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Medical Aid Plan for voluntary health insurance, Tamil Nadu
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Subject Area="Health financing." Objective="Mobilising community participation."
Details for Reform Option "Medical Aid Plan for voluntary health insurance, Tamil Nadu"

Background: Voluntary Health Services (VHS), a non-profit charitable organisation registered as a society. Dr.K.S.Sanjvi founded it in 1958 to meet the comprehensive medical needs of poor and middle-income sections of the community in Adyar, Chennai. The health services of the VHS can be broadly classified according to the level of care provided. Primary health care is delivered through Mini Health Centres (MHC) whereas specialised curative and diagnostic services are provided at a hospital and a Medical Centre, which also acts as a referral centre for the MHCs. The hospital is fully equipped and staffed and has grown into a 405-bed institution with a range of departments. Action: The Medical Aid Plan (MAP), a health insurance scheme offered by VHS, was conceived in 1958. It is based on voluntary subscription of the people on the basis of a sliding scale in relation to income. The head of the family is considered as a member on payment of an annual membership fee and his family members are considered as dependents. The monthly income of the prospective subscriber is usually assessed on an informal basis, although formal income assessment may be conducted either through income certificate or ration cards in cases of casual employment. Non-subscribers use the services after payment of the amount charged according to their capacity to pay. The collection is from two sources, the Medical Aid Plan (MAP) and user charges. User fees are levied for all direct personal services using a two-tier tariff schedule. The first charges are graded on the basis of membership to MAP and the second according to income. The sliding fee scale is employed for both subscribers and non-subscribers of the MAP. There is no waiting period following enrolment; the individual or family is immediately entitled to free Out Door Patient (OPD) services at MHCs and inpatient treatment at the tertiary referral hospital at concessionary rates. Categories of the subscribers based on monthly income and annual subscription fees are as follows: S.N. Category Monthly Income Annual membership INR INR Individual Family 1 Free Upto 750 35 80 2 Low Income Group 751-2500 70 120 3 Middle Income Group 2501- 5000 125 200 4 High Income Group 5001 and above 200 350 VHS in Adyar is the nodal referral center for 14 Mini Health Centres (MHCs) operating in adjoining Kancheepuram district. (For details of the MHCs see PROD entry No.126 Mini Health Centre Scheme, Tamil Nadu). Results: The total number of OPD attendance in 14 MHCs was 44,000 during the year 2004. Of these, 26,000 were subscribers and 18,000 non-subscribers. Utilisation data of VHS: Facility/ Year 1999 2000 2001 2002 OPD utilisation 88910 69870 75501 57110 % of VHS OPD by free group 58% 63% 40% 44% VHS admission 8038 8226 7628 7404 % of VHS admission by free group 61% 45% 40% 42%

Cost Information not available for establishment and running of the facility. But there are 5 major source of revenue generation- 1) Patient collection from MAP scheme and user charge 2) Government grant 3) Interest earnings 4) USAIDS 5) Private recurrent donations
Place VHS hospital and Medical centre is located in Adyar, Chennai, and 14 MHCs under the VHS are in two blocks- St. Thomas Mount community development block and Thiruporur block of Kancheepuram district.
Time Frame In the period of 1958- 1963, VHS has grown into fully equipped and staffed Medical centre.

Risk pooling: Health insurance with charges set according to income makes services available to those with limited economic access to specialised care. Resource pooling: A nominal amount is encouraged from the weaker section of the society.


Uneven subscription: The majority of the subscription is from the free category. Low motivation for renewal: Prime motive for subscription is to avail the tertiary care services. After availing the services renewal rate of the scheme is low. Of the subscribed population only 30-35% renewed their membership in the period of 1999-2003. Distance factor: Subscription depends on proximity of the referral hospital to community As the distance increases the rate of subscription decreases. Open to abuse: Absence of waiting period between enrolment and availing of services offers opportunities for abuse.


Private health care facility run by NGO or corporate sector.

Who needs to be consulted

Corporate sector, State government.



The scheme is sustainable because of the fact that the single largest source of revenue generation is patient collection (both from user charge and premium collected), which accounts for 57% of the total income generated.

Chances of Replication

Replicable provided the initiative gets sustained support from the community and State government as well as from the Centre.


Pooling of resources according to ability to pay and cross subsidization is a growing concept in India due to resource constraints. Schemes can be made more viable by addressing issues such as the waiting period for utilizing the services after subscription and promoting the coverage through renewal of subscriptions.


Submitted By

Dr. Anuradha Davey, Research Consultant, IRMS, July 2005

Status Active
Reference Files
Schematic representation of MAP.doc Schematic Representation and Plan categories
health-Lok Satta.pdf Ensuring a Healthy Future - Lok Satta
VHS-Medical aid plan.jpg
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