MUMBAI: After curtailing the list of hospitals eligible for cashless mediclaim, public sector health insurance companies are going further by proposing to order and pay for medicines and medical equipment themselves. They claim the move would help reduce the cost of medication and equipment by at least 20-30% in cashless claims, as hospitals are overcharging for the same. The PSUs are planning direct tie-ups with suppliers of medical equipment and medicines. Once a hospital determines the equipment and drugs a patient needs, it would inform the insurer, which would order the items directly from the supplier and get them forwarded to the hospital.
An official in the General Insurance Public Sector Association said, "We are planning to work on the inventory management system so that items like implants and drugs can be provided to patients at a reasonable cost."
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Experts from Medimanage.com give their opinion:
The insurers need to focus on their core competency of “Risk Understanding” & “Risk Underwriting” and should not get involved in service delivery. The insurer, by virtue of being a consolidated buyer, has every right to ask volume discounts for the services that they are purchasing & hence, they should ask for correct prices to be levied by the hospitals for the procedures undertaken.
The insurers should act more like a cost accountant wherein they should demand the detailed break-up of the charges by the hospital for a particular package. They then can identify the market prices of various consumables used during the procedure & identify the discounts possible thru’ volume buying. However, they should refrain from advising what doctors should “use” as that would be trespassing into another specialist’s territory.
Also, the insurers are neither equipped to handle the logistics requirements for these kind of interventions into the healthcare delivery system nor do they have the clinical expertise to make suggestions. These are the reason we think that this suggestion may not go through eventually.
This is a brilliant idea and it stops at that. The problem is who is going to make it work? How is it going to work?
Health care is a business and all most all service providers are there in it for making profits. Should one tell the other how much money to make? Should the insurers be bothered about how much money the hospital is making or their own bottom line? These are issues that can be debated forever.
The problem is most of the focus has been on how the hospitals are “overcharging” than how health insurance becoming unaffordable will impact the common man. Steps have already been taken by insurers by putting caps and co-pays to control claims but if these measures do not work, the premiums will rise and this cycle will continue and we could soon see a US like situation where you may not have food to eat but “pardner you gotta have your health insurance”.
In my view the insurers should not get into controlling healthcare delivery. Their job is to underwrite the risk at a price they deem fit. Having said this if we do not arrest this malicious cycle now there will come a time when the government will have to provide subsidies to consumers to be able to afford insurance.
If there can be low cost airlines and low cost housing cant there be low cost healthcare? It is possible and there are ways to do it.
Health insurance companies are trying to salvage the losses which are just increasing each year and here is another of their moves. Public Health insurance Companies (Oriental, New India Assurance, United, National) have announced that they are taking down large number of the hospitals from their list of network hospitals to access Cashless service. From the 800 hospitals which were in the Preferred Provider Network in Mumbai, only 90 remain, all others have been delisted.
Even some of the most reputed hospitals- Breach Candy, Bhatia Hospital, Jupiter, Lilavati and Hinduja have been removed from their lists. There are similar names which have been omitted from other metros like Chennai, Bangalore and Delhi.
So what caused this move?
Cashless service is offered by health insurance to the customers to avail hospitalization in select hospitals without paying any fees. The customers show their TPA card, fill a form and the hospital then receive the amount from the TPA, which is an intermediary between Health Insurance Company and the customer. Since the TAT or the Turn Around time, for the entire transaction is just few hours, there is less- than-effective examination of the documents and the some hospitals and some customers manage to file fraudulent claims. Most of the times, hospitals used to inflate their bills and in absence of rate cards could charge different rates for the same treatment.
Since the losses faced by health insurance are now running into hundreds of crores, health insurance companies are tightening the reins around the TPAs and hospitals. After examining the claims they found many Hospitals had filed fake claims and some TPAs were also hands in glove in the exercise. General Insurance Public Sector Association (GIPSA) has come decided to take stringent measures and delist all hospitals which are guilty of these practices as well as have implemented a rate card for treatments across all the hospitals.
This move is surely going to affect the consumers who had many options to choose the hospitals to avail cashless service. Now they will be forced to travel far or go for reimbursement claims. We ask our experts about this move and its impact on the customer.
Sudhir Sarnobat, co-founder of Medimange Health Insurance Broking Ltd, agrees that this move seems to be a knee jerk reaction to the losses faced, he says “Though TPAs have identified some incidences where over charging has happened, one cannot ignore the fact that the Tertiary care treatment facilities are available in these(big) hospitals only.”
He says that the basic essence of Mediclaim is to take cover against large, unforeseen health risks which are being treated at such hospitals. “Raising Rs. 10,000-20,000 is possible but the cashless really becomes useful when the claim amounts are large. Insurance companies are hitting that part and creating major inconvenience (for the customer)” he rues.
As a solution to the problem of overcharging, he suggests that Insurers should have created a list of diseases which can be treated at such hospitals and negotiated rates based on the Sum Insured.
Should there be Talks?
Reports suggest that the hospitals are still not aware of their status in the network hospitals, which suggests that there were no talks between the hospitals and the health insurance companies. So we asked the experts whether there should have been discussions between the parties.
Mr. Sarnobat replied, “As the insurers are essential for health market to grow, so are the healthcare delivery institutions (read Hospitals and Nursing Homes). Currently, the insurers view the hospital with antagonized view which needs to be altered.” He feels that Association of the hospitals should take a pro-active measure and self regulate and engage in a dialogue with the insurers to get a fairer deal.
He thinks it is the individual ego that is stopping the two parties from an honest dialogue and the decisions are based on few incidences more than wide spread activities.
Customers- the ultimate losers
While taking the policies, most customers were told that they had plenty of options to choose their network hospitals from (many boosted as high as 4000 hospitals), suddenly they will find themselves in a soup where either they need to travel far for Cashless or pay from their own pockets through the reimbursement route.
So for now, it’s bad news for the Hospitals and even more so for the Customers!