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Strengthening a valuable scheme

The decision of the Employees' State Insurance Corporation (ESIC) to recommend raising of the monthly wage ceiling for coverage under the ESI scheme from Rs.7,500 to Rs.10,000, though welcome, is also an occasion to ponder over the serious problems that beset this unique social security system for organised labour. Contrary to what one would expect in the case of welfare schemes of such vast magnitude as the ESI — which covers medical benefit to workers and their families/direct dependants, compensation for wage loss, maternity benefit and cash benefit against employment-related disablement — especially in a developing country, the main problem faced by the Corporation has not been dearth of funds but substantial cash surpluses and underutilisation of capacity, even in respect of hospital beds. One obvious cause of this phenomenon is that, as the wages of the working class increase nominally, employees in their thousands go out of the purview of the scheme. The other major cause is traceable to the inherent weaknesses of the system that drive the insured to private medical practitioners, even if this entails additional and higher costs. Such weaknesses include the inconvenient location of the more than 140 ESI hospitals — which means long commuting in times of physical suffering and distress — poor facilities, indifferent service and cumbersome procedures at the hospitals and more than 1,400 ESI dispensaries.

The remedy lies not in "privatisation" of part of the infrastructure of the ESIC to ensure its full utilisation, as suggested some years ago by the Sathyam Committee, but in correcting the defects of the system. Equally important is the need to explore the potential for "private-public partnership" — namely tapping in full the scope for using the infrastructure and efficiencies of identified private hospitals and doctors to benefit the workforce covered by the ESI. For instance, well-run medical facilities created by many large companies for their own workforce could be made use of by the ESI system. The Centre has also said the ESIC would be willing to take over State government-run ESI hospitals. This has to be seen in the context of the dual control by the ESIC, which builds all hospitals and maintains them, besides paying out cash benefits and compensation, and State governments, which run these hospitals — this is seen as one of the prime causes of the weaknesses of the system. The only financial burden for the States is one-eighth of the cost of medical benefit, while the Central government incurs no cost at all, since the scheme is run entirely with contributions made by employees and employers. It is in the interest of the stakeholders — the employees and the employers — to develop realistic and innovative remedies to the deficiencies of the system. It is difficult to find a substitute for the comprehensive health and social security coverage that the ESI scheme offers to the workers.

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