Securely Yours

[Apollo Munich CEO]

The health insurance industry, worldwide has benefitted immensely with
the implementation of information technology, which offers a win-win
situation for all

Health insurance has been the fastest growing segment in the non-life
insurance industry in India over the last few years. According to
IRDA, in 2009-10, industry premium revenue has grown about 12-fold
from a level of Rs 675 crore in 2001-02 to Rs 8300 crore, in just 8
years.

IRDA report says that insurance currently pays less than one-tenth of
all hospitalisation expenditure in the country but the share is much
larger for hospitals in metro cities and large towns, where it could
be 30-40 percent. Also, still there are schemes that do not cover all
procedures, because of which, there are substantial out of pocket
payments even for those covered by insurance.

IT in Health Insurance

Information technology (IT) plays the most critical role in automating
the fulfillment processes in customer facing businesses such as
insurance.

Anjana Agrawal, Head of Customer Services and Operations, Max Bupa
says, “Ability to compare different insurance options, seek an
immediate clarification on all queries, which could arise while
surfing the net (similar to phone a friend), ability to select and buy
a product on-line (similar to on-line banking), being underwritten
over the phone including a remote medical examination along with a
generation of medical report/prescription (similar experience as you
are sitting in a Doctor’s clinic and is being examined by them) and
completing a transaction of delivery of health insurance certificate
in few minutes is no more a dream. Organisations have been able to
utilise technology and other electronic gadgets efficiently for a
world-class customer service.”

She adds, “From a customer perspective, real customer service
experience starts with an after-sale-service, wherein the customer
would like to have a personalised 24×7 service, along with
availability of emergency services, something similar to having a
personal medical assistant, who can prepare a daily wellness schedule
and track the implementation of the same, fulfill day-to-day medical
needs, guide and nurture the concept of proactive caring and ensure
availability of medical facilities at just a click. Technology in
today’s environment has capability to provide all this at an
affordable cost right at your doorstep.”

Health insurance is one of the fastest growing business lines in
general insurance. McKinsey forecasts a `25000-30000 crore health
insurance market by 2015, at a CAGR of 25-30 percent (for perspective,
CAGR for 2001-02 to 2007-08 is 39 percent). This business involves
various stakeholders and voluminous data capture and transfer takes
place between the stakeholders. This includes the client,
intermediary, the insurance company, the TPA (if involved), the
hospital, doctors and diagnostic centers. All the stakeholders require
excellent IT infrastructure in terms of hardware as well as software.

Shreeraj Deshpande, Head– Health Insurance, Future Generali India
Insurance Co. Ltd says, “The capabilities of each of the stakeholder
in capturing data effectively and transferring the data across are
very important. Health insurance involves personalised services and
the efficiencies required are of a much higher level. Extensive
quality data, analysis and inference are very vital for a viable
health insurance portfolio. Health insurance underwriting as well as
claims processing system capabilities play a pivotal role. The extent
and quality of data captured by an insurance company helps in more
efficient product designing and pricing.” He adds, “Fraud detection is
another important area in health insurance where IT has a major role
to play. New regulatory initiatives such as portability require quick
retrieval and exchange of data within insurers and would require the
insurance companies to have excellent IT systems.”

Sharing the benefits of information technology in health insurance,
K.Murali, Head – Health Underwriting, L&T General Insurance Co. Ltd
says, “India being an IT powerhouse, no wonder we have progressed far
in using technology. RSBY is a good example to show where we use
biometric cards, paperless claims processing and electronic transfer
of funds. The best part is that the lower strata of the society
benefits immensely with use of technology in this scheme. For others,
there is e-filing of claims, online cashless authorisation and web
based tracking of claims. In future, customers would be able to enter
their claim details to get online approval and claim amount
transferred to their account instantly, with the use of rule engines.”

Challenges

Of course there will be barriers to the adoption or increased use of
IT in healthcare, which include infrastructural ones like power
supply, telecommunications and connectivity issues, as well as poor IT
awareness. But an information based approach will form the cornerstone
for a modern healthcare system that will be more efficient and
transparent and in the long term will result in better quality and
coverage. A national health data network, electronic records, and
standards will form the foundations of an information based healthcare
system.

India is a developing country with over 26 percent of the population
still living below the poverty line. Almost 35 percent of the
population is illiterate. The living conditions in semi urban and
rural India, makes the population living there vulnerable to various
diseases. Nearly one million Indians die every year due to inadequate
healthcare facilities and 700 million people have no access to
specialist care and almost 75-80 percent of medical specialists live
in metros and urban cities. Most of the people in India refrain
themselves from better medical facilities offered by private players
due to the exorbitant expenses. Some avoid medication in totality due
to expenses. There is very little awareness about medical insurance in
India.

Healthcare financing in India is unique with considerably low share of
public financing in total healthcare financing. It amounts to only
about one percent of the GDP, whereas the average share of public
financing in other low and middle-income countries is about 2.8
percent. Moreover, a significant portion of the public spending goes
into tertiary care, whose beneficiaries are mostly non-poor.
________________________________________
An information based approach will form the cornerstone for a modern
healthcare system that will be more efficient and transparent and in
the long term will result in better quality and coverage. A national
health data network, electronic records, and standards will form the
foundations of an information based healthcare system
________________________________________

Further, in the past decade our industry has seen considerable
development and innovation pertaining to the sales process, which
involves the sharing of information at the application stage. But
sadly the pace of development has been far too slow when it comes to
the claims processes. Antony Jacob, CEO, Apollo Munich Health
Insurance says, “We still heavily depend on snail mails or facsimiles
to share information resulting in high turn-around times and customer
dissatisfaction. This may be due to the fact that the processes
related to claims require integration of multiple stakeholders
including thousands of healthcare providers.” He adds, “IT should play
a significant role in enabling real time data sharing requirements
between the claims facilitators and providers. This may be possible by
creating a data highway where each customer, provider and claims
facilitator can work in tandem for faster decision making through real
time sharing of information.”

Public spending on healthcare is stagnant and most of this is by the
states. There is an enormous variance across states, and the overall
result is that healthcare infrastructure, utilisation, and disease
burden compare unfavorably with the average of even low income
countries. Availability of physicians and hospital beds are low,
despite the fact that India accounts for 20 percent of the global
disease burden.

Also, since the poor still depend on the public health system for
major health services, non-existent, poor, or underutilised medical
facilities and a shortage of medical staff often force patients to
travel large distances to get specialist care. Lack of standardised
data transmission protocols can make the process very inefficient. The
hospitals and insurance companies will benefit immensely from co-
operating in the development of protocols for efficient workflow.

Health insurance can improve access to good quality healthcare only if
it is able to provide for healthcare institutions with adequate
facilities and skilled personnel at affordable cost. Given this
scenario, the challenge, then, for the industry and policy-makers is
to find ways to improve upon