by Dhirendra Pratap Singh
Health insurance has been the fastest growing segment in the non-life insurance industry in India over the last few years. According to IRDA, in 2009-10, industry premium revenue has grown about 12-fold from a level of Rs 675 crore in 2001-02 to Rs 8300 crore, in just 8 years.
IRDA report says that insurance currently pays less than one-tenth of all hospitalisation expenditure in the country but the share is much larger for hospitals in metro cities and large towns, where it could be 30-40 percent. Also, still there are schemes that do not cover all procedures, because of which, there are substantial out of pocket payments even for those covered by insurance.
IT in Health Insurance
Information technology (IT) plays the most critical role in automating the fulfillment processes in customer facing businesses such as insurance.
Anjana Agrawal, Head of Customer Services and Operations, Max Bupa says, “Ability to compare different insurance options, seek an immediate clarification on all queries, which could arise while surfing the net (similar to phone a friend), ability to select and buy a product on-line (similar to on-line banking), being underwritten over the phone including a remote medical examination along with a generation of medical report/prescription (similar experience as you are sitting in a Doctor’s clinic and is being examined by them) and completing a transaction of delivery of health insurance certificate in few minutes is no more a dream. Organisations have been able to utilise technology and other electronic gadgets efficiently for a world-class customer service.”
She adds, “From a customer perspective, real customer service experience starts with an after-sale-service, wherein the customer would like to have a personalised 24×7 service, along with availability of emergency services, something similar to having a personal medical assistant, who can prepare a daily wellness schedule and track the implementation of the same, fulfill day-to-day medical needs, guide and nurture the concept of proactive caring and ensure availability of medical facilities at just a click. Technology in today’s environment has capability to provide all this at an affordable cost right at your doorstep.”
Health insurance is one of the fastest growing business lines in general insurance. McKinsey forecasts a `25000-30000 crore health insurance market by 2015, at a CAGR of 25-30 percent (for perspective, CAGR for 2001-02 to 2007-08 is 39 percent). This business involves various stakeholders and voluminous data capture and transfer takes place between the stakeholders. This includes the client, intermediary, the insurance company, the TPA (if involved), the hospital, doctors and diagnostic centers. All the stakeholders require excellent IT infrastructure in terms of hardware as well as software.
Shreeraj Deshpande, Head Health Insurance, Future Generali India Insurance Co. Ltd says, “The capabilities of each of the stakeholder in capturing data effectively and transferring the data across are very important. Health insurance involves personalised services and the efficiencies required are of a much higher level. Extensive quality data, analysis and inference are very vital for a viable health insurance portfolio. Health insurance underwriting as well as claims processing system capabilities play a pivotal role. The extent and quality of data captured by an insurance company helps in more efficient product designing and pricing.” He adds, “Fraud detection is another important area in health insurance where IT has a major role to play. New regulatory initiatives such as portability require quick retri and exchange of data within insurers and would require the insurance companies to have excellent IT systems.”
Sharing the benefits of information technology in health insurance, K.Murali, Head Health Underwriting, L&T General Insurance Co. Ltd says, “India being an IT powerhouse, no wonder we have progressed far in using technology. RSBY is a good example to show where we use biometric cards, paperless claims processing and electronic transfer of funds. The best part is that the lower strata of the society benefits immensely with use of technology in this scheme. For others, there is e-filing of claims, online cashless authorisation and web based tracking of claims. In future, customers would be able to enter their claim details to get online approval and claim amount transferred to their account instantly, with the use of rule engines.”
Of course there will be barriers to the adoption or increased use of IT in healthcare, which include infrastructural ones like power supply, telecommunications and connectivity issues, as well as poor IT awareness. But an information based approach will form the cornerstone for a modern healthcare system that will be more efficient and transparent and in the long term will result in better quality and coverage. A national health data network, electronic records, and standards will form the foundations of an information based healthcare system.
India is a developing country with over 26 percent of the population still living below the poverty line. Almost 35 percent of the population is illiterate. The living conditions in semi urban and rural India, makes the population living there vulnerable to various diseases. Nearly one million Indians die every year due to inadequate healthcare facilities and 700 million people have no access to specialist care and almost 75-80 percent of medical specialists live in metros and urban cities. Most of the people in India refrain themselves from better medical facilities offered by private players due to the exorbitant expenses. Some avoid medication in totality due to expenses. There is very little awareness about medical insurance in India.
Healthcare financing in India is unique with considerably low share of public financing in total healthcare financing. It amounts to only about one percent of the GDP, whereas the average share of public financing in other low and middle-income countries is about 2.8 percent. Moreover, a significant portion of the public spending goes into tertiary care, whose beneficiaries are mostly non-poor.
An information based approach will form the cornerstone for a modern healthcare system that will be more efficient and transparent and in the long term will result in better quality and coverage. A national health data network, electronic records, and standards will form the foundations of an information based healthcare system
Further, in the past decade our industry has seen considerable development and innovation pertaining to the sales process, which involves the sharing of information at the application stage. But sadly the pace of development has been far too slow when it comes to the claims processes. Antony Jacob, CEO, Apollo Munich Health Insurance says, “We still heavily depend on snail mails or facsimiles to share information resulting in high turn-around times and customer dissatisfaction. This may be due to the fact that the processes related to claims require integration of multiple stakeholders including thousands of healthcare providers.” He adds, “IT should play a significant role in enabling real time data sharing requirements between the claims facilitators and providers. This may be possible by creating a data highway where each customer, provider and claims facilitator can work in tandem for faster decision making through real time sharing of information.”
Public spending on healthcare is stagnant and most of this is by the states. There is an enormous variance across states, and the overall result is that healthcare infrastructure, utilisation, and disease burden compare unfavorably with the average of even low income countries. Availability of physicians and hospital beds are low, despite the fact that India accounts for 20 percent of the global disease burden.
Also, since the poor still depend on the public health system for major health services, non-existent, poor, or underutilised medical facilities and a shortage of medical staff often force patients to travel large distances to get specialist care. Lack of standardised data transmission protocols can make the process very inefficient. The hospitals and insurance companies will benefit immensely from co-operating in the development of protocols for efficient workflow.
Health insurance can improve access to good quality healthcare only if it is able to provide for healthcare institutions with adequate facilities and skilled personnel at affordable cost. Given this scenario, the challenge, then, for the industry and policy-makers is to find ways to improve upon the existing situation in the health sector and to make equitable, affordable and quality healthcare accessible to the population.