Hospitals overcharging Patients under Cashless Claims is under the media buzz since a few days.

Here is a quick post which reasons why Hospitals overcharge Cashless Claims:

No Contracted Rates with Hospitals:

TPAs do not have contract binding rates (treatment-wise) with Hospitals in their network. Globally, TPAs contract treatment-wise rates with each Hospital in their network. Treatment wise fixed rates would remove the disparities and anomalies that Hospitals currently enjoy. The core of the issue is TPAs lack negotiation power with Hospitals.

Why do TPAs lack negotiating power?

In India, more than 70% of the total hospital billing is still out-of-pocket and not through Insurance Companies or TPAs. Hospitals are overflowing with patients and therefore don’t depend on TPAs for their revenues. (Imagine a 100 employee TPA bidding to negotiate with a Hinduja, Apollo, Fortis or an Escorts?)

1). Insurance Companies under demands from Large Corporate Customers to list a large hospital, unconditionally pressure, TPAs to include certain hospitals into their network, without rates.

2). Add to this, TPAs are also under pressure to have a large and geographically wide list of close to 3500-4000 hospitals under their network. Due to such a large spread of hospital payments in the network, they cannot guarantee revenue to hospitals, which is the trump card for Health Claims Administrators worldwide.

3). Every division of a Government Insurance Company in a bid to offer the option of a TPA to large customers, use services of 6-8 TPAs. Customers are therefore spread across larger no. of TPAs.

4). Customers (especially Corporate/Group) want to decide their hospital. TPAs currently don’t take the healthcare responsibility of recommending hospitals. Hospitals therefore get 'business' on the decision of the consumer and not the administrator.

Delayed payments to Hospitals:

This is the justification each hospital will give. Insurance Companies (mostly Govt. and some Private) due to their internal deep rooted inefficiencies have been guilty of delaying payments to TPAs. TPAs being small sized companies depend on funding from Insurance companies and therefore in turn delay payments of the Hospitals. Some Hospitals in need of liquid cash, have been known to discount their authorized cashless claims with Banks and Financial Institutions, ofcourse at a cost. Every Hospital would be ready to reduce their costs if they are committed to payments in say, 30 days. 

Recently a new Insurance company has been sucessful in negotiating better rates with Hospitals on the contracted committments to pay on time, with interest penalties.

Lack of Uniform Grading:

There is no regulating apex body or uniform grading of hospitals in India, which makes contracting of rates with Hospitals all the more subjective and unscientific. Rates charges are merely based on location and popularity and not on the quality and consistency of the care and treatment.

Recommended Solution:

Apart from the recent kneejerk delisting/reduction in number of hospitals (to ones which agree to contracted rates), by Insurance companies, here are some solutions our experts recommend. 

1). Health Insurance premiums have grown by 10 times in 5 years. Insurance companies should work towards increasing their negotiating capabilities with Hospitals, by bringing revenue dynamics into picture.  

2). Govt. Insurance Companies should reduce the fragmented way in which it engages TPAs. This will bring more business to lesser no. of TPAs, and hence bring administrative and financial control on claims.

3). Insurance Companies should lobby with the Central Government and Ministy of Health and Welfare to bring in an apex body which enables self regulation and grading of Hospitals and other Healthcare providers.

4). Selection of Hospital Network should be based on quality of Healthcare. Like the "gatekeeper model" in the west, TPAs should be empowered to take responsibility of healthcare beyond negotiation of rates. They should be in a position to recommend the healthcare provider to the customer.  

5). Insurance Companies and TPAs should take into account demography and economics and scientifically fix a schedule of treatment-wise limits for cashless claims, in its policy condition.This way, Insurance Companies or TPAs would pay upto the limit and leave negotiation of the amount charged over the limit to the Customer. 

Do let us know if you have any questions or feedback. Write to Medimanage @ email [at] medimanage [dot] com.

In the high-performance-high-aspirations age we live, more and more Indians live as nuclear families in distant cities away from their own parents.

Long gone are the days, when Dada-Dadis or even Nana-Nanis used to be the doting baby care guides. In a way, Baby Care today has become a case of trial-n-error internet browsing or picking up a famous book recommended by your nearest book shop.

What better a gift for first time mothers, on Mother’s Day, than a well-researched simple guide to manage their most valuable little ones?

The Book – The Great Indian Guide for Baby Care was launched on the eve of Mother’s Day (8^th May) by renowned Pediatric Cardiologist Dr. Abdul Rasheed of Asian Heart Institute Mumbai.

With contributions from leading pediatrics and gynecologists, the well researched eBook has been compiled in lucid language keeping in mind the challenges of today’s young mother.  The eBook uniquely blends global best practices in Infant Baby Healthcare with a rich Indian flavor, perfect for the Indian Household.

The 109 page book is produced by www.medimanage.com; a free web-based Preventive Health Magazine. “We found that most books available in the market today are western, outdated or too thick for today’s tired mommies to go through. That’s when our online magazine thought of writing a simple eBook” Says Mahavir Chopra, Head – eBusiness, Medimanage.com

The eBook, currently available in English, can be personalized as a gift and downloaded from the website at the following link

http://www.medimanage.com/e-book-sign-in.aspx for free.

About Medimanage.com

Medimanage.com (http://www.medimanage.com) is a free India-centric online health magazine focused on day-to-day preventive health. The website provides lucid original content on 9 important aspects of Preventive Health, right from Weight and Diet to Parents’ Health and Health Insurance.  The website was launched in October last year, by Medimanage Health Services Pvt. Ltd. – A Preventive Health Management Company headquartered in Mumbai.

“The articles in the website as much as the chapters in this book are written by professional writers often in layman’s language or even in story form, so that they appeal to readers and encourage a healthy lifestyle.” – Says KS Sankar –Editor-in-Chief of the Website.

OK. Assume you are a journalist in a business daily. You get a press release with the following figures.

1. XYZ Ltd. Sales grows by 20%

2. XYZ Ltd. Operating Loss grows by 63%

Which would you select as your headline?

All major dailies reported "The News" from one of the general insurance companies, mostly copy-pasted from the press release they received from the insurance companies. What they missed (as always) was "The Real news" - or what they call as "Breaking News"

Business Sections of National Dailies Reported United India Insurance's rise in gross premium as well as net profits, without actually digging deep into what actually is a big-big hole - called Underwriting Losses. The Underwriting loss of United India grew from 541 Crore last year to 880 Crore this year, a whopping growth of 63%.

In simple language Underwriting loss or profit, means Premiums collected minus Claims Paid minus Overheads. Underwriting Profits or Loss is one of the most important parameter to analyze any Insurance Company's efficiency and performance.

The Net Profit press-released by all Public Sector Insurance Companies actually includes huge income made as a result of investments of premiums collected, which in all respects is non-core to their business of risk underwriting.

The real news is the 880 Crore of Underwriting Loss! Hello?!

The losses are a result of 2 major challenges faced by the General Insurance Industry:

1. Unhealthy Claim Ratios on Health Insurance (mostly Group business) ranging from 110 to 150%.

2. The government regulated/tariffed premium for third party motor insurance.

More on this Later.Watch this space.

Views Expressed are Personal

Keeping with our tradition of simple to-the-point health tips, here's our message this World Health Day 2010!

Do give us your feedback on the message/creative by putting comments below.

Cheers!

Mahavir Chopra

Health Insurance being the corner stone of growth for the Insurance Industry; specially the Non-Life side, has been in the news. Huge growth numbers have been regular headlines in all kinds of media. Though Mediclaim is the most important growth driver and prime focus for the Insurance Industry, claims keep soaring taller and taller than the premiums in the PPT presentations of Insurance Companies.

Recently one has noticed an interesting rise in the press articles targetting the TPAs, their disputes with customers and their general misgivings with headlines such as Public Sector Insurance Companies to rationalize TPAs, TPAs to be audited for customer service, TPAs payments to Hospitals to be taxed, Doctors in city blacklist TPAs over fee row, and more!

TPAs seem to now bring a picture of a monster, in the eyes of the consumer and general public, who is the root cause of all disputes and problems and who must die or atleast be shut down.

Couple this with the Leading Insurance companies terminating contracts with TPAs and started their own in-house claims management cells. For instant last year, ICICI – the largest private insurance company, sacked its long running TPA, to start its own in-house claims management department. In fact not having a TPA (read having an in-house TPA) is the trending USP seen in product brochures, nowadays.

And now with the Consumers suing TPAs, Healthcare Providers blacklisting them along with Insurance Companies Sacking them one question is coming  to  everyone's minds- is this the end of the road for TPAs?

We contacted some experienced members/veterans from the Indian Insurance Industry to throw some light on the future of TPAs and Claims Servicing in India:

Dr. Abhitabh Gupta:

A Doctor and Radiologist by qualification, Dr. Abhitabh Gupta is a veteran in the Health Insurance Industry.  He has designed many innovative Health Insurance products for the Indian Market and is a regular faculty at the National Insurance Academy.  Currently Dr. Gupta is the CEO of Paramount Health Services, a leading TPA.

Sudhir Sarnobat:

Mr. Sudhir Sarnobat is the Director of Medimanage Insurance Broking – the only dedicated health insurance broking company in India.  A seasoned, Healthcare Professional, Sudhir has been closely studying the Health Insurance Market and its operations for years now.

KS Sankar:

Mr. Sankar has over 30 years of experience in the insurance domain. To his credit, he has been singularly responsible for bringing to fore innovative products into the insurance market. His perspective below, also comes from his experience of being a part of designing various new arrangements in the Health Insurance Industry in India, including the arrangement of the TPA, the topic in question.

Here goes an interesting collage of interesting standpoints, we received for our questions which helped us get clarity and understand the TPA scene better, for today and tomorrow! 

Q1. There are regular stories in press on how Insurance Companies and the Regulator focusing on regulating the facilitator to control the claims ratio? What is your take? Is it going overboard?

Abhitabh Gupta: Let’s look at where all this originated. Health insurance used to be a small portfolio and was also a neglected one when TPAs were introduced. It was successfully used as an entry point for other lines of businesses by most of the insurers, especially in the private sector. Portfolio approach was the mantra of those days and health insurance was only a tool. Growth of the company was measured by numbers and top line especially public sector. Since the health portfolio was very small, therefore the losses in it were always neglected. The Health business was picked up at dirt cheap rates , due to portfolio approach. Some mid size policies were even underwritten by top insurers at Re. 1/-, Service levels were talk of the town when private sector insurance companies came up. Business calls were often taken and TPAs were asked to pay the full claims amount in spite of losses while Insurance Companies were compensated by other premiums. The health product was never adequately priced and did not take into account the inflation in health care and technological advances. There were no scientific underwriting guidelines or principles, both for individual and group businesses. Agents and customers utilized this to their benefit. TPAs did not have access to proper past data or proposal forms which were in any case incomplete.

The scenario has changed after de-tariffing. Health, forms almost 25 percent of overall business of insurance companies, which in few years will go as high as fifty percent. The focus has therefore shifted to service, the TPAs and claim control is the new success mantra for insurance companies. Not all TPAs were knowledgeable and therefore partly their inability to create an effective network and control losses has added up to all this.

Sudhir Sarnobat: In the current context , the absence of subsidy and inability to up premiums in the buyers market scenario, has increasingly resulted in Insurers having high claims ratio on Mediclaim.  Focus on claims containment was bound to happen, but holding the TPA alone responsible for this would not be correct. The claims ratio is high because there are no clear-cut benefit rationalization wordings in the policy documents of most of the insurers which limits the scope of TPA. Also the major party in this transaction is the Hospital which is not regulated at all. Even for insurance purpose, there are no guidelines set for them.   

KS Sankar: I do not see any real attempt by the Regulator regulating the facilitator to control the claims ratio. The Regulator, being a Government Body, if really keen, can certainly impress the Ministry to regulate the Hospitals. Yes, Insurers have started breathing down heavily on the facilitators. What the insurers do here varies widely from one insurance executive to another. The feet-firmly-on-mother-earth types are rightly seeking facilitators to come up with more and more scientific analysis of the claims data as a tool to control the claims ratio. My take is, facilitators can do a lot here but have been doing scarce little. Unfortunately, there are also insurance executives who rhetorically keep proclaiming the facilitator needs to control claims – as if the facilitator has a magic wand. Come the month when the renewal is around the corner, this very insurance executive would want the facilitator to pay all claims and sundry. My take here is, such insurance executives have to come out of their Utopia and in any case, arrest their pendulum swings.  

Q2. Is it true that, originally the TPAs were required to rationalize the treatment costs? Why do you think they failed in achieving this?

Abhitabh Gupta: Yes, originally the TPAs were required to rationalize costs. In fact several attempts were made by GIPSA (an association of all Public Sector Insurance Companies) and several insurance companies but the TPAs failed due to several issues including lack of clarity on several fronts, lack of unity amongst insurers, no regulatory body of healthcare providers to talk to, TPAs not being adequately compensated vis-à-vis the services that were expected, several TPAs having their own provider chain etc.

Sudhir Sarnobat: The original agreement with TPA is for Claims Settlement only (as the claim settlement mechanism by PSU Insurers was inefficient.) To add value, all, these TPAs were asked to throw in Value Added Service, which turned out to be Cashless Treatment for patients. If you look at the agreement between TPA & Insurer, it talks about Cashless Treatment & efficient claims management only.

KS Sankar: It is true that originally the TPAs were required to rationalize the treatment costs. You know I am privileged to have been hands on associated with the evolution of the concept of TPAs in India. We (meaning insurers – past tense for me) were not expecting the TPAs to mount the wild horse in just a day or two. The road map laid out was (at least in my opinion) pretty scientific. DBMS would become easier with TPAs since all claims data will be pooled and shared. Scientific data mining will empower TPAs to legitimately position and establish instances of hospitals misusing insurance. Without TPAs, the awareness of Hospitals misusing insurance was like Australia – everybody knew it was there, but nobody bothered beyond lamenting about it. The body of TPAs was expected to provide enough data based irrefutable inputs and logic with which insurance industry could go to GOI and push MOF to open the Nelson’s eyes of MOH. You can’t go to the Government talking about what you feel or infer or even know. You need to go to them with data and details that clearly establish what you say. The body of TPAs were expected to provide this teeth to the insurers, and I would say, they have miserably failed. The simplest of the simple things – when claims data was thinly distributed among the 10000+ insurance offices, same hospital charging differently for same procedure could not get noticed. Trust me, unless you and I push them to do it, no TPA by default will notice this either, despite the data having got pooled!  

Why the failure? Merrily, all to blame. The customer is still not educated to know insurance is an indemnity and not a bank deposit. Not even that if overcharged for one hospitalization, she ends up with a lower residual for the remaining policy period.

The insurance company, by paying disproportionately low rates of fees to TPAs. Pay peanuts, get monkeys. Add to this the pendulum swing the insurers themselves indulge in that I have referred to above – what better can you expect the monkey to do?

The body of TPAs whose entire concentration is only on hunting for new accounts and thus increasing their revenues at any cost than emerging as a professional body. Turf war has not alone made the TPA market place murkier, but has also created such close chestedness with data that the fundamental expectation of a robust DBMS has itself gone for a toss.

Q3. Insurance Companies haven’t lobbied enough to get Hospitals regulated through the Government. Regulation on TPA, without regulation on Health Providers is almost futile. Comment.

Abhitabh Gupta: I agree. However few things can be still managed. Create a smaller preferred network of good hospitals. TPAs should capture more data which can establish quality parameters at a given hospital. I think insurers and TPAs should agree on reducing their network and do preferential pricing

Sudhir Sarnobat: The revenue generated for Hospital Industry through insurance is less than 15% of their total turnover & hence majority patients are “Self-Pay” customers.  Such a scenario, does not allow TPAs to enforce regulation on Hospitals. Also the self-purchased insurance penetration is high only in Urban India & not rural. Govt.’s first priority today is Primary Healthcare & hence, the Hospital’s regulation is neglected. It’s high time that the Industry (Read the Regulator) pushes this issue with Health Ministry which is detrimental to good health of PSU insurers as well as consumer rights at the hospitals. In absence of regulations (or even guidelines), the hospital charges are going up without any improvement (or even responsibility) in quality. Shoddy services are being accepted by un-informed customers, without questioning the prices.  

KS Sankar: Insurance Companies are justified in regulating the TPAs to empower themselves with scientific data base and analysis thereof. This is the sine qua non starting point for any lobbying to get Hospitals regulated through the Government.

Q4. Insurance Companies are increasingly sacking TPAs and taking up the claims processing in-house? As a customer’s representative, do you think customers are better off without TPAs in the long run?

Abhitabh Gupta: Insurance companies are not sacking TPAs, for service issues or better control, but for their own brand building. I am sure they are incurring higher costs than outsourcing it to TPAs. Lately we have seen many corporates smoving out of such insurers and opting for TPAs. I am hopeful that insurers will reverse their decision in due course. Individual companies will never be able to match the pricing ability of a TPA due to the lack of volumes and therefore also not being able to match bulk discounts offered to TPAs by providers

Sudhir Sarnobat: Claims settlement by Insurer is anti-consumer as we see adamant & irrational claims settlement by Insurers when the Underwriter & Claims Setter is same. This can even be dangerous for corporate customers as they will be held  at ransom for outstanding claims when the company wants to move away from Insurer A to Insurer B. If there are issues with TPAs claims settlement, it’s because of  the absence of clear-cut guidelines and no proper audit/checks on performance by TPAs. If you cut your finger, you don’t chop off your hand & hence, just because there are claims issues by TPA, abolishing entire TPA eco-system is not the solution. I believe that if Insurers are starting their own TPAs, it’s not for efficiency improvement (except for Bajaj Allianz who took the plunge of self-TPA very early, all other insurer’s TPA’s efficiency & service levels are almost pathetic) or love for customer satisfaction. It is emanating more from trying to control the consumer & his/her claims.

KS Sankar: TPAs are not being done away with – Insurance companies are becoming their own TPAs, that’s all. The advantages to the customer in terms of cashless hospitalization, single point claim settling contact, etc. have come to stay. Saying customers are better off without TPAs is like saying we were better off under the British Rule. Your generation might have been luckily spared this but in my times some old people by my standards used to make statements of this kind. My blood used to boil then, it does even now if someone says she is better off without a TPA. We (again in my past tense) took up this challenge and gave the option to the insuring public to take a policy with or without TPA services. For all the yelling and shouting about TPA inefficiency, when it came to the crux, trust me, there were no takers whatever for the non-TPA option, despite premium being lower by about 6%.

Q5. Healthcare Providers are black-listing TPAs for various reasons, specially payment or authorization delay

Abhitabh Gupta: There could be some TPAs who do not have adequate infrastructure which could lead to such an issue. Mostly these situations arise due to delay in payment by the insurance companies to TPAs.

Sudhir Sarnobat: Hospitals are giving a knee jerk reaction for an issue or problem, responsibility for which they need to own up too. The hospital industry, without any regulations, has failed to self-regulate themselves. The mal-practices, instances of charging high prices, medical negligence, ethical issues are not being tackled by the industry. Instead of creating better & workable understanding or framework, they are looking at banning the TPA. Its same like Insurer’s approach of dropping the TPAs. The payment delay is majorly due to delay for payment from Insurers to TPA as well as disputes in billings where the hospitals ask for authorization on basis of information provided during admission and the actual diagnosis/treatment is totally different. Most of the hospitals too have not invested enough time & resources in understanding the insurance policy wordings/requirements and hence, have issues on payments. Those few corporate hospitals who have made efforts of understanding the insurance policies, unfortunately use this knowledge to take advantage of the cashless facility.     

KS Sankar: This was also expected to happen even while we were at the drawing board of the TPA model. It was expected TPAs will develop enough robustness to weather this storm in the tea cup. We expected what with the rate at which Hospitals are springing up, the vast majority, especially of the newer generation Hospitals will entertain TPAs. And this expectation has come true. Therefore, the storm kicked up by some of the Healthcare providers is only inside the tea cup. Having said this, the insurers need to take onus for two things – the expected rate at which more and more people were to have been brought under Health Insurance which will make life difficult for Hospitals not to recognize the TPAs (Insurer representatives) not being even neared, leave alone achieved. And avoidable inefficiencies in payments to healthcare providers that gave some healthcare providers the stick to beat the system with.

Q6. Is it the end of road for TPAs?

Abhitabh Gupta: TPAs are here to stay but they will have to change from their current role and graduate to actual medical management by implementing clinical protocols at network hospitals etc

Sudhir Sarnobat: Unless all the stake-holders (especially consumers & hospitals) do not take this issue up, TPAs will be favorite punching bag of members and will get all the blame. With more than 27 TPAs in system & PSUs who are not geared to handle claims on their own, I don’t think its end of the road for TPAs. But if  the TPAs don’t take initiative, leverage the media to bring forward their point of view and clean-up their own house to improve efficiency, it will not be long  before that Insurers will  start looking for alternates and that would be like going from the Pan to the Fire.

KS Sankar: I hope it shall soon be the end of the road for TPAs as they exist today because I hope that would be the beginning of the customer friendly road for new generation professional TPAs. I expect quite a few TPA companies to die as I do expect the TPA concept to evolve and flourish.

Final take: The current scenario has put huge pressure on TPAs and their future. Tough times will definitely shake off the weak links in the TPA community. As always, constraints also brin in various opportunities, including opportunity to innovate and fight back as a leader.

Hope you got a good perspective of the whole story.

Keep coming back for more such insights.

Do write in your feedback to our posts in the comments section below.

From Biscuits, Cooking Oil, Instant Noodles, Toothpaste, Chewing Gums... there are one too many advertisers in India, attaching the word - Health, Healthy,without any responsibility. In fact, if you visit McDonalds, even their  table pamphlets talk about health with great prominence!

Ads which claim that a change in cooking oil can help your kid pass with flying colors in the exams. Biscuits which make you lighter and more energetic.Toothpastes with Namak, which can help you prevent toothaches. Most of these claims are completely questionable.

Advertisers abroad, need to prove their health claims for their products. They go through rigorous approvals, before they can proclaim anything as healthy - whereas we are in a free for all scenario!

You would be surprised to know that Nestle's Maggi projecting itself as a Healthy Snack, is banned in various developed countries including the UK. In fact, they have even been fined Nestle for such stuff.

Alas, Large companies of even the size of Nestle, continue to discriminate and have double standards in their marketing policies.

Sad there isnt any active regulation correcting such stuff in India, trying to curb such malpractices by giant organizations with ironically huge "Corporate Social Responsibility" Budgets!

Can we do something?

Just read a story about experienced nurses migrating to developed countries in today's Hindustan Times, and found it very disturbing. I am no Healthcare expert, but common sense says that this definitely has large implications to the quality of Healthcare delivery in India. Nursing is an important and a niche profession in India, which has very few takers across the country (Have you heard of any little girl, saying she wants to become a nurse?) Migration can further mar the already bleak scenario of healthcare delivery in India.

Developed Countries have huge advantages as far as wages, working and living standards are concerned. Somethings that make experienced and talented people stop and stay back is the strong social network, stability or the belief in the India Story. 

The challenge that Hospitals and Healthcare in India face, is similar to a business, which employs freshers and takes them for granted (when they are new and when no one is willing to take them up) and later face a major challenge, when they arent able to retain staff, once they have got the good experience. 

If you have noticed, Nurses or "Sister" as we respectfully call them in our country, are generally emigrants most probably from Kerala. These people with their own sweet proprietory accent (in whichever language they speak to you), have already left their native and social circle for a job, and hence dont have a major social attachment. The language they speak is also different from what their patients speak. So what can really stop experienced nurses other than the attachment they could have with their peers and the organization they can work for?

Dissapointingly, if you read further in the same HT story, it also highlights that there have been 5 Strikes by Nurses in the last 6 months in New Delhi alone, which proves the dismal work conditions.

It seems no one cares for the Sisters of India, anymore. Sad.

Other sad highlights of Healthcare story:

1. India has a very low crisis like ratio of Healthcare Personnel to Population, a meagre 1.87 for every 1000 people. The Standard is 2.5. As per WHO, the risk of AIDS, Malaria, Maternal Deaths, Tubercolosis is multiply higher in countries where the Healthcare Personnel to Population ratio is low.

2. Nurses are so despondent for better living and working conditions in Inda, that they are ready to pay a one time fee of Rs. 50K to Rs. 500K to overseas job consultants, to get a job in a developed country.

Here's web link I could find to the entire article:http://www.hindustantimes.com/News-Feed/newdelhi/Nursing-a-foreign-dream/Article1-514546.aspx

Given the growth Health Insurance has shown, coupled with its potential in the evolving socio-economic environment in India, Mediclaim as it is popularly known in India remains the top story with all forms of the press. News/columns/opinions in the media quote consumer forums, government bodies as well as 'experts talking about the various opportunities, challenges that Health Insurance consumers face in India.

What’s also noticeable is that most of the news or stories have their eyes expectedly trained on Consumer Issues like disputed claims settled at the Consumer Forums or the Ombudsman. In fact, whenever, a customer wins a case, the press and consequently all of us beam with joy, happy to hear that rights of a consumer, someone like us, are protected, and that there is a resolve to the supposedly draconian ways of the Insurance Company. 

Most recently the press driven by opinion from experts and activists has demanded stricter/deeper regulation on better regulation on terms and conditions of Insurance policies and how Health Insurance Companies and TPA manage claims. For instance, take the Times of India (Business) report under the Consumer Watch Section on 19^th February, which talked about Insurance Companies denying the payment of Service Surcharge, Registration Fees charged by the Hospital [which could go to around 10% of the total bill]. Experts in the story recommended regulation of the terms and conditions of the policy as well as inclusion of these charges as a part of the policy.

While the suggestion for better regulation of the terms and conditions of Insurance policies, as a part of constant evolution/change, is welcome, the experts failed to realize that inclusions for any unfathomable charges won’t come for free, and that collectively Insurance premiums pay for the claims.  In short, such unwise inclusions actually end up increasing the premiums, making it more unaffordable, more than anything else.

The Story missed on targeting the real problem. The problem of understanding what these unexplained charges are?

My interactions with Healthcare professionals in Medimanage have shown that there are gross inefficiencies at the administration and costing level in a Hospital, on account of which direct charges that are levied on to the bill such as, room rent, or doctor fees are not scientifically calculated. The Costing department applies an ad hoc [read inflated] direct margin on all costs to arrive at the price to be billed to the customer.

Moreover, you would be surprised to know that most Hospitals do not have a well managed cost management system which calculates indirect overheads like Electricity, Water etc. to each billable service/item in the Hospital. So for e.g. if you manage to ask an accountant of a Hospital how much is his actual margin [gross and net of overheads] when he bills one pair of gloves to a patient, he will never be able to calculate it. This therefore is a weak spot for administration offices in almost every Hospital.

To cover these costs and protect their margins, Hospitals have therefore worked around and started loading additional overall loadings on the overall bill calling them different names like Administration Charges, Registration Charges or Surcharge.

Knowing this you will now realize, that the reason behind Insurance Companies denying payment of such charges is not the validity of the charge or managing claims, but the unscientific and open-ended way of charging this on to the bill.

The most crucial root of the whole problem simply lies in the lack of almost any real regulation on the largest to smallest of hospitals or healthcare providers in India. In fact, after some browsing on the internet and talking to some healthcare experts, I realized there isn’t any regulator or a distinct self regulatory association for Healthcare Provider Industry in India, which defines standardization of billing for a hospital.

Looking at lack of regulation, even the most esteemed hospitals and renowned doctors charge a higher charge and fee, depending on whether you own a Health Insurance or not.

So while the aam consumer is facing deduction in claims and the Insurance Companies continue making major losses, the Hospitals are laughing their way to the bank, with disproportionate and unreasonable charges.

Most would be surprised to know that world-over you pay lower charges in a hospital, if you have Insurance, than when you don’t. This is purely because the Health Insurance Company is able to consolidate business and negotiate better rates for surgeries with a Health Service Provider, than an individual who doesn’t have Insurance.

Remember, since the largest market share of health insurance is still owned by Public Sector Companies, we also end up paying for the losses in some way or the other, through taxes!

What we derive from this particular case is that the solution to this Great Indian Mediclaim Circus lies in giving Hospitals a chance to make a self regulatory body [under guidelines from the government],with a set deadline, and therefore getting the hospitals under phased regulation. If the body fails to shape up the billing practices in the stipulated time, a government formed body be formed to close the matter.

While they are loggerheads in India, The World over Health Insurance has been a partner of the Healthcare providers walking hand in hand, taking the Healthcare Industry to another level.

Missing to hit at the source of the problem, and pushing an already regulated body with huge standardized competition is taking on a bull by its tail.

Let’s catch the problem by its root, rather than killing the gardener.

Views expressed in the article are personal. The organization, does not necessarily agree to them.

In the Internet Age, we live in, kids are exposed to information without any boundaries, which makes it very difficult for children to classify right from wrong. Sex Education hence is very crucial, specially in a country like India.

We came across this great and very practical slideshow on Sex Education for Kids by Dr. Anjali Malpani. Though it is very long, it covering a broad dimension of the challenges parents face, while educating their kids, makes it worth your time.