Effectiveness and Efficiency of Government Health Insurance in India: Impacts of Strengthening Hospital Monitoring and Fraud Control

Abstract

Low- and middle-income country (LMIC) governments have rapidly expanded public health insurance programs that contract private hospitals for service delivery to expand healthcare access and financial protection for poor households. However, designing systems to effectively detect and deter fraud by profit-motivated private hospitals is challenging in contexts with limited institutional resources. While increased hospital monitoring can potentially reduce fraud and improve program efficiency, there is a risk that hospitals may transfer the financial burden to patients through unauthorized charges or poorer care. Public health insurance schemes are flagship programs across India's states aimed at achieving universal health coverage, but concerns persist regarding claims fraud by hospitals, and evidence suggests these schemes may not be providing truly free care. This study seeks to identify government interventions that can help improve the efficiency of public health insurance schemes and is conducted with, and at the request of, the Government of Andhra Pradesh (GoAP). We use administrative and survey data to measure the impact of increased hospital oversight on fraud, and evaluate the broader effects of increased monitoring on hospital behavior and patient outcomes.