She is the second most populous country in the world. She has been successful in gradually overcoming the global recession and is very much on her way towards achieving a double-digit growth and donning the mantle of being the fastest-growing economy in the world within the next four years. But even as she continues to march ahead and bask in the glory, there are certain challenges which she must meet, before her dream of becoming a power to reckon with, can turn into reality.

Of the many concerns which she must attend to, one of India’s pressing concerns pertains to the healthcare of her billion plus people. The World Bank report has cited health as the most significant challenge that India will face on her way to becoming an economic superpower. The rapidly increasing healthcare inflation, fast creeping lifestyle ailments and the increasing gap between professional and affordable healthcare, make health a costly affair and insurance a pertinent need. Hence, there is a need to undertake serious initiatives and bring about a reform in the way health insurance is handled in India.

With a 20% growth rate, health insurance has turned out to be the fastest growing segment in the non-life insurance industry in India. However, the Government’s attitude towards taking health not as a mainstream agenda for citizens coupled with unregulated nature of the healthcare provider industry, have brought in many concerns.

Measures that are essential for the all-inclusive growth of the Indian Health Insurance market:

      Changing the mass perception

Most people have certain notions pertaining to health insurance policies, that keep them from investing  in such policies. Some of the most common presumptions are, reimbursement of claims is difficult, certain ailments are not covered in many policies and the ones that are covered have waiting period of at least two years, the waiting period is too long and the terms and conditions included in the health policies are made in a way to provide excuses for non-reimbursement of claims, Health insurance is meant for the rich and educated, it is suitable only for those not over the age of 45. Many even think that health insurance benefits hospitals more than the policy holders. Here, the solution is to spread awareness.

      Government’s increasing role

The experience from other countries suggests that if health insurance is left to the private market in India, the poor may become more vulnerable. Hence, an active Government involvement in health is the need of the hour, agrees, Sudhir Sarnobat, Founder, Medimanage Insurance Broking Pvt Ltd, “The Government needs to bring the idea of ‘Healthcare for All’ at the centre of its political commitment and should promote small and medium hospitals’ growth in India. It should not get involved in providing healthcare at the secondary and tertiary care levels as the Government is bad at service delivery”. Also, the existing health insurance programs by the Government must reach the intended beneficiaries. Government should catalyze and guide the development of such social health insurance in India.  

      Regulator for the Healthcare Industry

Sudhir Sarnobat very emphatically explains the need for regulation, “Government should set up an efficient regulator for the Healthcare Industry and buy health insurance for its population from the insurers. This way government’s money will be utilized to buy healthcare for citizens while the responsibility of efficiency lies with the insurer. This way the Health Insurance portfolio will become very large in India and Health Insurers will innovate products to cater to the diverse requirements of the masses. There should also be a regulator set up to define the eligibility criterion for hospital infrastructure and service delivery parameters. The regulator’s role would be as watchdog for the industry where the interests of individual members would be tackled on priority.” Agrees Mahavir Chopra, Head, E-Business, medimanage.com, as he believes that self regulation by the Healthcare Provider Industry can help bringing in uniform billing for treatments.

      IRDA's intervention

The current manner of functioning of the IRDA attracts a lot of criticism from the industry experts and intellectuals alike. Mahavir Chopra laments, “The IRDA currently works in a very ad hoc and reactive manner, and the authority has hardly led a development initiative”. About the absence of government’s active role in increasing the importance of Health Insurance (by buying it directly from Insurers), “IRDA”, says Mr Sarnobat, “can ask the insurers to develop insurance plans for lower middle class and poor of the country and set up targets for Insurers to increase sales of these products.

This could be treated as social sector responsibility by insurers and their urban sector growth should be linked to this. IRDA can also set up a sub-regulatory body to keep check on Healthcare Providers for insurance purpose only.”

      Product Innovation

A stunning lack of innovation in health insurance products remains one of the prime challenges faced by the sector. To add to this, “health insurance products for the lower middle class population are virtually non-existent” explains Mr Sarnobat. At such times, innovation must rule the roost, for products to be recognized and for sale to be catalyzed. In a well thought out manner, Mahavir Chopra, puts forth the telecom industry’s success as an example of product innovation. “Most health insurance products are push marketing type, rather than the pull marketing type. Most of the Insurance products are sold, but are rarely bought. Innovation can lead to increasing product penetration which in turn can help insurance companies in becoming a stronger part of the payment mode pie of Hospitals, and hence influence charges”.

      A complete Database

“There is a lack of a global database of the numerous patients’ health and claims history. This again acts as a deterrent. Insurance Companies should get together to form a uniform database of insured customers. In the West, there is a social security number which tracks health details of each patient. Hence, Universal Identification Number (UID) must be introduced, but if the database is not maintained, execution for healthcare records will be a herculean task” says Mahavir Chopra.  

      An Insurance Ministry

A separate ministry for the Insurance Industry, just like the Telecom Ministry is set up for the telecom industry, is an interesting idea floated by Mahavir Chopra. He says this can help in bringing a huge focus on the industry. For starters a Health Insurance Sub-Ministry under Health and Welfare Ministry with professional members could also be a welcome initiative, he says.

The growth of the Health Insurance industry can be smoother and faster, if these steps are taken in full measure and there is a healthy Government-private coordination.

Views expressed by experts in this story/article are personal.