Democratising Indian health insurance
The existing
health insurance schemes can potentially cover 70% of the population – nearly
95 crores individuals, though actual coverage is lower (Table 1) . At present 3
categories of health insurance schemes are working in our country.
The potential coverage through India’s existing health insurance schemes –
1.government subsidized schemes,2.social health insurance schemes, and 3.
private voluntary schemes – is around 70% of India’s population. Nearly 95 crore
individuals or 21.5 crore families are eligible for or covered by health
insurance. The actual current coverage is lower since not all households
eligible for Government subsidized insurance are currently covered, and due to
the overlaps between different health insurance schemes. However, since
Government subsidized schemes are expected to eventually cover the eligible
population, India has a potential health insurance coverage of 70% based on the
existing landscape.
so, still
30% of the population(40crores) those comes under middle class category devoid
of any insurance coverage for their health care.
But, according to Minister of State for Finance Bhagwat Karad in a written reply to a Lok Sabha - the number of persons covered under health Insurance stood at 52.04 crore!
- The determinants of health: genetics, behavior, environmental and physical influences, medical care and social factors. These five categories are interconnected.
- At any given moment, 4 to 5 crore people are on medicine for a serious illness, while public(both central and state govts) funding for comprehensive health care accounts for only around 1% of GDP.
- The biggest healthcare challenge in India? Limited access to quality healthcare: Primary health centres and sub-centres are often understaffed and lack critical infrastructure to meet patient needs & Affordability.
- The current scenario of health insurance industry in India? The India health insurance market size reached US$ 120.1 Billion in 2022. Looking forward, IMARC Group expects the market to reach US$ 219.1 Billion by 2028, exhibiting a growth rate (CAGR) of 10.64% during 2023-2028.
- The current status of India's healthcare system? Inadequate Medical Infrastructure: India has a shortage of hospitals, particularly in rural areas, and many existing healthcare facilities lack basic equipment and resources. According to the National Health Profile, India has only 0.9 beds per 1000 population and out of which only 30% are in rural area.
- The potential of health insurance in India?India's retail health insurance sector has the potential to give a 20% yearly return on equity (RoE),
- AB- Health and Wellness Centres initiative for the delivery of comprehensive and integrated primary care & coverage of tertiary care for vulnerable populations
why such low penetration
of health insurance in india even after 75yrs of independence? Some of the major
factors behind the low health insurance penetration levels in India include low
awareness levels, lack of affordability, and limited reach and availability of
options for various segments of the population. Of these, the lack of financial
literacy and low awareness levels about health insurance policies and related
terms remain the top reasons why the vast majority in India fail to understand
the importance of a health insurance policy, particularly in the face of
rising healthcare costs and change in lifestyle leading to more
health risks.Can technological interventions make health insurance truly
accessible and facilitate 100 % penetration?
Recently Insurers, hospitals, NHA met and readying an initiative to make all health insurance claims cashless:
The goal : Making all health
insurance claims cashless . Aim is to do away with reimbursement claims;
The players : Insurance companies,
hospitals(Represented by IMA) , National Health Authority (NHA), insurance
regulator IRDAI and major stakeholders like PHARMA&medical
devices,etc...
It
needs Standardization of cost of healthcare in different hospitals across
cities.
First of all, why insurance?
The GDP of a
country is dependent on how healthy its population is. “A healthy individual
can contribute positively towards nation’s growth. The growing medical
inflation and increasing cost of healthcare should prompt people to buy health
insurance to secure their health or else it will lead to a medical debt”.
In India
best quality treatments are available now. But do they affordable? Are they within
the reach of majority population?
Like all
other industries, healthcare has seen massive changes and price increases in
recent years. According to data, medical
inflation in India is above 20%, up from 8-9% in recent years.
Why is India lagging behind other
countries in health insurance?
Health
insurance products remain complex as features like exclusions, waiting
periods, deductibles, co-payments, and sub-limits are difficult to interpret
People are
behaviorally biased against spending on a future expense that might not
materialise, especially at a high cost.
Policyholders
have had poor claims experience leading to limited trust in insurance
companies
Few Myths are also prevalent in our
country.
Myth#1:
Indian insurance companies do not give claims.
Myth#2:
Conditions like cancer and diabetes are not covered.
Myth#3:
Corporate group health insurance plan provided by employer is enough.
Myth#4:
Health insurance in India is expensive
Myth#5: People who smoke and drink alcohol are not eligible for health
insurance
Myth#6:
Alternative treatments are not covered
Myth#7:
Hospital networks are available only in big cities
Role of technology in insurance
penetration?
Technology
and advanced data analytics will enable better data capture and stratification
of individuals basis their health-seeking behaviour, medical history, and
financial discipline. This vast data pool will allow insurers to underwrite
policies customised to every customer providing better prices. The Government
of India’s NDHM will further bolster this ecosystem. Data will transform how
health risks are understood, managed, and thus insured for in the coming years.
1.inception of IaaS (Insurance as a
Service). & fast and sure claims adjudication are needy initiatives that could instill trust and reliability on insurance companies.
Cost of hospital services in India: a multi-site study
- The unadjusted cost
per admission was highest for tertiary care facilities (₹
5690, ) followed by private facilities (₹
4839) and district hospitals (₹ 3447).
- one major finding of the study is the extent of heterogeneity in the cost of health services.
What is the cost of healthcare in India?
The cost of universal health care delivered
through a combination of public and private providers is estimated to be Rs.1713 per capita per year in India.This cost can increase by 24% for using
branded medical supplies and drugs. This means the Indian government must spend
3.8% of the country's GDP to universalize healthcare services,where as now its at 1% of GDP!.
why we
need cost &pricing of various hospital services ?
The Recent reforms in the Indian health system like, Development
of the Health Technology Assessment Board (HTAIn) and the launch of the
national health insurance scheme— (AB PM-JAY) - have highlighted the
critical need for cost information on the delivery of health care services .
Costing is necessary for fixing fair provider payment rates(package rates for various procedures) and it is also crucial for undertaking robust economic evaluations.
Cost of Health Services in India’ (CHSI) is the first large
scale multi-site facility costing study across 11 states and 54 health
care providers of different types in India .
OBSERVATIONS
OF THE STUDY:
- Bed occupancy rates and length of stay are strikingly low in the private sector compared to public hospitals and provide important evidence of differing approaches to patient management and efficiency.
- Lower bed occupancy rates in the private sector appear to explain higher admission costs and suggest excess capacity in the private sector.
- study findings highlight the need for better cost accounting systems in the private sector to determine the actual cost, and to understand the basis of pricing decisions.
- In India, cities are classified into 3 tiers, by the National Pay Commission, according to the cost of living.
- that the inpatient care in India is no exception to the rule that scale of activity is known to be a driver of hospital costs and technical efficiency.
- After adjustment for capacity utilization, though the private hospitals still had higher OPD unit costs than the public tertiary hospitals, the per bed day costs were similar between these facilities, and tertiary hospitals had a higher cost per procedure.
- In addition, the cost per bed day (both in IPD and ICU) and cost per procedure were significantly higher in tertiary facilities but with a similar cost of outpatient consultation than in district hospitals. As a result, the estimates of cost derived from the analysis of data from public sector hospitals should be sufficient to cover the provider payment rates of the HBPs in any facility. This is more so as preliminary estimates from these data show that the procedure cost constitutes more than 66% of the total cost of surgical HBPs based on cost data from public tertiary care facilities. The analysis also confirms that geographical location does explain some of the heterogeneity and the justification of the price weights currently used to account for these differences in AB-PMJAY.
The CHSI cost data set provides a unique insight into cost
variability across different types of providers in India to assist in
healthcare decision making from budgeting to economic evaluation and
price-setting.
some of the interesting findings:
If we observe the Cost of Delivering Secondary Healthcare Through the Public Sector in India, that HR cost is almost 60%!
But in private sector, more than HR,Capital expenditure and expenditure on materials is more!
Patients' main reasons for choosing the hospital.
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