Employee healthcare reforms in India

HealthcareEver since the process of economic reforms was launched in India in 1991, employee healthcare reforms became a part of the government’s national socio-economic agenda. In addition to the involvement of the public and private sector corporations, various government, international and multi-lateral health agencies, and other private stakeholders such as private health insurers got involved in the reform process.  

Particularly, during the middle of the tenth five year plan (2004-05 onwards) the employee healthcare reforms received a very high priority from the government of India. Now, the health sector has become one of the key areas, with a major focus on providing primary health care services. The Employee State Insurance Corporation runs a scheme called ESI, which provides six social security benefits to employees: Medical benefit, sickness benefit, maternity benefit, disablement benefit, dependant’s benefit and funeral expenses. (1)

However, till today one of the handicaps faced in the path of employee healthcare reforms has been the lack of sufficient evidence based information about, and the impact-assessment of various initiatives (such as Balika Samriddhi Yojana, Nutrition Program for Adolescent Girls, Maternal Health Program, etc.) undertaken as part of the reform process. Looking into this weakness, the Ministry of Health and Family Welfare in conjunction with the World Health Organization (WHO) Country Office has undertaken a review and documentation of these initiatives in India. This is an ongoing review process that was started in the year 2004.

The initiatives that are under review are in the area of employee health care financing, health insurance, health system organization, delivery and management, public-private partnerships, and reforms related to human resource management in public and private sector organizations. (2)
As part of the reform process, the government of India is also increasingly adopting alternative means of financing such as seeking loans from the World Bank and other international financing institutions to upgrade and manage the labour welfare and health programs (such as National Family Welfare Program and Employee State Health Insurance Scheme) in the country. At the same time, the government has encouraged the establishment of corporate hospitals in order to improve the quality of healthcare. These corporate hospitals have tie-ups with most insurance companies and large business organizations to provide superior healthcare for the employees. Apollo Hospital chain, Escorts Hospital, Tata Memorial Hospital, Max Healthcare, and Fortis Hospital chain from Ranbaxy, are some of the premier corporate hospitals operating across India at present. (3)

At the grassroots level, the government of India has encouraged NGOs to play a pivotal role in delivering healthcare services to the working population. The reforms have been initiated to create a Public Health and Panchayat system collaboration, special funds have been allocated for health policy research, and there is a thrust on improving the health dynamics of the working women. (4)

However, in comparison to the developed economies of the western world, India has a long way to go in terms of employee healthcare. There are various inherent weaknesses in the national health policy. For instance, providing employee health insurance cover is not a mandatory requirement in the private sector in India till now. This is a fundamental weakness of the healthcare system in India that needs to be addressed urgently. Reforms in this area will pick up more pace when the government provides incentives and imposes stricter regulations on the employers in both public and private sectors in India.


- Vikas Vij (views expressed in the article are that of the author)


(1) http://www.ehealthonline.org & http://india.gov.in/citizen/health/employee_state.php

(2) http://www.whoindia.org

(3) “Informing Reforming,” The Newsletter of the International Clearing house of Health System Reform Initiatives ICHSRI, April-June 1997, pp. 7-11.

(4) “Health Sector Reform in India: Perspective and Issues,” by Thaneshwar Bir (2006), Arise Publishers