ESIC has accumulated large reserves, has a poor claims ratio, while its hospitals have a mere 68% occupancy
A recent meeting of the board of the Employee State Insurance Corporation (ESIC) should offer perspective on the gross mismanagement of public healthcare infrastructure. At the meeting, the board decided to not renew agreements with various state governments on management of 110 of its hospital, as the occupancy rate at these facilities averaged a mere 40%, against the backdrop of affordable healthcare infrastructure in the country badly lagging demand.
Some of these hospitals were operating as mere dispensaries as they did not have qualified medical staff. It is not as if the ESIC’s record is any better—occupancy rates at these hospital averages a mere 68%. And, this rate has been declining for ESIC’s hospitals that it runs itself or has handed over the management to state governments.
As this newspaper has pointed out earlier, the ESIC happens to be one of the costliest providers of the service categories it has a presence in. Against a poor claims ratio—a mere 35-40% against private sector service providers’ above 90%—ESIC registered a surplus of Rs 16,227 in FY18 and had reserves of over Rs 91,000 crore, 75% of which was not earmarked for any specific purpose.
While this should have deterred the government from extending ESIC and instead diverting its funds to create a better social security net for employees, it has plans to expand the service. The new social security code released by the government envisages extending the scheme for unorganised workers as well.