Suggests community group insurance products at FICCI Health Insurance Conference 2017
TS Vijayan, Chairman, Insurance Regulatory & Development Authority of India (IRDAI) has underscored the need to devise health insurance products that are simple and intelligible to the customers, provide coverage to the aged and infirm and those suffering from chronic ailments, bring down distribution costs and ensure that there is no profiteering to the detriment of the insured.
Inaugurating the 10th edition of ‘FICCI Health Insurance Conference 2017’ in New Delhi, Vijayan said the goal of achieving inclusive, accessible and affordable health insurance by 2025 was laudable and was in keeping with the millennium development goals. To this could be added another aim, that of responsibility and responsiveness in the delivery of health insurance service as suggested by Dr Sanjaya Baru, Secretary General, FICCI.
Vijayan said that the time was perhaps ripe to look at introducing community group insurance products to bring down distribution costs and determining the genuineness of health insurance claims. The veracity of claims by an insured person could be verified through members of a community or group so that insurance companies were not unnecessarily burdened with fictitious claims.
The IRDAI chief also underlined the need for standardisation of costs of healthcare from one hospital to another in a city. This analysis could be done procedure-wise in a particular city to allow the insured to opt for a hospital of his choice.
Vijayan spoke of the need to bring down out of pocket expenses of patients, currently reckoned at 62 per cent of all healthcare costs. This was extremely high and leads to impoverishment of the patients, he said. In comparison, out of pocket hospital expenses in developed countries such as the US and UK were 20 per cent and in BRICS countries about 20-25 per cent.
On the occasion, Vijayan released three knowledge papers — FICCI- KPMG Knowledge Paper on ‘MSME Group Health Insurance Penetration in India’, FICCI- KPMG Knowledge Paper on ‘Health Savings Account in India’ and FICCI- EY Knowledge Paper on ‘Distribution2.0 – Improving Distribution in Health Insurance’.
In his theme address, G Srinivasan, Chairman, FICCI Health Insurance Committee and CMD, The New India Assurance, said that while life expectancy in India has gone up significantly, the disease burden is still very high. The health insurance penetration was abysmally low in India at 30 per cent and therefore there was a long way to go.
Dr Baru said that there was a need to address the anxiety of the customers as they avail of the benefits of health insurance since many remain in the dark with regard to costs and the services offered to them. He therefore stressed the imperative of responsibility amongst healthcare providers in dealing with patients.
Speaking about the ‘MSME Group Health Insurance Penetration in India’ knowledge paper, Shashwat Sharma, Partner and Head – Insurance sector, KPMG in India said, “The Indian economy is one of the fastest growing in the world and the success of MSMEs is critical for maintaining India’s growth story. A key aspect of this growth story would be providing quality healthcare access and social security coverage to the largely informal or unorganised workforce employed in this sector. This could result in significant productivity improvement in this sector. The goal of improving healthcare coverage to the MSME workforce can be fulfilled through both development of infrastructure and as well as delivering effective and affordable healthcare.”
Antony Jacob – Co-Chair, FICCI Health Insurance Committee; CEO & Whole Time Director, Apollo Munich Health Insurance said, “Healthcare costs today are going up by the day due to lifestyle diseases in particular and the only way the gap between rising healthcare costs and affordability can be bridged is if the insurance sector develops a sustainable and viable mechanism. Today with out of pocket expenses accounting for nearly twice as much as institutional expenses there exists a real need for an all-inclusive solution towards healthcare in the Indian market.”
Speaking on the report, Shashwat Sharma, Partner and Head – Insurance, KPMG in India said, “A key imperative for enabling social security for the population is ensuring they have access to quality healthcare. Currently, 73 per cent of the population does not have access to pre-financed instruments for healthcare leading to 90 per cent of private sector expenditure being done through Out of Pocket spends. The concept of a health savings account could therefore prove to be a viable option for creating a corpus for meeting future healthcare needs. This will ensure that more and more people have funds for accessing healthcare services, thereby going a long way in realising India’s goal of providing healthcare to all.”
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