Insurers’ challenges

Health insurance companies should think beyond their traditional role of care reimbursement

Insurers’ challenges

With dismally low government spending on healthcare and health insurance penetration of just 3-4 percent, India has one of the highest out-of-pocket spending rates in healthcare.

Thanks to the government’s ambitious Ayushman Bharat scheme, as many 10 crore poor families are being brought under a basic medical security net. However, this would still leave a large number of Indians without any medical cover. According to a study by the Public Health Foundation of India, healthcare expenditure pushed about 55 million Indians into poverty in a single year.

Even among the burgeoning middle class, for whom a health insurance policy is a good investment, very few understand the value of a good insurance plan that pays for preventive care. According to The Economic Survey 2019 announced on 4th July, health insurance plans need to be simplified to make it easier for individuals to buy them. Most consumers want value for their money, and if they are paying premium for insurance coverage they don’t actually use, they tend to drop it. They often fail to understand that this only increases their expenses down the line.

Rising burden of NCDs

Lifestyle changes and increasing urbanisation and life expectancy has led to an increase in the burden of non-communicable diseases like hypertension, diabetes, anxiety, depression and cardiovascular disorders. The incidence of various types of cancers has also gone up in recent years with factors such as rising environmental pollution, obesity, unhealthy lifestyles and life expectancy contributing to this surge. These chronic diseases put a major dent on patients’ health and finances and often require hospitalisation with hefty expenditure. The PHFI study mentioned above found that non-communicable diseases accounted for the largest chunk of spending by households on health in India. The study also concluded that cancer had the highest probability of resulting in a “catastrophic expenditure”.

With NCDs expected to increase, the need for medical insurance cannot be overestimated. There is a strong need to educate customers about the need for preventive care — adopting healthy lifestyles to reduce the incidence of disease, while buying health insurance to cover for any eventuality.

Need to raise awareness

Although health insurance penetration has grown in recent years, its pace has been sluggish. The rolling out of the ambitious Ayushman Bharat programme has helped generate a lot of discussion and debate on the subject of health insurance, which is a good sign, particularly in rural areas where penetration of health insurance has been specifically low.

There is an emergent need for creating more awareness through campaigns and messages that seek to explain the utility of health insurance and simplify it for the common man, to fill the gap in awareness. Such awareness campaigns have to come both from the government as well as the industry. The insurance industry must work proactively to spread the right knowledge about insurance and help the masses understand the nuances and benefits of buying health insurance.

Innovations hold the key

Since there is a high number of uninsured people in India, and government spending on health insurance and healthcare is limited, private players need to develop innovative solutions that encourage more people to buy health insurance and make them understand the value of preventive care. Let us take a look at some ways in which insurance companies can incentivise the purchase of a good insurance plan and promote healthy lifestyle habits:

Innovative Insurance Packages – Companies that are looking to enter the health insurance market should consider offering packages for the extended family, a strategy that was being tested by some insurance companies. Not only will it help them widen their customer base, it is also a more sustainable option for the insurance provider in the long run. Similarly, insurance services in India have major voids. Prominent among them is the paucity of packages covering OPD and medicine costs. Notably, OPD and medicine expenditure amount for a bulk of healthcare expenditure and people find it odd to buy insurance that will not cover any part of this expenditure. Providers must therefore devise innovative and new packages outside hospitalisation cover for the needs of diverse people.

Incentivizing wellness – A lot of new players have started to link insurance programmes with smart phone apps that monitor the vitals and physical activity of their clients. The ones who work out on a regular basis are given a monthly reimbursement. Digital technology can be used to educate and engage customers and reward healthy behaviour.

Create a network to promote preventive care – Insurance providers should create a network of hospitals, pharmacies, and clinics to educate customers about preventive care and encourage them to take preventive steps that would keep them from getting hospitalised. A smart phone app can be used to help them with continuous health monitoring and follow a healthy regimen so that they spend less money as outpatients.

If we are to achieve universal health coverage (UHC) by 2030 in line with WHO’s sustainable development goals, health promotion and preventive care should be given as much importance as treatment, palliative care and rehabilitation. Insurance companies should think past their traditional role of care reimbursement and leverage tech solutions to engage customers in preventive care practices and become the custodian of customer health and wellness by rewarding them for following a healthy lifestyle.

 

The author is managing director, Paras Healthcare, Haryana

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