An Impact Evaluation of RSBY on Hospitalization and Total Out-of-pocket Expenditure

Abstract: The Rashtriya Swasthya Bima Yojana (RSBY, literally "National Health Insurance Programme") was introduced in 2008 in India to provide financial protection for below poverty line population (BPL) and increase access to health care. RSBY is one of the largest health insurance schemes in the world and this paper introduces the first longer term impact analysis of RSBY on health care utilization, as well as evaluate differing effects on rural and urban households separately. We use a triple difference approach in order to estimate causal "intention to treat effects". The analysis was conducted on recently published data from the India Human Development Survey (IHDS), which provides better identification of BPL households than previous surveys. Finally, we validate previous research on the impact of RSBY on total morbidity expenditures and likelihood of catastrophic expenditure using the IHDS dataset. We find very different effects of RSBY on rural and urban households. While there is suggestive, but not statistically significant, evidence that RSBY seems to decrease total morbidity expenditure by as much as 30% for rural households, there is no effect at all on urban households. There's evidence that RSBY induces longer stays at healthcare facilities for urban households, statistically significant at the 10% level, while there is no effect on rural households. Our research suggests that RSBY partly achieves its goals: it alleviates morbidity expenditures for the rural poor, and the scheme increases health care utilization, but only among urban households.