A few days ago The Hindustan Times in New Delhi reported that the global acturial company Milliman has ‘launched ‘claims processing guidelines’ that enables a third party administrator (TPA) or insurer to determine the severity of a patient’s condition and identify if the length of hospital stay investigations, consumables and treatment procedures are more than what is typically required’.
The product reportedly called ‘Claim Ref’ can apparently be linked to a software, which allows it to compare a claim made by a hospital, with a ‘typically’ similar case taken out from a database containing information about 125 procedures gathered from Indian hospitals. This simply means that the insurance companies can hold back payments to the hospitals if the claim amount is in excess of what ‘Claim Ref’ indicates.
I am hugely skeptical of such arithmetic modelling for the following reasons.
Different people suffering from similar conditions may require different treatments. Different doctors doing the same procedure may employ different techniques, may use different consumables and medicines, may even use different techniques depending upon their comfort, familiarity and skillsets. The post operative course of the patients may also vary and may depend upon their general health condition, complicating factors like diabetes or hypertension and hence the stay in the hospital might be of differing duration. How can such differentiation be corrected using statistical tools?. And for arguments sake even if one is able to find a pattern, how fair will it be to compensate a hospital based on these findings.
Insurance companies the world over try to determine the pricing of procedures and surgeries in a hospital. In India, where health insurance is just about taking off, things are getting difficult for the hospitals. Insurance companies are laying down arbitrary pricing conditions for cashless transactions and insisting that they will pay only so much and no more. Hospitals competing for the business are succumbing to the pressure tactics of the insurance companies and agreeing to these pricing terms, because they would much rather have a filled hospital bed rather an empty one.
While this may lead to better profits for the insurance companies, what it really does is force hospitals to cut corners, use inferior medical consumables, pay surgeons less for operating on patients with cashless hospitalisation benefits and ruthlessly cut costs to squeeze some profit. This does sound scary, but with insurance companies tightening the screws, and the hospitals trying to survive in a cut throat business environment, this would be inevitable.
Alarmingly ‘Claim Ref’ claims to reduce insurance payouts and reduce hospital – insurance company disputes. “The tool also tries to reduce the areas of frequent disputes between insurers and hospitals. For example- hospitals include anesthetist’s fees for procedures where a surgeon himself could have provided anesthesia. The product tells a TPA under what conditions an anesthetist is required,” says Alam Singh, assistant managing director at Milliman’s Indian unit.’
This to me sounds absurd.
How can a decision support tool decide, whether an anaesthetist should give anaesthesia or a surgeon should himself do the needful. If I was the patient I would certainly like an anaesthetist to be involved, ( assuming he is the person trained in this) and I would expect the decision to be taken keeping in mind my best interest and not that of the insurance company!
My solution to the problem is simple enough. The insurance companies must have a smaller number of hospitals in their network and they should monitor them well. In my experience I have seen it is primarily the doctors, who in an effort to ‘help’ their patients cut corners by hiding material facts. Instead of relying on unreliable tools like Claim Ref, insurance companies should employ people, who liaise closely with hospitals and try and weed out doctors and hospital administrators who fudge medical data to inflate patient bills. They should warn the erring hospitals once and if they catch them again, take harsh measures like throwing them out of the network for a specified time. The hospitals will learn soon enough.
What the insurance companies can not do is to tell hospitals how they should treat their patients, what materials they should or shouldn’t use, what investigations they should and shouldn’t do and how long a patient should stay in the hospital. These decisions must be only of the treating doctor.
Thus, even if Claim Ref is capable of doing all this, it must not, simply because a patient’s health must always take precedence over the profits of an insurance firm.
Pic courtesy http://www.flickr.com