This impasse has been going on for years. No wonder Indian health insurance has the highest complaints rate as compared to other countries.
This is bound to happen when demand and supply are allowed free play in the healthcare industry. The market should always determine the price of a commodity.
By Tushar Chatterjee
Health insurance and healthcare are two inseparable elements for the insurance industry. If the cost of healthcare is too high, it will be difficult for insurers to provide health insurance at an affordable cost. When insurers are under compulsion to keep the price low, they will cut corners by imposing a whole lot of exclusions in the policy conditions. This is what our experience is. Rate of claim rejections continue to be high (except in group health covers purchased by big corporations). In many situations, only a fraction of the total healthcare costs are reimbursed. Out of pocket expenses continue to be high. This impasse has been going on for years. No wonder Indian health insurance has the highest complaints rate as compared to other countries.
This is bound to happen when demand and supply are allowed free play in the healthcare industry. The market should always determine the price of a commodity. But, in a country where people are yet to be as prosperous as the developed countries, high costs of medical treatment can lead even a middle-income household into penury.
Health insurance is more of a social security type arrangement, designed to indemnify a person of the financial losses suffered due to medical treatment including treatment that is needed after hospitalisation. The healthcare industry and health insurance industry are functioning at cross-purposes in most situations. Health insurers can remain useful to society only if the hospitals do not overcharge and avoid going for treatment protocols that are not required.
In India, the end result is both health insurers and healthcare providers manage to maintain their bottom-line at the expense of the customers and customers accept this as fait accompli. India can prosper only if people are strong and healthy. Rise in lifespan per se does not indicate good health of citizens. A disease infested body can neither do quality manual or intellectual work.
Use of artificial intelligence
What then is the way out? One solution is to delist all hospitals which thrive by exploiting customers with some health insurance cover. Artificial Intelligence should be used to find out cases where unnecessary medical protocols may have been used to extract money. To make health insurance more acceptable, there should be simpler health plans with very limited exclusions. Rather, let there be a battery of medical tests before a proposal is accepted. Let there also be a waiting period of, say, 90 days that can prevent customers from claiming reimbursement for treating diseases like cancer, paralytic stroke, renal failure and even Covid-19. But, after 90 days, there should be no scope for insurers to reject any portion of the claim whatsoever.
However, to make health insurance really alter the face of healthcare, the health insurers perhaps need to go one step further. As it is practically impossible to keep a tab on how each of their network hospitals function across the country, a model adopted by many health insurers of the developed markets can be looked into. The insurers are acquiring hospitals in major cities and making it mandatory for their customers to get admitted into these hospitals only. This arrangement ensures that the medical bills are never inflated and out-of-pocket expenses are kept at the minimum. US health insurer Aetna not only owns hospitals but ties up with specialist doctors also. This model can reduce the costs in India much more than the developed countries. The government also has to encourage more hospitals and medical colleges to come up.
The author is an insurance industry analyst
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