Start Date:  March 2011   End Date:  March 2012   Status: Completed

Recognising that household expenditure resulting from catastrophic illness drives the poor into a vicious cycle of poverty, debt and ill health, India's Eleventh Five Year Plan (2007-2012) highlighted the need to plan for universal health coverage building on the experience of health financing schemes established in a number of states to address the financial burden of serious illness in poor households. Madhya Pradesh introduced the State Illness Assistance Fund (SIAF) in 1997-98 to provide financial assistance for the treatment of serious illnesses, to households living below the poverty line. The Government of Madhya Pradesh commissioned an independent review of the SIAF with an aspiration to enhance the effectiveness and efficiency of the scheme. M Rao was invited to lead the review.


The aims of the study were to

  • Undertake a rapid review of the State Illness Assistance Fund (SIAF) in relation to its objectives
  • Examine the extent to which the SIAF was contributing to achieving overall health improvement in Madhya Pradesh and in particular, its accessibility to the targeted BPL population
  • Assess how the scope of the SIAF could be expanded (in terms of its population coverage, budgetary provision and types of diseases covered) and recommend an appropriate mechanism for its effective delivery.


The methods included a literature review and collation of evidence from health financing schemes in other developed and developing countries, analysis of secondary data obtained from the SIAF database, consultations with leading policy makers in the Government, members of DFID's Technical Assistance Support Team in MP, senior staff of public, private and trust sector health delivery organisations and district level health officials and focus group discussions with local government representatives, members of local communities and beneficiaries. A questionnaire survey of a small sample of beneficiaries or care givers of beneficiaries was also undertaken, to understand their experience of accessing and utilizing the scheme. Lastly, the review team facilitated a stakeholder workshop in June 2011 to present the preliminary findings and to test out the team's conclusions and recommendation with the stakeholders before finalising the report.

Main Findings

Positive findings were that the SIAF had been allocated increasing levels of funding during the previous decade and the scheme was perceived as highly beneficial by the 'below poverty line' (BPL) individuals who had received quality care without incurring catastrophic out of pocket expenditure.

But overall, only a small proportion of BPL families benefited from the scheme particularly in the poorest districts of MP, with funding limited to few treatments and at private or trust hospitals. Out of pocket expenditure was incurred despite the availability of the scheme. Several financial and non-financial barriers militated against the largely illiterate or semi-literate families having  access to the scheme funding. These included lack of awareness of entitlements and eligibility for grants, a complicated and bureaucratic funding application process and confusion regarding diseases and treatments covered by the scheme and the process of applying for funding. Inefficiencies were also found in relation to treatment package costs  and verifications of treatment.  


The review had had significant impacts. These have particularly included contributions to the development in 2011-2013 of a more efficient financial support scheme for care of the seriously ill in MP. More specifically, the report's recommendations resulted in the constitution in August 2011 of a State Steering Group in MP, tasked with overseeing the restructuring of the SIAF. That Group has since acted on a number of other recommendations of the report through the promulgation of Government Orders and directives. These included significant changes between October 2011 and October 2012 to the management of the fund (including a boost to its overall value); strengthening the leadership and management in the unit responsible for overseeing the fund delivery; renegotiating treatment package rates with healthcare providers; devolving powers to authorise funds at district level; and better verification of patient treatments funded by the scheme [b]. Other reforms currently underway include the introduction of better accreditation procedures for providers and reduction in the bureaucracy around securing funds. The development and implementation of this more efficient health financing system is particularly beneficial to MP’s many poor citizens.

Patient feedback forms, introduced in 2013, are already achieving a respectable and growing response rate of 50%, with the feedback now being linked to the Management Information System (MIS) to ensure that patient experience informs health care provider monitoring and evaluation and feeds into decisions about the selection or de-selection of those commissioned to provide care funded by this scheme. In a move marking a significant step towards the eventual development of a single, comprehensive health service system, the MIS now integrates the myriad schemes providing various healthcare entitlements.

Contact us

Project Lead: Professor Mala Rao

Project Team: Lipika Nanda, Sandhya Kanneganti, Ranjani Gopinath, Subodh Kandamuthan, Sofi Bergkvist, Neena Minhas, Crystal Morris

Funder: FID

Project Partners: Administrative Staff College of India, Hyderabad

Mala Rao

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