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.
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!
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 (8th 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.
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
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
With breakfasts in Suburban India being relegated to the easy and quick Cornflakes, Toasts and eggs, breakfast sure has lost its nutritional edge!
Lack of time is cited as the primary reason as to why we are avoiding the traditional Indian breakfasts. But what most of us don’t realize is that many Indian breakfasts can be prepared within a time frame of 5-10 minutes! Plus there is no denying the high nutritional value of Upma, Sheera, phalaahar, Ragi porridge etc which contain high levels of proteins, iron, carbohydrates and necessary vitamins, needed by the body.
An old adage goes, “Eat breakfast like a king, lunch like a prince, and dinner like a pauper“ citing the importance of breakfast as the first meal of the day and with nutritional experts world over agreeing that breakfast is the most important meal of the day, it’s high time we do justice to our bodies first meal of the day! To read more, click here….
Intermediary is often-used-management-jargon for simple word “Agent” or “Broker”. In India, we are aware of insurance/estate agents and share/estate brokers. Generally, these are those tie-wearing, persistent people who sell you insurance (Please note, you never BUY insurance, it’s always SOLD to you) or those mobile chattering, cigarette-smoking ones who help you find buyer for your house or find you a house for renting. That’s the image you have about them. So it’s quite natural that you look at a Broker or Agent as Seller’s representative. But there is huge difference between an Agent & a Broker when the context is Insurance industry.
An Agent is a representative of a single insurance company who is authorised to sell only one insurance company’s products while a Broker is buyer’s sole representative who can help you buy insurance from multiple insurance companies. An agent’s paramount concern is to safeguard Insurance Company’s interest while a Broker must ensure that his Client’s welfare is taken care of first. That’s why you often find an agent pushing certain products to you even when you are not convinced that they are the right fit for your needs. Generally, the drivers of push in such cases are the targets of insurance company or higher percentage of commission for agent. But a broker’s primary responsibility is to understand your needs, use his market knowledge to identify correct product, negotiate the rates (generally, for group insurances), obtain the cover for you & help you in case of a claim. An appropriate way to summarise his role is to say that “a broker helps you buy an insurance product & service it during its lifespan”.
The fundamental principle on which the “intermediation” started in the world was “Information Asymmetry”. In simple words, the buyer didn’t know what’s available in the market & the seller didn’t know who wants to buy a product. The “Intermediary” or “Agent” or “Broker” brought these two together and made a sale, albeit by earning some commission. If you look around all the agents or brokers till the internet exploded, they were focused only on bringing you information about what is available. But when internet came in common man’s life, searching for products & services became easy on web & the “Information Asymmetry” collapsed. Now, simply by typing some search terms, one could find out what he needed, also get some detailed information about the product & then make his decision. Thus internet has simply changed the rules of the game for Brokers. Now, the Broker cannot simply rely on information that he holds to win a client. It’s possible that a smart client knows more than him thru internet.
So what’s that broker should do now to remain relevant in the changed business scenario? Now the broker needs to “add value” to services offered by him than just get product information & quotes to a client. There are three areas where we can see value offering happening.
Underwriting Expertise where the broker can help client buy right product by explaining him the policy conditions, its impact on claims, providing alternatives which will reduce premium but not affect the benefits much etc. This is very important support needed by clients for all types of Insurances but matters most for Liability & Health Insurance. Service Expertise where client’s all insurance related processes are managed by the broker thus client having minimal interaction with Insurance company or its outsourced agencies. Health or Motor insurance, due to high claims, are service intensive & hence, this aspect is very important for these two lines of insurance business. Complementary Domain Expertise & value add is what separates a good broker from an excellent broker. A Motor insurance broker adding value to client about how to minimise accidents, more help on Automobile care and assistance to get best service (both preventive or breakdown) would be always preferred than one who helps you in just first two aspects. A Health Insurance Broker, who educates you about better Lifestyle, not only helps you live healthy but also supports you completely when you get hospitalised, will be always preferred by clients.
Unfortunately in India, the brokers came on the insurance scene pretty late i.e. in 2003 (time when insurance industry was opened to private players too). Till then, as clients were aware about only insurance agents, it took lot of time for brokers to position their services in correct manner. Most of the brokers did not have patience to educate their clients & hence, started operating like an agent by just getting quotes from the insurer & placing the business. Also many retired (compulsory or voluntary) insurance officials got into broking business on strength of the captive business that they were handling as insurance officials & continued managing those clients now as brokers. On top of this, by end of 2009, there are around 300 licensed brokers, operating mainly in major cities & vying for the business that other brokers are currently managing. This has brought intense competition in the market where for a single client, there are multiple brokers appointed to get better premium rates. Here, the competition is not between multiple insurers but truly between different brokers.
Worldwide, it’s standard practice that a Broker evaluation is done first where client evaluates various service aspects & capabilities of 2-3 short-listed brokers & selects one of them as Authorised Broker who then helps the client buy the most appropriate product. This broker then also services those products for the period of insurance. Generally, these broker appointments are for 3-5 years tenure where a broker can design a medium to long term insurance program & execute the same in the best interests of client. But in India, due to clients’ perception of brokers as “agents of insurer” as well as brokers’ focus to root out current broker & win the business solely on basis of obtaining “lowest quote”, client are being misguided in appointing multiple brokers for single insurance contract. This logically has led to unethical practices as well as falling service levels for the insurance contracts. Following are the logical fall-outs of this faulty practice.
When the competition is between the brokers & not insurers, the broker tends to fudge the claims & other related data while presenting to insurer to enable him obtain a lower quote. This is simply “misrepresentation of client’s information” which most of the clients may not be aware of. Many clients are strict about their corporate code of conduct, ethics & values but ignore such wrongful conduct by their authorised representatives. Ethical conduct is the first casualty of multiple broker arrangement. Misrepresentation of data may help a broker get lower quote but when insurers come to know about this, they either ask for more premium OR are ready to cancel the policy as the claims ratio is high (this is bound to be high when the premium underwriting is faulty). The ultimate sufferer in such case is always the client. Faulty underwriting, over a period of time, results into continuing losses for insurers & hence, insurers tend to behave extra-conservative. Insurance is about calculated risk-taking to arrive at moderate premium rates but with continuing losses, the premium rates harden which ultimately results in higher costs for clients. When insurers make losses, they look at various options to cut down the costs. The brokerage gets cut first which results into lower incomes for brokers. Brokers then look at providing minimal service & tend to make same revenues by increasing volume. This further deteriorates the service levels of the broker. As the broker who now has understood his client’s philosophy of using multiple brokers every year, has no interest in looking at the client’s insurance program for more than 1 year horizon which results in short-term approach. This tends to make the insurance program undergo changes every year which results in inconsistent user experience.
As the broker is supposed to be Client’s representative, the change must be initiated at clients’ end. The clients are not under the purview of Insurance Regulatory & Development Authority (IRDA) & hence, IRDA really can’t do much about this except for occasionally fining an errant broker. I have high hopes that over a period of time, clients would realise the fault in “Multi-Broker” theory and would change for better. It would need lot of education & counselling of clients by the Insurers & Brokers. To put it appropriately, Monogamy is the law of marriage & that applies to Insurance Industry too.
When innocence, curiosity and the simple joys of young lives are replaced by stress, depression and other negative factors alike, what you are left with is a spate of suicides, with no end in view!
The recent ‘Epidemic’ of student suicides has hit the city with more force than a Tsunami! An alarming rise in the number of stress related suicide cases amongst young students all over the country has given rise to some very pertinent questions. Questions such as ‘Who is responsible for this fatal stress build up in students? The parents or the education system?, ‘Is it high time that the education system itself is revamped?’, ‘Are movies like 3 idiots really responsible for such suicides?’ etc…
Given the emphasis on the rote learning nature of our education system, many students are simply unable to cope up. However the ‘No Mercy’ mindset adopted by the parents and society alike towards academic failure has done nothing but add to the ever increasing mountain of stress for the students.
This stress coupled with the depression of not being able to meet the heightened expectations of parents, peers and themselves too, many students are giving up! Young minds which are not conditioned to deal with such stress and depression are bound to break down, the result of which is for all of us to see.
Exploring the views of those directly affected, a leading daily conducted a survey which reported that while 71% of the student community blamed pressure and competition, 62% blamed parental expectation and pressure, surprisingly 27 %, a very small percentage of those interviewed found the education system alone to be at fault. A mere 3% agreed with movies being the reason behind these suicides!
To read more of the article, Click here
How to make a couch potato.
Take potato Chips add long hours of Cable TV, throw in a Couch and what you get is a well rounded Couch potato!!
Couch potatoes have been in existence for a long time now. Through the decades we have often heard our mothers use the saying ‘Turn off that TV or you’ll turn into a couch potato!’ to good use, every time we have been found lazing in front of the TV. And now with the recent reports indicating that too much TV can rocket our risk of death by almost 46%, we see the ugly truth behind the terminology ‘Couch Potato’
Many long hours spent viewing TV can lead to disastrous effects on our body, yet we are still just waking up to the actual harm caused by it!
A recent article in a leading daily had this to say about the topic, every hour in front of the TV was associated with an 11% increased risk of death from all causes, a 9% higher risk of cancer death, and an 18% increased risk of cardiovascular disease (CVD) related death.
Now you do the math. And kindly turn that TV off while you are doing it, wouldn’t want you turning into a ‘Couch Potato’.
To read more of the article Couch Potatoes beware, TV can kill.