Fixing Health Insurance’s Health

This article was first published in the April-June issue of the IRDA Journal.

India, a massive country with a population of 1.2 billion (source: stands on the historically rich soil where Ayurveda was born and surgery techniques once flourished. It is ironic how its people are perishing in the absence of the same healthcare services in the present era. Innovations in science and technology have certainly improved the very field of healthcare but at the same time, have done little to nothing for the masses at large. A major part of the population does not have access to basic healthcare services while, the benefits of the innovations are enjoyed by the ones with deep pockets only.  For around 70% (source: world Bank)  of the population living in the rural areas, the healthcare facilities are in a dismal condition. The inadequate number of Public Healthcare Centres adds further to the woes. .

Unfortunately, healthcare costs are also the reason that pushes many below the poverty line every year. Recent figure published by NSSO amply justify this – only 18.1% of the urban population is insured while the numbers are as low as 14.1% in rural areas despite the numerous government schemes. This sheds light on a different aspect altogether. Thus, it is evident that health insurance is the best possible solution to bridge the gap in affordable and accessible healthcare. (source: NSSO 71st round)

Current Industry Scenario:

The developments in science and technology have certainly benefitted the US$ 100 billion (source: IBEF) worth health sector but the vertical of health insurance is yet to jump in to that wagon. Though, health insurance has a lot of catching up to do, the opportunities and scope for growth and success are tremendous.  Whether an insured individual is making a cashless or a reimbursement claim, the claims exchange process does not enjoy the same speed, efficiency, and a robust and reliable electronic process that several other counterparts in banking and finance sector do. Both the processes are manual in nature, heavily relying on manual interpretation which leads to a higher turnaround time and poor customer service.

Apart from being a laborious process, it is very complicated as well for the consumer.  The involvement and handling of the paper documents create further struggles.  Like a Domino effect, the last tile is the policyholder who faces the hassle of continous back and forth with the insurance desk and high waiting time.

Currently, the sector is witnessing a bias towards cashless health insurance, with the government at the centre planning for a universal scheme. Cashless insurance is a step ahead of reimbursement insurance as the patient need not shell out any upfront cash at the hospital. The hospital and payer settle the claim, with the patient paying a minimal sum. Cashless health insurance claims exchange calls for quick-response technology solutions that enable the hospital and the payer to approve and settle claims in real-time, ensuring a hassle-free experience for everyone involved.

A major problem with the current system is that from the time a policy is purchased to the time a claim is made, the agent guides the entire process. It creates an element of dependency and the policyholder has very little knowledge regarding the process. Furthermore, in the typical claims exchange process today, insurance desks at hospitals collect information from the policyholder through a physical form, interpret that information, enter it into their hospital information systems and e-mail the information to the payer. The payer interprets this information, enters it into their back office system and sends a response. This process is repeated every time an enhancement is made on the claim. Thus, the policyholder is left out of this loop, with little or no transparency, information is interpreted at each step of exchange which leads to leaks and inconsistent exchange of information and hence, results in an unreliable process.

While the private sector is mulling on an electronic claims exchange process, various state governtments have taken the leap to provide cashless health insurance through various health schemes to their citizens. Some of these schemes are exemplary as they are using technology as a scalable solution. They function in a completely paperless format and make utility very simple for the beneficiary. For example; very recently the state government of Punjab introduced mobile e-cards for health insurance. The scheme makes use of an app which contains all the policy details.

However, there is still a long way to go to ensure that 1.2 billion have access to afforadable healthcare.

Need for focused health insurance solution – investment in innovative solutions

To make a change on such a large scale that will strengthen the health insurance sector from the root, support and buy-in from every single stakeholder is key. Just like research and development form strong pillars of other subsidiaries of healthcare such as medical equipment, pharma and immunology, health insurance too, needs focused research for development and implementation of technology tools that can bring the change and boost required. Perhaps, technology advancements implemented by the banking sector, the way it has synced with mobile and online wallets in such a way that access to and utilization of products and services is available at the fingertips of consumers.

Taking the example of mobile phones; technology in the form of mobile devices and applications can help address the problem of accessibility to healthcare insurance to a large extent. It has been a topic of constant debate whether mobile phones are a boon or bane to humankind, both sides have concrete reasons to prove their point but its enormous reach and ease of use definitely count as positives. In India, mobile phones have a reach of around 1 billion; (source:  the figure includes the rural population as well. The number of people using this technology is certainly to be considered while looking for a solution for healthcare insurance.

The potential of a focused technology solution:

Transparent transactions for all: Bringing the hospital, the payer as well as the policyholder on a real-time and electronic platform will make the entire process accountable and thus, transparent. On an electronic platform, the payer nor the hospital need interpret any data after it is entered the first time. Drop-down and rule-based options eliminate the need to manually enter data releated to the treatment and the necessary items it would entail. Furthermore, the technology solution would also bring the policyholder in the loop where the platform would enable SMS or app notifications alerts. The poliycholder will not be dependant on the insurance desk for updates and will have access to information incase there is misuse or fraud.

Technology facilitates automation: With an elecronic platform in place that facilitates transparent and reliable transactions, health insurance claim settlement can become automated where the rule-based platform can adjudicate claims without any manual intervention. Development of and investment into such technology would prove tremendously beneficial for outpatient health insurance as outpatient has a 98% (source: NSSO 60th Round)  share of the total healthcare needs but no insurance to cover the same.

Providing Outpatient Health Insurance: Due to a lack of suitable outpatient insurance cover, a common practice is often making the patient stay overnight for a treatment that could be completed within 24hours. While this ensures that the treatment is covered by insurance, it has a negative impact on the availablility of hospital beds and other resources where they are really needed and leads to malpractice. If patients have access to outpatient insurance and are able to easily use it, not only will the burden of healthcare expenditure reduce but also, resources will be more optimally and appropriately used.

Having outpatient cover will yield better results and the problem of fast payments too, can be tackled by an automated digital platform. Before visiting the healthcare clinic or facility, the consumer can fill the claim form on a mobile app which will send alerts to the insurers as well as the hospital. The patient, the payer and the hospital will be connected through the same app with different functions for the three. The doctor can select the ailment the patient is being treated for, the drop-down menu will show patient’s eligibility, cost incurred and the treatment required. This information will reach the payer at the click of a button. If the information sent meets all the eligibility criteria, the app will automatically sanction payer’s approval. Similarly, the diagnostic center and the pharmacy too, can be brought into this loop.

Customer Happiness: At the heart of the entire claims process is the patient who is the policyholder and the customer for the hospital as well as the payer. Thus, ensuring customer happiness goes way beyond providing a suitable health cover. The consumer should be able to make use of it in the time of need without any hassle. Today, a customer still needs to fill forms manually at admission, wait in long queues at the insurance desk for a status update, and wait for several hours for a discharged to get processed. In the case of reimbursement claims, the entire cycle lasts upto a month or more with the patient or their relative making several trips to the payer’s desk.

To make health insurance customer-friendly, lot of work needs to be done to make utilization simple. Simple solutions such as sending SMS-based alerts, mobile apps that can enable the patient to send all policy related information to the hospital and the payer before coming to the hospital in the case of pre-empted treatment, will eliminate the admission process. A mobile app will also enable the policyholder to have history of usage and related documents in a completely paperless format, just like the way taxi-hailing apps such as Uber allow the customer to save service utility data that is easily accessible. Thus, it is clear that just the way mobile apps have changed the way we consume and have access to products and services, health insurance too, can be utilized in the same way.

Conclusion: We need all hands on deck

Inform and educate: The responsibility of appropriately using the health policy lies equally on the policyholder’s shoulders. Thus, we must ensure that the fine print, and clauses and exceptions are well known before we enroll for a particular type of insurance. Insurers too, must employ more transparent means while selling policies and ensure that their customers have all the information required to use the policy and file a claim.

Support and buy-in from all stakeholders: The ecosystem of healthcare insurance, including the governments at the state and the center must come together to ensure that specialized and suitable technology solutions are implemented. While this mandates a few cultural and infrastructural changes for any organization, support from key management and success case studies from foreign and Indian counterparts can become the foundation for the road ahead.

Regulations and standardization protocols: If regulatory bodies too, pitch in and support efforts towards development and implementation of technology solutions in health insurance that mandate transparent and customer-friendly practices by floating regulations and making it a norm, the industry will be encouraged to adopt. If regulatory bodies and the government put the first foot forward and lead the way, others will have no choice, but to follow.

In sum, the way health insurance is provided for and used certainly, needs to become more transparent and customer-friendly. And this can happen only if all parties join hands to develop and implement a robust solution, one that can deliver health insurance to every single citizen.



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