Chit funds originated in India but spread through traders and migrants to South-East Asia. The system allows subscribers to withdraw a large sum early to meet major expenses such as a wedding or funeral and repay it through the monthly instalments.
Employers who pay their employees’ group health insurance premiums can instead invest in chit fund schemes.
With chit funds, a group of individuals can make a monthly subscription installment that is equal to the monthly installment for health insurance cover and the accumulated money can be deposited in a joint savings account and made available to anyone who falls ill to defray expenses up to the coverage limit.
Private health insurance is rapidly becoming the primary source of health financing in India through public–private partnerships.
public-funded health services in India are grossly inadequate, with 48.2 per cent of total health expenditure being paid ‘out-of-pocket’ by patients. Private health care is generally unregulated, leading to concerns over quality and access to care.
The bottom line, though, is that without adequately trained and skilled health personnel doctors, nurses, lab technicians and others insurance, irrespective of the payment system, will never be able to provide rational medical care.