Bhargav Dasgupta
MD and CEO, ICICI Lombard General Insurance Company

ICICI Lombard GIC Ltd. is the largest private sector general insurance company in India.  In an interaction with eHealth, Bhargav Dasgupta, MD and CEO, ICICI Lombard General Insurance Company shared his perspective on the emerging health insurance environment in India vis-a-vis the world. Excerpts:

How has the health insurance sector evolved over the past years?

Health Insurance in India has evolved as the second largest segment within general insurance. It is also amongst the fastest growing with a CAGR of more than 25 percent in the last two years generating a premium of Rs. 9,210 crore in 2009-2010 contributing 26 percent to the industry. The drivers of growth include higher affluence of the Indian middle-class, increase in various lifestyle-related diseases, rising health care costs and growing awareness about the benefits of health insurance.

A buoyant economy and the resultant increase in the workforce have also given a boost to Group Health Insurance taken up by corporates for their employees. Another key impetus has come from the government, which is increasingly taking the insurance route for implementation of its social health schemes. The liberalisation of the sector along with the entry of stand-alone health insurance companies has triggered a higher level of competitive intensity as well. This has resulted in the industry seeing advanced levels of innovation with various product offerings for different segments including senior citizens, corporates, below poverty line and the affluent class. However, with health insurance still contributing to less than 4 percent of healthcare spends, there is significant potential that is yet to be realised.

How important, from a healthcare insurance point of view, is to have a national health IT policy or standard based IT practices in healthcare?

Leveraging technology for growth has been one of the key mantras of the industry. Implementation of Rashtriya Swasthya Bima Yojana (RSBY), the government-sponsored mass health insurance scheme through biometric cards is a prime example of the same, exemplifying standards based approach to the health insurance life cycle. Standardisation in the way technology is used is a significant business enabler with wide applicability in the areas of hospital billing systems, health claims forms, sharing of claims data within the insurance industry as well as universal accessibility of health information pertaining to individuals. Commonality of technology protocols and data structures would facilitate frictionless exchange of information between the various stakeholders leading to higher process efficiencies and a better customer experience.
What is the response that you have seen from the healthcare provider segment in terms of collaborating with insurance providers in making a seamless working environment feasible? What are the challenges that you see?

There are a number of initiatives being undertaken by various stakeholders towards a more collaborative industry environment. This includes the industry bodies, which also have a representation from the healthcare provider segment. The primary challenge is the implementation of agreed protocols as the health care sector is largely unregulated. Different providers follow different treatment protocols and billing practices for a given illness of injury and the final objective is to define a commonality of approach across stakeholders.

In India, the providers of care tend to over provide care. Do you see this as a bottleneck in growth of the health insurance sector?

Quality of outcomes per unit cost is a metric that can be used to benchmark healthcare providers. The experience in a number of countries also suggests that the high cost of healthcare is not necessarily correlated with quality of outcomes. There is also empirical evidence to indicate that sharing of information on quality of outcomes with consumers helps in improving the same at a lower per unit cost. India historically has had a low-cost, high-quality health care delivery platform as compared to other nations and we must sustain this advantage.

Standardisation of treatment protocols is a part solution to this challenge. Agreement with providers on package rates for treatment of various illnesses is another approach to address this issue.  

A lot of companies in India are faced with the challenge of marketing their health insurance products as our healthcare insurance penetration is very low. Why do you think health insurance is still not working in India?

The industry has taken several significant steps in setting benchmarks of customer service for building trust. The high growth rates of the segment are an indication that these efforts are bearing fruit. There is a wider range of health insurance solutions available and the awareness and understanding of the product amongst customers continues to grow. Innovative solutions have been developed to reach out to the under privileged segments as exemplified by the RSBY program and the provision of cashless OPD for weavers. It must be said that the health insurance industry has seen significant positive developments in the recent past towards increasing category penetration and these are in line with the stage of evolution of the industry. 

 Affordability is a challenge in making health insurance mandatory. In a large country like India, implementation of such a mandate will also be a challenge, though it could possibly be given to organized employers for permanent and temporary employees

Do you think making health insurance mandatory for everyone can address the issue of low health insurance penetration?

Affordability is a challenge in making health insurance mandatory. In a large country like India, implementation of such a mandate will also be a challenge, though it could possibly be given to organized employers for permanent and temporary employees. The below poverty line population would require intervention from government and the social sector for funding. For the rest, higher incentives in terms of tax benefits could partly serve the purpose.

However, the key to driving health insurance penetration in a sustainable manner lies in gaining an insight into the healthcare needs of the uninsured, developing products aligned to those needs, building robust financing models with cost-effective delivery platforms in addition to encouraging greater awareness among masses about the need for health insurance. 

The experience of developed markets also suggests that policy decisions on health insurance are a definitive means of assuring affordable, accessible and quality healthcare to a large uninsured population leading to a significant impact on a country’s economy. Needless to say, these efforts must be targeted towards improving the quality of health care outcomes per unit cost in order to build a sustainable solution to universal health insurance.

If health insurance is mandated in India, what would it cost? What healthcare services would it cover? And, how would it be paid for?
The cost of health insurance is a function of the coverage provided and the policy terms and conditions. A basic policy would cover hospitalization and offer cashless access to health care. There are several routes to financing health insurance including employer supported, government funded, community based plans as well as self funded and would depend on the segment being targeted.

What would be your thrust areas for the coming years? What are the expansion plans for ICICI Lombard?

Technology based solutions for distribution of health insurance and claims servicing would continue to be a key area of focus. The ability to handle scale efficiently is a competitive advantage and in the last fiscal ICICI Lombard handled over 50 lakh health claims across customer segments in retail, corporate and rural. Strengthening relationships with network providers across geographies for ensuring enhanced service levels to our customers will continue be an important thrust area.

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