Understanding the Links and Interactions between Low Sanitation and Health Insurance in India

October 3, 2016

India accounts for 33 percent of the global population without access to safe water and adequate sanitation. At the same time, few Indians have health insurance and therefore pay for most health care out of their pockets. Researchers will examine the link between improved health status and reduced health expenditures in poor, rural India by evaluating the effects of a community-based healthcare program and a sanitation program that provides access to credit to construct safe sanitation systems.

Good sanitation is indispensable for reducing many diseases and improving overall public health. There are also important economic consequences – the World Bank’s Water and Sanitation Program estimates that developing countries lose between one and seven percent of GDP annually due to poor sanitation. But improvements and investments in sanitation haven’t kept up with need in urban or rural areas. Experts in this field are still working to understand what mix of informational campaigns, credits and sanitation infrastructure can work to improve demand and usage. This evaluation will improve our understanding of what works by looking at the effect of combining better access to health insurance with informational campaigns and credit for constructing improved sanitation facilities. Researchers will also be building evidence on the links and interactions between safe sanitation and the availability of health insurance.

India is home to 594 million people defecating in the open; over 50 per cent of the population. (Unicef)

Research area: Early Childhood Nutrition, Development, and Health

Country: India

Evaluation Sample: Project 1: 120 Gram Panchayat (a local governing institution that usually covers one or two villages) in rural India, Project 2: Three Gram Panchayat in rural India

Timeline: 2012 - 2017

Intervention: Informational campaigns, micro loans, low-cost health insurance

Researchers: Orazio Attanasio, University College London; Manish Kumar, World Bank; Sonali Andrea David, World Bank; Britta Augsburg, Institute of Fiscal Studies, University College London; Bansi Malde, Institute of Fiscal Studies, University College London

Partners: Grameen Financial Services IndiaSAS Poorna Arogya Health Care Pvt. Ltd., MysoreUniversity College LondonEDePo at the Institute for Fiscal StudiesFINISH (Financial Inclusion Improves Sanitation and Health) Society; YASHDA, Pune, India



The Indian Government has worked to improve sanitation through its Nirmal Bharat Abhiyan policy (formerly known as the Total Sanitation Campaign), but safe sanitation uptake and usage remains low. The 2011 Indian census reported that almost 50 percent of Indian households do not have access to a private or public latrine, meaning that over half a billion people still defecate in the open. At the same time, the Indian Government has been expanding access to health insurance through its Rashtriya Swayam Bima Yojana health insurance program for the poor ( rsby.aspx). The expansion of health insurance makes it possible to look more closely at the links and interactions between improved sanitation and health insurance.

Ray Witlin / World Bank

Intervention and Evaluation Details


The two-year intervention consists of a sanitation awareness campaign, micro-loans and low-cost health insurance. In the first year, the project will implement a community sanitation education and awareness campaign, including theatre plays, community information sessions, and interaction with the Sarpanch (elected heads of the Gram Panchayat village institutions). Grameen Financial Services will also offer two-year sanitation loans up to Rs. 10,000 (about $164 US). In the second year, families will be offered low-cost health insurance through Grameen.

A secondary pilot study will analyze the potential of offering a free community-based insurance product to villages that have achieved and maintain government-designated “open-defecation free” status. Villages that have received this designation will receive the health insurance product the first year, and it will be renewed the second year only if the village maintains open defecation free status. Although the final health insurance product still needs to be designed, it will likely include free consultations with primary care providers (who may or may not be trained doctors and nurses), some free over the counter medicines prescribed by the health care workers and a discount for some specialist services.


The evaluation will use a randomized control trial. A random sample of 120 Gram Panchayat(typically one or two villages) will be assigned to either a control group or to one of two treatment groups: Both treatment groups will have access to sanitation microloans, which can help those who can’t afford to pay for improved sanitation, while one treatment group will also be exposed to campaigns to improve people’s awareness of sanitation issues and boost their knowledge of what they can do to build or improve their own sanitation facilities. In the second year, all 120 Gram Panchayats in the study will be offered access to Grameen-provided low-cost health insurance. Families in 60 randomly selected Gram Panchayats will be able to purchase the health insurance product at a subsidized price during the first two months. Researchers will measure the impact of the sanitation campaign on health by looking at the take-up of health insurance and the number and type of health insurance claims filed.

The secondary pilot study evaluation of a free primary care program for villages that maintain their “open defecation free” status involves three Gram Panchayats that received the government’s NGP prize, which is given to villages that meet certain sanitation requirements. If this exploratory study is successful, the Water and Sanitation Program plans a future evaluation with 40 villages, half of which would serve as the control.

Policy Impacts

Results will provide sanitation practitioners and policymakers with information on the effectiveness different approaches to reduce open defecation and promote the construction of improved facilities. The results will also help researchers develop a village demand-elasticity model for health insurance premiums.