Global Health Ideas

Finding global health solutions through innovation and technology

13 Cents a Month for BOP Health Insurance

A C.K. Prahalad speech was recently profiled by a Wharton newsletter, in that lecture he spoke about Indian farmers paying 13 cents a month for health insurance which allowed:

Narayana Hrudayalaya, a pediatric heart hospital in Bangalore, to operate upon 25,000 farmers and to offer free medical consultation to 85,000 more. “This year we have increased the monthly contribution by farmers to Rs 10 (25 cents) a month, but still, we hope to cover 13 million individuals using the world’s largest telemedicine network to deliver critical health services to rural areas…

This displays the power of pooled community based insurance. The first thing that came to my mind is that this has a shot of working because India is a place with massive volume, human resources and technological capacity. These are sweeping generalizations, but they are worthing thinking about when comparing India to other developing regions that do not have the same capacity on these three fronts. Never-the-less this is a great example and experiment that may hold powerful lessons.

 ‘The Poor Deserve World-Class Products and Services’
Published: January 24, 2008 in India Knowledge@Wharton


Written by Aman

January 28, 2008 at 10:16 pm

6 Responses

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  1. Every country and insurer should take note of this. Making insurance serve the people it’s designed to protect rather than the opposite is a worthy goal we should be adopting as an industry.

    Health Broker

    May 30, 2008 at 4:16 am

  2. I find the figures staggering – cannot believe that you can deliver health care for so little insurance. If these figures are correct – then the World should take notice.

    Health Links

    February 25, 2008 at 4:03 pm

  3. I’d love to know how they use telemedicine. I assume long-distance diagnosis, but maybe it’s something more interesting.


    February 25, 2008 at 9:08 am

  4. Maybe the numbers presented aren’t accurate (which wouldn’t be new for Prahalad), but if they operated on 25,000 farmers, and received monthly payments of 10Rs/$.25 ($3/year) from 110,000 (85k+25k) farmers, then if you discount the cost of “free” consultations (~$2?) and non-operable conditions (malaria? ante-natal?), then they received about $13.20 for each of the 25,000 farmers that were operated upon. While $13 is clearly an improvement on $0 it seems to me that this health insurance still needs to be subsidized. The Wharton article clarifies this by also saying that the government provides a 2.5Rs/$.07 subsidy ($.84/yr).

    As far as models go, by implementing care under a health insurance model (as opposed to “free’ clinics) engages the “BOP” as financial contributors to their own health and economic development. But this is clearly not “eradicating poverty through profit,” and entrepreneurship (as described in the article) requires a little more. Thus the hospital turned the position of their health clinics in the community into income by becoming retailer channels. That’s really great considering that the government clinics I visited in Uganda were astonishingly scarce of supplies and medications.

    The strength of what Prahalad says is that he makes space for entrepreneurship, space for people to think of new (user-oriented?) ways to address poverty without being a financial black hole. But I still wince at the acronym “BOP”; I don’t know if we can actually expect the extreme poor (the real BOP) to escape poverty (or just poor health) by becoming consumers.

    Melissa Ho

    February 14, 2008 at 8:01 pm

  5. Good info. and reading. I would definitely bookmark you to check for new updates.

    Dean Calvert

    February 10, 2008 at 11:49 pm

  6. Wow, thanks Aman. It’s good to see Prahalad doing more research on BoP models – I keep hearing a lot of the same “success” stories and that’s not good for the growth of the space. Thanks again for the link.


    January 31, 2008 at 10:14 pm

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