulty in biometric enrolment

number generation process (%) for pehchan card (%)

Yes 48% Yes 42%

No 52% No 58%

requisite, the employer was required to register relatively less than those in Haryana (67 per cent)
the mobile number and bank account details (Figure 3.3). The 17-digit unique ID card serves as
of the employee. Nearly one in two employers, verification and authentication of Insured Persons
reported a lengthy process of the insurance (IPs) and their families while availing treatment in
number generation, on average. However, striking ESI hospitals or dispensaries across the country,
inter-state variations were found in which over two given its portability feature even if employees
thirds of employers in Haryana. The latter faced change their job. One ID card is issued to every IP
the issue of a lengthy number generation process, and one for each member of the dependents who
as against only one fourth of employers in Tamil are entitled to benefits. In view of the difficulties
Nadu. faced in obtaining pehchan card, ESIC considers
IP’s aadhaar number, as a permanent identity card
Similarly, significant inconvenience was reported
in lieu of a biometric pehchan card. However, in the
by employers in biometric enrolment for pehchan
absence of the aadhaar number, IPs are mandated
card (Identification Card) of its employees. About
to obtain either the aadhaar number or a biometric
41 per cent of the employers surveyed indicated
pehchan card by visiting any Pehchan Camp, which
the difficulties surrounding the biometric
is required for availing medical treatment beyond
enrolment process for obtaining pehchan card, as
30 days of registration of IPs.
employers in Tamil Nadu (24 per cent) complained
68 Accessing medical benefits under ESI scheme: A demand-side perspective
Key findings from the field survey among beneficiaries

For any establishment that employs 10 or 3.2.3. Enrolment pattern

more workers, ESI registration is mandatory. and scheme coverage
Considering the difficulties faced by employers,
transparency and simplification of procedures among beneficiaries
were being carried out timely by the ESIC. Despite
Although mandatory for the employees, an
these efforts, employers continued to complain
evidence about the enrolment of employees
about these procedures being cumbersome and
and their dependents from the survey reveals
time-consuming. The survey highlighted that
interesting patterns. The proportion of the
30 per cent of employer respondents appear to
enrolment of the households in the ESI scheme
face challenges in the online registration process,
including its IPs, worked out to 85 per cent, while
although it varied from one to another. A huge
the share dropped to 78 per cent excluding
proportion of employers from Haryana (58 per
employees. Thus, over one in five household
cent) faced this difficulty, followed by Jharkhand (26
members, who are the potential beneficiaries,
per cent), Rajasthan (19 per cent) and Tamil Nadu
did not enrol in the scheme, despite it being
(18 per cent). Similarly, the survey further revealed
universal among the ESI households. The survey
that 28 per cent of the employers reported having
further highlighted that over three fourths of the
faced the challenge of submitting documents,
households and employees were in possession
including the quantum of documents required and
of ESIC cards. Among those employees, who
the process of submission of those documents.
responded to the enrolment status, about 2.5
Again, the challenges faced by employers across
per cent did not enrol until the day of the survey,
states differed, with employers in Haryana facing a
the rest enrolled in the scheme. Notwithstanding
higher share of challenges (56 per cent) as against
the compulsory nature of the scheme, for its
those in Tamil Nadu (14 per cent).
employees, and universally applicable to its
Employers are also required to submit the dependents, one fifth of the respondents did not
following documents, although they can do so enrol in the scheme. This could plausibly be due
online: (i) registration certificate of the unit, (ii) to the time of joining the job by the employee and
articles of association and memorandum of the resulting delays in obtaining the ESIC card by
association of the company, (iii) employee list, (iv) them and its dependents. Since a large number
PAN card details of the company, (v) compensation of dependents was not living with the employees,
details of all employees, (vi) cancelled cheque their enrolment could have been delayed.
of the bank account, (vii) attendance register of
However, available evidence, especially in the
employees, and (viii) employer’s registration form
context of publicly-funded health insurance
which are downloaded online and uploaded on
schemes such as RSBY, points out socioeconomic
the ESIC website. Covering note from employer
and institutional determinants influence
is mandatory while issuing pehchan card, with
enrolment of beneficiaries. One study revealed
particulars of the employer code number,
a strong influence of institutional factors (poor
employer details, date of handover of declaration
quality of governance of a district) that explains
form of employees, number of declaration forms,
variation in participation and enrolment in
list of IPs, date of acknowledgement by ESI official,
RSBY. It also reported that, districts that were
name of the ESIC field inspector. Such procedures
socioeconomically backward were not only less
were simplified in 2020 making them online with
likely to participate, but their enrolment rates
only a few pages of information sought from
were also lower. Summing up the phenomenon of
employers. However, a potential reason for a
notionally high coverage and yet relatively lower
higher reporting of challenges during registration
enrolment, a critical observation comes from
was due mainly to the year of registration. The
another study. It highlighted that although wage
field survey pointed out that only about 6 per cent
contribution was paid but was not actively enrolled
of the employer respondents registered for ESI in
since ESI smart cards were not issued in time.
2020, whereas nearly one in three of them were
registered during 2010-2019, the rest (63 per cent) Extending coverage benefits by including more
did so before 2009. informal workers into the scheme, has been
 Accessing medical benefits under ESI scheme: A demand-side perspective
Key findings from the field survey among beneficiaries 69

initiated in the past. But by far this initiative has union leader from Haryana contended that “The
mixed responses. For instance, a proposal has unorganized workers are not being covered as
been put forward to reach out to people working government is not ready to share the contribution
in unorganized sector through trade-unions and and it is a contributory scheme. So, if a person who
plans are made to create a guild for major sectors is earning Rs. 8000/- and contributing 4 per cent
in the unorganized sector e.g, domestic help, premium, and when unorganized workers will be
street vendors, and so on, as per Regional Director attached to this scheme then who will pay their part
and Deputy Director, ESIC, Chennai. As per the of the contribution? If nominal charges are taken
SRO, ESIC, Tamil Nadu, some pilot projects were from them even then it will be an injustice to those
being implemented. There is a separate Act for who are contributing regularly under the scheme”.
unorganized workers and they were being tried
to be covered under a pilot project some 5-6 years
ago but it did not materialize well because the
3.2.4. Knowledge about employer
employers are not very much forthcoming to join and employee contribution
the scheme due to the awareness issues.
The ESI scheme is purely a contributory scheme
According to the SRO, “the Supreme Court’s order in nature, with the employers, employees and
says that there is need to cover the construction the state governments contributing in different
site workers under the scheme. We initially covered proportions. The current contribution range from
all the construction companies and directed them 3.25 per cent of wages contributing by employers
to comply even for the site workers but once the and 0.75 per cent of wages by employees. Over two
issue reached the Supreme Court many of the in three employers surveyed in the field correctly
employees, stopped paying the contribution. One indicated <4 per cent of wages as the current
or two famous builders in Coimbatore, had initially contribution by employers, even though 17 per
been making payment for all the site workers. Now cent of them misunderstood the contribution
they have stopped paying it. From August 2015, to be <5 per cent (Figure 3.4). The knowledge
ESIC headquarters issued an instruction to cover about correct contribution varied from as high
all the construction workers under the ESI scheme as 75 per cent in Rajasthan to as low as 42 per
prior to that those people were not brought cent in Jharkhand. Wage contributions and their
under the coverage. Unfortunately, the Builder’s respective shares were to be collected and paid by
Association of India, which is a leading organization the employer monthly to ESIC, which is usually paid
representing the builders has filed a case in the by the 15th of the following month. The employer
Supreme Court and obtained a stay against the has the option of paying the contribution either
operation of such instruction. Therefore, until the online as well as cash/cheque. To the question of
stay is vacated there is a bar in registering them whether the employer paid online or cash, about
under the scheme. The Deputy Director, ESIC, three fourths of them, reported having used online
Tamil Nadu stated that” if construction workers payment mode and the rest cash payment mode.
are brought into the mainstream, they are going
Further illustrates the difficulties faced by
to get a host of benefits, but there is an artificial
employers in paying contribution, where one in
barrier acting there in the form of stay obtained by
five employers highlighted this as an issue. About
the builders, they have their own excuses. They say
one fourth of the surveyed employers highlighted
that bringing these people under the scheme adds
that the contribution amount was high, although
cost to their projects. But this is a social security
the process of making contribution every month
scheme that is useful for construction workers
was found to be a larger problem among 47
because they are vulnerable and more prone to
per cent of the employers. About 14 per cent of
accidents and injuries. The builders must realize
them identified unsuitable timing for making
this aspect, and should withdraw the case. The
contribution and 12 per cent identified fewer
scheme is built in such a way that the employer
returns as a common problem being encountered
should be there so that the unorganized workers
by them. Two in three employers, correctly
are not being covered under the scheme. Officials
identified and confirmed their knowledge about
from Haryana too shared this view. Besides, a trade
70 Accessing medical benefits under ESI scheme: A demand-side perspective
Key findings from the field survey among beneficiaries

X Figure 3.4. Challenges faced by employers in making payment contribution

50
47.06
45

40

35

30 25.21

25
21.52
20
14.29
15
11.76
10

0
Process Amount Difficulty faced Timing not Less
complicated high in contribution suitable returns
Haryana- 56,52

Jharkhand- 50

Jharkhand- 50

60
Haryana- 46

Tamil Nadu- 35.71

Rajasthan- 40

50
Haryana- 28.99

Rajasthan- 23.33

40
Tamil Nadu- 21.43

Rajasthan- 20
Rajasthan- 16.67

Tamil Nadu- 14.29

Tamil Nadu- 14.29

30
Jharkhand

Haryana- 10.14
Rajasthan
Tamil Nadu- 8.09

20
Haryana- 4.35

10

0
Process Amount high Difficulty faced Timing not Less returns
complicated in contribution suitable
 Accessing medical benefits under ESI scheme: A demand-side perspective
Key findings from the field survey among beneficiaries 71

the time limit for wage contribution as 15 days from all type of vendors, masons, maids, cooks
within the last day of the month. About 57 per cent and so on, and the premium could be increased
of them are aware of interest penalties leviable as when they are start utilizing the services”,
on delayed payment. After the initial registration clearly articulating the need for including informal
with the ESIC, employers are mandated to submit workers in the ESI fold. Overall, there is a lack of
ESI returns which are expected to be filed by them knowledge about correct contribution amount by
twice a year. Several documents were required the employers, even in the organizations which
to be submitted by employers which include the are enrolled under ESIS. Among the employers,
attendance register of employees, wage register, who are aware, majority are satisfied with the
Form 6 register, accidents register (information amount of contribution, though their views often
about accidents that occurred in the premises) differ from trade union members, who advocate
and monthly returns and challans. for less contribution from employees, who work in
informal setup.
In respect of the contributions paid, functionaries
from both Tamil Nadu and Haryana opined that
the premium collected was reasonable. According 3.2.5. Awareness and knowledge
to an ESI official from Tamil Nadu, “the premium
levels underlying grievance
collected (6.5 per cent) has now been reduced
to 4 per cent and it was reasonable, sufficient redressal mechanisms
to cover the costs as well as economical to the
Grievance redressal is an important tool to resolve
beneficiaries”. As per one of the branch managers
issues in the functioning of any organization,
from Tamil Nadu, “beneficiaries pay a minimum
as this assumes a vital role as an accountability
premium (0.75 per cent of their wage) and get
measure. One method of ascertaining the
huge benefits including out-patient treatment
accountability criteria is to assess how well the
and in-patient treatment, disability, sickness
employers and the employees are aware of the
and maternity benefits, and so on.” An Assistant
resolution mechanisms in place. Expectedly, only
Director from Haryana, while appreciating the
about half of the employers surveyed were aware
efforts of the scheme, said, “the present measures
of different grievance redressal mechanisms that
of the premium collection are appropriate, and
exist currently. A similar share of them had used
the system made for the same is workable. The
telephonic mode in the past as a mechanism to
scheme has the lowest premium and provides
reach out to the authorities. Unfortunately, only
a number of benefits”. As per a trade union
one in three employers were cognizant about
leader, “of the total population in Tamil Nadu,
Suvidha Samagam, while inspections from ESIC
only 20 per cent are employees and 80 per cent
officials were reported by one fourths of the
work in unorganized segments on contractual
employer as a mechanism for grievance redressal.
basis. A premium of Rs.100, should be collected
Suvidha Samagam, is considered a one-stop
solution and acts as a platform for redressing the
grievances of stakeholders including employees,
beneficiaries and employers. This platform is
The selected indicators organized once a month in ESIC offices or ESIC
hospitals. This platform also serves to settle all
represent five different pending grievances.
dimensions of ESI’s Although mechanisms may vary between states, in
functions in different Tamil Nadu, for instance, an MIS system has been
states functions in created for registering and monitoring grievances.
The Turn Around Time (TAT) has remained at
different states. three days. “There is a proper mechanism for
public redressal system, and there is an online
system so that people need not come directly.
72 Accessing medical benefits under ESI scheme: A demand-side perspective
Key findings from the field survey among beneficiaries

There is a separate module called PG Portal that 3.3. Healthcare utilization

can be accessed through the online portal and
that is very easy to operate, anybody having a
pattern among ESI
complaint can raise the issue. Once the complaint beneficiaries
is received it has to be disposed of within a week;
however, we try to dispose it of within three days”,
said an ESI official from Tamil Nadu. In addition,
3.3.1. Reporting of illness
Shikhayat Adalat (Courts for Complaints) are also by beneficiaries
organized periodically for faster settlement of
Even though the ESI scheme extends its
grievances, Post the settlement of grievances a
entitlements to cover a wide range of benefits
satisfaction survey is conducted to identify areas
to its beneficiaries, the core coverage relates to
for improvements. Basically, TAT and the number
healthcare protection to its employees and their
of successful recoveries completed are a measure
families. The survey captured the proportion of
of effectiveness as per the DD. According to one
persons suffering from any illness and those who
of the branch managers, “We have not received
sought treatment for acute, chronic and other
any public grievances till date, because every
interventions. Survey findings reveal that one in five
year “Shikayat Adalat” is organised at our regional
persons reported at least one illness over the past
office and wide publicity has been given to that.
15 days of the recall period (Figure 3.5). Females
Whenever people have public grievances either
reported a slightly higher rate of illness than
from the medical side or from the branch office,
males. Considerable variations were observed,
they report it directly and it is settled and there.”
in illness reporting across states, with only 4 per
As far as Haryana is concerned, “with regard to the cent persons reported sick in Jharkhand as against
public grievances redressal system, ESI PG Portal 33 per cent in Rajasthan, while beneficiaries in
and RTI are available. At the local level, complaints Haryana and Tamil Nadu reported 11 per cent and
are replied and redressed in a set mechanized 14 per cent disease conditions. About half of those
way and in a time-bound manner as per available who reported sick, did so for acute illness, whereas
rules and regulations to resolve issues at the local 14 per cent of illnesses were reported due to the
level” – a point outlined by SSO/Superintendent, chronic conditions while the rest one third of the
Haryana. Conversely, a trade union leader from sickness was owing to the other conditions.
Haryana did not share this optimism, “since
The survey further illustrates healthcare-seeking
hospitals have their own grievances committee,
behaviour with over half of those who were sick,
it is totally up to them what they would do with
sought treatment. Yet, the average among the four
the complaints received from the IPs. However,
states hides significant differentials in treatment-
unless a tripartite committee is formed nothing
seeking as 94 per cent of beneficiaries in Tamil
will happen. There is a need for such a committee
Nadu sought care as against barely 10 per cent in
and a process for hearing the complaints and
Jharkhand, while the share of beneficiaries seeking
solutions need to be provided, without this no
treatment in Haryana and Rajasthan was 60 per
improvements can happen”. Echoing similar views,
cent and 38 per cent, respectively. Substantial
a trade union leader from Jharkhand stated that,
differences in utilization of healthcare across
“the Government has not assigned any role for us
states highlight variations in treatment-seeking
in grievance redressal and in ESI Act too, no role of
behaviour and partly point to the availability or
a trade union is defined. We can only assist, and if
lack of healthcare facilities (Figure 3.6). About 7 per
any issue arises, we file a written complaint to the
cent of beneficiaries did not seek treatment due
deputy commissioner’s office“. It can be summed
to the lack of nearby health facility and 8 per cent
up that though there are several initiatives from
had to forgo treatment owing to unsatisfactory
the administration to address the grievances,
health service provision. It may further be noted
the employees are not very much aware of such
that 82 per cent of the beneficiaries did not seek
facilities, and also in view of trade union leaders,
treatment because the ailment was considered
there is a lack of institutional support in addressing
not serious enough to seek care.
the issues raised.
 Accessing medical benefits under ESI scheme: A demand-side perspective
Key findings from the field survey among beneficiaries 73

X Figure 3.5. Persons suffering from illness for the past 15 days and treatment sought

10
Four states Total 20

13
Tamil Nadu
14

13
Rajasthan
33

7
Haryana 11

0
Jharkhand
4

0 5 10 15 20 25 30 35
Persons sought care for illness (% of total)
Persons suffering from illness in past 15 days (% of total)

X Figure 3.6. Challenges in seeking and reasons for not seeking healthcare

Challenges faced while seeking Reasons for not seeking

healthcare healthcare

Patient denied
Others 24% No nearest health treatment 2%
facility 9% Others 2%
Patient denied Transportation
No nearest health
treatment 4% Healthcare problem 1%
facility 6%
service not
considered
satisfactory Healthcare
Financial
9% services not
constraints
6% considered
Ailment not satisfactory
considered 7%
Transportation
serious 45%
problem 2%
Financial Ailment not considered
constraints 7% serious 76%
74 Accessing medical benefits under ESI scheme: A demand-side perspective
Key findings from the field survey among beneficiaries

3.3.2. Treatment pattern of evidence must be read with a caveat, as NSSO OP

out-patient care visits figures are based on 15 days recall period while
ESIC OP reporting is for the entire year. Therefore,
From those beneficiaries who sought treatment, this is strictly not comparable but provides a broad
the rate of the out-patient visits, was observed to direction.
be 50 per thousand beneficiaries, with a relatively
The gross underreporting of out-patient
larger number of the OP visits in Tamil Nadu (150
treatment is plausibly due to COVID-19, and
per thousand) and an abysmally lower number
associated restrictions placed during the field
in other states, Haryana (13 per thousand),
survey period. The survey in three states, namely
Jharkhand (31 per thousand), Rajasthan (28 per
Jharkhand, Haryana and Rajasthan was carried
thousand) (Figure 3.7). The out-patient treatment
out during September-October, 2020, when the
registered by beneficiaries in the survey appears
COVID-19 pandemic was at its peak. Although no
to be grossly underreported. For instance, the
blanket lockdown was in place during this time-
country-wide NSSO morbidity survey carried out in
period, several restrictions were in place, including
2017-18 demonstrated that the rate of out-patient
limited availability of out-patient care services,
visits was 75 per thousand at the all-India level.
reservation of hospital infrastructure for COVID-19
Whereas, the rate of out-patient visits remained
patients rendering non-COVID-19 services virtually
extremely high at 692 per thousand (old and new
unavailable, unless otherwise it was required for
cases) during 2017-18 and even higher at 900/1000
emergency use. Patients were under the influence
during 2016-2017, as reported by ESI facilities in
of fear and stigmatization, rendering them to
its annual reports. It may be observed that this

X Figure 3.7. Rates of healthcare utilization by out-patient and in-patient visits

IP Episodes, 66

IP Episodes, 62
IP Episodes, 58

OP Visits, 54

OP Visits, 154
OP Visits, 50
OP Visits, 47

IP Episodes, 104
IP Episodes, 67
IP Episodes, 49

IP Episodes, 29
OP Visits, 31

OP Visits, 28
OP Visits, 13

Male Female Total Jharkhand Haryana Rajasthan Tamil

Nadu
Across gender (A) Across states (b)
 Accessing medical benefits under ESI scheme: A demand-side perspective
Key findings from the field survey among beneficiaries 75

not report even if they faced simple ailments of unlocking that witnessed hesitancy of people
fever, cold, cough, and so on. Several media and accessing care even in dispensaries. As far as other
journal articles attest to this trend at the ground states are concerned, a part of the reason is due
level. A National Health Authority (NHA) study to the designation of ESIC hospitals as COVID-19
confirms the influence of supply and demand- facilities, rendering them unusable for non-
side challenges contributing to a sharp drop COVID-19 patients. A relatively higher rate of out-
in utilization of healthcare services during the patient visits in Tamil Nadu, was partly due to the
COVID-19 pandemic period ( On the supply-side, timing of the survey, as it was conducted during
the report showed that hospital activity during the receding pandemic period of the first peak
the early lockdown period declined by 49 per (November and December), which also coincided
cent and 37 per cent during the late lockdown with post-monsoon time highlighting seasonal
period. From the demand side, it was observed peak of illness such as common cold, fever
that service utilization in empanelled hospitals of and cough. Beneficiaries accessing out-patient
PMJAY beneficiaries dropped by 61 per cent during treatment in government hospitals registered a
an early lockdown and 46 per cent during the late share of 12 per cent (Figure 3.8). While a sizeable
lockdown, compared to a pre-lockdown month). share accounting for about 40 per cent of total
out-patient visits was categorized as ‘not known’
Similarly, national programmes involving
indicating the challenge in respondents’ recall
reproductive, maternal and child health services,
period associated with dependents’ treatment.
immunization coverage, access to TB, Malaria
and HIV/AIDS services were affected substantially It may be observed that, unlike hospitalization
leading to less access to prevention and treatment episodes, private empanelled services for out-
coverage of such services. A rapid national survey of patient visits were barely found. This is largely
TB programme officers revealed an approximately due to the near absence of such services except in
80 per cent decline in daily TB notifications two state: Maharashtra and West Bengal, where a
during the lockdown period compared to the large share of IMPs (empanelled clinics) function.
average daily notifications in previous years (Stop In the four states surveyed, the IMPs role is very
TB Partnership). A decline in the number of limited. Taking cue from NHM performance, a
the patients, notified by the private and public recent study indicated that in non-EAG states
sector, is reported during the lockdown period, (relatively better performing states), the share of
compared to the number of notified cases in the patients visiting government institutions for out-
preceding two years (‘NIKSHAY’ portal, a national patient visits accelerated in 2017-18 compared
government portal that provides information/data to 2014. Conversely, in EAG states it declined
about TB prevalence/incidence, DoTs programme marginally during the same time, indicating that
and so on). In 2020, only 58 per cent cases were when additional services were made available
notified by the public and 45 per cent by the and improved in non-EAG states in government
private sector; with an overall notification rate of facilities, an increase in-patient footfall was
only 53 per cent (public & private sector combined) observed. Clearly, the state-level variation in the
as compared to 84 per cent in 2019 (more than 30 out-patient and in-patient visits in ESIC-owned
per cent drop in overall notifications). facilities and private empanelled and non-
empanelled facilities is linked to the availability
Yet, when out-patient care visits occurred, barely
and quality of services performed in those states.
one in four out-patient visits were sought in
ESIC dispensaries/hospitals. A similar share Resonating the evidence above, according to the
was accounted for by private non-empanelled officials from both Tamil Nadu and Haryana, the
facilities, but that is marked by considerable availability of services is satisfactory, but the quality
variation among states, as the average is of services needs to be improved. Officials from
driven by a larger share of out-patient visits by Tamil Nadu felt dispensaries are concentrated
beneficiaries in Tamil Nadu while out-patient in a particular area that used to have a working
treatment in other states recorded a dismal 3-5 population earlier. But with the industries moving
per cent in ESIC dispensaries/hospitals (Box 6). An out of the city and coming up in the far-away areas,
immediate reason for the grossly lower rate of OP the dispensary network should also be moved out
visits in states other than Tamil Nadu was partly to accommodate such population too. There is a
due to COVID-19 related and the initial period of need to further spread the dispensaries across
76 Accessing medical benefits under ESI scheme: A demand-side perspective
Key findings from the field survey among beneficiaries

X Figure 3.8. Utilization of out-patient healthcare by types of facilities across states

Outpatient care utilisation by types of facilities (%)

Not know ESIC 24%

40%

Public 12%

Private
others 3%
Private non-
empaneled 21%

Outpatient care utilisation by types of facilities across states (%)

Not known, 5
Private
others , 9
Private non-
Not known, 52 empaneled, 17
Not known, 59
Not known, 57 Public 5

Private other, 0
Private other, 0
Private other, 0
Private non- ESIC, 63
empaneled, 33 Private non- Private non-
empaneled, 22 empaneled, 23
Public 12 Public 15 Public 15
ESIC, 3 ESIC, 3 ESIC, 5

Jharkhand Haryana Rajasthan Tamil Nadu

the district. There is no dedicated cadre of medical (in-patients) at hospitals. The ESI has integrated
officers for the state ESI, and this sometimes systems for patients to cater to the need for
is a problem for the beneficiaries because the all types of services. In case accidents happen
new interns who come into the ESI scheme are in workplace, the patients are transferred to
often not aware of the nuances of the ESI act. government hospitals after giving first-aid. In the
Officials from Haryana too mentioned the need to present environment of corporates situation, ESI
develop the existing infrastructure at facilities in provides good medical facilities for employees. But
smaller locations and enhance treatment facilities this service is not available in the sub-urban areas.
provided at ESI dispensaries. The union leader further mentioned the need
for 5-10 bedded capacity facilities in all industrial
As per a trade union leader in Tamil Nadu, OPD
areas. Union leaders from Tamil Nadu and Haryana
services are obtained at dispensaries and IPD
 Accessing medical benefits under ESI scheme: A demand-side perspective
Key findings from the field survey among beneficiaries 77

felt that there are no doctors and para medical was reported to be significantly higher than other
staff available in the hospitals, equipment is not states, with respondents from Rajasthan (28 per
enough and some are not available. Medicines are thousand persons) reporting the least rate of
not available in the dispensaries and IPs have to hospitalization while beneficiaries from Haryana
purchase them from the market. Sometimes they (67 per thousand persons) and Jharkhand (49 per
have to wait for 8-10 months to get it reimbursed. thousand persons) reported an average IP rates
A trade union leader from Jharkhand averred closer to the four states' average. During 2017-
that “though the beneficiaries are getting the 18, the country wide estimate of hospitalization,
benefits, the process needs to be made easy for as reported by NSSO, provides an estimate that is
better reach of the scheme. Everyone should be significantly lower by half times, at 34 per thousand
held accountable because even now it takes a persons. In fact, a similar survey conducted during
lot of effort in the referral process.” According to 2014 by NSSO revealed that the hospitalization rate
this trade union leader from Jharkhand, some of was about 42 per thousand, signaling a lower rate
the reasons for the underutilization of healthcare of hospitalization episodes during 2017-18, chiefly
services including the long waiting time for due to a sharp drop in consumption brought
availing services as the number of hospitals is less about by demonetization and the resulting loss of
and the process of registration, and so on, is not wages/salaries from several supply and demand-
very simple and time-consuming. On other hand, side constraints. ESI scheme data in its annual
a trade union leader from Tamil Nadu identified report also reported a hospitalization episode of
poor infrastructure facilities at dispensaries to be 28 per thousand beneficiaries (110 per thousand
the key reason for underutilization. IPs) in 2017-2018. Moreover, since the recall period
used for hospitalization episodes was 365 days
The presence of an ESIC hospital or a dispensary
prior to the survey, which captured both COVID-19
and its awareness on the part of the employers
and pre-COVID-19 utilization patterns, revealing a
is another benchmark of how well the system
pattern that is less influenced, unlike out-patient
functions even if the employers are not the direct
care visits.
beneficiaries. It may be observed that about 90 per
cent of the employers are aware of the presence of The average length of stay for an episode of
an ESIC hospital and dispensary in a district. Except hospitalization worked out to five days, with
for employers in Tamil Nadu, employers in other considerable variation across states. For an episode
surveyed states are well aware of the functioning of of hospitalization, beneficiaries from Tamil Nadu
the ESIC hospital. But in the case of the dispensary, stayed relatively longer at 6 days as against 3 days
employers in Jharkhand were relatively less aware by patients in Rajasthan. Whereas, in Jharkhand
(74 per cent) as against those in Rajasthan (94 and Haryana, the mean days were 5 and 4 days
per cent). However, on the question of whether respectively. Likely, patients seeking treatment for
their employees availed cashless super-specialty hospitalization in an ESI/public hospital may stay
treatment, little over one-third of the employers relatively longer than in private hospitals, even if
were aware of any such facility being availed in empanelled due to cost considerations, as private
the past. Except for Haryana, where access to facilities gain by way of longer stays. However,
super-specialty treatment is relatively higher (70 it is equally impossible to speculate the precise
per cent), barely one in four employers in other reason for a relatively lower length of stay as
states were cognizant of their employees seeking hospitalization in Rajasthan.
treatment in a super-specialty facility.
As far as the hospitalization is concerned, ESI
beneficiaries have the options, to choose from
3.3.3. Treatment pattern for three alternatives: (i) ESI hospitals which are
owned by ESIC or state government-supported ESI
hospitalization episodes
hospitals; (ii) empanelled hospitals that included
In respect of the hospitalization episodes, about 62 government and private hospitals; and (iii) other
per thousand beneficiaries sought hospitalization facilities that include non-empanelled private,
treatment, as per the survey findings. The rate public and not-for-profit hospitals. A significant
of the hospitalization during one year before the share of the responses (21 per cent) elicited a
survey in Tamil Nadu (104 per thousand persons) response that is ‘unknown’ as the employees were
78 Accessing medical benefits under ESI scheme: A demand-side perspective
Key findings from the field survey among beneficiaries

not able to recollect the type of hospitals preferred in private hospitals that were not empanelled
by their dependent family. The four states' survey (Figure 3.9).
suggested the following pattern of hospitalization:
Despite the availability of ESIC’s own hospitals,
(i) on average, one in three hospitalizations
government facilities and arrangements with
occurred in an ESI hospital; (ii) about 15 per cent
private empanelled facilities, nearly half of
hospitalization occurred a government hospital; (iii)
treatment, requiring hospitalization were sought
barely 5 per cent of the hospitalization occurred in a
outside the ambit of ESIC’s arrangement.
private empanelled facility; and (iv) the rest nearly
The findings further highlight the inter-state
half of the hospitalization episodes were treated

X Figure 3.9. Utilization of hospitalisation by types of facilities across states

Utilisation of hospitalisation by types of facilities (%)

Not known
ESI 32%
21%

Private
others 9%

Private non-
empaneled 18% Public 15%

Private
empaneled 5%

Utilisation of hospitalisation by types of facilities across states (%)

Not known, 2 Not known, 8

Not known, 0
Private non- 5
empaneled, 0 Private 2
empaneled, 12 Not known, 29
Private non-
empaneled, 33
Private non-
Public, 21
empaneled, 46 12
Private non-
Private empaneled, 11
Private
Private empaneled, 2
empaneled, 50 ESI, 60 empaneled, 10 Public, 15
Public, 10

ESI, 31
Public, 17 ESI,24

ESIC, Jharkhand Haryana Rajasthan Tamil Nadu

 Accessing medical benefits under ESI scheme: A demand-side perspective
Key findings from the field survey among beneficiaries 79

differentials in access to hospitalization care. In the case of medical services like heart surgery and
Haryana, nearly one in three hospitalizations liver surgery, one will need to approach tertiary
was sought in ESIC hospitals, about one in five care facilities and super specialty. We require
occurred in a government facility, about 12 per more hospitals to come up in the secondary and
cent in a private empanelled hospital. However, tertiary categories, as we are having considerable
in Rajasthan, beneficiaries chose private non- primary level health facilities. Primary level health
empanelled hospitals, in close to half of IP facility is good as far as ESI is concerned, but more
treatment, while treatment options in ESIC improvement is required at secondary and tertiary
facility was an option to about one fourths of level”. According to one of the officials from
the patients, 10 per cent of each hospitalizations Haryana, “basically, we should improve our own
occurred in government and private empanelled infrastructure. Once basic requirements are met,
hospitals. The pattern of hospitalizations in Tamil then there will be less than 20 per cent of cases that
Nadu, demonstrates a far more different pattern, will be referred outside. Health infrastructure has
as one in three hospitalizations was carried out a key role in terms of efficiency, access, attracting
in ESIC hospitals, followed by public hospitals in patients and improving the overall quality of health
about 15 per cent while private non-empanelled services. A better-upgraded system provides
facilities accounted for close to one fourths of all better services and attracts beneficiaries.”
hospitalization by the beneficiary.
Yet, the preferred option for beneficiaries 3.4. Financial risk
in Jharkhand were private empanelled
hospitals in half of IP treatment. Private non-
protection measures
empanelled hospitals also accounted for one- Although not an explicit objective underlying
third of hospitalization, and government hospitals ESI, the key goal of any health insurance scheme
accounted for about 17 per cent of hospitalization, globally, whether it be social health insurance or
with virtually no hospitalization reported by tax-funded health insurance scheme, is to provide
beneficiaries in ESIC hospitals. The findings financial risk protection. This would eventually
presented for Jharkhand must be qualified with mean funding a delivery mechanism that takes
caveats, as the number of the total samples care of preventive, promotive and curative care
surveyed was about 200 employees. Even assuming services for its beneficiaries in a way they do
a 3 per cent rate of hospitalization, the results are not place a significant financial burden. This is
unlikely to be robust and its share of distribution extremely critical for employees and dependents
underlying utilization between different types of in the LMIC context like India, where a significant
facilities will be equally questionable. Moreover, financial burden is incurred by households leading
as the survey was carried out during COVID-19 to high OOP, resulting in the impoverishment of
and the partial lockdown period, a higher level of people and/or incurring catastrophic spending.
underreporting can be expected, as the findings The survey results from the field highlight a few
from the survey for Jharkhand demonstrates. notable aspects of the ESI. For an episode of
Since some of the ESIC hospitals were designated treatment for hospitalization, on average, the
for COVID-19 care, it is highly unlikely that mean spending incurred by a household works
beneficiaries would have sought treatment in ESIC out to Rs. 23,834 (Figure 3.10), while the median
hospitals. value is Rs. 5,000. However, the average hides
considerable differential payment, highlighting
Echoing some of the challenges faced at the
the financial cushion provided to ESI beneficiaries
secondary and tertiary level care, according to
when they get hospitalized in ESIC facilities, about
the DD, RDI, Tamil Nadu, “To a reasonable extent
42 per cent of them do so. They ended up paying
the quality of available infrastructure is good.
barely Rs. 2,426 for an episode of in-patient service
I personally feel that we need to build more
(median value Rs. 1,000) as against Rs. 34,372
hospitals at the secondary level and tertiary level.
when beneficiaries sought treatment from the
We avail the medical services for OPD, and if you
private non-empanelled hospital (median value
go beyond that say for minor operations such as
Rs. 7,750). Nearly one in three beneficiaries did so.
an operation for fracture, hernia, tonsil, and so
On the other hand, even though only 7 per cent
on, then secondary medical care is required. In
80 Accessing medical benefits under ESI scheme: A demand-side perspective
Key findings from the field survey among beneficiaries

X Figure 3.10. Levels of OOP expenditure among beneficiaries including utilisation for hospitalisation
and out-patient visits

Total 23834 (100%) Total 509 (100%)

Private 34272 Private 1021
non-empaneled (33%) Non-empaneled (17%)
Private empaneled 13409 (7%) Private empaneled 842 (3%)
Government Government
2827 (18%) 355 (49%)
facility facility
ESIC facility 2426 (42%) ESIC facility 157 (30%)

OOP Exp. For IP (Rs); Figures in Brackets OOP Exp. For OP (Rs); Figures in Brackets
Percent Utilisation Percent Utilisation

of ESI beneficiaries sought treatment in a private health insurance schemes. Several studies that
empanelled hospital, and yet they were forced to investigated the impact of government-funded
pay Rs. 13,409 about five times than when they health insurance had concluded that RSBY did not
sought care in ESI facilities. It may be noted that reduce households' OOP. A systematic review of
the health survey carried out by NSSO during the studies that examined the impact of tax-funded
2017-18 points out that on average, households health insurance schemes on healthcare utilization
paid Rs. 26,894 per episode of treatment for and financial risk protection also demonstrated
hospitalization, reaffirming the financial burden no conclusive evidence of a reduction in OOP
on households. The NSSO survey findings revealed expenditures or a relatively higher financial risk
that an episode of hospitalizations in public and protection. Similarly, a study that specifically
private facilities ranged from Rs. 4,874 to Rs. targeted at the effect of RSBY on financial protection
32,793. The evidence from the field suggests that a confirmed earlier studies demonstrating that the
considerable share of beneficiaries seek treatment scheme did not affect the likelihood or level of
in private non-empanelled hospitals, and by doing OOP spending on hospitalization nor did it so on
so were exposed to a serious level of out-of- reducing catastrophic spending.
pocket spending, rather revealing the imperative
Despite the claims made by ESIC underscoring
for strengthening its facilities, making available
comprehensive coverage involving ESIC'S own
facilities in nearby areas and adding more private
facilities, or in private empanelled facilities, and
empanelment of hospitals.
even reimbursement paid to beneficiaries, the
Similar scenarios emerge in respect of out-patient survey findings point to (i) continuing financial
care visits. Although not significant, per episode burden: (ii) a relatively lower level of payment
out-patient treatment in private non-empanelled incurred by them even in ESI hospitals; (iii) a
facilities cost beneficiaries Rs. 1,021 as against Rs. higher level of OOP expenditure when they
157 when beneficiaries visited ESI dispensaries. seek treatment from private non-empanelled
Even in a private empanelled facility, beneficiaries and empanelled providers. The survey further
ended up paying a relatively high OOP at Rs. 842. revealed that beneficiaries incurred both medical
Notwithstanding the treatment and cost associated and non-medical expenses, accounting for
with it, the pattern observed here corroborates 42 per cent and 58 per cent, respectively when they
the evidence presented in the previous section. sought treatment in ESIC hospitals for in-patient
It highlights that ESI scheme beneficiaries were treatment.
less prone to incurring catastrophic spending,
Non-medical expenses included transportation,
than those covered by government-funded
lodging and food charges for accompanying
health insurance schemes or even private
 Accessing medical benefits under ESI scheme: A demand-side perspective
Key findings from the field survey among beneficiaries 81

patients, and so on while medical expenses largely per annum, while the number of work days lost
included medicines (51 per cent), diagnostics for beneficiaries in Rajasthan and Tamil Nadu was
(24 per cent), consultations (20 per cent) and at four days per annum (Figure 3.11). The higher
bed charges (5 per cent). What this indicates is number in Jharkhand can be attributed to the lower
that medicines’ shortage remains a major issue sample size from the state. The survey findings
in ESIC hospitals while the non-availability of further demonstrated that one in five employees
comprehensive diagnostics services is yet another reported wage loss due to hospitalization.
critical factor accounting for OOP incurred by the Whereas the average wage loss in four states
beneficiaries. Whereas the largest contributors to was found to be Rs. 750, with marked variation
OOP for beneficiaries seeking treatment in non- across states with the lowest wage loss reported
private empanelled hospitals are consultation by beneficiaries in Haryana while the highest in
charges (30 per cent), medicines (26 per cent), Rajasthan and Tamil Nadu. This translated into a
diagnostics (24 per cent), bed charges (21 per mean wage loss of approximately 4 per cent as a
cent). share of monthly income, whereas the differential
in share ranged from 1 per cent in Haryana to
approximately 7 per cent in Rajasthan. A relatively
3.4.1. Workday and wage loss significant wage loss compensation provided to
due to hospitalization employees could perhaps be one of the reasons
why the wage loss reported is comparatively lower
Hospitalization episodes are often associated
as compared to NSSO. The national health survey
with loss of work days and wage loss. After
of NSSO, 2017-18, confirmed a relatively lower
removing the outliers, the survey findings
level of income loss due to hospitalization among
confirm that about four days, on average, are lost
ESIC'S households at Rs. 4,965 per episode of
due to hospitalization-related illness episodes.
hospitalization as against over double the amount
Beneficiaries in Jharkhand reported a relatively
Rs. 9,461 incurred by those households who had
larger number of days of work days’ loss at 12 days
private health insurance, signaling the cushioning

X Figure 3.11. Average work day lost and wage loss due to hospitalisation

4
4 States Total 5

4
Tamil Nadu
6

4
Rajasthan
3

1
Haryana 4

12
Jharkhand 5

0 2 4 6 8 10 12 14

Average workday loss Average length of stay

82 Accessing medical benefits under ESI scheme: A demand-side perspective
Key findings from the field survey among beneficiaries

impact of wage loss compensation by ESI. It may ceiling provided by ESI. But she had to pay
be observed that the income loss reported by the a far higher amount of Rs. 36,630 per child
NSSO survey for ESI beneficiaries is for the entire delivery in a private non-empanelled hospital
households taken into consideration, while the (Figure 3.12). It is even important to observe that
survey findings only considered the employees’ when a pregnant woman delivered at a public
wage loss and the associated compensation. hospital, she had paid atleast Rs. 1,500 per delivery,
However, the survey results reaffirm the evidence underscoring the improvement in institutional
presented in the previous section highlighting delivery brought about by National Health Mission
that ESI households are placed relatively better at (NHM). However, the spending for child delivery
receiving compensation to wage loss than those in ESIS hospital (which includes non-medical
covered by other health insurance schemes. expenditure) is though found to be slightly higher
(mean Rs. 2,244 and median Rs. 1,100) than this,
still it is considerably lower as compared to the
3.5. Maternity, child delivery overall average expenses for child delivery across
and OOP payments facilities (mean Rs. 14,978 and median Rs. 1,500).
It may be worth noting that pregnant women are
One of the key aspects of the field evidence
provided conditional cash transfers for ante-natal
pertains to reproductive, maternal and child
check-ups and for delivering in an institution.
deliveries patterns among women employees and
This could be the reason why women delivering
female households. The survey findings point out
in a government hospital are paying by far the
that one in three child delivery occurred in ESIC
least among other facilities, perhaps pointing to
facilities, and nearly an equal share was accounted
the need for ESI to improve not only its facilities
for by private non-empanelled hospitals. About
but also provide cash compensation for child
10 per cent each was accounted for by public
delivery services. This has a salutary impact in
hospitals and private empanelled ones. This
terms of accelerating maternal care and reducing
implies a significant gap in the provision of child
catastrophic health expenditure when women
delivery services either within ESIC or empanelled
deliver in government facilities. While there is no
facilities.
further scope of segregating between normal and
However, when a pregnant beneficiary delivered C-section deliveries in the present study, there is
in a private empanelled hospital, she had to a possibility that C-sections are happening more
incur Rs. 21,100 over and above the package frequently in private facilities, thus driving up the
cost as compared to the public facilities.

X Figure 3.12. Utilization pattern of child delivery and OOP expenses

Total 14978 (100%)

Private
non-empaneled 36630
(30%)
Private 21000 (10%)
empaneled
Government 1500 (10%)
facility
ESIC facility 2244 (32%)

0 5000 10000 15000 20000 25000 30000 35000 40000

OOP Exp. for child delivery (Rs.): Figures in brackets per cent utilisation
 Accessing medical benefits under ESI scheme: A demand-side perspective
Key findings from the field survey among beneficiaries 83

3.6. COVID-19 and its from the survey further suggest that only one in
five employees who had reported wage loss had
associated knowledge, received some compensation. At the state level,
compensation from ESI one finds an inverse relationship, wherein states
that reported higher level of wage loss are the
The current pandemic caused by COVID-19
ones where least share of employees received
brought in a lot of misery not just in terms of
compensation as in Haryana, while employees
health crisis and health system challenges, India’s
in Tamil Nadu, who relatively faced far less wage
stringent and longest lockdown, and several
loss is also the state in which a higher share of
restrictions that followed rendered workforce both
employees (39 per cent) had confirmed receiving
also informal and formal workers in a vulnerable
wage compensation during the health crisis. Yet,
state. The resultant migration of workers, loss of
when it pertained to actual wage compensation
employment and wages for a longer time period
received, on average, an absolute amount totaling
meant workers and salary earners had to cut back
Rs. 11,510 were received as compensation, with
on basic necessities, borrow or rely on a meagre
employees in Rajasthan receiving a higher level
cash support programmes of the government.
of compensation at Rs. 19,492, whereas Tamil
The success of a scheme and its resilience during
Nadu employees received the least level of
such a pandemic, must be ascertained how well
compensation at Rs. 3,992, about five times that
it responded to the needs and aspirations of its
of the former. This indicates that the employees in
employees and its dependents.
Tamil Nadu remained the least in terms of wage
The current survey examined this aspect by loss faced during the COVID-19, but they got a
investigating the knowledge and challenges higher level of wage compensation, although
faced by the employees during the COVID-19 the amount they received was the minimum.
crisis. Nearly one in two employees (45 per cent) Employees in Rajasthan, remained one among
confirmed having received communications the most affected but only approximately one
from ESIC in respect to COVID-19, the preventive fourth of them received compensation, but the
measures and restrictions imposed by the compensation amount they received was the
lockdowns (Figure 3.13). But this was marked by highest.
considerable variation, where over two in three
employees (71 per cent) in Haryana received
communication from the ESI while only 13 per cent
of workers in Jharkhand confirmed so, whereas The success of a scheme
the respective share of employees was 47 per
cent in Tamil Nadu and 26 per cent in Rajasthan.
and its resilience during
A marked variation could be attributed to the a pandemic, must be
fact that employees in Haryana being closer to
the national capital region, could have been
ascertained by how
receiving a relatively better communication due well it responded to the
to its location, as next to the nation’s capital and needs and aspirations
possibly due to efficient functioning of the ESI
scheme in a crisis. And the same could not be of its employees and its
attributed to Jharkhand, given its standing as hard dependents.
to reach area and perhaps due to limited capacity
to communicate to its employees.
Sadly, only one in four employees felt protected
by ESI during this health crisis. About 62 per 3.7. Occupational hazards
cent of employees surveyed had incurred wage and safety measures
loss during the lockdown period in specific and faced by employees
during the pandemic overall, with a significant
share of employees from Haryana (75 per cent) Work-related morbidity or mortality not only
confirming this so as against only about 45 per affects the worker’s health and productivity, but
cent of employees in Tamil Nadu. The findings also has a direct implication on the welfare of the
84 Accessing medical benefits under ESI scheme: A demand-side perspective
Key findings from the field survey among beneficiaries

X Figure 3.13. Mean wage loss and compensation against COVID-19

Reported wage loss and compensation (%)

80

70

60

50

40

30

20

10

0
Jharkhand Haryana Rajasthan Tamil Nadu Overall

Reported wage-loss due to COVID-19 (%) Reported receipt of compensation against COVID-19 (%)

Average compensation of wage Loss against COVID-19 (INR)

All 4 States

Tamil Nadu

Jharkhand

Haryana

Rajasthan

0 5000 10000 15000 20000 25000

worker’s household, and the society as a whole. atmosphere and their health status. Safety at the
Healthy working conditions and workplace safety workplace along with the provision of healthcare
are of utmost importance to the employees and access is significant to ensure greater productivity
their families. Working adults spend a significant and better quality of work. It is often emphasized
time of their lifespan in their workplace and their in the literature that poor occupational health can
wellbeing is directly influenced by the working adversely affect the economy and the cost to society,
 Accessing medical benefits under ESI scheme: A demand-side perspective
Key findings from the field survey among beneficiaries 85

which includes lost productivity and increased use workers in 2011 were in the range of 5.3 per cent
of medical and welfare services, has been estimated to 13 per cent.
at 2-14 per cent of the GNP in different studies, in
With surplus labour in the agricultural sector,
different countries (Leigh et al. 1999).
labour in India is available at low wage and
Though India is one of the fastest-growing large health and safety at the workplace is often
economies in the world, around 85 per cent of compromised. Despite different initiatives
the non-agricultural workforce is informal. The taken by the government, there are still many
Indian manufacturing sector is characterized by challenges in establishing occupational health and
the existence of a large number of small firms or safety measures in enterprises, especially small
enterprises, which employs workers in the setup enterprises in India. There is also a lack of evidence
of the informal sector (Mehrotra 2019). Labour in this field. A huge extent of undiagnosed and
laws, though exist, are only applicable to the unreported occupational illnesses, leads to a lack
formal sector and also always not strictly followed. of accurate information and data on the scope
In India, ensuring humane and safe occupational and extent of occupational diseases. There is
conditions for workers is the responsibility of indifference and apathy of employers, employees,
the Ministry of Labour and other State Labour the general public and other stakeholders to
Departments through constitutional provisions. occupational health issues with a lack of awareness
Additionally, several regulations related to about occupational health issues among both
occupational safety and health (OSH) of workers employers and employees. In this study, we tried
exist in different sectors, namely manufacturing, to capture the status of occupational safety and
mining, ports, and construction, which include the health implemented in enterprises in India, the
Factories Act, 1948 as amended in 1987, the Dock underlying risk factors and the measures taken to
Workers (Safety, Health and Welfare) Act, 1986, improve the workplace environment and to reduce
the Building and other Construction Workers workplace accidents. Considering the importance
(Regulation and the Employment and Conditions of this issue, various information regarding
of Service) Act, 1996, the Child labour (Prohibition knowledge and awareness about different
and Regulation) Act 1986, the Mines Act 1952, workplace hazards and safety measures from the
(amended in 1957) and the Mines Rules 1957. The employers, as well as the employees, is necessary
National Policy on Safety, Health and Environment for the implementation of existing legislations and
at Workplace was notified in 2009 with the aim safety practices.
of decreasing work related injuries, diseases,
fatalities, disasters and promoting preventative
safety and health culture at the workplace,
3.7.1. Levels of health risks
through improving data collection to facilitate faced by employees, including
monitoring, enhancing community awareness on types of health risks
OSH, research and development, and promoting
sustainable enterprise development. From the field data, it emerges that overall 44
per cent of the employees had some knowledge
Occupational health hazards can be of varying
about safety and health risks associated with
types. They can be broadly classified into physical
their job while only 14 per cent of the employees
hazards, chemical hazards, biological and
had knowledge about any type of health risk
mechanical hazards and psychological hazards.
assessment that had been conducted in the
According to the estimates by the International
past one year at their enterprise (Figure 3.14).
Labour Organization (ILO) in 2003, annually
The sub-class analysis on the basis of salary
around four lakh people die from work-related
and employment size of enterprises showed
causes in India and another 3.56 lakh suffer from
an association of employees with knowledge
occupational diseases (ILO 2008), as compared to
about the safety and health risks with salary and
the number of deaths being around 55 thousand in
employment size. Amongst the states, employees
the United States during the same year. According
working in Tamil Nadu had the highest knowledge
to a study by the National Institute of Miners’
regarding the health risks associated with their
Health (NIMH), the prevalence of pneumoconiosis
job while employees in Jharkhand had the least
opacities in chest radio figures in open cast mine
86 Accessing medical benefits under ESI scheme: A demand-side perspective
Key findings from the field survey among beneficiaries

X Figure 3.14. Health risk due to occupation and knowledge about health and safety risks of jobs

Panel A

Health risks faced due to occupation and knowledge about health and safety risks
of job (%) across salary band (Panel A) and health risk assessment at workplace in
last 1 year for different industries (Panel B)

Overall 44.29
13.82

>Rs. 21,000 50
4.17

Rs. 20,000 to Rs. 21,000 46.32

8.42

46.07
Rs. 10,001 – Rs. 20,000 14.17

36.76
<Rs. 10,000
13.99

0 10 20 30 40 50
Knowledge about health and safety risks of job (%) Facing health risks due to occupation (%)

Panel B

Health risk assessment at workplace in the last 1 year (%)

Overall

Others

Education and Health

Transportation & Accommodation

Wholesale and Retail

Construction

Manufacturing

0 10 20 30 40
 Accessing medical benefits under ESI scheme: A demand-side perspective
Key findings from the field survey among beneficiaries 87

knowledge (70 and 4 per cent, respectively). 3.7.2. Employers’ awareness

Meanwhile, employees in Tamil Nadu had greater about occupational hazards
knowledge about health risk assessment at their
enterprise (29 per cent) followed by Haryana (14 Among the surveyed employers, 28 per cent had
per cent). identified the presence of any kind of workplace
health hazards in their enterprises. Employers
Further, the findings suggest that a large
involved in the construction industry accounting
proportion of the employees were not aware of the
for 43 per cent of enterprises reported awareness
health risks they faced due to their occupations. As
of workplace health hazards. On the contrary,
per the self-reporting by the employees, a small
awareness about workplace health hazards is
share of employees is facing health risks due to
the least among employers in the education and
their job type (14 per cent). But among those who
health sector (Figure 3.15, panel I). Panel II of
reported health risks, the majority of them faced
Figure 3.15, shows that in general, employers in
a risk of crushing injuries due to their job (20 per
large enterprises are more aware of workplace
cent) (Table 3.1). Moreover, the evidence showed
health hazards. However, survey results show that
an increase in the percentage of employees
there is a decline in employers’ awareness about
reporting health risks due to their occupation with
workplace hazards for enterprises with more than
an increase in the employment size of enterprises.
100 employees as compared to that of enterprises
Amongst the states, employees working in Tamil
with employees 51 to 100. Employers in Jharkhand
Nadu reported a higher percentage of health risks
had far more awareness about workplace health
associated with their job (28 per cent) followed
hazards (56 per cent), followed by Rajasthan (25
by Haryana (14 per cent). Among the reporting
per cent), Tamil Nadu (12 per cent), and Haryana
employees, 54 per cent in Haryana reported a risk
(11 per cent) (See Panel III of Figure 3.15). This
of crushing injuries while 67 per cent in Tamil Nadu
could perhaps be attributed to the nature of the
reported another type of health risks faced during
assignment that they are involved as most of them
the occupation.
are either directly or indirectly aware of mines and
quarrying activities, which also ties up with the fact
that Rajasthan is also another state where mining
activities are prominent.

X Table 3.1. Percentage of employees facing different types of health hazards

Crushing Communicable
Fractures Injury Burns Poisoning Complications Others
Sector injury disease
(%) (%) (%) (%) of trauma (%) (%)
(%) hazards (%)

Manufacturing 10 7 35 3 2 1 2 40

Construction 33 0 33 0 0 0 22 11

Wholesale and
10 14 14 0 0 5 0 57
Retail

Transportation
and 7 0 5 26 0 2 16 44
Accommodation

Education and
13 13 3 0 0 0 3 69
Health

Others 18 6 4 1 2 0 5 64

Overall 13 6 20 4 2 1 4 49
88 Accessing medical benefits under ESI scheme: A demand-side perspective
Key findings from the field survey among beneficiaries

X Figure 3.15. Awareness among the employers about workplace hazards (% of employers aware about
the presence of occupational hazard in the workplace)

By enterprise sector
50
43
40
35
30 28
24 23
20 17

10 7

0
Construction

Wholesale and
Retail

Transportation &
Accommodation

Education and
Health

Others

All
Manufacturing

By enterprise size class

60

50

40

30

20

10

0
0-10 11-20 21-30 31-50 51-100 >100 All

By enterprise location
60 56

50

40

30 28
25
20
11 12
10

0
Haryana Jharkhand Rajasthan Tamil Nadu All
 Accessing medical benefits under ESI scheme: A demand-side perspective
Key findings from the field survey among beneficiaries 89

3.7.3. Treatment sought for

Larger health-seeking occupational hazards by the type
behaviour is reported of health facilities used and states
among employees of When occupational injuries and hazards occur, it
enterprises with less is mandatory for the employer to provide health
care for its employee. ESI provides the options
than 10 employees as of super-specialty treatment in case of burns,
compared to a greater injuries, and so on, which are reported as the
number of employees. major health risks faced by the employees. The
health-care seeking behaviour of the employees
for various occupational hazards was estimated
and it was found that amongst the employees
As far as Tamil Nadu is concerned, one would have who developed an illness due to occupational
expected much more awareness but the survey hazards, 5 per cent sought healthcare treatment
showed no such pattern, as some of the industries with almost half of them seeking treatment from
like chemicals, fireworks, and so on are present in a government institution (Figure 3.17). Relatively
large numbers in that state. larger health-seeking behaviour is reported
among employees of enterprises with less than
Further, the findings pointed to a pattern where the
10 employees (8.5 per cent) as compared to a
majority of the workplace health hazards were due
greater number of employees. Over 70 per cent
to chemical (27 per cent), ergonomic (35 per cent)
of the employees from the Education-Health and
and physical reasons (16 per cent). However, there
Transport Accommodation sectors sought care
is a wide variation of prevalence of the dominant
from government facilities while the share stood
nature of the health hazards across sectors. For
at less than 50 per cent for other sectors. State-
manufacturing enterprises, the most dominant
wise estimates revealed that healthcare-seeking
reasons for workplace health hazards are chemical
behaviour is highest among Tamil Nadu employees
(31 per cent), ergonomic (32 per cent) and Physical
and lowest among Rajasthan employees (8.5 per
(14 per cent), whereas physiologic health hazard is
cent and 1.7 per cent, respectively). More than 50
most common for employees in the education and
per cent of employees in Tamil Nadu and Haryana
health sector (Figure 3.16).

X Figure 3.16. Distribution of health hazards

By enterprise type

All 5 27 16 12 35 5

Others 25 13 63
Biological
Education and Health 25 50 25 Chemical
Physical
Transportation & Accomodation 25 31 13 31
Safety
Wholesale and Retail 6 24 18 12 29 12 Ergonomic
Psychosocial
Construction 9 18 64 9
Manufacturing 7 31 14 12 32 4

0% 20% 40% 60% 80% 100%

90 Accessing medical benefits under ESI scheme: A demand-side perspective
Key findings from the field survey among beneficiaries

X Figure 3.17. Percentage distribution of healthcare sought for the occupational hazards and type of institution

Private hospital
31%

Government NGO ESI facility 7%

hospital 52%

Enterprise level
health facility 10%

X Figure 3.18. Types of cards used for occupational health treatment

Others 0%

MSBY 1% None 47%

MJPJAY/RGJAY 0%
Private insurance 1%

CMCHIS

PMJAY 1%

ESI 50%

preferred government hospitals for treatment. basis of employment size of the enterprises,
For employees of Jharkhand, the preferable choice employees of small enterprises with employment
for healthcare treatment is private hospitals size of <10 reported the least usage of ESI cards for
(62 per cent). healthcare treatment (25 per cent) (Figure 3.18).
Unfortunately, 81 per cent of the employees in
Analysis of the type of cards used for healthcare
Jharkhand didn’t use any card for treatment. The
treatment, demonstrated that almost 50 per cent
same figure stood at 68 per cent for Tamil Nadu.
of the employees who had sought healthcare
In both States, the utilization of ESI cards was very
treatment used ESI cards for treatment while 47
low. Among those who possessed ESI cards, 58 per
per cent used no card at all. ESI card usage for
cent used them for seeking health care.
treatment was least among the lowest salary
range of employees (40 per cent) while on the
 Accessing medical benefits under ESI scheme: A demand-side perspective
Key findings from the field survey among beneficiaries 91

3.7.4. Measures taken by Rajasthan (5 per cent), and Jharkhand (3 per cent)
the employers to prevent (Figure 3.20, Panel III). As regards the question of
whether any protection measures were available
work site accidents and implemented in enterprises, 28 per cent of
enterprises had put in place measures to prevent
It may further be noted that 11 per cent of
occupational hazards in the workplace. This is
the enterprises reported accidents in the last
more so among the construction (39 per cent) and
year. Given the nature of the work involved,
the manufacturing (34 per cent) sectors (Figure
the prevalence of accidents remains high
3.20, Panel I). State-wise share of workplace
among manufacturing enterprises followed by
accident prevention measures indicated that 53
construction enterprises with 13 per cent and 11
per cent of the enterprises surveyed in Haryana
per cent, respectively. While health and education
took measures to prevent occupational health
sectors (5 per cent) reported the least share of
hazards, followed by Rajasthan (25 per cent), Tamil
workplace accidents (Figure 3.19, Panel I) Bigger
Nadu (12 per cent), and Jharkhand (11 per cent)
enterprises appear to be relatively more prone
(Figure 3.19, Panel III).
to the accident in the work place; 27 per cent
and 19 per cent of the surveyed enterprises with Figure 3.20 shows various measures implemented
employment size 51 to 100 and more than 100, have by enterprises to prevent occupational health
reported accidents in the last one year. Whereas hazards. Incidence investigation and periodic
only 6 per cent of the surveyed enterprises with inspection are the two most common tools for
employment less than 10 had registered accidents preventing occupational health hazards; 21 per
in the workplace in the last year (Figure 3.19, Panel cent and 16 per cent of the enterprises surveyed
II). The findings demonstrated the vulnerable have reported for these two measures for
nature of employees in large enterprises. In these preventing hazards in the work place. However,
enterprises, employees are far more exposed routine preventive measures are far more common
to workplace accidents than in the smaller measures for preventing health hazards in the
enterprises, highlighting poor management and work place among enterprises in the health and
inadequate protection measures. Workplace education sector (50 per cent) (Figure 3.20, Panel
accidents varied in states, a large proportion of the I). Unlike other states, for enterprises in Jharkhand
surveyed enterprises in Haryana (27 per cent) had employee training and hazard control plans are
reported accidents in the last year, as compared the most common measure for preventing health
to enterprises located in Tamil Nadu (5 per cent), hazards in the work place (Figure 3.20, Panel II).
92 Accessing medical benefits under ESI scheme: A demand-side perspective
Key findings from the field survey among beneficiaries

X Figure 3.19. Accidents in last 5 years and measures taken for preventing occupational hazards

By enterprise type

All 28 11
Others 17 9
Education and Health 9 5
Transportation & 23 7
Accommodation
Wholesale & Retail 23 10

Construction 39 11
Manufacturing 34 13

-50 -40 -30 -20 -10 0 10 20

Measures taken for preventing OH (%) Accidents in last 5 years (%)

By enterprise size class

All 28 11

>100 46 19

51-100 55 27

31-50 40 20

21-30 24 11

11-20 16 8

0-10 21 6

-60 -40 -20 0 20 40

Measures taken for preventing OH (%) Accidents in last 5 years (%)

By enterprise location

All 28 11

Tamil Nadu 12 5

Rajasthan 25 5

Haryana 53 27

Jharkhand 11 3

-60 -40 -20 0 20 40

Measures taken for preventing OH (%) Accidents in last 5 years (%)

 Accessing medical benefits under ESI scheme: A demand-side perspective
Key findings from the field survey among beneficiaries 93

X Figure 3.20. Measures taken for preventing occupational hazards, by enterprises types

By enterprises sector

All 16 21 14 12
35 5 8 11 12

Others 13 13 25 25 13 13

Education and Health 25 25 50

Transportation & 12 24 60 6 18 24 12
Accommodation
Wholesale and Retail 28 17 6 22 6 6 17

Construction 9 9 18 9 9 9 36

Manufacturing 17 24 17 12 4 7 8 11

0% 20% 40% 60% 80% 100%

Periodic inspections Incident investigations Employee training Hazard control plan

Inputs from workers PPE Routine preventive maintenance

By enterprises size class

All 16 21 14 12
35 5 8 11 12
Periodic inspections
>100 19 6 16 19 10 16 13
Incident investigations
51-100 7 15 33 15 4 15 11 Employee training
Hazard control plan
31-50 20 10 10 10 20 10 10 10
Inputs from workers
21-30 9 36 18 9 9 9 9 PPE
Routine preventive
11-20 30 20 10 10 10 20 maintenance

0-10 17 30 6 9 5 2 11 20

0% 20% 40% 60% 80% 100%

By enterprises location

All 16 21 14 12
35 5 8 11 12 Periodic inspections
Incident investigations
Tamil Nadu 10 19 14 14 10 10 24 Employee training

Rajasthan 29 29 6 22 4 27 Hazard control plan

Inputs from workers
Haryana 11 18 19 18 5 14 15 1
PPE

Jharkhand 25 25 25 25 Routine preventive

maintenance

0% 20% 40% 60% 80% 100%

94 Accessing medical benefits under ESI scheme: A demand-side perspective
Key findings from the field survey among beneficiaries

3.7.5. Enterprises facing accidents surveyed enterprises in these two sectors who also
and the type of support received experienced accidents said that they reported the
accident to ESI. But only 6 per cent of 2 per cent of
Figure 3.21 depicts the role of ESI as a provider of them got any support from ESI (Figure 3.22, Panel
support to enterprises undergoing and reporting I). Reporting of an accident as well as receiving
accidents in the workplace. One in five enterprises support from ESI is found to be high among
that experienced accidents submitted a report enterprises surveyed in Haryana, as compared to
to ESI, but only 3 per cent of them received any other states (Figure 3.21, Panel II). The majority of
support from ESI. Manufacturing and Construction the enterprises that received support from ESI are
remain the two most hazardous activities among for medical benefits (69 per cent) (Figure 3.21).
the six sectors; 26 per cent and 11 per cent of the

X Figure 3.21. Percentage of enterprises submitted an accident report and received support (any) from ESI

By industry
30
26
25

19 20
20 18

15
11 12
10
6 7
5
3 3
2 1 1 2
0
Others
Wholesale
Manufacturing

Transportation
Construction

Education

Total

Submitted an accident report (%) Received any support from ESIS (%)

By enterprise location
60

40 39

18 20
20
11 11
8
2 1 2 3
0
Jharkhand Haryana Rajasthan Tamil Nadu Total

Submitted an accident report (%) Received any support from ESIS (%)
 Accessing medical benefits under ESI scheme: A demand-side perspective
Key findings from the field survey among beneficiaries 95

X Figure 3.22. Types of benefit received from ESI for reporting accident

By enterprise sector

All 69 4 24

Others 45 9 45
Medical

Education and Health 58 42 Temporary disability

Transportation & Permanent disability

59 11 30
Accommodation Dependents

Wholesale and Retail 59 41 Others

Construction 67 33

Manufacturing 79 4 12

0% 20% 40% 60% 80% 100%

3.8. Satisfaction levels of the providers (Prakash, 2010). Indicators for patient
satisfaction can be used to identify the quality
employers and employees gap and highlight the practices hampering the
This section describes the experience of employers delivery of quality care. It points out good practice
and employees while utilising healthcare and identifies the challenges in the provision of
services and other benefits. Although subjective, services. In this Section, several questions and
the employee’s expression of satisfaction or responses were elicited from the patient to find
dissatisfaction remains a vital tool as feedback out-patients's opinion about the experience while
from beneficiaries, for whom the services are seeking healthcare in hospitals. Questions were
made available. This, in turn, would facilitate asked about satisfaction levels involving several
identifying the strengths and limitations, of the dimensions from ESIC hospitals, empanelled and
ESIC system through exploring the challenges that non-empanelled hospitals. The study showed
the employees face while utilizing the services. that only 50 per cent of the employees were
Employer’s satisfaction or dissatisfaction level satisfied with the information provided by ESI
can also be considered as another dimension regarding cost, treatment and reimbursement.
to capture the challenges faced by them while The satisfaction level ranged from 42 per cent, in
registering with ESIC or for the compliance, or the Jharkhand to 52 per cent in Tamil Nadu, implying
grievance redressal. Importantly, there are several that only one in two were satisfied with the
initiatives that are taken to ease the system, and healthcare services provided, pointing to the need
as a result, the registration process became a to substantially improve services. Furthermore, it
little less cumbersome in recent years. The survey shows that overall 51 per cent and 47 per cent of
identified several suggestions that employees and the employees were satisfied with cost coverage
employers provided to improve the services and to and flexible modalities, respectively, to pay
make them more accessible. (Figure 3.23). Among states, satisfaction levels in
Jharkhand remain the least (45 and 42 per cent,
respectively). Beneficiaries in Tamil Nadu reported
3.8.1. Patient satisfaction level relatively a slightly higher level of satisfaction, 52
relating to health care and 50 per cent, respectively. In respect to the
availability of staff/medicines, about 61 per cent of
Patient satisfaction is a widely used parameter to respondents remained satisfied and two in three
assess the quality of health care and is also used patients appear to have been satisfied with the
as an effective proxy indicator to measure the quality of services provides in ESIC hospitals.
performance of the healthcare workforce and
96 Accessing medical benefits under ESI scheme: A demand-side perspective
Key findings from the field survey among beneficiaries

X Figure 3.23. Share of employees reporting various types of ESI hospital satisfaction

45%
No/limited delay to get reimbursed 44%
45%
50%
No/limited level of out of pocket
49%
expenditure
50%

46%
Quality of equipment 49%
45%

48%
Competency of the medical staff 49%
47%

46%
Quality of patient reception 45%
46%

49%
Availability of medicine 51%
49%

47%
Availability of medical staff 46%
47%

45%
Accessiblity 44%
45%

44%
Health facilities nearby and assessable 46%
44%

47%
Flexible modalities to pay 47%
46%

51%
Affordable cost 49%
51%

47%
Efficient treatment of claims 49%
47%

50%
Information costs, reimbursement, 52%
and so on 50%

38% 40% 42% 44% 46% 48% 50% 52% 54%

Overall Female Male

Note: no. of male= 2,651, no. of female= 590

 Accessing medical benefits under ESI scheme: A demand-side perspective
Key findings from the field survey among beneficiaries 97

X Figure 3.24. Conditions of ESI facilities in IP patients' opinion (treated in ESI hospitals)

65%
Female attendant present in case a male
doctor was attending a female patient 81%
59%

70%
Bed linens changed every 3rd day or
81%
when required 66%

75%
Clean drinking water available 70%
for 24 hours in the hospital 77%

87%
Separate toilet for males and 89%
females in the hospital 86%

77%
Clean toilet facility available in 78%
the hospital 76%

39%
Treatment costs told to you
54%
in advance
35%

0% 20% 40% 60% 80% 100%

Total Female Male

Note: male= 374, female=103

The survey findings further suggested that for 39 that a female attendant was present in case a male
per cent of IP cases, treatment cost was told to the doctor was attending a female patient. Again,
patient in advance (Figure 3.24). However, ideally there is adequate scope for improvement on this
one would have expected no payments from the score, given that female security and their rights
beneficiaries since the services were supposed are critical to bringing in confidence among them.
to be cashless and free. This is an aspect where
In respect of the satisfaction levels of beneficiaries,
attention needs to be paid by ESI authorities to
while accessing empanelled hospitals, several
make sure that ESIC hospitals provide all the
dimensions emerge from the field. A little
services that were supposed to be provided free
over one in three in-patient cases treated in
and cashless. As far as cleanliness and hygiene
empanelled hospitals claimed there was a
conditions in hospitals are concerned, 77 per cent
designated ESI reception or help desk (Table
opined that a clean toilet facility was available while
3.2). About half of patients treated in empanelled
87 per cent informed that separate toilets for males
private hospitals received fast-tracked treatment
and females were provided. Around 75 per cent
or were received separately as ESI patients. It
of the respondents reported that clean drinking
is also encouraging to know that among 44 per
water was available for 24 hours in the hospital
cent of patients empanelled hospitals did not ask
while 70 per cent informed that hospitals changed
for any document other than the ESI card. As far
bed linens every 3rd day or when required. It is
as performance at the state level is concerned,
also reported by 65 per cent of the respondents
98 Accessing medical benefits under ESI scheme: A demand-side perspective
Key findings from the field survey among beneficiaries

patients from Rajasthan and Tamil Nadu, reported To the question of positive aspects about ESI (with
a relatively better experience in these parameters multiple choices), respondents ranked several
as compared to the beneficiaries from Jharkhand aspects of ESI, and among them, the key ones were
and Haryana. medical benefits (85 per cent), wide coverage (59
per cent), sickness benefit (49 per cent), disability

X Table 3.2. Experience of IP patients in ESI-empanelled private hospitals

Fast-tracked/ Hospital asking Number of

Designated
received for any document episodes in private
ESI reception
separately as ESI other than the ESI empanelled
or help desk
patient card hospitals

Jharkhand 33% 33% 33% 3

Haryana 0 57% 0% 7

Rajasthan 60% 50% 60% 10

Tamil Nadu 40% 60% 80% 5

Total 36% 52% 44% 25

X Figure 3.25. Positive aspects of ESI Scheme in employer’s and employee’s opinion

Others 3% 0%
Easily accessible 6% 9%

Easily available 7% 9%

Multiple benefits 7% 11%

Physical rehabilitation 5% 5%
Vocational rehabilitation 6% 6%
Funeral expenses 8% 9%
Dependent benefit 12% 18%

Rgsky for unemployment 11% 10%

Maternity benefit 20% 25%

Disability benefit (perm.) 16% 23%

Disability benefit (temp.) 20% 30%
Sickness benefit 42% 49%
Medical treatment 80% 85%

Wide coverage 49% 59%

Employees Employees
 Accessing medical benefits under ESI scheme: A demand-side perspective
Key findings from the field survey among beneficiaries 99

benefit (30 per cent) and maternity benefit (25 considered satisfactory, implying that adequate
per cent) in a decreasing order (Figure 3.25). room exists to improve behaviour as over half
It is a matter of concern that easy accessibility of such hospitalization events turned out to be
and easy availability ranked poorly in the list of unsatisfactory. In 52 per cent of hospitalization
positive aspects of ESI. Responses elicited from cases, beneficiaries were willing to visit again for
the field also suggested beneficiaries considered treatment. We also explored the reasons for the
unemployment benefit, physical and vocational dissatisfaction of patients treated in ESI hospitals
benefits also ranking very poor in the list of the and in empanelled private hospitals.
positive aspects.
Survey results highlight that the key reasons for
the dissatisfaction are the following:
3.8.2. Dissatisfaction levels and (i) respondents were not aware of the benefits
reasons for dissatisfaction available for the beneficiaries (17 per cent), (ii)
partial coverage of payment (13 per cent), (iii)
ESI scheme differs from other insurance schemes
technical problems (11 per cent), iv) problem in
in terms of wide coverage of diseases and financial
claim settlement (10 per cent), v) unavailability
protection it provides to its beneficiaries. The
of medicines/ equipment (9 per cent), and so on
treatment is supposed to be free and cashless
(Figure 3.26). Moreover, 6 per cent and 5 per cent of
including the medicines. There is a lack of awareness
respondents complained about non-cooperation
about the available benefits, but implementation
from the employers and non-submission of funds
is affected by lack of co-operation from the health
from the employer, respectively. On the other
providers and employers, unavailability of services,
hand, analysis of the reasons for dissatisfaction
or technical difficulties. The field findings revealed
in non-empanelled private hospitals shows
that only 47 per cent of hospitalization cases were
that the major reasons were partial coverage

X Figure 3.26. Reasons of dissatisfaction for hospitalization episodes treated in ESI hospitals

For episodes treated in ESI hospitals

Not aware of benefits provided under ESIS 17%

Partial coverage of payment 13%

Technical problems 11%

Problem in claim settlement 10%

Unavailability of medicines/equipment 9%

Non-coverage of all diseases 8%

Healthcare provider’s behavior 7%

Non-availability of services in empaneled… 7%

Other 6%

Employer was not co-operative 6%

Funds were not submitted from employer end 5%

Empaneled healthcare facility located far away 1%

0% 5% 10% 15%
100 Accessing medical benefits under ESI scheme: A demand-side perspective
Key findings from the field survey among beneficiaries

X Figure 3.27. Reasons of dissatisfaction for hospitalization episodes treated in private empanelled

For episodes treated in Private empanelled hospitals

Partial coverage of payment 35%

Other 17%
Problem in claim settlement 17%
Not aware of benefits provided under ESIS 13%
Healthcare provider’s behaviour 4%
Unavailability of medicines/equipment 4%
Non-coverage of all diseases 4%
Employer was not co operative 4%

0% 5% 10% 15% 20% 25% 30% 35% 40%

of payment, problem in claim settlement, and

that lack of awareness about the benefits of ESI
(Figure 3.27). Contrary to the claims made by the
Survey highlighted
ESI officials, the survey points out the continuing that 30 per cent of
practice of providers, seeking to charge patients
over and above the package rates in the case of
employer respondents
empanelled private hospitals, while no justification appeared to face
exists for the ESIC owned hospitals, for exposing challenges in the online
beneficiaries to pay for services that are cashless
and free. registration process.

3.9. Summing up
concerned, a sizeable share of them were aware
Findings from the field result pointed to a relatively of employees’ medical benefits (92 per cent),
higher level of awareness about medical benefits followed by cash benefits (62 per cent), medical
that ESI offers (89 per cent) among employees, but aid (57 per cent), disability benefits (41 per cent)
far less on cash (46 per cent) and disability benefits and far less on funeral expenses (20 per cent) and
(32 per cent), although understanding is relatively unemployment benefits (14 per cent). Prior to
greater among employees in Haryana (94 per cent). reforms initiated in 2020 whereby the registration
In Jharkhand, only three in four employees know process was made simple, employers were often
about the medical benefits. This could plausibly be faced with several challenges. Nearly one in two
due to the socio-economic and educational status employers reported a lengthy process of insurance
of the respondents. Since four in five sample number generation, whereas 41 per cent of the
respondents were the employees receiving a employers indicated the difficulties surrounding
relatively higher salary in the range of Rs. 10,000 the biometric enrolment process for obtaining
and above, besides the fact that over two in three pehchan card. The survey further highlighted that
of them possessed secondary level education and/ 30 per cent of employer respondents appeared to
or a graduate, one could conjecture that this may face challenges in the online registration process,
perhaps be the contributing factor in a higher level while 28 per cent of them reported having faced
of awareness. As far as employers’ knowledge was the challenge of submitting documents, including
 Accessing medical benefits under ESI scheme: A demand-side perspective
Key findings from the field survey among beneficiaries 101

the quantum and processing of the documents states highlight variations in treatment-seeking
required. behaviour, partly pointing to the availability or lack
of healthcare facilities.
Although enrolment is mandatory for the
employees, the proportion of enrolment of Although 82 per cent of the beneficiaries did not
households in the ESI scheme including its IPs, seek care due to the illness not being considered
worked out to 85 per cent, while the share drops serious enough, about 7 per cent of beneficiaries
to 78 per cent excluding employees. Thus, over did not seek treatment due to lack of nearby
one in five household members did not enrol in health facility and an equal percentage of them
the scheme, whereas over three fourths of the (8 per cent) had to forgo treatment owing to
households and employees had in possession of unsatisfactory health service provision. From
ESIC cards. In respect to contributions made, two those who sought treatment, the rate of out-
in three employers correctly indicated less than patient visits was observed to be 50 per thousand
4 per cent of wages as the, current contribution beneficiaries, with a relatively larger number of
by employers, even though 17 per cent of them OP visits in Tamil Nadu (150 per thousand) and an
mistook the contribution to be less than 5 per abysmally lower number in other states, Haryana
cent. Further, the survey indicated that one in (13 per thousand), Jharkhand (31 per thousand),
five employers identified the challenges during Rajasthan (28 per thousand), reflecting gross
paying contribution, while one fourth of them underreporting.
pointed to the contribution amount to be high,
The gross underreporting is plausibly due to the
although the process of making contribution every
COVID-19, and associated restrictions placed
month was found to be a larger problem among
during the field survey period. The survey in three
47 per cent of the employers. About 14 per cent
states namely Jharkhand, Haryana and Rajasthan,
of them identified unsuitable timing for making
was carried out during September-October,
contribution and 12 per cent identified less returns
2020, when the COVID-19 pandemic was at its
as a common problem. Expectedly, only about half
peak restricting the use of limited availability of
of employers were aware of grievance redressal
out-patient care services, reservation of hospital
mechanisms. Again half of them had used
infrastructure for COVID-19 patients rendering
telephonic mode in the past as a mechanism to
non-COVID-19 services virtually unavailable.
reach out to the authorities. Unfortunately, barely
Patients on their part were under the influence
one in three employers were cognizant about
of fear and stigmatization, rendering them to not
Suvidha Samagam, while inspection from ESIC
report even if they faced simple ailments of fever,
officials were reported by one fourths of employer
cold, cough, and so on. Yet, barely one in four OP
as a mechanism for grievance redressal.
visits were sought in ESIC dispensaries/hospitals,
With respect to healthcare utilization pattern, one and a similar share was accounted for by private
in five persons reported at least one illness in the non-empanelled facilities. A relatively higher rate
past 15 days with females reporting a slightly of out-patient visits in Tamil Nadu, was partly due
higher rate of illness than males. Considerable to the timing of the survey, as it was conducted
variations were observed in illness reporting across during the receding pandemic period of the first
states, with only 4 per cent persons reporting sick peak (November and December), which also
in Jharkhand as against 33 per cent in Rajasthan, coincided with post-monsoon time highlighting
while beneficiaries in Haryana and Tamil Nadu seasonal peak of illness such as common cold,
reported 11 per cent and 14 per cent disease fever and cough. Beneficiaries accessing out-
conditions. Over half of the sick beneficiaries patient treatment in government hospitals
sought treatment. Yet, the average among the four registered a share of 12 per cent.
states hides significant differentials in treatment-
The survey findings in respect of the hospitalization
seeking as 94 per cent of beneficiaries in Tamil
episodes revealed that 62 per thousand
Nadu sought care as against barely 10 per cent in
beneficiaries sought treatment, with significant
Jharkhand. Also the share of beneficiaries seeking
variation among states; Tamil Nadu (104 per
treatment in Haryana and Rajasthan was 60 per
thousand persons), Rajasthan (28 per thousand
cent and 38 per cent, respectively. Substantial
persons), Haryana (67 per thousand persons) and
differences in utilization of healthcare across
Jharkhand (49 per thousand persons). The rate of
102 Accessing medical benefits under ESI scheme: A demand-side perspective
Key findings from the field survey among beneficiaries

hospitalization episodes as reported by the survey Even though the beneficiaries were supposed
appears to be slightly on the higher side, indicating to receive health benefits free and cashless at
a higher level of hospitalization when ESIC, the point of service delivery, the survey results
empanelled and non-empanelled hospitalization highlight the practice of OOP spending by them.
was taken into consideration. In respect to type of For an episode of treatment for hospitalization,
facilities chosen, (i) one in three hospitalizations the mean spending works out to Rs. 23,834 but
occurred in an ESI hospital; (ii) about 15 per cent with significant variation depending upon which
of the hospitalization in a government hospital; facilities beneficiaries choose from. Beneficiaries
(iii) barely 5 per cent of the hospitalization ended up paying barely Rs. 2,426 for an episode
occurred in a private empanelled facility; and (iv) of in-patient service as against Rs. 34,372 when
the rest nearly half of the hospitalization episodes beneficiaries sought treatment from the private
were treated in private hospitals that were not non-empanelled hospital. Nearly one in three
empanelled. Despite the availability of ESIC’s own beneficiaries did so. On the other hand, even
hospitals, government facilities and arrangements though only 7 per cent of ESI beneficiaries sought
with private empanelled facilities, nearly half of treatment in a private empanelled hospital, and
treatment requiring hospitalization were sought yet they were forced to pay Rs. 13,409, about
outside the ambit of ESIC’s arrangement. Among five times than when they sought care in ESI
those who possess ESI cards, 58 per cent used facilities. The evidence from the field suggests
them for seeking healthcare. that a considerable share of beneficiaries seek
treatment in private non-empanelled hospitals
The survey also pointed to inter-state differentials
and by doing so were exposed to a serious level of
in access the hospitalization care. In Haryana,
OOP spending.
nearly one in three hospitalizations was sought
in ESIC hospital, about one in five occurred in a Similar scenarios emerge in respect of out-patient
government facility, about 12 per cent in a private care visits. Per episode out-patient treatment in
empanelled hospital. In Rajasthan, beneficiaries private non-empanelled facilities cost beneficiaries
chose private non-empanelled hospitals in close Rs. 1,021 as against Rs. 157 when beneficiaries
to half of IP treatment, while treatment options visited ESI dispensaries. Even in a private
in ESIC facility was an option to about one fourth empanelled facility, beneficiaries ended up paying
of the patients, 10 per cent of each hospitalization a relatively high OOP at Rs. 842. Notwithstanding
occurred in government and private empanelled the treatment and cost associated with it, the
hospitals. The pattern of hospitalization in Tamil pattern observed here corroborates the evidence
Nadu demonstrates a far more different pattern, presented in the previous section. It highlights
as one in three hospitalizations was carried out that ESI scheme beneficiaries were less prone
in ESIC hospitals, followed by public hospitals in to incurring catastrophic spending than those
about 15 per cent while private non-empanelled covered by government-funded health insurance
facilities accounted for close to one-fourth of schemes or even private health insurance
all hospitalization by the beneficiary. Yet, the schemes.
preferred option for beneficiaries in Jharkhand
was a private empanelled hospital in half of IP
treatment, while private non-empanelled hospitals
also accounted for one-third of hospitalization, Beneficiaries were
and government hospitals accounted for about supposed to receive
17 per cent hospitalization, with virtually no
hospitalization reported by beneficiaries in ESIC health benefits free and
hospitals. Moreover, as the survey was carried out cashless at the point
during COVID-19 and the partial lockdown period,
a higher level of underreporting can be expected,
of service delivery,
as the findings from the survey for Jharkhand the survey results
demonstrates. Since some of the ESIC hospitals
were designated for COVID-19 care, it is highly
highlight the practice
unlikely that beneficiaries would have sought of increased OOP.
treatment in ESIC hospitals.
 Accessing medical benefits under ESI scheme: A demand-side perspective
Key findings from the field survey among beneficiaries 103

The survey further reveals that beneficiaries approximately 4 per cent as a share of monthly
incurred both medical and non-medical expenses, income. Although one would have expected a
accounting for 42 per cent and 58 per cent, higher amount of the wage loss given that nearly
respectively, when they sought treatment in ESIC 20 days were lost due to hospitalization, a relatively
hospitals for in-patient treatment. Non-medical significant wage loss compensation provided to
expenses included transportation, lodging and employees could perhaps be one of the reasons
food charges for accompanying patients, and why the wage loss reported is comparatively lower.
so on while medical expenses largely included Did the pandemic and the associated lockdowns
medicines (51 per cent), diagnostics (24 per cent), rendered insured persons' job and wage losses?
consultations (20 per cent) and bed charges (5 About 62 per cent of the employees surveyed had
per cent). This indicates that medicines’ shortage incurred wage loss during the lockdown period,
remains a major issue in ESIC hospitals, while the in the specific and the pandemic overall and that
non-availability of comprehensive diagnostics only one in five employees who had reported
services is yet another critical factor accounting wage loss, had received some compensation. Yet,
for OOP incurred by the beneficiaries. However, when it pertained to actual wage compensation
the largest contributors to OOP for beneficiaries received an absolute amount totalling Rs. 11,510
seeking treatment in non-private empanelled was received as compensation.
hospitals are consultation charges (30 per cent),
The field data emerges that overall 44 per cent of
medicines (26 per cent), diagnostics (24 per cent)
the employees had some knowledge about safety
and bed charges (21 per cent).
and health risks associated with their job while
As far as child delivery services are concerned, the only 14 per cent of the employees had knowledge
findings revealed that one in three child deliveries about any type of health risk assessment that
occurred in ESIC facilities, and nearly an equal share had been conducted in the past year at their
was accounted for by private non-empanelled enterprise. Among those who reported health
hospitals. About 10 per cent each was accounted risks, the majority of them faced a risk of crushing
for by public hospitals and private empanelled injuries due to their job (20 per cent), fractures
ones. This implies a significant gap in the provision (13 per cent), injury (6 per cent), burns (4 per
of child delivery services either within ESIC or cent), communicable disease hazards (4 per cent),
empanelled facilities. However, when a pregnant and so on. On their part, employers’ awareness
beneficiary was delivered in a private empanelled about occupational hazards from the field
hospital, she had to incur Rs. 21,100 over and above suggested that 28 per cent of them had identified
the package ceiling provided by ESI, while she the presence of any kind of workplace health
ended up paying a far higher amount of Rs. 36,630 hazards in their enterprises. Employers involved
per child delivery in a private non-empanelled in construction industry accounting for 43 per cent
hospital. It is even important to observe that when of registered enterprises reported awareness of
a pregnant woman delivered at a public hospital, work place health hazards. Contrarily, awareness
she had paid Rs. 1,500 per delivery, underscoring about workplace health hazards is the least
the improvement in institutional delivery brought among employers in education and health sector.
about by National Health Mission (NHM). It may be In respect of workplace health hazards, the survey
worth noting that pregnant women are provided results showed that it is due to chemical (27 per
conditional cash transfers for ante-natal check- cent), ergonomic (35 per cent) and physical (16 per
ups and for delivering in an institution. This could cent) reasons. Further, prevalence of an accident
potentially be the reason why women delivering in remains high, among manufacturing enterprises
a government hospital are paying by far the least followed by the construction enterprises with
among other facilities, highlighting the need for 13 per cent and 11 per cent, respectively. While
ESI to improve not only its facilities but also provide health and education sectors (5 per cent) reported
cash compensation for child delivery services. the least share of workplace accidents.
The survey findings further demonstrated that Indicators for patient satisfaction can be used to
one in five employees, reported wage loss due identify the quality gap and highlight the practices
to hospitalization, with an average wage loss at that hamper the delivery of quality care. The study
Rs. 792. This translated into a mean wage loss of showed that only 50 per cent of the employees
104 Accessing medical benefits under ESI scheme: A demand-side perspective
Key findings from the field survey among beneficiaries

In terms of availability
of staff and medicines,
about 61 per cent of
respondents remained
satisfied and two in
three patients appear
to have been satisfied
with the quality of
services provided in
the ESIC hospitals.

were satisfied with the information provided by

ESI regarding cost, treatment and reimbursement.
Further, it shows that overall 51 per cent and 47
per cent of the employees were satisfied with
cost coverage and flexible modalities to pay
respectively. In respect to the availability of staff/
medicines, about 61 per cent of respondents
remained satisfied and two in three patients
appear to have been satisfied with the quality of
services provided in the ESIC hospitals. In respect
of the dissatisfaction levels, the field findings
painted a grim picture of hospital behaviour as
only 47 per cent of hospitalization cases were
considered satisfactory, implying adequate
room exists to improve behaviour as over half
of such hospitalisation events turned out to be
unsatisfactory. In 52 per cent of hospitalisation
cases, beneficiaries were willing to visit again for
treatment.
Survey results identified several reasons for
dissatisfaction: (i) respondents were not aware
of the benefits available for the beneficiaries (17
per cent), (ii) partial coverage of payment (13 per
cent), (iii) technical problems (11 per cent), iv)
problems in claim settlement (10 per cent), and v)
unavailability of medicines/ equipment (9 per cent)
and so on. Moreover, 6 per cent and 5 per cent of
respondents complained about non-cooperation
from the employers and non-submission of funds
from the employer. On the other hand, analysis of
the reasons for dissatisfaction in non-empanelled
private hospitals shows that the major reasons
were partial coverage of payment, problems in
claim settlement, and the lack of awareness about
the benefits of ESI.
 Accessing medical benefits under ESI scheme: A demand-side perspective
Key findings from the field survey among beneficiaries 105

4. Key findings and recommendations

The chapter encompasses the comprehensive synthesis of the key

findings and recommendations of the study.

The current study set out to achieve three key 4.1. Key synthesis from
objectives:
secondary evidence
1. Assess health-seeking behaviour, potential
requirements, and expected challenges of
beneficiaries in respect to ESI healthcare ► ESI covers a tenth of india’s population
insurance, access to healthcare services and The performance of ESI as underscored earlier in
in respect to views that relate empanelled this study points to rapid and significant growth,
healthcare providers;
signalling a five-fold increase in a number of
2. Investigate beneficiaries’ knowledge, enterprises from 0.22 million in 1999-2000 to 1.03
attitude and awareness in relation to ESIC million during 2018-2019 with a corresponding
entitlements; rise in the number of employees covered from
3. Identify and suggest potential solutions 7.86 million to 31.17 million. As a result, ESI-eligible
that can be used to design services, which beneficiaries now account for about a tenth of the
would deepen service coverage and total population in 2018-2019 as against 3 per cent of
facilitate beneficiaries, employers, and the population in 1999-2000. However, the share of
healthcare providers underlying ESI health women workers in respect of total insured persons
insurance schemes. remained low in the range of 12 per cent–17 per
It has achieved the first two objectives through a cent during the last twenty years, in sharp contrast
large-scale survey of ESI beneficiaries combined to a relatively higher share of female employment
with the collection and analysis of additional proportions among regular/wage salaried (21 per
qualitative and secondary data. Section 4.2 cent in 2017-2018 as per the 75th NSSO Round).
summarizes the key findings pertaining to the first
two objectives. ► Increased in-patient service utilization
and decreased out-patient service
The third objective has been realized through
utilization in ESI
extensive analysis of the data from this study in
correlation with valuable insights and feedback In respect to the performance of healthcare
received from ILO’s social partners and direct utilization, the rate of hospitalization enhanced
stakeholders in the ESI Scheme – the representative significantly from 1.3 per cent in 1999-2000 to 2.8
organizations of workers and employers from per cent during 2017-2018, with utilization rates
all over India. A comprehensive synthesis of the reflecting similar levels recorded in national sample
findings of this study is presented in sections 4.1 surveys. In respect to out-patient utilization rates,
and 4.2 of this Chapter. per 1,000 beneficiaries dropped from 609 to 208
for the same period, a sharp drop that could be
Therefore, the ILO has developed a theory of
explained by inadequacy in facility expansion, and
change for ESI reforms (section 4.3) and prepared
similarly, the rate of investigations (diagnostics)
a set of recommendations (section 4.4) for the
per 1000 beneficiaries also went down substantially
ESIC to consider.
from 37 to 15 for the period under consideration.
106 Accessing medicalbenefits
Accessing medical
Key
Key findings
findingsand
benefits under
under
andrecommendations
recommendations
ESIESI scheme:
scheme: A demand-side
A demand-side perspective
perspective

► Relatively better financial protection programmes. Moreover, emerging evidence also

under ESI indicates that about 5 per cent of households
The shallowness of health insurance coverage is covered under ESI recorded a loss of income
often reflected in the magnitude of households’ compared to nearly double among households
expenditure, over and above the cost covered not covered by any insurance programme.
by the scheme per se. Despite generous
medical and cash benefits, ESI beneficiaries 4.2. Key findings from
appear to be incurring significant out-of-pocket
expenditure even if lesser than in other insurance
the field survey
schemes. The average expenditure incurred by
households covered by the ESI scheme ended up ► A necessary demand-side perspective
spending about Rs. 38,668 annually, while CGHS of ESI service utilization
beneficiaries paid out Rs. 50,470 and households
Overwhelming evidence given above points to
covered by private health insurance paid nearly
potentially large scope for enlarging the coverage
double the expenditure incurred by ESI beneficiary
of enterprises and employees and bringing them
households. A relatively lower level of households’
into the ESI fold. Given the large surplus that
OOP expenditure could presumably be because
ESIC has managed to accumulate in the past,
households may be accessing secondary-level
resource availability is far less a vital factor than
nursing homes or other less expensive facilities.
making available health facilities and services
it is equally possible that the large share of this
and deepening coverage benefits. Lack of health
spending could be used up for buying medicines,
infrastructure availability – hospitals, out-patient
diagnostics and consultations. Correspondingly, a
facilities, diagnostic facilities, and so on and
relatively lesser share of households covered by ESI
inadequate health workforce besides shortages
(12 per cent) was suffering from health spending
and stock-out of essential medicines and supplies
catastrophe, which is only half of catastrophic
appears to be the key factors hindering access and
payments compared to other insurance
 Accessing medical benefits under ESI scheme: A demand-side perspective
Key findings and recommendations 107

uptake of health benefits. Even after contracting that ESI offers (89 per cent) among employees, but
with the private sector – in-patient and out- far less on cash (46 per cent) and disability benefits
patient– utilization of healthcare facilities has been (32 per cent), although understanding is relatively
far short of the potential. Purchasing of healthcare greater among employees in Haryana (94 per
services is still found to be fragmented and sub- cent) in Jharkhand only three in four of them know
optimal, raising serious questions about efficiency, about the medical benefits. This could plausibly
effectiveness and quality of services provided. In be due to the socio-economic and educational
order to investigate the reasons and factors that status of the respondents. Since four in five
hinder coverage, lack of facilities, underutilization sample respondents were employees receiving a
of services, and so on there was a need for eliciting relatively higher salary in the range of Rs. 10,000
the current knowledge, behaviour and utilization and above, besides the fact that over two in three
pattern of the ESI scheme from its stakeholders. of them possessed secondary level education and/
Past research and evidence focused on themes or a graduate, one could conjecture that this may
that are largely from the supply side. Adequate, perhaps be the contributing factor in a higher level
robust and reliable evidence from the demand of awareness. As far as employers’ knowledge is
side has been missing about the programme concerned, a sizeable share of them is aware
performance. of employees’ medical benefits (92 per cent),
followed by cash benefits (62 per cent), medical
► Scope of the present study aid (57 per cent), disability benefits (41 per cent),
and far less on funeral expenses (20 per cent) and
This piece of research brings out for the first time unemployment benefits (14 per cent).
robust and sufficient evidence about the current
challenges afflicting the scheme, purely from the
► Registration and compliance issues
beneficiary side. One of the major objectives of
faced by Scheme members
this study was to undertake this exercise among
employees, employers, healthcare providers, Prior to recent reforms whereby the registration
representatives of trade unions and employers’ process was made simple, employers were
associations. Employing a two-stage stratified often faced with several challenges. Nearly one
random sampling, the field survey was carried in two employers reported a lengthy process of
out in four states, namely Tamil Nadu, Haryana, insurance number generation, whereas 41 per
Rajasthan and Jharkhand. A total of 553 enterprises, cent of the employers surveyed indicated the
along with 3,339 employees, plus healthcare difficulties surrounding the biometric enrolment
providers and representatives constituted about process for obtaining pehchan card. The survey
3,984 samples from the field. The survey covered further highlighted that 30 per cent of employer
several themes, among them the core ones are respondents appear to face challenges in the
online registration process, while 28 per cent
● Awareness, knowledge and attitude of
of them reported having faced the challenge of
stakeholders underlying ESI benefits;
submitting documents, including the quantum
● Healthcare utilization pattern among ESI and processing of documents required.
beneficiaries;
Although enrolment is mandatory for employees,
● Financial risk protection measures; the proportion of enrolment of households in
the ESI scheme including its IPs, worked out
● COVID-19 and associated wage loss;
to 85 per cent, while the share drops to 78 per
● Occupational hazard and safety measures cent excluding employees. Thus, over one in five
faced by employees and finally; household members did not enrol in the scheme,
● Satisfaction levels of employers/employees. whereas over three fourths of the households
& employees were in possession of ESIC cards.
In respect to contributions made, two in three
► Awareness of ESI benefits among employers correctly indicated less than 4 per
beneficiaries cent of wages as the current contribution by
Findings from the field survey suggested a relatively employers, even though 17 per cent of them
higher level of awareness about medical benefits mistook the contribution to be less than 5 per
108 Accessing medical benefits under ESI scheme: A demand-side perspective
Key findings and recommendations

cent. Further, the survey indicated that one in five ► Out-patient utilization
employers identified the challenges during paying From those who sought treatment, the rate of out-
contribution, while one fourth of them pointed to patient visits was observed to be 50 per thousand
the contribution amount to be high, although the beneficiaries, with a relatively larger number
process of making contribution every month was of OP visits in Tamil Nadu (150 per thousand)
found to be a larger problem among 47 per cent of and an abysmally lower number in other states,
the employers. About 14 per cent of them identified Haryana (13 per thousand), Jharkhand (31 per
unsuitable timing for making contribution and thousand), Rajasthan (28 per thousand), reflecting
12 per cent identified less returns as a common gross underreporting. The gross underreporting
problem. Expectedly, only about half of employers is plausibly due to COVID-19 and associated
were aware of grievance redressal mechanisms, restrictions placed during the field survey period.
and a similar share of them had used telephonic The survey in three states, namely Jharkhand,
mode in the past as a mechanism to reach out Haryana and Rajasthan was carried out during
to the authorities. Unfortunately, barely one in September-October, 2020, when the COVID-19
three employers were cognizant about Suvidha pandemic was at its peak restricting the use of
Samagam, while inspections from ESIC officials limited availability of out-patient care services,
were reported by one fourths of the employer as a reservation of hospital infrastructure for COVID-19
mechanism for grievance redressal. patients rendering non-COVID-19 services virtually
unavailable. Patients on their part were under the
► Variable health-seeking behaviour influence of fear and stigmatization, rendering
and medical benefits utilization across them to not report even if they faced simple
states ailments of fever, cold, cough, and so on.
In respect to healthcare utilization pattern, one Yet, barely one in four OP visits were sought in ESIC
in five persons reported at least one illness in dispensaries/hospitals and a similar share was
the past 15 days with females reporting a slightly accounted for by private non-empanelled facilities.
higher rate of illness than males. Considerable A relatively higher rate of out-patient visits in
variations were observed in illness reporting Tamil Nadu was partly due to the timing of the
across states, with only 4 per cent persons survey, as it was conducted during the receding
reporting sick in Jharkhand as against 33 per pandemic period of the first peak (November and
cent in Rajasthan, while beneficiaries in Haryana December). It also coincided with post-monsoon
and Tamil Nadu reported 11 per cent and 14 per time highlighting seasonal peaks of illness such
cent disease conditions. Among those who were as common cold, fever and cough. Beneficiaries
sick, over half of them sought treatment. Yet, the accessing out-patient treatment in government
average among the four states hides significant hospitals registered a share of 12 per cent.
differentials in treatment-seeking as 94 per cent of
beneficiaries in Tamil Nadu sought care as against ► In-patient utilization
barely 10 per cent in Jharkhand, while the share
of beneficiaries seeking treatment in Haryana The survey findings in respect of hospitalization
and Rajasthan was 60 per cent and 38 per cent episodes revealed that 62 per thousand
respectively. Substantial differences in utilization beneficiaries sought treatment, with significant
of healthcare across states highlight variations variation among states; Tamil Nadu (104 per
in treatment-seeking behaviour and partly point thousand persons), Rajasthan (28 per thousand
to the availability or lack of healthcare facilities. persons), Haryana (67 per thousand persons) and
Although 82 per cent of beneficiaries did not Jharkhand (49 per thousand persons). The rate
seek care due to the illness not being considered hospitalization episodes as reported by the survey
serious enough, about 7 per cent of beneficiaries appears to be slightly on the higher side, indicating
who did not seek treatment was due to lack of a higher level of hospitalization when ESIC,
nearby health facility and an equal percentage of empanelled and non-empanelled hospitalization
them (8 per cent) had to forgo treatment owing to was taken into consideration. In respect to type
unsatisfactory health service provision. of facilities chosen, (i) one in three hospitalization
occurred in an ESI hospital; (ii) about 15 per cent
 Accessing medical benefits under ESI scheme: A demand-side perspective
Key findings and recommendations 109

hospitalization in a government hospital; (iii) with significant variation depending upon which
barely 5 per cent of the hospitalization occurred facilities beneficiaries choose from. Beneficiaries
in a private empanelled facility; (iv) the rest nearly had to pay only Rs. 2,426 for an episode of in-
half of the hospitalization episodes were treated patient service as against Rs. 34, 372 when
in private hospitals that were not empanelled. beneficiaries sought treatment from the private
Despite the availability of ESIC’s own hospitals, non-empanelled hospital. Nearly one in three
government facilities and arrangement with private beneficiaries did so. On the other hand, even
empanelled facilities, nearly half of treatment though only 7 per cent of ESI beneficiaries sought
requiring hospitalization were sought outside treatment in a private empanelled hospital, and
the ambit of ESIC’s arrangement. The survey yet they were forced to pay Rs. 13,409, about
also pointed to inter-state differentials in access 5 times than when they sought care in ESI
to hospitalization care: in Haryana, nearly one in facilities. The evidence from the field suggests
three hospitalizations was sought in ESIC hospitals, that a considerable share of beneficiaries seek
about one in five occurred in a government treatment in private non-empanelled hospitals
facility, about 12 per cent in a private empanelled and by doing so were exposed to a serious level of
hospital. However, in Rajasthan, beneficiaries out-of-pocket spending. Similar scenarios emerge
chose private non-empanelled hospitals in close in respect to out-patient care visits. Per episode
to half of IP treatment, while treatment options out-patient treatment in private non-empanelled
in ESIC facility was an option to about one fourths facilities cost beneficiaries Rs. 1,021 as against Rs.
of the patients, 10 per cent each hospitalization 157 when beneficiaries visited ESI dispensaries.
occurred in government and private empanelled Even in a private empanelled facility, beneficiaries
hospitals. The pattern of hospitalization in Tamil ended up paying a relatively high OOP at Rs. 842.
Nadu demonstrates far more different pattern, Notwithstanding the treatment and cost associated
as one in three hospitalization was carried out with it, the pattern observed here corroborates to
in ESIC hospitals, followed by public hospitals in the evidence presented in the previous section
about 15 per cent while private non-empanelled highlighting that ESI scheme beneficiaries were
facilities accounted for close to one fourths of less prone to incurring catastrophic spending
all hospitalization by the beneficiary. Yet, the than those covered by government-funded
preferred option for beneficiaries in Jharkhand health insurance schemes or even private health
was a private empanelled hospital in half of IP insurance schemes. The survey further reveals
treatment, while private non-empanelled hospitals that beneficiaries incurred both medical-related
also accounted for one-third of hospitalization, and non-medical expenses, accounting for
and government hospitals accounted for about 42 per cent and 58 per cent respectively when they
17 per cent hospitalization, with virtually no sought treatment in ESIC hospitals for in-patient
hospitalization reported by beneficiaries in ESIC treatment. Non-medical expenses included
hospitals. Moreover, as the survey was carried out transportation, lodging and food charges for
during COVID-19 and the partial lockdown period, accompanying patients, and so on. The medical
a higher level of underreporting can be expected, expenses largely included medicines (51 per
as the findings from the survey for Jharkhand cent), diagnostics (24 per cent), consultations
demonstrate. Since some of the ESIC hospitals (20 per cent) and bed charges (5 per cent). This
were designated for COVID-19 care, it is highly indicates that medicines’ shortage remains a
unlikely that beneficiaries would have sought major issue in ESIC hospitals, while the non-
treatment in ESIC hospitals. availability of comprehensive diagnostics services
is yet another critical factor accounting for OOP
► Out-of-pocket expenditure incurred by the beneficiaries. Whereas the largest
contributors to OOP for beneficiaries seeking
Even though beneficiaries were supposed to treatment in non-private empanelled hospitals are
receive health benefits free and cashless at consultation charges (30 per cent), medicines (26
the point of service delivery, the survey results per cent), diagnostics (24 per cent), bed charges
highlight the practice of OOP spending by them. (21 per cent). As far as child delivery services are
For an episode of treatment for hospitalization, concerned, the findings revealed that one in three
the mean spending works out to Rs. 23,834 but child delivery occurred in ESIC facilities, and nearly
110 Accessing medical benefits under ESI scheme: A demand-side perspective
Key findings and recommendations

an equal share was accounted for by private non- ► Occupational safety and health
empanelled hospitals. About 10 per cent each Field data show that overall 44 per cent of the
was accounted for by public hospitals and private employees had some knowledge about safety
empanelled ones. This implies a significant gap and health risks associated with their job while
in the provision of child delivery services either only 14 per cent of the employees had knowledge
within ESIC or empanelled facilities. However, about any type of health risk assessment that
when a pregnant beneficiary delivered in a private had been conducted in the past one year at their
empanelled hospital, she had to incur Rs. 21,100 enterprise. Among those who reported health
over and above the package ceiling provided risks, the majority of them faced a risk of crushing
by ESI, while she ended up paying a far higher injuries due to their jobs (20 per cent), fractures (13
amount of Rs. 36,630 per child delivery in a private per cent), injuries (6 per cent), burns (4 per cent),
non-empanelled hospital. It is even important to communicable disease hazards (4 per cent), and
observe that when a pregnant woman delivered so on. On their part, employers’ awareness about
at a public hospital, she had paid Rs. 1,500 per occupational hazards from the field suggested
delivery, underscoring the improvement in that 28 per cent of them had identified the
institutional delivery brought about by NHM. It presence of any kind of workplace health hazards
may be worth noting that pregnant women are in their enterprises. Employers involved in the
provided conditional cash transfers for ante-natal construction industry accounting for 43 per cent
check-ups and for delivering in an institution. of enterprises reported awareness of workplace
This could potentially be the reason why women health hazards. On the contrary, awareness about
delivering in a government hospital are paying workplace health hazards is the least among
by far the least among other facilities, perhaps employers in the education and health sector. In
pointing to the need for ESI to improve not only its respect to workplace health hazards, the survey
facilities but also provide cash compensation for results showed that it is due to chemical (27 per
child delivery services. cent), ergonomic (35 per cent) and Physical (16
per cent). Further, the prevalence of accidents
► Wage loss and compensation remains high among manufacturing enterprises
The survey findings further demonstrated that followed by construction enterprises with 13 per
one in five employees reported wage loss due cent and 11 per cent, respectively. While health
to hospitalization, with an average wage loss at and education sectors (5 per cent) reported the
Rs. 792. This translated into a mean wage loss of least share of workplace accidents.
approximately 4 per cent as a share of monthly
income. Although one would have expected a ► Beneficiary satisfaction
higher amount of wage loss given that nearly 20 Indicators for patient satisfaction can be used
days were lost due to hospitalization, a relatively to identify the quality gap and highlight the
significant wage loss compensation provided to practices hampering the delivery of quality care.
employees could perhaps be one of the reasons The study showed that only 50 per cent of the
why the wage loss reported is comparatively lower. employees were satisfied with the information
Did the pandemic and the associated lockdowns provided by ESI regarding cost, treatment and
rendered insured persons job and wage losses? reimbursement. Further, it shows that overall
About 62 per cent of employees surveyed had 51 per cent and 47 per cent of the employees
incurred wage loss during the lockdown period were satisfied with cost coverage and flexible
in specific and the pandemic overall and that only modalities to pay, respectively. In respect to the
one in five employees who had reported wage availability of staff/medicines, about 61 per cent of
loss, had received some compensation. Yet, when respondents remained satisfied and two in three
it pertained to actual wage compensation received patients appear to have been satisfied with the
an absolute amount totaling Rs. 11,510 was quality of services provided in ESIC hospitals. In
received as compensation. respect of dissatisfaction levels, the field findings
painted a grim picture of hospital behaviour as
only 47 per cent of hospitalization cases were
 Accessing medical benefits under ESI scheme: A demand-side perspective
Key findings and recommendations 111

considered satisfactory, implying adequate 4.3. A theory of change

room exists to improve behaviour as over half
of such hospitalisation events turned out to be
for the ESI Scheme
unsatisfactory. In 52 per cent of hospitalisation Based on the present study and the diagnostics
cases, beneficiaries were willing to visit again submitted to ESIC earlier, the ILO has developed
for treatment. Survey results identified several the following theory of change for the ESI Scheme.
reasons for dissatisfaction: (i) respondents The ILO emphasizes the following four inter-
were not aware of the benefits available for the related pillars of ESI transformation:
beneficiaries (17 per cent), (ii) partial coverage
1. Improvements in the supply of social health
of payment (13 per cent), (iii) technical problems
protection services,
(11 per cent), (iv) problems in claim settlement
(10 per cent), (v) unavailability of medicines/ 2. Tracking, measuring and building upon
equipment (9 per cent), and so on. Moreover, 6 per such improvements,
cent and 5 per cent of respondents complained 3. Generating demand for ESI services at the
about non-cooperation from the employers and ground level, and
non-submission of funds from the employer,
4. Ensuring buy-in of stakeholders through
respectively. On the other hand, analysis of the
participatory governance systems,
reasons for dissatisfaction in non-empanelled
private hospitals shows that the major reasons The parameters and strategies for the first two
were partial coverage of payment, problems in pillars related to supply are presented in detail
claim settlement, and lack of awareness about the in the ILO’s Technical Report - Recommendations
benefits of ESI. for Transformative Actions for India’s Employees’
State Insurance (ESI) – a contribution to Universal

X Figure 4.1. Theory of change for the ESI scheme

Scalable
Outcome-focused
implementation
capacity & awareness
models in selected
building programs
areas (2 yrs)

Financing & strategic Poor health-

purchasing Improve Generate seeking behaviour
supply demand
Health service Local
Supply Demand competitiveness
provision
Measure track Participatory
improvements governance Weak local
Governance
oversight

Performance Building local

indices adaptable ownership and
for varied contexts accountability
112 Accessing medical benefits under ESI scheme: A demand-side perspective
Key findings and recommendations

Health Coverage (2020). The recommendations contributions and having representation in

in this report focus on time-bound qualitative the governance system, the insured persons
improvements in three key social health insurance remain open to making additional payments to
functions of the ESIC, viz. health financing (and access better health facilities. In other words,
strategic purchasing), health service provision and the availability of ESI facilities in an area by itself
governance. These recommendations provide a may not ensure improved utilization and effective
phased transformation plan with short-medium coverage. Quality of services and ease of access
and long-term goals for improving supply-side remain crucial determinants of ESI beneficiaries’
issues. choice of a healthcare facility.
The remaining part of this chapter focuses on The study reveals that more beneficiaries prefer
specific recommendations pertaining to pillars ESI facilities to other public sector facilities.
3 and 4. The strengthening of these pillars, in However, in both in-patient and out-patient care,
turn, depends on addressing three key issues ESI facilities face stiff competition from non-
highlighted by the findings of the present study. empanelled private providers at the local level. This
reality holds despite the fact of the beneficiaries
incurring higher out-of-pocket expenditure in
4.3.1. Poor health-seeking accessing the non-empanelled facilities. It is also
behaviour depressing demand worth noting that in the districts covered by the
current study, the majority of the beneficiaries
The ESI beneficiary base in general demonstrates
were within a 10-kilometre distance.
poor health-seeking behaviour. A large number of
beneficiaries do not opt for treatment based on A key aspect of competitiveness of healthcare
self-assessment of the health need. At the same facilities is patient satisfaction. The present study
time, it is also clear that a range of other social has found that among those who used ESI facilities,
determinants (education levels, gender norms, about half were satisfied with the affordability and
and so on) and workplace-related challenges quality of the services. However, there is a need for
(availability of paid leaves, risk of wage loss, and a comparative assessment of quality perceptions
so on) may also be acting as deterrents against between ESI and other non-empanelled health
the utilization of ESI health services. ESI may service providers. This may reveal specific aspects
need to study some of these factors in detail to of service delivery, which if improved may attract
assess their relative impact on the health-seeking more beneficiaries.
behaviour of a typical ESI beneficiary. Currently,
the findings of the study indicate that such factors
4.3.3. Weak local oversight
may be substantially depressing the demand for
ESI health services at the local level. and stakeholder ownership
While many of these factors are beyond the The study found that, on the one hand, a
purview of the ESI’s functions, they nevertheless significant number of employers faced challenges
need to be accounted for in ESI’s strategies for with the functioning of nodal ESI offices, and on
outreach and effective coverage. These factors the other, insured persons reported poor access
also underscore the need and potential for ESIC’s and availability of services. Both these core
collaboration with concerned stakeholders such stakeholders did not report effective support from
as relevant departments of respective state grievance redressal mechanisms.
governments, development agencies, local civil
In parallel, ILO’s consultations with national
society actors and crucially, the employers.
representatives of the workers and the employers,
have revealed the unsatisfactory functioning of
4.3.2. Local competition tripartite governance structures at the state and
local level. Some felt that greater stakeholder
to ESI services
participation decentralized governance
The choice of healthcare facilities among those mechanisms, including in healthcare facilities,
who seek treatment reveals that ESI does not were critical to improving beneficiary satisfaction.
operate in a captive market. Despite paying The ESIC has already stepped forward in this front
 Accessing medical benefits under ESI scheme: A demand-side perspective
Key findings and recommendations 113

with the proposed formation of tripartite local

committees at the district level.
With a decentralized
The demand-side issues abetting under-utilization
of ESI health services can be summed up as
approach, the outreach
follows. ESI caters to a beneficiary base with poor and training efforts
health-seeking behaviour in a competitive local
service delivery landscape with weak decentralized
of the mission may
mechanisms of oversight to ensure the quality be pivoted in existing
and availability of its own services. In other words, ESI dispensaries and
the key issues faced by ESIC in improving health
service utilization are: hospitals.
1. Low demand due to:
(a) Poor health-seeking behaviour based
on various social and labour market 4.4. Recommendations
determinants
Based on the findings of the study and feedback
(b) Lack of strategic collaborations with state received from social partners, the ESIC may
and district level actors to address these
consider the following measures to deepen
determinants
effective coverage of its existing beneficiaries.
2. Local non-competitiveness due to:
(a) The assumption of a captive market 4.4.1. Outcome-focused
among contribution-making beneficiaries
awareness strategy
(b) The absence of updated knowledge on
the local healthcare provision markets in The ESIC may consider supplementing its existing
its areas of operation awareness programmes with the launch of a
(c) The absence of strategic purchasing results-oriented awareness mission. This mission
would have a two-fold purpose – outreach to
3. Weak oversight due to: beneficiaries beyond their workplaces and
(a) Unsatisfactory functioning of state and training of both beneficiaries and concerned ESI
local level tripartite governance systems staff in improved access and delivery systems.
(b) Lack of ownership of the Scheme among Importantly, besides the promotion of the ESI
the stakeholder ecosystem Scheme in general, the mission should have a
special focus on addressing the needs of female
There are two cross-cutting factors that feed into beneficiaries. With a decentralized approach, the
all three issues: outreach and training efforts of the mission may be
(a) Lack of awareness of the benefits and pivoted in existing ESI dispensaries and hospitals.
access mechanisms of the Scheme Further, the local tripartite committees should be
among beneficiaries roped in for building stakeholder ownership and
(b) The limited capacity of ESI institutional capacity for cascading training methods.
actors at various levels of administration In the wake of the ongoing COVID-19 pandemic,
and governance to respond to the ESI may also use ILO’s and its own expertise
dynamics of the healthcare provision
in addressing issues of OSH. To facilitate the
landscape
rejuvenation of member enterprises while
A sustainable positive transformation of ESI ensuring the safety of the insured persons, the ESI
performance can be achieved by addressing the may launch a dedicated OSH campaign for training
aforementioned issues on the demand side in enterprises and workers to protect against the
conjunction with the supply-side reforms. risks of COVID-19.
114 Accessing medical benefits under ESI scheme: A demand-side perspective
Key findings and recommendations

4.4.2. Improving ESI healthcare

service utilization ESI should focus on
Based on the findings of this study, it is important improving awareness
that ESIC adopts a bottom-up approach for
improving services. The same can be attained by
of its financial risk
progressively incorporating new information and protection benefits as it
evidence generated on the local implementation progresses in increasing
environments of the Scheme. An agenda for such
evidence generation is laid out in a subsequent the utilization of its
recommendation. services.
In order to achieve synergy of central reforms
with on-ground implementation, the central
and regional office leadership of the ESI may
impact of this positive feature. First, beneficiaries
actively engage with local tripartite committees
have reported significant levels of out-of-pocket
to identify location-specific sources of inefficiency.
expenditure even when using ESI’s own facilities.
As revealed by this study, they may be as simple
Second, the overall low levels of utilization of
as the timing of nodal offices or difficulty in using
healthcare services indicated an undermining of
online platforms. Fixing these simple issues may
the advantages of risk pooling. Hence, the desired
yield quick gains in service utilization.
level of financial risk protection can be achieved
The present study also underscores the significant by addressing these two realities. The latter issue
role of a weak primary healthcare system in the of low utilization has been dealt with the previous
ESI Scheme in overall lower service utilization and recommendation. The issue of significant OOP
significant levels of out-of-pocket expenditures. expenditures requires further study as laid out in a
Primary healthcare providers should be accorded subsequent recommendation.
the highest priority in the ESI reforms agenda.
Summarily, the ESI should focus on improving
States with functional IMP systems appear to be
awareness of its financial risk protection benefits
performing better than those that exclusively
as it progresses in increasing the utilization of its
depend on ESI’s own dispensaries. The ESI should
services.
engage with more state governments to expand
the IMP system for better availability of primary
healthcare services. 4.4.4. Improving overall
Based on the present study, it is further argued beneficiary satisfaction
that healthcare service provision in the Scheme
should shift from a demand-based approach to As mentioned earlier in this study, patient
a population-based approach. In other words, satisfaction is a widely used parameter to assess
the ESI should aim to expand services beyond the quality of healthcare and used as an effective
those who directly approach their facilities. One outcome indicator to measure the performance of
way of doing this would be to increase focus on the healthcare workforce and providers.
preventive health programmes that reach out to The study contends that periodic beneficiary
beneficiaries in their places of work and living. satisfaction surveys should be considered as an
effective device to track the effectiveness of all
4.4.3. Improving financial risk reform measures discussed here. Such surveys
should also take into account the internal diversity
protection of ESI beneficiaries of the beneficiary base as well as the varying
implementation environments across different
The secondary data show that that ESI’s scheme
regions. Ideally such a survey should generate
design already provides a relatively better level of
periodic performance matrices for different
financial risk protection compared to other public
implementing actors within the ESI system. For
and private health insurance schemes. However,
instance, health facilities (both ESI’s own and
two key findings of the study explain the low overall
 Accessing medical benefits under ESI scheme: A demand-side perspective
Key findings and recommendations 115

private empanelled) can be ranked by their 1. Determinants of health-seeking behaviour

performance (in turn strengthening ESI’s capacity of ESI beneficiaries
for strategic purchasing). (a) As identified in social and labour market
Similarly, this study has developed a model environments
composite index of ESI functioning of different (b) As variable across different regions
states. The ESIC may consider further developing
(c) As variable for diverse beneficiary groups
this index as per their specific needs for an annual
such as women, children, the aged and
public ranking of states by their performance in persons with disabilities
delivering ESI services.
(d) As variable across morbidity patterns
Another key aspect of the Scheme determining
beneficiary satisfaction is the effectiveness of the (e) As owing to patterns of out-of-pocket
expenditure on healthcare
grievance redressal mechanisms. The study has
found that the awareness and impact of these 2. Map of wider stakeholder ecosystem at the
mechanisms for beneficiaries are variable across state level
states. A related difficulty reported by users has (a) Identification of public and private
been the capacity to use ESI’s digital platforms. sector actors engaged in addressing
While the objectives and design of grievance the determinants of the health-seeking
redressal systems and ESI’s digital interventions behaviour of ESI beneficiaries
are positive, the ESI may want to assess their
(b) Exploration of common grounds for
reception among the target beneficiaries. Such collaboration to improve indicators of
an assessment may help adjust these systems for health-seeking behaviour
better utilization overall.
3. Understanding local healthcare provision
landscape
4.4.5. Generating evidence (a) In strategically identified regions
for ESI transformation (b) In catering to specific needs of women,
As mentioned above, in order for centrally children and other vulnerable population
groups
designed reforms to have the desired impacts,
the ESI must make such reforms compatible with 4. Assessment of non-empanelled providers’
diverse implementation environments. In other capacity and willingness to empanel with
words, supply-side reform measures should be the ESI Scheme
in synergy with demand-side issues reported 5. Review of the functioning of tripartite
in this study. To achieve this objective, the study governance structures at various levels in
has identified gaps in information and issues the states
warranting additional investigation. Together,
The evidence and information thus generated
these constitute a complementary agenda of
can be systematically utilized in developing more
further research that has been laid out below.
responsive reforms with measurable impact on
ESIC may undertake additional research on the local level utilization of ESI health services.
following issues:
116 Accessing medical benefits under ESI scheme: A demand-side perspective

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118 Accessing medical benefits under ESI scheme: A demand-side perspective

Annexures

Table 1: Values of indicators used for estimating index

% of ESIC employer to
total non-agricultural

# of IPs per employee

100,000 beneficiaries

100,000 beneficiaries
# of beneficiaries per

# of dispensaries per

Hospitalisation Rate
Expenditure (in Rs.)
# of employee per

# of hospital per
ESIC employer

OP Visits**
employers

Per capita
employer

(%)
Andhra Pradesh 1.40 28.00 1.08 117.00 0.110 1.69 2 561 11.29 251.00

Assam & NE 0.50 19.00 1.06 79.00 0.100 2.59 4 735 0.00 429.00

Bihar 0.70 19.00 1.09 79.00 0.325 1.95 1 998 1.54 23.00

Chhattisgarh 2.70 35.00 1.09 148.00 0.000 1.57 1 295 0.00 369.00

Delhi 8.60 23.00 1.10 97.00 0.055 0.45 5 555 6.72 130.00

Goa 7.20 33.00 1.12 143.00 0.106 1.27 1 604 3.71 99.00

Gujarat
2.20 28.00 1.11 123.00 0.196 1.70 1 951 5.00 136.00
(+DNHDD)

Haryana 6.10 45.00 1.12 196.00 0.061 0.67 1 207 7.23 321.00

Himachal
2.10 36.00 1.13 156.00 0.164 1.23 2 259 10.30 8.00
Pradesh

Jammu &
1.10 50.00 1.04 204.00 0.093 0.93 958.00 37.18 109.00
Kashmir

Jharkhand 2.90 20.00 1.09 82.00 0.204 1.43 2 401 4.69 438.00

Karnataka 4.00 36.00 1.12 156.00 0.074 0.91 1 986 8.00 106.00

Kerala+
1.90 22.00 1.10 93.00 0.307 3.28 4 281 45.24 1401
(Lakshadweep)

Madhya Pradesh 1.40 31.00 1.10 133.00 0.190 1.14 2 182 33.98 596.00

Maharashtra 3.30 28.00 1.10 120.00 0.073 0.36 866 0.62 59.00

Odisha 1.30 28.00 1.08 118.00 0.228 1.75 1 805 0.87 0.00

Punjab 2.90 29.00 1.09 123.00 0.177 1.55 2 490 35.62 815.00

Rajasthan 2.10 27.00 1.11 115.00 0.111 1.55 1 688 16.99 668.00

Tamil Nadu 3.40 34.00 1.10 144.00 0.060 1.27 1 636 10.62 505.00

Telangana 3.10 29.00 1.11 125.00 0.104 1.04 3 725 0.00 0.00

Uttar Pradesh 1.30 28.00 1.12 121.00 0.197 1.22 1 752 4.94 258.00

Uttarakhand 3.40 50.00 1.15 225.00 0.000 0.75 1 598 0.00 403.00

West Bengal 1.20 30.00 1.06 121.00 0.185 0.58 3 291 7.37 605.00

All India 2.30 30.00 1.10 129.00 0.113 1.10 2 165 9.42 322.00
 Accessing medical benefits under ESI scheme: A demand-side perspective
119

Table 2: Index values of indicators and average composite index

# of hospital per 100,000

Average composite index

Hospitalisation Rate (%)
# of employee per ESIC

Per capita Expenditure

% of ESIC employer to

# of IPs per employee

total non-agricultural

# of beneficiaries per

100,000 beneficiaries
# of dispensaries per
beneficiaries

OP Visits**
employers

employer

employer

(in Rs.)
Andhra
10.93 29.26 36.52 26.29 33.79 45.62 43.79 24.97 19.28 30.05
Pradesh

Assam & NE 0.00 1.61 18.21 0.00 30.62 76.30 100.00 0.00 32.95 28.85

Bihar 2.60 0.00 45.90 0.04 100.00 54.48 29.25 3.41 1.77 26.38

Chhattisgarh 26.42 51.54 42.14 47.24 0.00 41.39 11.08 NIL 28.34 27.57

Delhi 100.00 13.40 51.40 12.78 16.89 3.22 121.19 14.86 9.98 38.19

Goa 83.16 44.93 72.32 44.04 32.63 31.29 19.07 8.21 7.60 38.14

Gujarat
21.23 30.92 64.07 30.08 60.22 45.79 28.04 11.05 10.45 33.54
(+ DNHDD)

Haryana 69.15 83.97 68.81 80.56 18.83 10.47 8.81 15.97 24.65 42.36

Himachal
19.10 53.76 77.63 52.95 50.34 29.73 35.99 22.78 0.61 38.10
Pradesh

Jammu &
7.05 100.00 0.00 85.64 28.73 19.68 2.36 82.18 8.37 37.11
Kashmir

Jharkhand 30.09 3.21 37.75 2.54 62.83 36.66 39.68 10.37 33.64 28.53

Karnataka 42.63 55.06 67.55 53.14 22.66 18.73 28.95 17.69 8.14 34.95

Kerala+
17.43 10.06 53.33 9.80 94.37 100.00 88.26 100.00 107.60 64.54
(Lakshadweep)

Madhya
11.16 40.01 47.57 37.12 58.39 26.70 34.01 75.12 45.78 41.76
Pradesh

Maharashtra 33.98 30.15 52.17 28.38 22.42 0.00 0.00 1.37 4.53 19.22

Odisha 9.79 29.57 36.65 26.59 70.21 47.62 24.27 1.93 0.00 27.40

Punjab 29.31 33.13 40.97 30.21 54.33 40.62 41.96 78.74 62.60 45.76

Rajasthan 19.47 25.20 60.92 24.47 33.99 40.67 21.24 37.56 51.31 34.98

Tamil Nadu 36.13 47.34 54.63 44.60 18.54 31.04 19.90 23.48 38.79 34.94

Telangana 31.56 33.15 56.43 31.54 31.93 23.25 73.89 0.00 0.00 31.31

Uttar Pradesh 9.54 29.14 67.02 28.65 60.65 29.48 22.88 10.92 19.82 30.90

Uttarakhand 35.72 99.73 100.00 100.00 0.00 13.32 18.92 0.00 30.95 44.29

West Bengal 8.40 34.48 10.09 28.80 56.76 7.57 62.67 16.29 46.47 30.17
120 Accessing medical benefits under ESI scheme: A demand-side perspective

Table 3: Values of indicators used for estimating composite index

% of ESIC employer to
total non-agricultural

# of IPs per employee

100,000 beneficiaries

100,000 beneficiaries
# of beneficiaries per

# of dispensaries per

Hospitalisation rate
expenditure (in Rs.)
# of employee per

# of hospital per
ESIC employer

OP visits**
employers

Per capita
employer

(%)
Andhra Pradesh 1.40 28.00 1.08 117.00 0.110 1.69 2 561 11.29 251.00

Assam & NE 0.50 19.00 1.06 79.00 0.100 2.59 4 735 0.00 429.00

Bihar 0.70 19.00 1.09 79.00 0.325 1.95 1 998 1.54 23.00

Chhattisgarh 2.70 35.00 1.09 148.00 0.000 1.57 1 295 0.00 369.00

Delhi 8.60 23.00 1.10 97.00 0.055 0.45 5 555 6.72 130.00

Goa 7.20 33.00 1.12 143.00 0.106 1.27 1 604 3.71 99.00

Gujarat
2.20 28.00 1.11 123.00 0.196 1.70 1 951 5.00 136.00
(+ DNHDD)

Haryana 6.10 45.00 1.12 196.00 0.061 0.67 1 207 7.23 321.00

Himachal
2.10 36.00 1.13 156.00 0.164 1.23 2 259 10.30 8.00
Pradesh

Jammu &
1.10 50.00 1.04 204.00 0.093 0.93 958 37.18 109.00
Kashmir

Jharkhand 2.9 20.00 1.09 82.00 0.204 1.43 2 401 4.69 438.00

Karnataka 4.0 36.00 1.12 156.00 0.074 0.91 1 986 8.00 106.00

Kerala+
1.90 22.00 1.10 93.00 0.307 3.28 4 281 45.24 1401.00
(Lakshadweep)

Madhya Pradesh 1.40 31.00 1.10 133.00 0.190 1.14 2,182 33.98 596.00

Maharashtra 3.30 28.00 1.10 120.00 0.073 0.36 866 0.62 59.00

Odisha 1.30 28.00 1.08 118.00 0.228 1.75 1 805 0.87 0.00

Punjab 2.90 29.00 1.09 123.00 0.177 1.55 2 490 35.62 815.00

Rajasthan 2.10 27.00 1.11 115.00 0.111 1.55 1 688 16.99 668.00

Tamil Nadu 3.40 34.00 1.10 144.00 0.060 1.27 1 636 10.62 505.00

Telangana 3.10 29.00 1.11 125.00 0.104 1.04 3 725 0.00 0.00

Uttar Pradesh 1.30 28.00 1.12 121.00 0.197 1.22 1 752 4.94 258.00

Uttarakhand 3.40 50.00 1.15 225.00 0.000 0.75 1 598 0.00 403.00

West Bengal 1.20 30.00 1.06 121.00 0.185 0.58 3 291 7.37 605.00

All India 2.30 30.00 1.10 129.00 0.113 1.10 2165 9.42 322.00
 Accessing medical benefits under ESI scheme: A demand-side perspective
121

End notes

Honda A, Mclntyre, D, Hanson K, Tangcharoensathien V. Strategic Purchasing in China,

Indonesia and the Philippines. Manila: World Health Organization, Regional Office for
the Western Pacific, 2016. http://www.searo.who.int/entity/asia_pacific_observatory/
publications/country_comparative_studies/ccs_strategic_purchasing/en/
Selvaraj S. and A.K. Karan. Why Publicly-Financed Health Insurance Schemes are Ineffective
in Providing Financial Risk Protection. Economic & Political Weekly. 47(11):2012:61±8.
Suvidha Samagam, is a platform for redressing the grievances of stakeholders including
employees, beneficiaries and employers, which is organized once a month in ESIC offices
or ESIC hospitals. This platform also serves to settle all pending grievances.
124 Accessing medical benefits under ESI scheme: A demand-side perspective
Background, objectives and sample design

International Labour Organization

ILO DWT for South Asia and Country Office
for India
India Habitat Centre,
Core 4B, 3rd Floor, Lodhi Road
New Delhi – 110 003, INDIA