Section 59 of ESI Act : Section 59: Establishment And Maintenance Of Hospitals, Etc, By Corporation

Explanation using Example

Imagine a scenario where the local community in a small town has a high concentration of factory workers who are covered under the Employees' State Insurance (ESI) scheme. The nearest ESI hospital is located 50 kilometers away, making it difficult for workers and their families to access medical services promptly.

To address this situation, the Employees' State Insurance Corporation (ESIC) decides, with the approval of the state government, to establish a new ESI dispensary in the town. This is in accordance with Section 59(1) of the ESI Act, which allows the ESIC to create medical facilities for the benefit of insured persons and their families.

Additionally, the ESIC explores a partnership with a local private hospital to provide specialized medical services that the new dispensary cannot offer. They negotiate an agreement, as per Section 59(2), where the private hospital will treat insured workers and their families, with the costs being shared between the ESIC and the hospital.

Furthermore, to ensure the sustainability and efficiency of the new ESI dispensary, the ESIC opts for a model of third-party participation. As per Section 59(3), they sign a contract with a private healthcare management company to commission and run the dispensary, thereby ensuring professional administration and high-quality medical care for the insured workers and their families.